Track: Supply Chain
Supply Chain Synchronization for Assembly Systems under Long and Highly Variable Supplier Lead Times
Monday, April 12, 3:35-4:15pm EDT
The COVID-19 pandemic has revealed and exposed supply chain vulnerabilities in every industry. Particularly, OEMs sourcing components from around the world experience not only shifts in demand but also long and highly variable supply lead times. Without successful supply chain synchronization, this results in an assembly process for which (i) on-time customer delivery performance of the final product is chronically low and hard to predict, and (ii) high quantities of inventory accumulate as late deliveries delay final assembly. We discuss tools and strategies that can help to orchestrate variable supplier lead times for assembly systems. We discuss an industrial case study of an OEM in the aerospace industry for which the resulting supply chain synchronization leads to a win-win situation: It significantly improves delivery performance, while drastically reducing component inventories. Our industrial case study shows that a simple strategy using risk-averse safety lead times is close to optimal and fairly robust to changes in the underlying behavior on the supply side.