Why companies leave money on the table

We don’t normally think about how our Amazon packages arrive so quickly at our doorstep unless they arrive late. And we definitely notice when we’re hungry and our DoorDash order is cold or takes too long to arrive.

Imagine a world where your deliveries are always on time and your food is never cold. Restaurants are able to coordinate when orders are prepared and apps are able to efficiently assign multiple orders to drivers or even ask customers picking up an order if they would be willing to drop off an order with their neighbor on the way back. This is the efficient world that Zhi-Long Chen, a professor at Maryland Smith, and Nicholas G. Hall, a professor at Ohio State University, hope to help create through their recently published book, “Supply Chain Scheduling.”

“Through our models described in this book, we look at the planning level of supply chains, where day-to-day business operational decisions are made,” says Chen. “We want to help companies determine an efficient way to manage the very detailed decisions of supply chain operations, such as order prioritization and scheduling in capacity-constrained fulfillment centers, and scheduling deliveries of orders at customers’ homes.”

The mathematical models described help companies coordinate planning decisions throughout the supply chain, which minimizes costs and maximizes performance.

“The value of schedule coordination in terms of cost savings, especially for retailers, is huge,” Chen says. “These businesses often operate on thin margins and supply chain and logistics costs are often the only way retailers can save costs. We have found that savings from using coordination models range from a few percentage points to between 20-30% of upfront costs. »

Focusing on the value of effective coordination between different functions in firm and efficient scheduling, Chen and Hall aim to shed light on the ever-evolving field of supply chain management through their research.

“The field of supply chain planning is only about 15 years old,” Chen says. “Companies are used to performing operational tasks in isolation, but our research shows that there is real potential to improve business performance using our coordination models.”

Thanks to the ever-increasing popularity of e-commerce, a large number of manufacturers and retailers are now selling personalized products online. This gave rise to new operational challenges. Chen and Hall’s new book aims to provide mathematical models and algorithms capable of solving such challenges. They have applied and validated their models in a variety of real-world settings across various industries.

Overall, Chen hopes their research, summarized in the book, will provide a foundation for future supply chain research.

“There are currently not many books on the market that deal with planning issues in supply chains. We hope this book outlines important areas for companies to focus on in supply chain management and provides a direction for future research.

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