Optimization-based Operability Analysis of Process Supply Chains

Abstract

The North American forest products industry is primarily commodity-based and faces challenges. This has led to the proposal of a shift toward revenue diversification through the production of high-value specialty products along with the conventional commodity products. A key consideration for this new business strategy to remain competitive and sustainable is that the forest products supply chain designs must perform satisfactorily under the dynamic market conditions. The notion of supply chain operability attempts to characterize the ability of a supply chain to perform satisfactorily in the face of uncertainty. However, limited quantitative analysis is available in the current body of literature. In this work, the concepts originated within the context of process systems engineering are adapted to develop optimization-based frameworks in order to characterize supply chain operability measures, in particular, supply chain flexibility and dynamic responsiveness. Although motivated by the forest products industry, the practical mathematical formulations presented are widely applicable to general process supply chains in other industries. This thesis aims to extend the supply chain flexibility analysis formulation established by Mastragostino (2012) to include additional quantitative flexibility measures. The resulting framework provides a quantitative mapping to various types of flexibility frequently discussed in the operations research literature. Two case studies are included to illustrate the application of this framework for analyzing the flexibility of existing supply chain processes, as well as utilizing it in supply chain design. The work also builds on the analysis framework established by Mastragostino and Swartz (2014) to assess supply chain responsiveness, and to configure the framework in preparation for tackling design problems under uncertainty. Then a composite operability analysis framework is proposed to address both flexibility and responsiveness metrics simultaneously in forest products supply chain design and operation. A comprehensive case study based on a forest product company is performed and the trade-offs among flexibility, responsiveness and economics are examined.