2. Objectives:
• Introduction of OR and SCM
• History
• Overview of Supply chain management
• SCM an application of OR
• OR tools and Application
• Advantages
• Disadvantages
• Conclusion
3. Introduction
Operation Research is the application of advanced analytical methods to help
make better Decision
Operations research arrives at optimal or near-optimal solutions to complex
decision-making problems.
Because practical applications, operations research has overlap with other
disciplines, notably Industrial Production and Operation management.
4. Supply chain management is the management of the flow of goods and
services and includes all processes that transform raw materials into final
products.
competitiveness of a company is strongly dependent on the performance of
supply chain (SC).
An example of these conflicts is the interrelation between the sale department
desiring to have higher inventory levels to fulfill demands and
the warehouse for which lower inventories are desired to reduce Holding costs
5. History
After the Word War 2,The Operation Research were more widely applied to the
Business , Industry, and Society
In the 17th century (1629-1695), mathematicians like Christiaan Huygens
and Blaise Pascal tried to solve problems involving complex decisions
with probability.
Modern Operation Research Originated in Bawdey Research Station United
Kingdom in 1937
The term "supply chain management" was first coined by Keith Oliver in 1982.
Seminar book Introduction to Supply Chain Management in 1999 by Robert B.
Handfield and Ernest L. Nichols Jr.
Supply-chain evolution is characterized by both increasing value added and
reducing costs through integration.
7. SCM is based on the idea that nearly every product that comes to market results
from the efforts of various organizations that make up a supply chain.
As we know SCM is the management of the Flow of Goods and Services also
includes all processes that transform raw materials into final products.
Why SCM is Important?
By managing the supply chain, companies are able to cut excess costs and deliver
products to the consumer faster.
SCM performance has a direct effect on the organization's overall performance.
8. SCM: application of OR
Supply chain solutions incorporate business analytics features that measure past
performance as well as Future also. This mathematical analysis is done by the
Operation Research Easily
Examples include using prescriptive analytics to minimize supply chain
disruption, determining optimal procurement strategies and identifying the
most cost-effective distribution structures.
For this type of problems, Operation Research is great platform to obtain the
optimal solutions.
Finally, supply chain management solutions need Advanced analytics for
measuring and managing performance.
In SCM, generally solution found by the Traveling salesman concept ,Queuing
theory, sequencing etc.
9. Analytical studies in the literature includes facility location problems, routing problems, inventory
management problems, supplier selection and pricing models which are conventional problems.
Location Routing Problem analyzes the strategical, tactical and operational levels of SCM, by
simultaneous optimization of routing and facility location variables.
Examples : bus scheduling problem,
delivery problem,
combining truck trip problem,
vehicle routing problem,
helicopter routing problem,
truck loading problem,
travelling salesman problem and variants,
convoy routing problem, railroad blocking problem,
air traffic flow management problem etc
10. OR tools and Applications
Tools:
Inventory control models
Replacement problems
Network Analysis
Sequencing
Dynamic programming
Assignment problems
11. Applications:
Areas of management where OR Technique Successfully used
Allocation and Distribution in Projects.
Production and Facilities .
Planning Programs Decisions.
Marketing.
Organization Behavior.
APLICATIONS
12. Advantages
Effective Decisions: Operations Research (OR) helps the managers to take better
and quicker decisions.
Better Coordination: Operations Research (OR) helps to coordinate all the
decisions of the organization.
Facilitates Control: Operations Research (OR) helps the manager to control his
subordinates.
Improves Productivity.
Easy to analyze in the supply Chain management
Linear Programing
Enhanced Productivity
14. Conclusion
In supply chain management it is important to choose the smallest path for
supply and it is one of best option. Operation Research is most efficient and
useful method to determine the solution for supply chain management. The
present study has suggested that any conventional mathematical problem can be
upgraded to an framework to address real-world problems while applying fewer
assumptions.
