Balancing product flow and synchronizing transportation

Traditionally, production and transportation planning processes are managed separately in organizations. In such arrangements, order processing, load planning, and transportation scheduling are often done sequentially, which can be time consuming. Establishing a proactive steady flow of products between two nodes of a supply chain can bypass this order-plan-ship process. A steady flow of products can reduce transportation costs, increase cross-dock productivity, and reduce bullwhip effect upstream in the supply chain. This thesis develops an analytical framework to calculate this steady flow. The determination of eligible SKUs in this approach is performed by analyzing each SKU's historical and forecasted demand. The level of flow of each SKU is found using optimization with the objective of maximizing total savings. The methodology was tested on a plant-to-warehouse lane of a fast moving consumer goods company. The relationship between demand characteristics and optimal steady flow was studied. It was found that as the coefficient of variation decreases, the optimum steady flow moves closer to the mean of the non-zero demand and selected forecast over the model horizon. The methodology developed in the research, with its potential to reduce transportation cost and improve warehouse productivity, also presents the opportunity for new and innovative contract types with transportation providers.

Department dc:contributor.department

Massachusetts Institute of Technology. Supply Chain Management Program.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2017

Authors dc:creator

• Andleigh, Priya
• Bullock, Jeffrey Scott

Advisor dc:contributor.advisor

• Ahmad Hemmati and Chris Caplice.

• Supply Chain Management Program.

Statement dc:rights

• MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/112877

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/112877