Reconfiguring the Supply Network Using Current Performance Data

Abstract

ABSTRACTReconfiguration of the supply chain network from time to time is essential for businesses to retain their competitive edge. This paper presents a methodology for reconfiguration of an existing supply chain network. The methodology is characterized by two decision levels. In the first level, the current network performance is evaluated and efficient practices are identified. In the next level, a model that incorporates efficient practices is developed to reconfigure the network. This integrated methodology allows for decision maker (DM) input throughout the process. The methodology has been implemented and tested in the reconfiguration of an outbound petroleum supply chain network for CountryMark Cooperative, Inc. In this case study, Data Envelopment Analysis (DEA) is used to analyze current operations and an integer programming (IP) model that incorporates efficiency metrics is developed for selection of distribution facilities and allocation of resources to the facilities. Use of this methodology can lead to improved operations and reduced operating expenses.