Capturing dynamics in integrated supply chain management

A major challenge for an enterprise to stay competitive in today's highly competitive market environment is to be able of capturing and handling the dynamics of its entire supply chain (SC). This work incorporates uncertainty and process dynamics into enterprise wide models which also contemplate cross-functional decisions. The SC integrated solution developed includes a design-planning and a financial formulations. A model predictive control (MPC) methodology is proposed that comprises a stochastic optimization approach. A scenario based multi-stage stochastic mixed integer linear programming (MILP) model is employed to address the problem. The novel control framework introduced constitutes a step-forward in closing the loop for the dynamic supply chain management (SCM) and a supporting platform for the Supervisory module handling the incidences that may arise, in the SC. The potential of the presented approach is highlighted through a case study, where the results of the deterministic MPC and the joint control framework are compared. It is emphasized the significance of merging uncertainty treatment and control strategies to improve the SC performance. (c) 2007 Elsevier Ltd. All rights reserved.