We’ve now posted all the CPLEX model and accompanying Excel and Access files to go along with the free e-book, A Deep Dive into Strategic Network Design Programming (for the files, scroll to the bottom of this book’s page).
This book is a compliment to the book, Supply Chain Network Design. It is a great way for supply chain people to learn about optimization (which is a good skill to have). And, for people who just want to learn about optimization, this book gives you a real problem to solve and allows you to explore issues that will come up in many different industries.
The June 2013 issue of Inbound Logistics had an article on the importance of the “entrepreneurial spirit” in site selection.
The article is mostly about the large number of large companies in NW Arkansas (near Walmart) and of innovation at the port of Cleveland.
But, the start of the article reminds us that network design is usually about one or two primary factors and that different industries make different trade-offs:
[primary factors include:] labor cost and availability, proximity to market, transportation accessibility, utility rates, and business tax incentives. Different industries prioritize one criterion over another. Utility rates trump labor for more data-intensive purposes; heavy commodity sourcing may favor rail access over road.
But, the article also reminds us that issues like “entrepreneurial spirit” can be just as important. This is a nice reminder that network design is a business decision. There are many factors that can be quantified, but other issues, which may be just as important need to also be considered.
A recent article in the June 2014 issues of Inbound Logistics by Michelle Comerford of Biggins Lacy and Shaper & Co wrote on 5 issues to consider when locating facilities.
The article is a nice reminder of some familiar themes in site location: fuel costs (and the truck vs rail trade-off), proximity to customer base (fast response), and sustainability (taking miles out of the system).
The article also reminds us of some hard-to-quantify business issues– driver and equipment shortages.
Finally, there is a point on “new product development” talking about possible moves to regional manufacturing strategies.
The book discusses the importance of the optimized baseline model. But, there are nice ways to expand on this idea.
My recent article for Supply Chain Digest goes into an extension of this idea– using the optimized baseline model to show the you the best you can possibly do. This can then be used to determine what you should work on.
We recently recently released a free e-book on the optimization behind network design.
The book is great for teaching optimization. (I use it at Northwestern in my classes.)
It is also good if you just want to learn more about optimization and the CPLEX modeling language.
At CSCMP’s annual conference in Denver, CSCMP and Supply Chain Digest put together a video timeline of the history of supply chain management. (The video starts around the 4:00 minute mark of this telecast).
The timeline includes major supply chain management innovations or key milestones. Some of these include the first use of bar codes, the first MRP install, Toyota teaching its suppliers its Lean system, and the founding of FedEx and Walmart.
I was pleased to see that network design software made the list. In 1972, “Dr. Arthur Geoffrion and Dr. Glenn Graves (UCLA) developed the first computerized network optimization tool…”
The March 2013 IFORS Newsletter had a one page book review (see page 7). Here is the last paragraph:
Supply Chain Network Design is an excellent book that would be of value not only to all supply chain executives, managers, strategists, and analysts and researchers but also to students and instructors of advanced supply chain management and/or logistics courses. It is without any hesitation that this reviewer highly recommends this book for the OR practitioner!
A theme we keep going back to is that you should visualize your data with a map. (You can see some examples, here, here, here, and here). One important aspect of this is that you should see a different amount of data as you zoom in on the map.
The following example shows the demand by three different types of products at the state level. The second example shows the same data, but reported by census tract. So, when you are analyzing a small geographic area, you are presented with much more detailed information.
Today’s Wall Street Journal featured an article on the growing popularity of supply chain management in MBA and undergraduate programs. Here is the opening of the article:
Call it a problem of supply and demand.
With global operations becoming more complex, companies in manufacturing, retail and technology—and the consulting firms that service them—are scrambling to hire people with supply-chain expertise. But these experts are hard to come by.
Sensing growing demand, more than a half-dozen universities have recently introduced undergraduate majors, M.B.A. concentrations and even entire degree programs dedicated to procurement, inventory management and global supply-chain strategy.
This again shows the continued importance of network design. Bringing network design to the classroom can enhance the student’s learning. I have had good success using IBM’s LogicNet Plus in the classroom at Northwestern. And, the students seem to get a lot out of using a commercial tool. If you are a professor teaching this topic, we have a lot of material to help get you started. And, drop me a note if you would be interested in a more in-depth discussion.
Back in 1854, John Snow plotted cholera on a map to help prove that the outbreak could be traced back to a water pump. Fast forward to 2011 in Lahore, Pakistan, and the same idea is being used to prevent the spread of the mosquito borne dengue fever. The health team is allowing a smartphone app to record the presence of infected mosquito larvae, plotting this on a map, and then using this to help determine when to best spray. It is a clever update of John Snow’s idea and shows the power in geographical visualization.
For more information on this application, see the recent article in The Economist, Technology Review (which is where the map is from), or IRIN.
This type of visualization is also important in network design and important to business, in general, as Justin Holman, CEO of TerraSeer, points out.