Supply chain design and multilevel planning—An industrial case

In this paper we address a case study, inspired by a real agrochemicals supply chain, with two main objectives, structured in two stages. In the first stage we redesign the global supply chain network and optimise the production and distribution plan considering a time horizon of 1 year, providing a decision support tool for long term investments and strategies. The output decisions from the first stage, mainly the supply chain configuration and allocation decisions, are the input parameters for the second stage where a short term operational model is used to test the accuracy of the derived design and plan. The outputs of this stage are detailed production and distribution plans and an assessment of the customer service level. At the operational level, failure to meet on time the demand fulfilment targets established at the planning stage is usually caused by allocation of too many products/customers to the same resource in the first stage, especially to those surrounding the system bottlenecks. This introduces idle periods in the planning of the bottleneck resources, preventing the whole system from operating at its maximum capacity. An analytical methodology was developed to use the information gathered in the second step to improve the supply chain design and plan by enforcing a more distributed allocation of products/customers to the available resources in each time period.