9:10am-10:00am
Aligning Supply Chain Structure with Corporate Strategy
Dennis Arnow, Director, Worldwide Demand Planning, Logitech, Inc.
Some products are brand-leaders; some fast-followers; and some lowest-cost-offerings. Should these products all have the same service level? The same supply chain? How do we decide? How can we connect supply chain metrics to the financial metrics of each of these products and to the company overall? Arnow and his colleagues analyzed 14 different supply chains and compared the resulting different financial metrics. One was lowest-cost, while another was highest margin. Highest profit, highest ROIC, and lowest inventory investment were all found in different supply chains. The team then educated key decision-makers as to the overall methodology and gave real examples of how globally optimizing the overall supply chain would require local sub-optimizations. Perhaps because everyone’s bonus has a large component that is tied to corporate profitability, there was executive alignment and support.
10:30am-11:20am
When Disaster Strikes: Lessons from Logistics at Home Depot and Waffle House
Özlem Ergun, Assistant Professor, School of Industrial & Systems Engineering, Georgia Institute of Technology
The last few years have seen an increase in major natural disasters. Unfortunately these catastrophes are not anomalies, but rather are a pattern of increased volatility often attributed to changing weather patterns and human occupation of hazardous locations. Disaster relief aid is typically provided on an urgent basis through governments and global aid agencies, and private companies have also been active. Ergun will present case studies of big box retail (Home Depot, the world’s largest home improvement retailer) and food services (Waffle House, an early responder after hurricanes for the past decade) companies and how they have planned and responded to disasters. She will:
• Describe how these firms organize their supply chain planning and response activities prior to and during the hurricane season,
• Show how the response has changed over the last 10 years,
• Outline activities within functional areas such as purchasing and inventory, logistics, and human resources.
11:30am-12:20pm
Optimal Decisions in the Face of Uncertainty: Using Robust, Stochastic, and Simulation Optimization
Daniel H. Fylstra, President and CEO, Frontline Systems Inc.
Nearly every business decision must be made with imperfect information and uncertainty about the future. But conventional optimization assumes the data is perfect, yielding solutions that may be unusable when reality turns out differently. Stochastic optimization has been challenging to use, but this is changing rapidly. This tutorial will explain modeling fundamentals and demonstrates how robust, stochastic, and simulation optimization can yield better decisions, including:
• How optimization magnifies the effect of noise and uncertainty in model parameters;
• What it means to satisfy constraints and optimize an objective in the presence of uncertainty;
• Ways to specify uncertainty in an optimization model, using Monte Carlo simulation;
• How to use recourse decisions in models where uncertainty will be resolved in the future;
• Advantages, limitations, and scalability of robust optimization, stochastic programming, and simulation optimization;
• Available software, and key questions to determine which method is suitable for your problem.
3:10pm-4:00pm
Supply Chain Network Design in Retailing Companies
Jeremy F. Shapiro, Professor of Operations Research and Management Emeritus, Massachusetts Institute of Technology
Retailing companies are increasingly applying analytics to data-driven decision problems including strategic studies of their supply chain networks using optimization models. For companies facing expansion of their retail stores, the motivation is coordinated expansion of the network replenishing these stores. However, retailing companies with a steady or declining customer base have also applied network optimization models to identify cost savings and improvements in customer service. In this session, Shapiro will provide:
• An overview of optimization models for supply chain network design in retailing companies;
• Case study of expansion planning in a North American company--locating distribution centers and selecting their missions over a multiple year planning horizon;
• Case study of expansion planning in a Mexican company--integrating inventory deployment with network design decisions.
• Lessons learned and future modeling developments.
4:10pm-5:00pm
Supporting Rapid Growth: Supply Chain Planning at SanDisk
Robert Benson, Managing Principal and Co-Founder, Spinnaker
SanDisk, founded in 1988, is the world’s largest supplier of flash memory data storage products, with 2007 revenues of approximately US $3.9 billion. Despite SanDisk’s rapid growth and sophisticated product offering, the company’s global planning processes were mired in largely manual processes that were time-consuming, impossible to scale, and lacking in analytics and consistency. This presentation will explore business process, organizational, and technological change within supply chain planning to support SanDisk’s rapid growth while remaining responsive to the rapidly changing dynamics of their industry. Growth challenges that will be discussed include:
• Five year annual growth rate exceeding 54%,
• Expansion to over 200K storefronts worldwide,
• Two significant corporate acquisitions,
• Organizational transformation to a multi-business unit structure,
• VMI programs supporting some of the largest handset manufacturers,
• Ramp to volume of SanDisk’s first wholly owned and operated manufacturing site.
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