COORDINATED CONTROL OF MANUFACTURING SUPPLY CHAINS USING MULTILEVEL TECHNIQUES

The problem of optimizing the operation of an autonomous manufacturing/supply chain is considered. The chain consists of an upper level manufacturer and a hierarchy of intermediate suppliers/subsuppliers that provide the required materials. Each subsystem involved in the chain incurs some costs that have to be handled effectively. This paper considers the case of ordering and holding costs. It is assumed that each level in the chain may add some delay in the materials' procurement due to the extra processing taking place or to the time required to supply the corresponding materials. Three possible scenaria are examined. In scenario I, the manufacturer optimizes his own costs and imposes the resulting policy to the (sub)suppliers without any question. In scenario II, all levels of the chain are assumed to cooperate in the sense that their common objective is to minimize the overall operational cost. Finally, in scenario III, each level is optimizing a local cost function in a decentralized way, which may be in conflict with that of the other levels. A partial cooperation is assumed, in the sense that each part minimizes its own costs, plus appropriately weighted deviations of its order profile from a set of calculated reference variables that depend upon the dynamics of the immediate downstream level. A complete numerical example illustrates the above cases.