Supply Chain Network Design Using Grid-Based Service Level Metrics
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Solution Overview
Problem
Existing supply chain network design techniques face challenges such as high data requirements, inefficiency, and instability due to changes in the customer base, and often necessitate inputting all possible positions of network resources, which can lead to suboptimal solutions and increased costs.
Innovation Solution
A strategic supply chain network design algorithm that uses a Greenfield approach, employing a satisficing technique to position supply chain network resources based on a service level agreement metric, generating a grid over a geographical region and iteratively placing resources at the center of cells with the highest metric values until a desired service level agreement threshold is met, while considering feasibility and adjusting positions for optimal cost-effectiveness.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If existing supply chain network design techniques are used, then comprehensive coverage can be achieved, but the design becomes inefficient and unstable due to high data requirements and changes in customer base
Solution Approach 1:
The geographical region is divided into a grid of cells, where each cell is independently evaluated based on service level agreement metrics. This segmentation allows the system to process large geographical areas in manageable units, improving computational efficiency while maintaining design stability through systematic evaluation of each cell's service requirements
Solution Approach 2:
The system changes the approach from using comprehensive customer base data to using service level agreement metrics as the primary parameter for resource positioning. This parameter transformation reduces data requirements and improves design efficiency while maintaining reliability through the standardized metric evaluation framework
2Measurement precision
If all possible positions of network resources are input, then comprehensive evaluation can be performed, but the solution becomes suboptimal and costs increase
Solution Approach 1:
The system extracts only the essential information needed for resource positioning by using service level agreement metrics instead of requiring all possible position data. This extraction approach maintains measurement precision by focusing on the most relevant parameters while significantly reducing system complexity
Solution Approach 2:
Instead of starting with all possible resource positions and evaluating them, the system inverts the approach by starting with service level agreement metrics and deriving optimal positions from there. This inversion improves positioning accuracy while reducing the complexity of evaluating every possible location
3Area of stationary object
If too many entities are placed close to each other, then coverage is improved, but resource utilization decreases and costs increase
Solution Approach 1:
The system applies local quality by evaluating service level agreement metrics for each cell individually, allowing resource placement decisions to be optimized for specific local conditions rather than applying uniform placement rules. This ensures efficient resource utilization while maintaining appropriate geographical coverage
Solution Approach 2:
The system merges the evaluation of multiple cells and their service level agreement metrics to determine optimal resource placement. By combining information from adjacent cells and evaluating their collective service requirements, the system achieves comprehensive coverage while avoiding redundant resource placement that would waste resources
Data Source
AI summary
A system is provided that designs a supply chain network. The system identifies a service level agreement metric definition. The system further generates a grid including cells, where the grid is located over a representation of a geographical region. The system further computes a service level agreement metric for each cell of the grid using the service level agreement metric definition. The system further selects cells that have the largest service level agreement metrics and that have not been previously selected. The system further positions a supply chain network resource at a center of the selected cells. The system further computes a service level agreement based on the service level agreement metric of the selected cells.