Time Traps in Supply Chains: is Optimal Still Good Enough?

Author(s)
Fabian Dunke, Iris Heckmann, Stefan Nickel, Francisco Saldanha-da-Gama
Journal
European Journal of Operational Research
Year
2016
Volume
in press
Abstract
Operations Researchers support Supply Chain Management and Supply Chain Planning by developing adequate mathematical optimization models and providing suitable solution procedures. In this paper we discuss what . adequate could mean. Therefore, we may ask several questions concerning "optimality" in Supply Chain Planning under causal and temporal uncertainty: What is an optimal solution? When is it optimal? For how long is it optimal? How should the design of a supply chain be changed when conditions and requirements ask for new structures? In particular, we discuss new approaches to Supply Chain Planning in order to give an optimal transformation from an initial solution over multiple periods to a desired one rather than just specifying an optimal snapshot solution. Time and uncertainty are the factors triggering the whole discussion. In particular, several flaws often found when dealing with these factors result in so-called "time traps". We look at the impact of recent technological developments like the Internet of Things or Industry 4.0 on operational supply chain planning and control, and we show how online optimization can help to cope with real-time challenges. Moreover, we re-coin the concept of risk in the realm of Supply Chain Planning. Here the question is how to measure supply chain specific risks and how to incorporate them "adequately" into mathematical models.
Online Sources
http://www.sciencedirect.com/science/article/pii/S0377221716305537
DOI
10.1016/j.ejor.2016.07.016
Research focus
Logistics and Supply Chain Optimisation
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