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Supply chain and network design, management and optimization: From facility location to vehicle routing
Abstract
Supply chain (SC) and logistics management deal with "the design and management of productive systems as well as with the planning and control of daily business operations within a company or in transcorporate networks" [Hieber and Schönslebeh, 2002]. The activity of configuring and organizing a logistic distribution network significantly affect the performance of a complex company, especially when it operates worldwide, in presence of a large number of products and points of demand, and is supported by the availability of several production plants, distribution centers, retailers, up to the final customers. One of the most critical issue and challenge for logistics management is the development of effective tools to support the strategic, tactical and operational decisions of managers. In particular companies that can gather and act upon integrated supporting decisions models, methods and tools can gain great competitive advantages. This chapter presents a conceptual framework for the design, management, control and optimization of a logistic network from the location of facilities to the organization of trips and routes (known as the vehicle routing planning). Effective models and solving methods are also illustrated, from mixed integer linear programming (MILP) to cluster analysis (CA), passing through the development of ad-hoc heuristics algorithms.
... In a first stage, abstracts from the total number of papers were read to ensure pertinence of the study. In this stage, to obtain and include relevant documents to focus on, a list of inclusion and exclusion criteria was established: (1) search for papers, published in a peer-reviewed scientific journal in English, (2) papers from 2015 to 2018, (3) no reviews were included, (4) papers not related to the strategic decision-making level were excluded in accordance with the framework classification proposed by Manzini et al. (2011) (see Fig. 1), (5) papers dealing just with routing or allocation over already defined networks were excluded from the study, and (6) selected papers must contain an assessment of at least two out of three sustainable dimensions under study (i.e., economic, environmental, or social). Indeed, many papers mention some terms related to sustainability issues in their abstracts but do not present indicators to measure it. ...
... Issues and decisions in distribution network planning optimization(Manzini et al., 2011). ...
Increasing pressure from governments and stakeholders has motivated the study of sustainability assessment in the supply chain context at operational, tactical, and strategic levels. Several papers have been published during the last two decades, and the number is still rising. Although several authors present complex models that include environmental and social assessment, the applicability and usefulness of these works is often limited by lack of data availability and lack of consensus in what is to be measured on implementations of sustainable practices and strategies. This paper presents a systematic literature review of works addressing the supply chain network design (SCND) problem, in which at least two of the three dimensions of sustainability are assessed. This paper aims to identify indicators that are used when sustainability is evaluated in real applied cases. A total of 113 papers from 2015 to 2018 were selected, including documents studying forward, reverse, and closed loop supply chains (CLSC). Indicators in the economic, environmental, and social dimensions were classified according to an existing framework in the sustainable supply chain literature. The review finds a highlighted emphasis on environmental considerations; social criteria are still hardly studied. The study country origin analysis also shows an increasing concern for sustainable practices in developing economies, mainly in Asia. Finally, this paper presents a brief description of the areas where research opportunities exist, including sectors, measures, and methodologies to assess sustainability in the SCND problem.
... However, over the last few years, with the growing global concern about environmental and social impacts derived from supply chain operations, both practitioners and academics have seen the need to incorporate additional factors allowing a broader assessment of the supply chain in the three dimensions of sustainability. (Manzini et al., 2011) In fact, during the last decades, the integration of the triple-bottom-line (TBL) dimension in classical Operations Management problems has attracted an increasing number of researchers and practitioners, making sustainability one of the most active supply chain management topics. This fact is reflected by the Literature Review 13 growing number of original papers addressing this issue like in (Ansari & Kant, 2017;Gupta & Palsule-Desai, 2011;Rajeev et al., 2017;Seuring & Müller, 2008;Touboulic & Walker, 2015) and also, by the increasing number of review papers aiming to synthesize the progress in the area (Ansari & Kant, 2017;Carter & Washispack, 2018;Rajeev et al., 2017). ...
This work addresses the research problem of quantitative support for decision-making in sustainable supply chain network design (SSCND). We first identify the common key indicators utilized to assess sustainability in supply chain design applications. We propose both (i) a single-objective and (ii) a multi-objective modeling approaches to deal with environmental and social criteria to the design of a supply chain network from a company perspective. Considering a broader perspective of sustainability in supply chains, the unit of analysis is extended from a company perspective to consider a wide-industry perspective for the sector. We specifically consider the effects of policy application on encompassing the sector towards sustainable development and its impacts in the supply network structure.The purpose of this work is to propose an efficient assessment procedure for the joint assessment of economic, environmental, and social performance for the design or redesign of supply chain network. A mathematical formulation considering the evolution of the supply chain and the construction of capacities in the long term is presented. To this regard, we define sustainability objectives according to the current conditions of the sector and the country. We compare the supply chain structure changes over a time horizon following an ex-ante sustainability assessment approach. Moreover, sustainability key performance indicators are chosen considering current sustainability challenges of the sector. The performance of the model is tested with an application in the dairy industry in a developing-economy country. It illustrates the utility of the model to evaluate national mitigation and adaptation activities in the design of supply chain networks. The need of setting targets when measuring sustainability in the supply chain field is highlighted. Results offer meaningful decision support to policymakers in evaluating implementation of policies and actions, and in the definition of strategical paths towards sustainability.
