The application of filter theory to the study of supply chain dynamics

Abstract

Recently, there has been a rebirth of interest in supply chain demand amplification, a trend accelerated by the availability of a wide range of simulation packages. However, although this approach provides some guidance on design improvements possible in a given situation, it rarely offers insight for the future. In the present paper the use of simple filter theory is proposed to help bridge this gap. The example chosen to illustrate the approach is a three-echelon system in which there are factory, distributor, and retailer activities. The results vividly confirm an optimal design previously obtained via a multi-attribute utility technique (MAUT) expert system. However, the knowledge gained via filter theory should improve yet further the effectiveness of the expert system. This is because the sequential steps to be followed when varying the echelon dynamics as part of the search procedure can be greatly improved. The paper concludes by showing how simulation results might be used to confirm the supply chain dynamic design which will minimize stockholdings in the presence of demand fluctuations. However, it should be noted that in common with the successful application of systems dynamics techniques in production-distribution systems generally, the solutions are most applicable to the medium-term operations horizon. The latter term may need re-definition for use in ‘lean’ supply chains. Our intuitive reaction is that a scientific definition may well turn out to be a multiple of the largest remaining process lead-time in the slimmed down supply chain rather than being the customary arbitrary choice of, for instance, a 12-month period.

Keywords:

• material flow
• demand amplification
• supply chains
• system dynamics

Additional information

Notes on contributors

D. R. TOWILL

DENIS Towill is Lucas Professor of Manufacturing Systems Engineering and Head of the School of Electrical, Electronic and Systems Engineering at the University of Wales College of Cardiff. His particular teaching and research interests are in the fields of systems modelling and design, computer-aided control systems design, health monitoring and fault diagnosis. His published papers have been distinguished on ten occasions via learned society awards for outstanding contributions to knowledge. He holds the degree of DSc from the University of Birmingham and has been elected a distinguished overseas Scientist member of Eta Kapa Nu. In 1988 he was elected a Fellow of the Royal Academy of Engineering for his personal achievements of exceptional merit and distinction in the field of engineering.

A. DEL VECCHIO

ANTONIO DEL VECCHIO received his Master Degree in Systems Engineering in 1987 and is currently completing a PhD thesis on knowledge-based design of multi-echelon production-distribution systems. His interests include industrial supply chain planning and logistics. During his research he was seconded to a multi-national automotive manufacturer where he was responsible for providing computer modelling support and contributed towards the development of an integrated supply channel strategy. At present he is working for Nestle as a project leader involved in productivity studies, material control and the development of planning systems.