Integrated Product and Supply Chain Design

Northwestern University, Evanston IL

Investigators

Abstract

The research of this project focuses on developing models that address the interface between product variety/architecture and production/supply chain management. With a series of interrelated optimization models that draw on the literatures of product design, operations management, marketing and economics, we seek to: (a) quantitatively evaluate the effect of production and supply chain capabilities on product variety decisions, (b) develop principles for matching product platform architectures to various production and market environments, and (c) construct methods for dynamically evolving a production/supply chain system to support a product family in a web-enabled, collaborative customization design environment. The core of the research will focus on using discrete choice theory to represent consumer preferences and modern supply chain theory to characterize support costs. Research will focus on discrete choice theory instead of the more traditional approach of using a location model to represent customer decisions because it is more compatible with conjoint analysis techniques from marketing, and hence is more likely to yield results relevant to practice. The models will first address product families containing horizontally differentiated variants and will then move to more complex product architectures involving modules and vertically differentiated variants. Similarly, the models will begin by optimizing the product variety decision from the perspective of a single firm, but will ultimately consider environments in which variety decisions are an important part of competitive market strategy.