Integrated supply chain design and management under supply uncertainty

As supply uncertainty has become a major challenge for many industries, I believe there is a need for academicians and practitioners to take account of supply uncertainty in the design and management of supply chains. The two main factors of this uncertainty are supply timing (lead time) and supply quantity (yield). Thus, I propose a two-phase research program in which I will incorporate the lead time and yield uncertainty in supplier management and supply chain design. In Phase I, I will develop and analyze a multiple-supplier inventory model with both random lead time and random yield. I seek to answer the following questions: Under what conditions is supply diversification justified? What type of supply uncertainty (timing or quantity) does benefit more from diversification? How does supply uncertainty affect management of the suppliers? In Phase II, using the results of Phase I, I will investigate supply uncertainty impacts on the supply chain configuration and the supplier base. I propose an integrated supply chain design problem (a joint location-inventory problem) that determines the suppliers, the locations of distribution centers (DCs), the assignments of the DCs to the suppliers, the assignments of the retailers to the DCs, and the inventory policies used at the DCs in order to minimize the total costs of location, transportation, and inventory. I intend to address the following questions: What are the impacts of supply uncertainty on the optimal supplier selection, facility location, and demand-allocation decisions? How does the interaction between inventory pooling (centralization) and multiple sourcing (diversification) at the DCs affect the supply chain configuration? Can significant cost savings be realized in practice by incorporating supply uncertainty in the supply chain design phase? Acknowledging the increasing effects of supply uncertainty on supply chains, this research project will play a critical role in helping successful businesses minimize upstream uncertainty. Furthermore, it provides young investigators in the Industrial Engineering discipline with ample opportunities to learn new concepts and apply advanced analytical techniques to practical settings.