New Purdue lab tackles complex management problems
WEST LAFAYETTE, Ind. A multidisciplinary lab at Purdue University is striving to understand how the complex interactions between corporations affect vital "supply chain" factors like production planning and scheduling, inventory management, distribution, and warehousing.
Gone are the days when a factory manager could operate in isolation, said Reha Uzsoy, a professor of industrial engineering who initiated the creation of the Laboratory for Extended Enterprises at Purdue (LEEAP).
"In the old days, we never really worried about what happened outside a given factory," said Uzsoy, one of six researchers running the lab. "I was the plant manager, and I ran my plant, and that was the end of my world."
Now, however, management is far more complicated.
"Everybody has come to the conclusion that it's the overall supply chain that matters," Uzsoy said. "Your relationships with your customers, your suppliers, and other units of your own company are constantly changing and being redefined. So you are not just living within an individual plant any more."
Corporations and facilities are woven together in an "extended enterprise," a web of firms doing business with each other, which complicates the management decision-making process. Particularly with the advent of new technologies such as e-commerce, managers are being forced to make decisions for which their past experience offers little guidance because the environment has changed so radically. Often, software models and other specialized tools are needed to simulate the whole environment and predict the likely effects of specific management decisions. But creating such sophisticated tools requires expertise from various specialties.
LEEAP combines researchers from engineering, economics and management, said Jennifer K. Ryan, an assistant professor of industrial engineering and one of the six researchers in the lab.
"What's really key is that it's interdisciplinary," Ryan said. "The idea is to bring together faculty, graduate students and industry."
The lab, which was formed last spring, recently won a $100,000 grant from the National Science Foundation for the first project involving all six researchers. The project is to test the feasibility of developing a supply chain optimization and protocol environment, a software tool for simulating management scenarios in an extended enterprise.
Here is a simple example:
A large, multinational corporation with worldwide distribution needs to add a few warehouses and distribution centers, but management is unsure where the new facilities should be built. Corporate officials could try actually building the new facilities and then waiting to see how well they worked. But a better way would be to test these management ideas first with software.
"This would be a way of doing it virtually, to simulate the environment and see what would happen," Ryan said.
However, such a tool could also be used to study much more complex problems. For example, an automobile manufacturer needs to know whether it would be best to produce or outsource the production of engines for a certain car model.
"You can look at decisions like that and test them virtually before implementing them," Ryan said.
The four other faculty members in the lab are: Ananth V. Iyer, an associate professor of management in the Krannert Graduate School of Management; Joseph F. Pekny, a professor of chemical engineering; Paul V. Preckel, a professor of agricultural economics; and Ronald L. Rardin, a professor of industrial engineering. Several graduate students also are involved.
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