Economy of Chain

Economy of Chain

Publieke samenvatting / Public summary

Currently industry combines supply chain design experience with modeling and optimization tools. While current models provide valuable insights with respect to the workings of the supply chain, they are inadequate with respect to structure and dynamics: proposing new supply chain structures during a simulation, taking into account market responses to increased/decreased supply and demand and exploring the relationship between (conceptual) process design and supply chain design.
Because of these limitations current supply chain models cannot adequately express the needed flexibility. This limitation becomes even more pertinent as the survival of modern companies depends on their ability to quickly adapt their value chains to changing market circumstances. There is a vast need for tools with predictive value for market developments that incorporate the market dynamics that result from technology investments made by the companies/actors in the value chain.


Korte omschrijving
Supply chains are subject to continuous change and therefore require periodic re-design. Complexity is added with product changes, acquisitions and growing global reach. The customer base is increasingly demanding, expecting on-time delivery with shorter lead-times and higher demand fluctuations. Rising competitive pressures such as costs increases, tax laws and material availability, create increasingly complex business environments. This trend is faced by many companies, and it requires periodic re-evaluation and re-design of the supply chain strategy.

This project will deliver a method that helps reduce uncertainties about volumes, location, and cost of new production capacity. It develops a valuation method for the concept of Economy of Chain that is able to predict market dynamics and dynamically change the structure of the supply chain to a more competitive structure in terms of efficiency, flexibility and customer responsiveness. Furthermore the tool may be used for scenario analysis to calculate financial effects and profitability of new production concepts.