Global Supply Chain Management at Digital Equipment Corporation

Bruce C. Arntzen, Gerald G. Brown, Terry P. Harrison and Linda L. Trafton
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Bruce C. Arntzen: Systems Manufacturing and Logistics Group, Digital Equipment Corporation, 129 Parker St., PK02-l/J30, Maynard, Massachusetts 01754
Gerald G. Brown: Operations Research (OR/BW), Naval Postgraduate School, Monterey, California 93943
Terry P. Harrison: Management Science Department, Penn State University, University Park, Pennsylvania 16802
Linda L. Trafton: Worldwide Manufacturing and Logistics Digital Equipment Corporation, Amherst, New Hampshire 03031

Interfaces, 1995, vol. 25, issue 1, 69-93

Abstract: Digital Equipment Corporation evaluates global supply chain alternatives and determines worldwide manufacturing and distribution strategy, using the Global Supply Chain Model (GSCM) which recommends a production, distribution, and vendor network. GSCM minimizes cost or weighted cumulative production and distribution times or both subject to meeting estimated demand and restrictions on local content, offset trade, and joint capacity for multiple products, echelons, and time periods. Cost factors include fixed and variable production charges, inventory charges, distribution expenses via multiple modes, taxes, duties, and duty drawback. GSCM is a large mixed-integer linear program that incorporates a global, multi-product bill of materials for supply chains with arbitrary echelon structure and a comprehensive model of integrated global manufacturing and distribution decisions. The supply chain restructuring has saved over $100 million (US).

Keywords: inventory/production: multi-item/echelon/stage; production/scheduling: planning; integer programming: applications (search for similar items in EconPapers)
Date: 1995
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