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Information Flow in a Supply Chain Management System

Diploma Thesis for

Stud.techn. Rune Teigen

May 1997



The supply chain of a manufacturing enterprise is a world-wide network of suppliers, factories, warehouses, distribution centers and retailers through which raw materials are acquired, transformed and delivered to customers. In order to optimize performance, supply chain functions must operate in a coordinated manner. But the dynamics of the enterprise and the market make this difficult: materials do not arrive on time, production facilities fail, employees are ill, etc. causing deviations from the plans. In some cases, these events may be dealt with locally, i.e. they lie within the scope of a supply chain function. In other cases, the problem can not be locally contained and modifications across many functions are required. Therefore, the supply chain management system must coordinate the revision of plans across supply chain functions. The Integrated Supply Chain Management (ISCM) project addresses coordination problems at the tactical and operational levels. The project's approach is through the use of intelligent agents.

This thesis, which is written in relation to the ISCM project, aims to contribute to the efforts of introducing multi-agent systems to the domain of supply chain management. The first part of the thesis gives a theoretical background on which the work of the second part is based. The theoretical background: a) treats important issues of supply chain management, focusing on flexibility, inventory management, and customer service, b) gives an introduction to intelligent agents, and c) describes the features of the COOrdination Language (COOL), an agent language developed at the Enterprise Integration Laboratories. COOL provides constructs for defining agents and coordination protocols which allow for complex coordinated behavior among agents.

The latter part of the thesis describes the practical work: the COOL implementation of a simple supply chain model from HP-labs, and the design and implementation of a more extensive (though still simple) multi-echelon supply chain model, the so-called PMC model, consisting of 40 agents. Through simulation on the latter model, several different coordination strategies were tested. The strategies involving more information sharing among agents proved to enhance the reactivity of the supply chain, in this case improving inventory management. Simulating coordination protocols with different levels of information sharing allowed us to produce quantitative estimations of how the absence of information sharing affects the operation of the supply chain.

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Rune Teigen
Tue May 27 17:50:58 EDT 1997