Production and Logistics Systems Planning in Supply Chains

Production and Logistics Systems Planning in Supply Chains

A production and logistics system is an integrated system consisting of various entities that work together in order to acquire raw materials, convert these raw materials into specified final products, and deliver these final products to markets.

The production section of these systems includes the design and management of the entire manufacturing process. The logistics section determines how raw materials are sourced and transported from suppliers to plants, how products are retrieved and delivered from plants to distribution centers/warehouses to retailers, as well as how return commodities are transported back (reverse logistics). The typical production and logisics system consistst of:

  • suppliers of components and raw materials;
  • manufacturing plants
  • zero, one, or more distribution echelons with distribution centers/warehouses
  • customers
  • recycling centers for used products and returned packaging containers
  • transportation channels that link all of the above components
Over the last decades, competitive pressures have posed the challenge of simultaneously prioritizing the four dimensions of competition: flexibility, cost, quality, and timely delivery. In addition to these dimensions, other factors such as the speed with which products are designed, produced, and distributed, as well as the need for higher efficiency and lower operational costs, are forcing companies to continuously search for ways to improve their supply chain operations. Deterministic or stochastic optimization models and algorithms, decision support systems, and to computerized analysis tools are used to improve the performance of the production and logistics systems of companies in order to remain competitive under the threat of increasing competition.The research done in this area within Sabancı University primarily addresses the production and logistics systems planning problems using mathematical programming models, in addition to developing heuristics. Some of the studied problems include, but are not restricted to: the scheduling of jobs in a production facility, transportation problems, vehicle routing, production and distribution planning and the optimization of container terminal operations.