Supply Chain Optimization under Uncertainty

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Supply chains are networks of entities that include suppliers of raw material, production manufacturing units who convert the material into products, warehouses that store, and distribution centres that cover the flows of products from suppliers to retailers and customers. Modern industries strive to have the most optimized supply chain because it usually translates to a better performance for the company. Supply chain optimization implies optimization of three types of activities: strategic design, tactical planning and operational execution, which are distinguished by managerial level, time horizon and uncertainty in the decision environment. Strategic design decisions establish and modify the resources available to the enterprise, such as manufacturing plants, logistics networks and warehouses. Tactical planning decisions imply developing timetables for planned production, maintenance, transportation, workforce, sales and the inventory levels that will optimally match high-quality production to sales. Operational control involves the detailed execution of short-term schedules by all parts of the organization, in such a way as to achieve the profit and performance goals established by the plans. At each level, there are many kinds of uncertainties that create significant challenges for optimization. These uncertainties include machine failures, accidents, attacks, and fluctuations of demands, raw materials, costs and prices. Our research program is part of a continuing effort aimed at developing effective decision-support tools to tackle important optimization problems encountered at the strategic design, tactical planning and operational execution of supply chains. The proposed research program will focus on the following projects: At the strategic level - Design of failure-prone manufacturing networks used in high-volume production. - Design of robust distribution networks under random supply and demand. - Design of maintenance logistics networks. At the tactical level - Tactical planning in maintenance logistics networks. - Integrated planning of production, maintenance and quality. At the operational level - Reactive planning under uncertainties in demand, supply quantities, raw material costs, machine failures, and price fluctuations. Efforts will be made to ensure the transfer of the research program results to industry. Considering the socio-economic importance of supply chains and the challenging scientific and practical problems encountered when dealing with uncertainties, the impact of this new research program could prove to be extremely significant.