Science, Global Supply Chains, and Operations Research

I was thrilled to see the cover of the recent Science magazine published by AAAS with a feature section on "Rethinking the global supply chain."

In this volume were several themed articles that I especially enjoyed, including "The information highway gets physical," in which ideas from the existing Internet are being promulgated to create a physical Internet for more effective logistics. Personally, and since we are part of a big NSF project to reenvision the existing Internet, I also see many synergies in the reverse direction through appropriate game theory models! In that nice article, written by Jeffrey Mervis, operations researcher Russ Meller was noted, and his co-authored book, "The Physical Internet: The Network of Logistics Networks." I sent Russ a congrats yesterday and he responded en route to the airport for a flight to Europe. I also enjoyed reading quotes from Kevin Gue, who gave a keynote recently at the Physical Internet conference in Quebec City  (and who is moving from Auburn U. to the U. of Louisville). I was already committed to being in Europe in May so I did not attend. The conference was hosted by Benoit Montreuil of Laval University in Quebec City, Canada.

Kevin J. Dooley of the W.P. Carey School of Business at Arizona State University also had a nice article, "The whole chain," in which he stated that Science is key to holistically managing sustainable supply chains, which I thoroughly agree with and which we have been emphasizing in many of our sustainable supply chain research articles with applications as varied as blood supply chains and even fast fashion!

In the volume there were also several additional articles on sustainable supply chains, and I found it interesting to see the lists of references and journals represented.

In particular, I very much enjoyed the article. "The science of sustainable supply chains," by Dara O'Rourke, who is at UC Berkeley. It was terrific to see cited therein our latest book, "Networks Against Time: Supply Chain Analytics for Perishable Products!"

 

And speaking of supply chains, today we heard the great news that our paper, Supply Chain Network Competition in Time-Sensitive Markets, Anna Nagurney, Min Yu, Jonas Floden, and Ladimer S. Nagurney, was accepted for publication in the journal, Transportation Research E! This paper was recently presented at the 18th European Conference on Mathematics for Industry, Taormina, Italy, June 9-13, 2014 and also at the Conference on Optimization, Control and Applications in the Information Age - in honor of the 60th Birthday of Professor Panos M. Pardalos, Chalkidiki, Greece, June 15-20, 2014.

You can read more about our paper in an earlier blogpost. 

The above presentation can be downloaded in its entirely here.

Supply Chain Network Competition in Time-Sensitive Markets

The production and delivery of products in a timely manner are essential not only to the satisfaction of consumer demands in many industries but also to a company's reputation.

During last Christmas season, we saw delays of numerous deliveries in the US and even in Sweden Christmas trees that were ordered online, in some cases, arrived past the holiday! Needless to say, there were very many disappointed (and even furious) individuals and families.

Also, there may exist major events or even features such as the top-grossing animated Disney movie, Frozen, that generate intense demand for associated products, including clothing, under immense time pressures. Some of  these are being driven by children's demands for various paraphernalia. As a consequence, and because of the time pressures, now some of the Frozen  clothing products that are produced in China, such as the garments of Princess Anna (I do like that name - thanks, Disney), are being shipped by air rather than by slow boats.

Markets in which consumers are willing to pay a higher price for lower delivery times are knows as  time-sensitive markets. Below are examples of a few products that fit into this important category of consumer goods.

Fresh produce, many medicines and vaccines, human blood, as well as certain fashion goods are all time-sensitive.

One of the major challenges of supply chains that are globally dispersed is the pressures put in the production and transportation of time-sensitive products. Brands and firms that can deliver the goods in good condition and in a timely manner can reap greater profitss.

In our latest research, Supply Chain Network Competition in Time-Sensitive Markets, Anna Nagurney, Min Yu, Jonas Floden, and Ladimer S. Nagurney,  we develop a game theory model for supply chain network competition in time-sensitive markets in which consumers respond to the average delivery time associated with the various firms' products. The firms' behavior is captured, along with the supply chain network topologies, with the governing equilibrium concept being that of Nash equilibrium. We derive the variational inequality formulation of the equilibrium conditions and provide illustrative examples. We also identify special cases for distinct applications. An algorithm is proposed, and the framework further illustrated through a case study in which we explore varying sensitivities to the average time delivery with interesting results.

We will be presenting this paper at the Mathematics for Industry conference in Taormina, Sicily, Italy, next week, upon the invitation of our colleague, and  Center Associate of the Virtual Center for Supernetworks, Professor Patrizia Daniele. Our paper will be presented in the session: Recent advances on equilibrium problems with applications to networks. One of my former PhD students, Professor Fuminori Toyasaki of York University in Toronto will also be presenting in this session.

We will also present the paper the week after at the festschrift conference in Greece in honor of our dear friend, Professor Panos M. Pardalos.

The full presentation can be downloaded from the Virtual Center for Supernetworks website here.

How appropriate that this collaboration across continents is now being disseminated at various venues.

Time-Sensitive Products, Cost, and Cargo Security

Freight as the Weakest Link in the Chain was the title of my blogpost the other day and I see that today's New York Times has an article: In Air Cargo Business, It's Speed vs. Screening, Creating a Wink Link in Security.

The article focuses on time-sensitive products, a topic that we have conducted a lot of research on from fashion supply chains (not a life or death application but clothing is a basic right) to blood supply chains (another fascinating topic of research that we are completing a study on).

The Times article has several quotes from Professor Yossi Sheffi, a colleague of mine in transportation and logistics at MIT, whose center I visited when I held an NSF Faculty Award for Women.

Sheffi says: “You cannot stop the flow of time-sensitive air freight,” and “It is simply not realistic.” Professor Sheffi is the author of the book, Urban Transportation Networks, which is one of the books that I recommend to my students in the Transportation & Logistics course that I am instructing with help from my two wonderful Teaching Assistants, Nathan Kollett and Min Yu, who are doctoral students in Management Science at the Isenberg School of Management. Sheffi is also the author of The Resilient Enterprise.

Freight is a critical link in our global supply chains that produce and distribute products around the world. Hence, their security and viability are essential to our connected enterprises.

The air cargo system is built into the way many companies do business. However, the way that cargo is packed also makes it difficult to inspect, from special packaging, such as shrink-wrapping, which may provide exemption from inspections.

We are in an era of Fragile Networks in which multicriteria decision-making needs to be the norm for decision-making coupled with the identification of vulnerabilities and potential synergies in business.