Supply chain network redesign problem for major beverage organization in ASEAN region

• Published in: Annals of operations research Vol. 324; no. 1-2; pp. 1067 - 1098
• Main Authors: Panchal, Gajanan B., Mirzahosseinian, Hassan, Tiwari, Sunil, Kumar, Ajay, Mangla, Sachin Kumar
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.05.2023; Springer; Springer Nature B.V
• Subjects: Alliances; Analysis; Beverages; Business administration; Business and Management; Combinatorics; Decision making; Economics and Finance; Free flow; Humanities and Social Sciences; Integer programming; International economic integration; Linear programming; Logistics; Mathematical optimization; Mixed integer; Network formation; Operations research; Operations Research/Decision Theory; Optimization; Original Research; Redesign; Regional development; Supply chains; Theory of Computation; Warehouses; Pacific Rim; Economic integration; Supply chain network design; Simulation; Transportation; Distribution
• ISSN: 0254-5330; 1572-9338; 1572-9338
• DOI: 10.1007/s10479-022-04571-0

Global supply chains engage in economic exchanges and flows of capital across borders. The free flow of economic goods opens opportunities for organizations to optimize supply chains across global networks and develop socially embedded interdependent relationships. This study explores issues related to multi-echelon supply chains and the effect of economic integration on a major beverage company’s distribution in the emerging Association of Southeast Asian Nations (ASEAN) Economic Community (AEC). Case-based modeling is conducted to resolve discrepancies in perceptions of supply chain network formation between academic research and industry. This paper determines the network configuration involving minimum gross cost while considering the impacts of barriers to resource accessibility and external economic decisions on infrastructure in a real-world supply chain network where end products of in-house manufacturing are acquired from external sources and incorporated in warehouses. A mixed-integer linear programming model was developed to design a multi-stage supply chain network using ILOG LOGIC NET. The model explores location and capacity selection for plants and warehouses in parallel with capacity selection for suppliers and transportation in the AEC, and we determine the optimal flow of products and product families through the network medium. Three different scenarios were evaluated to obtain differing resolutions that can empower decision-makers to understand influences on overall supply chain networks based on futuristic development preferences and regional economic integration.