Project scheduling in optimizing integrated supply chain operations

A Supply Chain (SC) requires undertaking considerable number of activities covering the flow of information and goods among multiple production and distribution cells over several tiers. The successful implementation of a SC hinges on the optimum integration and synchronization of these activities.In this paper, we formulate an integrated SC as a project network (PN) with activities covering: sending and receiving orders, processing these orders as well as sending and receiving of shipments and their precedence. This PN is also modeled as a Mixed Integer Program (MIP) that captures various trade-offs including stationary and transient inventory holding costs, crashing cost of the processing activities, shipping cost, and penalty for late delivery of customer orders. The SC activities are synchronized using the MIP to ensure proper coordination among all the SC cells. The solution provides the optimal: cycle time(s), shipping modes, processing times, and the due dates for all SC cells at minimum cost.The computational work for optimizing SCs of an illustrative example as wells as an applied case for the production and distribution of automotive batteries demonstrated that the proposed approach is of merit in efficiently optimizing integrated SCs.

► Integrates the production and distribution chains into one supply chain (ISC). ► Represents the ISC as a project network to synchronize five types of activities. ► An efficient MIP model for this project network was formulated and optimized. ► Developed bounding procedures to efficiently optimize large size ISCs. ► The MIP minimizes shipping, inventory holding and processing costs and penalty.