I recently presented to a group of supply chain managers in Buenos Aires, along with another educator from Spain and two practitioners from Argentina. The conference organizer closed out the conference with a question-and-answer period during which the speakers were assembled as a panel to answer questions from the audience...
Supply Chain Frontiers issue #37 The story of how PLAZA opened for business in 2005 on the outskirts of Zaragoza, Spain, and grew into Europe’s largest logistics park, is detailed in a Harvard Business Review case study written by Dr. Santiago Kraiselburd and Dr. Noel Watson from the Zaragoza Logistics...
This project incorporates demand variability in the creation of a long-term transportation planning process for Wal-Mart Stores Inc. Using a combination of stochastic metrics and simple heuristics, the analysis proposes a robust operations strategy that is easy to execute on a weekly basis, is capable of handling demand uncertainty over...
We develop models for XL Hybrids, a startup company that hybridizes aftermarket vehicles, to plan four aspects of their supply chain: production scheduling, capacity planning, inventory policy, and component distribution. In addition, we recommend strategies for capacity expansion and strategic sourcing for key components, while distilling supply chain strategies that...
Renewable feedstocks can be used to produce fuels such as ethanol and biodiesel, which are replacements for petroleum derived fuels. We show that switchgrass is not competitive in price compared with gasoline at current prices, and we identify challenges the biofuel industry must deal with to narrow the price gap...
Automobile manufacturers need to make sourcing decisions very early in the vehicle planning process. A cost/risk assessment that weighs costs, risks and variables in a single sourcing strategy decision model could ensure delivery of the lowest total landed cost. Author: Kristin M. Vincent Advisor: Charles H. Fine
The feasibility of developing a logistics hub in Panama was studied by analyzing the key characteristics of Singapore and Dubai’s successful development of logistics hubs. We then used these key characteristics to determine the short-term effects of a Panamanian logistics hub on the Latin American port system. Authors: Daniel Munoz...
This project develops a simulation model of the distribution network of a large oil and gas services company and evaluates two alternative delivery network configurations – pure hub-and-spoke and hub-and- spoke with postponement setups. The hub-and-spoke with postponement design is shown to be superior in terms of total logistics costs...
This project developed an optimization model as a decision tool, using a Mixed Integer Linear Programming (MILP) approach, to help an industrial conglomerate redesigning its warehouse networks. The redesign included warehouses consolidation of 3 of company’s business units and the changing of products flow patterns. The result showed that about...
The thesis focuses on three areas of the downstream order fulfillment cycle from the retail delivery company to the customer. The first is materials innovation, the analysis of suitable alternative materials. The second involves waste elimination, the reduction and reuse of packaging material. Lastly, we address implementation, strategies that affect...
This project focuses on the impacts of fuel price volatility and its distribution throughout the supply chain, with the goal of stabilization. Hedging and fuel surcharges are analyzed as tools for stability, with research including: a market benchmarking survey, fuel surcharge component sensitivity testing and a simulation of varying derivative...
This project developed a model to evaluate the cost effects of lane aggregation in long-haul, truckload trucking in the United States. The model provides simple guidelines for determining how shippers should bid out lanes to elicit the best rates from carriers. Authors: Julia Collins and Ryan Quinlan Advisor: Chris Caplice
Using a large-scale worldwide, online survey conducted by the MIT Global SCALE Initiative as a base, this thesis analyzed the relationship between attitudes towards Prevention vs. Response (the dependent variable) and demographics (the independent variables). The analysis shows that the demographic factors of country of origin, gender, primary field of...
Most supply chains today cuts across multiple countries, languages, income levels, and industries, meaning that there are differences in supply chain risk management behaviors or attitudes. Do demographic factors play a role supply chain risk management decisions? The data show that geography and firm size fundamentally drive risk management practices...
Evidence suggests that incorporating travel time data in route plan development produces improved solutions compared to standard, deterministic approaches. A holistic approach was used to evaluate the delivery process, determine why differences exist between route planning methods, examine the impact of drivers’ actions, and consider opportunities for further exploration. Authors...
This project developed a model that uses historical consumption data of Partners in Health’s (PIH) drugs and medical supplies to forecast demand over the next three years. This demand data is then used to compare PIH’s current annual order policy with ordering policies having more frequent reviews. Our model shows...
Companies engaged in sustainable supply chain management face the challenges of selecting sustainability initiatives, measuring those initiatives, and assessing their overall progress toward sustainability. Three hundred sustainability initiatives implemented by eight apparel companies were compiled to explore the metrics of individual initiatives and provide a system for assessing sustainability programs...
This project developed an assortment planning tool allowing a consumer goods manufacturer to assess its product mix from the perspective of cooperating retailers. Thanks to the tool, the manufacturer can rationalize its product portfolio in a way which increases utilization of its clients’ supply chains and improves their financial results...
Chiquita, a fresh produce distributor with a multi-echelon supply chain, wants to develop an optimal inventory policy that results in the lowest inventory costs, while maintaining 95% service levels at each echelon. We developed a simulation model to determine the optimal inventory policy. The model’s input parameters include inventory holding...
This project determined the effects of risk from supply chain disruptions using a space vehicle production process as the example, primarily through the use of a computer simulation model and various disruption scenarios. Output of the model was used to develop confidence percentiles for the complete duration times. Author: Bryan...
Why are some companies more effective within disaster relief supply chains than others? Our research explores and consolidates best practices applied by companies effectively during past disasters. We conclude with a framework of nine best practices and suggest how to apply it across a range of ten industries. Author: Karn...
Supply Chain Frontiers issue #37 Cross-docking, a method routinely used by retailers to improve the flow of goods, could save countless lives in developing countries by streamlining the supply of lifesaving drugs to health care clinics. The method is being tested in a number of districts in Zambia by a...
Supply Chain Frontiers issue #37 The future rarely moves in predictable, incremental ways. Often, seemingly small changes in technology, demographics, regulations, economics, or a myriad of other factors have dramatic and unintended consequences for how companies source, manufacture, distribute, and operate in general. The MIT Center for Transportation & Logistics...
Supply Chain Frontiers issue #37 Market leadership and more than 70 years in the business provide a solid foundation for success—but do not make an organization impervious to change. This is what cement and concrete manufacturer Argos realized about six years ago, when it had become too detached from its...
