Exploitation of material consolidation trade-offs in multi-tier complex supply networks
While consolidation strategies form the backbone of many supply chain optimisation problems, exploitation of multi-tier material relationships through consolidation remains an understudied area, despite being a prominent feature of industries that produce complex made-to-order products. In this pape...
| Main Authors: | , , , , |
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| Format: | Journal article |
| Language: | English |
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Elsevier
2023
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| _version_ | 1797112575931973632 |
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| author | Chauhan, VK Alomari, M Arney, J Parlikad, AK Brintrup, A |
| author_facet | Chauhan, VK Alomari, M Arney, J Parlikad, AK Brintrup, A |
| author_sort | Chauhan, VK |
| collection | OXFORD |
| description | While consolidation strategies form the backbone of many supply chain optimisation problems, exploitation of multi-tier material relationships through consolidation remains an understudied area, despite being a prominent feature of industries that produce complex made-to-order products. In this paper, we propose an optimisation framework for exploiting multi-to-multi relationship between tiers of a supply chain. The resulting formulation is flexible such that quantity discounts, inventory holding, and transport costs can be included. The framework introduces a new trade-off between tiers, leading to cost reductions in one tier but increased costs in the other, which helps to reduce the overall procurement cost in the supply chain. A mixed integer linear programming model is developed and tested with a range of small to large-scale test problems from aerospace manufacturing. Our comparison to benchmark results shows that there is indeed a cost trade-off between two tiers, and that its reduction can be achieved using a holistic approach to reconfiguration. Costs are decreased when second tier fixed ordering costs and the number of machining options increase. Consolidation results in reduced inventory holding costs in all scenarios. Several secondary effects such as simplified supplier selection may also be observed. |
| first_indexed | 2024-03-07T08:26:07Z |
| format | Journal article |
| id | oxford-uuid:61a6fbc3-f9fd-415a-9680-c94f2366b56b |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T08:26:07Z |
| publishDate | 2023 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | oxford-uuid:61a6fbc3-f9fd-415a-9680-c94f2366b56b2024-02-16T10:57:03ZExploitation of material consolidation trade-offs in multi-tier complex supply networksJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:61a6fbc3-f9fd-415a-9680-c94f2366b56bEnglishSymplectic ElementsElsevier2023Chauhan, VKAlomari, MArney, JParlikad, AKBrintrup, AWhile consolidation strategies form the backbone of many supply chain optimisation problems, exploitation of multi-tier material relationships through consolidation remains an understudied area, despite being a prominent feature of industries that produce complex made-to-order products. In this paper, we propose an optimisation framework for exploiting multi-to-multi relationship between tiers of a supply chain. The resulting formulation is flexible such that quantity discounts, inventory holding, and transport costs can be included. The framework introduces a new trade-off between tiers, leading to cost reductions in one tier but increased costs in the other, which helps to reduce the overall procurement cost in the supply chain. A mixed integer linear programming model is developed and tested with a range of small to large-scale test problems from aerospace manufacturing. Our comparison to benchmark results shows that there is indeed a cost trade-off between two tiers, and that its reduction can be achieved using a holistic approach to reconfiguration. Costs are decreased when second tier fixed ordering costs and the number of machining options increase. Consolidation results in reduced inventory holding costs in all scenarios. Several secondary effects such as simplified supplier selection may also be observed. |
| spellingShingle | Chauhan, VK Alomari, M Arney, J Parlikad, AK Brintrup, A Exploitation of material consolidation trade-offs in multi-tier complex supply networks |
| title | Exploitation of material consolidation trade-offs in multi-tier complex supply networks |
| title_full | Exploitation of material consolidation trade-offs in multi-tier complex supply networks |
| title_fullStr | Exploitation of material consolidation trade-offs in multi-tier complex supply networks |
| title_full_unstemmed | Exploitation of material consolidation trade-offs in multi-tier complex supply networks |
| title_short | Exploitation of material consolidation trade-offs in multi-tier complex supply networks |
| title_sort | exploitation of material consolidation trade offs in multi tier complex supply networks |
| work_keys_str_mv | AT chauhanvk exploitationofmaterialconsolidationtradeoffsinmultitiercomplexsupplynetworks AT alomarim exploitationofmaterialconsolidationtradeoffsinmultitiercomplexsupplynetworks AT arneyj exploitationofmaterialconsolidationtradeoffsinmultitiercomplexsupplynetworks AT parlikadak exploitationofmaterialconsolidationtradeoffsinmultitiercomplexsupplynetworks AT brintrupa exploitationofmaterialconsolidationtradeoffsinmultitiercomplexsupplynetworks |