Concurrent design of product modules structure and global supply chain configurations

'Supply chain management' deals with the coordination and integration of the interactions among its members. It encompasses integration of functional and geographical considerations as well as tactical and operational decisions. In this paper, the effect of product modules structure on the corresponding globally distributed supply chain configuration is studied. The currency exchange rates affect the overall allocation cost (production, inventory, and transportation). An integer linear decision support model is developed to determine the optimal location of global supply chain nodes, by simultaneously considering the currency exchange rate at various sites and the optimal modular product structure to be used in order to minimise the total cost. An automobile wiper system was used to illustrate the use of the model and the effect of including the currency exchange rate, varying the product modular structure and employing postponement strategies in a global supply chain configuration. The application of this approach is also useful in managing the challenges arising from prevailing trade barriers, financial systems in different regions as well as protecting intellectual property.