(494f) Topological Paradigms for Supply Network Optimization

A supply chain is a network of suppliers, manufacturing plants, warehouses, and distribution channels organized to acquire, convert and distribute materials. An efficient design of the supply network is crucial for the financial success of a company [1]. Several attempts have been made in the past to design an optimal supply network structure by using conventional supply chain management techniques. However, recent progress in the area of complex systems provides us another framework for modeling the supply network as a complex system [2], for which the application of complex network analysis methods can provide valuable insight.

In this work, we pursue this approach and present a topological evolution mechanism that represents the change in the structure of the supply network before and after the application of the stochastic optimization algorithm of Santoso and coworkers [3]. The resulting mechanism is applied on some supply networks [4] and is found to give comparable results to that of the stochastic optimization approach by revealing fundamental topological paradigms in supply networks. The development of the topological paradigms provides a novel basis for optimization. In addition, robustness analysis on the supply network when the same is subjected to disturbances may be performed [5] with better understanding. The development of the relationships between the components of the supply network can also be analyzed from a different perspective. The methods developed may be applied in the analysis and modeling of chemical processes [6] and transportation networks.

References

1. Geunes, J and. Pardalos, PM (2003) Network Optimization in Supply Chain Management and Financial Engineering: An Annotated Bibliography Networks 42 2 66–84

2. Surana A, Kumara S, Greaves M and Raghavan UN (2005) Supply-chain networks: a complex adaptive systems perspective International Journal of Production Research 43 20 4235–4265

3. Santoso, T, Ahmed, S, Goetschalckx, M and Shapiro, A (2005), A stochastic programming approach for supply chain network design under uncertainty, European Journal of Operational Research 167 96–115

4. Serrano MA and Boguna M (2003) Topology of the world trade web Physical Review E 68, 015101(1-4)

5. Thadakamalla, H., Raghavan, U., Kumara S. and Albert, R. (2004) Survivability of Multiagent-Based Supply Networks: A Topological Perspective IEEE Intelligent Systems 19, 24 – 31

6. Mangold, M, Motz, S and Gilles, ED (2002), A network theory for the structured modelling of chemical processes Chemical Engineering Science 57 19 4099-4116