Coordinated Supply Control and Demand Management

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Background. Supply chains are a vital part of the Canadian economy, and they consist of an array of industries such as production, distribution, transportation, international trade and retail. Matching supply and demand is challenging due to the scale, complexity and constantly changing nature of a supply chain. Supply chain decisions often require information visibility across functional areas and affect multiple stakeholders. However, supply-side and demand-side decisions are frequently made in silos. Goal and Objective. Our research goal is to improve the overall performance of supply chains. While we are interested in reducing cost on the supply side and increasing revenue on the demand side, we will focus on maximizing profit through the joint control of supply and demand and assessing the benefit of joint control. More specifically, (a) we will study the joint supply-demand control when there are multiple products from which customers choose based on factors such as preference, quality and price. (b) When supplies are subject to random yield, spoilage and perishability, we will study how such negative effects can be mitigated by levers in both supply and demand. Our findings can be applied to agriculture supply chains and energy markets. Furthermore, (c) we will examine how the principles of supply chain management can be applied to better control the workload and wait times in service settings. Importance. Since one-tenth of Canada’s GDP is tied to inventory, any improvement to supply chain efficiency can result in substantial savings. Service levels for both products and service can improve dramatically without increasing cost; thus contributing to the competitiveness of Canadian firms and organizations. Scientific Approach. We will use three aspects of analytics: (a) Descriptive analytics: We understand important tradeoffs in supply chain drivers and build models to study them. (b) Predictive analytics: Using models and available data, we forecast how a supply chain would perform. (c) Prescriptive analytics: Based on stochastic optimization methods, we generate insight and tools to aid supply chain decisions. Anticipated Outcome. We will disseminate our findings through publications, academic conferences and practitioner-oriented industry councils. Doctoral students will be trained as competent scholars in researching supply chains, and other students will champion supply chain process improvement in the private sector or the government (HQP account for a majority of the budget). Benefit to Canada and the Marketplace. Product and service providers will better manage their processes: resulting in higher profitability and competitiveness. End-customers will enjoy the product offerings and service experiences that fulfill their criteria and satisfy their needs. Government policy makers will gain insight into the impact of regulatory alternatives.