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Teaching, Research, Consulting and Training : Experience sharing Dr S G Deshmukh Director ABV-Indian Institute of Information Technology & Management Gwalior 10 Jan 2009 National Conference on “Modeling & Simulation “ (9-11 Jan 2009)

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Page 1: Sgd teaching-consulting-10-jan-2009 (1)

Teaching, Research, Consulting and Training : Experience sharing

Dr S G Deshmukh Director ABV-Indian Institute of Information Technology & Management Gwalior 10 Jan 2009

National Conference on “Modeling & Simulation “ (9-11 Jan 2009)

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Observation..

“Mathematical ideas originate in empirics…but [then] the subject begins to live a peculiar life of its own and … after much ‘abstract’ inbreeding, is in danger of degeneration … whenever this stage is reached, the only remedy seems to me to be the … reinjection of more or less directly empirical ideas”

John von Neumann

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Remarks..

Economics, Finance, Accounting and Marketing all started up as theoretical disciplines, then enjoyed an explosion of empirical studies and came to a balance between empirics and modeling.

How much of our (modeling) research can we utilize in teaching?

How much of our (modeling) research interests top managers?

Applied research can make us more relevant as researchers, teachers, consultants as well as stimulate better models!

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Teaching-Research–Consulting-Training Cycle

Teaching

Training

Consulting

Research

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REAL - WORLD

SYSTEM

MODEL

• Definition of the Problem

* Construction of the Model

• Solution of the Model

* Validation of the Model

• Implementation of the Final Result

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Academic Environment

Lot of opportunities to enhance teaching because of demanding students !

Research

Consulting

Training

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Sprit ..

Consulting assignments

Involvement of students

Exposure to model real life

Opportunity to “play” with models Applying what has been “taught” Opportunity to enhance “soft skills” (team

work, getting along with the client)

Bottom line: Upgrade “resume” !

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Assignment 1 Case study in SCM of a Tyre manufacturing company

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Tyre Industry in India

16 Major Players

34 Plants

Top 5 companies hold 70% market share

Rs 9000 Crore Industry

Buyers

OEM’s 30 %

Replacement 60 %

Exports 10%

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XYZ Ltd.

A leading truck tyre manufacturer in India

An ISO 9000 organization

Product range : Truck Tyres, LCV Tyres Radial Tyres, Tubes/Flaps etc.

Four Plants, 8 Regional Distribution Centres (RDC) and 98 District Warehouses

Extensive & exclusive dealer network

Sales Turnover : Rs 1500+ Crores.

30 % Business from Northern region

25 % From Rajasthan, MP , and Gujarat

20 % From Bihar and Eastern Region

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Remark..

"Broadly, the cost-cutting initiatives are across two areas — manufacturing and supply chain. Our facilities are functioning at 100 per cent capacity and wastages are being minimized at every step in the production process. Our target this year is to achieve two per cent operating margins and we are well on course to achieve it.,“

CEO of XYZ (Source: Hindu Business Line, March 20, 2003)

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Problems with existing Supply Chain(SC)

Not having quick response layers in the distribution system

Lack of proper information flow between the echelon and head office

Dispatch schedule based on Transportation model

Various business functions such as Forecasting, Production and, Distribution acting in isolation

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Use of models ..1

Instead of existing TRANSPORTATION Model use of TRANSSHIPMENT Model

LP based model conceptualized

Data intensive model developed

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Existing SC

F01 ……. F04

1 2 3 4 5 6 7 8

1 2 30 47 60 80 98

Fig 1(a) : Existing Distribution network model of XYZ

Plants

RDC’s

DO’s

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Proposed SC based on TRANSHIPMENT model

F01 ……. F04

1 2 3 4 5 6

1 2 30 47 60 80 98

Plants

RDC’s

DO’s

Fig 1(b) : Proposed distribution network model of XYZ

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Typical Transshipment Model

Min cijxij i j s.t. xij < si for each origin i j xik - xkj = 0 for each

intermediate i j node k xij > dj for each

destination j i

xij > 0 for all i and j

xij represents the shipment from node i to node j

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Shipping based on Transshipment Model

Existing Method of Allocation based on Transportation Model

Proposed method : Based on Transshipment Model

Why Transshipment

Goods Transport between any node to any node

Reduction in Inventory

Reduction in Transportation cost.

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Advantages of the proposed approach

Any node (plant,RDC,DO) can act as a supply point or demand point

More sharing of information

Supply chain becomes responsive

Overall cost reduces

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Modeling and Simulation ..

Decision Support System

Model base

Data Base

User interface

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Partial Spreadsheet

A B C D E F G H

1

2 Constraint X11 X12 X13 X21 X22 X23 RHS

3 #1 1 1 1 50

4 #2 1 1 1 50

5 #3 1 1 25

6 #4 1 1 45

7 #5 1 1 10

8 Obj.Coefficients 24 30 40 30 40 42 30

LHS Coefficients

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Partial Spreadsheet

A B C D E F G

10 X11 X12 X13 X21 X22 X23

11 Dec.Var.Values 5 45 0 20 0 10

12 Minimized Total Shipping Cost 2490

13

14 LHS RHS

15 50 <= 50

16 30 <= 50

17 25 = 25

18 45 = 45

19 10 = 10E.Dem.

