Theory and Practice of Supply Chain Synchronization

In this dissertation, we develop strategies to synchronize component procurement in assemble-to-order (ATO) production and overhaul operations. We focus on the high-tech and mass customization industries which are not only considered to be very important to create or keep U.S. manufacturing jobs, but also suffer most from component inventory burden. In the second chapter, we address the deterministic joint replenishment inventory problem with batch size constraints (JRPB). We characterize system regeneration points, derive a closed-form expression of the average product inventory, and formulate the problem of finding the optimal joint reorder interval to minimize inventory and ordering costs per unit of time. Thereafter, we discuss exact solution approaches and the case of variable reorder intervals. Computational examples demonstrate the power of our methodology. In the third chapter, we incorporate stochastic demand to the JRPB. We propose a joint part replenishment policy that balances inventory and ordering costs while providing a desired service level. A case study and guided computational experiments show the magnitudes of savings that are possible using our methodology. In the fourth chapter, we show how lack of synchronization in assembly systems with long and highly variable component supply lead times can rapidly deteriorate system performance. We develop a full synchronization strategy through time buffering of component orders, which not only guarantees meeting planned production dates but also drastically reduces inventory holding costs. A case study has been carried out to prove the practical relevance, assess potential risks, and evaluate phased implementation policies. The fifth chapter explores the use of condition information from a large number of distributed working units in the field to improve the management of the inventory of spare parts required to maintain those units. Synchronization is again paramount here since spare part inventory needs to adapt to the condition of the engine fleet. All needed parts must be available to complete the overhaul of a unit. We develop a complex simulation environment to assess the performance of different inventory policies and the value of health monitoring. The sixth chapter concludes this dissertation and outlines future research plans as well as opportunities