... Manzini et al. (2008) define a conceptual framework for the development of a new approach for the modelling of the production and distribution system design, with the aim of introducing an integrated approach for the design and management of a supply chain. A model for SC and network design and optimisation, referring to the facility location and the vehicle routing problem is proposed by Manzini et al. (2011), in which some effective tools to support the strategic, tactical and operational decisions of managers are proposed. The performance evaluation of the SC is a further key topic in literature. ...
European Directive 2000/53 on end-of-life vehicles (ELVs) introduced new constraints, regulations and recommendations on the vehicle design, waste disposal and take-back policy. Automotive original equipment manufacturers (OEMs) are even more involved in the expected vehicle recovery network modifications. As a consequence, one of the most critical and challenging issues for reverse logistics (RL) management is the development of effective tools to support strategic, tactical and operational decisions to yield the maximum economic benefit in compliance with the reference regulations. In this paper, a mixed integer linear programming (MILP) model for ELV closed-loop network design is proposed. The network cost minimisation objective function, the integration of forward and reverse logistics and the inclusion of remanufacturing activities for vehicle module reuse represent the model key features. The proposed model is, further, applied on a realistic Italian case-study and the results of a sensitivity analysis are presented to identify the parameters most affecting the model outcomes.
... Manzini et al. (2008) define a conceptual framework for the development of a new approach for the modelling of the production and distribution system design, with the aim of introducing an integrated approach for the design and management of a supply chain. A model for SC and network design and optimisation, referring to the facility location and the vehicle routing problem is proposed by Manzini et al. (2011), in which some effective tools to support the strategic, tactical and operational decisions of managers are proposed. The performance evaluation of the SC is a further key topic in literature. ...
The ambition to attain sustainability and the continuous quest for production and logistics cost minimization
as competitive levers are leading to a new concept of "end-of-life" (EoL). Manufacturers know that products
can, and must be "reborn". The new challenge is to achieve this while yielding the maximum economic
benefit in compliance with international regulations. In this paper the case of End of Life Vehicles (ELV) is
considered, following the European Union Directive on ELVs that makes the Original Equipment
Manufacturers (OEM) responsible for free take-back and recovery of their vehicles. One of the most critical
and challenging issues for logistics management is the development of effective tools to support the strategic,
tactical and operational decisions of managers. In this work, an innovative multi-period optimization model
for design of an ELV reverse logistics network is proposed. Key features of the model are the integration of
forward and reverse logistics for long term strategic choices and specific operational aspects related to
reprocessing and reuse of individual components by the OEM. An extensive sensitivity analysis is conducted
in order to evaluate the economic impact of the reverse logistics network.
The vehicle routing path (VRP) is non-deterministic polynomial-time hard (NP-hard) and therefore difficult to solve. The fact that VRP is both of theoretical and practical interest (owing to its real-world applications), explains the amount of attention given to the VRP by researchers during past years. Research on the development of heuristics for the VRP has made considerable progress since the first algorithms were proposed in the early 1960s. Several families of heuristics have been proposed for the VRP. The purpose of this paper is to review some of the most important families of heuristics for the VRP. At the end, the survey presents the solution method used for a small-scale case study in a logistic company in Turkey.
This paper develops an optimal solution procedure for the multi-period online fulfillment assignment problem to determine how many and which of a retailer/e-tailer’s capacitated regional warehouse locations should be set up to handle online sales over a finite planning horizon. To reduce the number of candidate solutions in each period, dominance rules from the facility location literature are extended to handle the nonlinear holding and backorder cost implications of our problem. Computational results indicate that multi-period considerations can play a major role in determining the optimal set of online fulfillment locations. In 92% of our test problems, the multi-period solution incorporated fewer openings and closings than myopic single period solutions. To illustrate the use of the model under changing demands, the multi-period solution yielded different supply chain configurations than the myopic single period solution in over 37% of the periods.