Using strategic supply chain network design, companies can achieve dramatic savings from their supply chains. Now, experts at IBM and Northwestern University have brought together both the rigorous principles and the practical applications you need to master. You’ll learn how to use supply chain network design to select the right number, location, territory, and size of warehouses, plants, and production lines; and optimize the flow of all products through your supply chain even if extends around the globe. The authors present better ways to decide what to manufacture internally, where to make these products, which products to outsource, and which suppliers to use. They guide you in more effectively managing tradeoffs such as cost vs. service level, improving operational decision-making by integrating analytics throughout supply chain management; and re-optimizing regularly for even greater savings. Supply Chain Network Design combines best practices, the latest methods in optimization and analytics, and cutting-edge case studies: everything you need to maximize the value of supply chain network design. For all supply chain executives, managers, strategists, and analysts; and for all students, instructors, and researchers in advanced supply chain management and/or logistics courses.
“This book takes a very technical subject and makes it possible for managers and students alike to understand all aspects of network design. The practical approach used in discussing topics throughout the book provides a clear and excellent framework for those seeking to learn more about the topic.”
—Dr. Mary C. Holcomb, Department of Marketing and Supply Chain Management, University of Tennessee
“Supply chain management (SCM) is a rapidly growing area of study—and network design is one of the fastest growing areas within SCM. I have been a long-time practitioner of network modeling, as a manager in business and as a consultant, and I have covered the topic in university lectures. I still learned a great deal about a subject I thought I knew thoroughly!”
—Bill Nickle, Principal, Nickle Consulting
“…the authors draw on their extensive expertise as practitioners to provide valuable insights into how to successfully execute a network design study.”
—Dr. Mike Hewitt, Kate Gleason College of Engineering, Rochester Institute of Technology
“Supply Chain Network Design will help students, academics, and practitioners alike understand the importance of successfully designing and optimizing a global supply chain network, while also explaining in easy-to-understand steps how to make it happen.”
—John A. Caltagirone, Quinlan School of Business, Loyola University
This book provides a complete foundation for building tomorrow’s most complex global supply chain models and using them to reduce costs and support business strategy. Drawing on their experience building and optimizing hundreds of supply chains, the authors thoroughly introduce each key concept and its modern scientific foundations and demonstrate its use through realistic case studies.
The authors offer specific solutions for a wide range of common challenges, including efficiently expanding a warehouse/plant network, managing the subtle interactions between capacity and service levels, and leveraging differences in cost and mode between inbound and outbound transportation. They also guide you in nuts-and-bolts planning and data collection and answering real-world questions such as: How do you build an effective supply chain modeling team? How do you quantify capacity? How accurate does your data need to be? How do you debug models and avoid common mistakes?
Using their techniques, many supply chain practitioners have reduced their costs by 5-15%—translating into tens of millions of dollars of savings. You can achieve comparable results—and this book is the place to start.
Use leading-edge network design techniques to:
• Select the right number, location, and size of warehouses, plants, and production lines
• Specify the right territories for each facility
• Optimize flow of all products through the supply chain
• Decide what to manufacture internally, where to make these products, which products to outsource, and which suppliers to use
• Manage crucial tradeoffs such as cost versus service level
• Integrate analytics more effectively throughout supply chain management
• Optimize regularly for even greater savings
Includes case studies and exercises that can be used with commercially available software.
Michael Watson is currently the world-wide leader for the IBM ILOG Supply Chain Products. These products include the network design product, LogicNet Plus XE. He has been involved with this product since 1998 when the product was owned and produced by LogicTools and then sold to ILOG in 2007 prior to being acquired by IBM. During this time, he has worked on many network design projects, helped other firms develop network design skills, and helped shape the direction of the group and product. He is an adjunct professor at Northwestern University in the McCormick School of Engineering, teaching in the Masters in Engineering Management (MEM) program. He holds an M.S. and Ph.D. from Northwestern University in Industrial Engineering and Management Sciences.
Sara Lewis is currently a world-wide technical leader for the IBM ILOG Supply Chain Products. She has run many full-scale network design studies for companies around the world, she has conducted hundreds of training sessions for many different types of clients, leads a popular network design virtual users group, and helps create educational material for network design. She has been involved with this group since 2006 when the network design tool was owned and produced by LogicTools. Prior to LogicTools, she held various supply chain roles at DuPont. She holds a Bachelor’s degree in Business Logistics and Management Information Systems from Penn State University and is a fre- quent guest lecturer on the topic of network design at several U.S. universities.
Peter Cacioppi is the lead scientist for IBM’s network design product, LogicNet Plus XE. He also holds the lead scientist role for IBM''s inventory optimization solution. He first began developing network design engines in 1996 as employee number one for LogicTools, a supply chain planning company that was sold to ILOG in 2007 prior to being acquired by IBM. His responsibilities include translating business design issues into formal mathematical problems. His scientific contributions have ranged from developing a targeted network design computational engine to designing both the GUI and the engine for network design multi-objective analysis. He holds an M.S. in Computer Science (with a thesis in Operations Research) from the University of Chicago, and a BA in Computational Physics from Dartmouth College.
Jay Jayaraman currently manages the ILOG Supply Chain and Optimization consulting services team within IBM. This team solves clients’ most challenging supply chain and optimization business problems. He brings extensive hands-on expertise in supply chain network design and inventory optimization, with projects ranging from large scale, global supply chain network design strategy to implementing production planning and inventory optimization projects at the tactical level. He has successfully led and managed consulting projects for clients around the world and in many different industries such as chemicals, consumer packaged goods, retail, transportation, pharmaceutical, and many others. Prior to joining LogicTools (later acquired by ILOG and then IBM), he worked for Kuehne & Nagel, helping run network design projects and implement the results. He holds an M.S. in Industrial Engineering from the University of Florida, and a Bachelor’s degree in Industrial Engineering from Anna University, India.