Publication Date
Authored by
Alessandro Scutari, Aviva Tova Kosansky
Topic(s) Covered:
  • Data Analytics
  • Network Design
  • Strategy

The sponsor company for this capstone has a complex logistics network due to the fact they use a service model for their products. Their products use advanced technology to service water, wastewater, oil, and gas pipelines across the world. This requires managing the movement of these products from their inventory holding locations to the customer site in both the forward and reverse directions, as well as for maintenance operations. The goal of this capstone is to assess a supply chain network and make recommendations for the sponsor company to minimize logistics costs while maintaining high service levels and high product utilization rates. We optimized the current network using the uncapacitated Facility Location Problem. This allowed us to identify the number of facilities required to serve all the North America projects and cluster the demand geographically. Based on historical data, we then used forecasting techniques to establish an inventory policy for the product families under analysis for every inventory holding location. The proposed optimized network could lead to a total mileage reduction of 20%, reducing cross-border shipments and streamlining operations.

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