W.Dem.

N.Dem.

Constraints

P1.Cap.

P2.Cap.

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Partial Sensitivity Report

Constraints

Final Shadow Constraint Allowable Allowable

Cell Name Value Price R.H. Side Increase Decrease

$E$17 P2.Cap 30.0 0.0 50 1E+30 20

$E$18 N.Dem 25.0 30.0 25 20 20

$E$19 W.Dem 45.0 36.0 45 5 20

$E$20 E.Dem 10.0 42.0 10 20 10

$E$16 P1.Cap 50.0 -6.0 50 20 5

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IT Enablers…2... DSS

User Dialogue

Module

Database

Module

Model base

Forecast

Logistics

Master production schedule

dispatches

inventory

relocation

Fig 2 : A Decision Support System for integrated supply chain

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Model base

LP model to optimize the costs

Forecasting model for aggregate planning

Inventory model to manage inventory

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Model Purpose of the Model

Forecast( Trend Analysis) Using Trend lines, Moving average to

forecast the demand for Do’sLogistic (Transportation Algorithm) Prepare appropriate product mix- Plant

wise, item wise taking consideration of

total Logistic cost.

MPS (Linear programming) Prepare the MPS taking in to consideration

the contribution and capacities of each item

at each plant.

Dispatches(Transshipment

Algorithm)

Unifying the inventory at various nodes

and minimize the transportation cost.

Inventory Using MPS to find the Material

requirement at each plant for a month and

to decide whether to place order.

Reallocation To minimize the total distribution cost.

Various models in the DSS

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Model Databases

Forecast (Trend Analysis) AVG9697,AVG9798,

COST_MAS,FORE_OUT,FORE_DO

Logistic (Transportation Algorithm) TRA_COST,DEMAND,CAP,MFG_Y_N,C

OST,LOG_MIN,MPS,CAPACITY

MPS (Linear programming) VX_TEMP,VX_ICODE,PM_EQ1,PM_TEM

P

Dispatches(Transshipment Algorithm) TRANSP,TOT_DEM,TOT_SUP,T_COST,T

_COST2,TOT_OUT

Inventory BOM,RM_DEM,LOG_MIN,MPS,REVIEW,

RM_DE_HS, VENDOR,ORDER_P1

Reallocation RELOCOUT,INPUT1,INPUTR-1

Databases for Various Models

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Experimentation with model..

Sensitivity analysis

“What if” scenarios related to

Cost ,Capacity

Demand, Budget, Manpower

Quantification of impacts of

Delayring the supply chain

Adding an additional node

Cost parameters

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Snapshot of a typical solution

OBJECTIVE COEFFICIENT RANGES

Variable Lower Limit Current Value Upper Limit

X13 3.000 5.000 7.000 X14 6.000 8.000 No Limit X23 3.000 7.000 No Limit X24 No Limit 4.000 6.000 X35 No Limit 1.000 4.000 X36 3.000 5.000 7.000 X37 5.000 8.000 No Limit X45 0.000 3.000 No Limit X46 2.000 4.000 6.000 X47 No Limit 4.000 7.000

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Benefits to the Client …

Enhancement of effective Information flow

Better monitoring of Inventory

Reduction in Transportation costs

Reduction in lead time

Reduction in inventory

Reduction in Hidden costs

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Benefits to students

Enhanced soft skills

Exposure to real life

Change in perception:

Theory can be applied !

Modeling has real life use !!

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Benefits to the teacher

Real life case wherein efficacy of

model building is actually

demonstrated

Use of Sensitivity analysis to gain

insights

Teaching gets strengthened

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Outcomes …

Four master’s thesis

Publication of Paper

Case material developed

Use in training module

Student got good jobs !

More consulting assignments from similar domain areas

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Insights …

SCM involves integration and interfacing of various business functions

Shared perception is necessary

Critical Issues- Management of Inventory, information, and infrastructure

IT plays an important role in SCM

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Insight..

Building a model is an iterative, trial-and-error process. A model is usually built up in steps of increasing complexity until it is capable of replicating the observed [or anticipated] behavior of the system [in sufficient but not excessive detail]. Then it is used to learn whether the simulated behavior can be improved by changes in … variables….

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What students gained ?

Value addition through professional experience in handling a live project

Importance of modeling

Interactions with the leading group

Sharpened analytical skills: enhanced communication skills

Insights into model building

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Integration with teaching : MEL756: Supply Chain Management Topics Example Through

Exposure to Supply Chain

Maruti Udyog, Training Programme

Perishable Products Amul Training Programme

Supply Chain Coordination

Semi-conductor Manufacturing

Research

Cost and Inventory Tyre Manufacturing

Consultancy

Transportation Indian Railways Sponsored Research

Information Systems

India Today Consultancy

Performance Measurement

Indian Army Research, Consultancy

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Closing remarks..

If we want to be relevant as a discipline, we must strike a balance between the empirical data and models. This is the way to differentiate ourselves !

Applied research appeals to much wider audiences, leads to more consulting, better teaching and training opportunities !

Every other area of business is doing it so there is little hope that we can get away with just models.

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Thanks a lot for your patience … [email protected]