An important aspect of supply chains is the flow of materials from the point of origin to the point of consumption. The recent emphasis on productivity gains and customer satisfaction has led to rapidly evolving business environments characterized by time-compressed supply chains. It has also highlighted the importance of designing or redesigning the production and distribution networks. In order to meet customer requirements in the most efficient and cost-effective way, a number of issues have to be addressed, such as transportation modes, production technologies, in-process inventories, capacities, etc. We apply advanced optimization tools to determine the optimal allocation of resources and flow of materials in order to meet customer requirements at minimum costs.
In a study for the pharmaceutical industry, we integrated the production distribution network with a risk analysis in order to address new regulatory changes in the industry (see also Risk analysis). The optimization model was adjusted to accommodate penalties for low quality and non-compliance and examined various remediation options by restructuring its supply chain assets. The goal was to determine the optimal sequence of remediation actions a company needed to take in order to minimize its exposure to business risk while maximizing profit.
In today's increasingly complex business environment, we frequently encounter uncertainty with regard to input parameters and robustness of solutions. We have an on-going research program for developing methodologies to address these problems.