Based on evidence from the economics literature, we argue that following the collapse of Lehman Brothers in 2008, virtually all companies decided to drastically reduce inventories due to limitations on cash availability. We model the supply chain using system dynamics, with a focus on behavioral delays, and validate the model empirically. The resulting model allows us to predict demand dynamics far beyond the credit crisis; the model has been successfully implemented a number of companies. We supplement the system dynamics model with a control theoretic analysis in which we demonstrate that even without demand dynamics, a significant bullwhip effect can be experienced in supply chains.
Presenter: Jan C. Fransoo (Eindhoven University of Technology, Netherlands)
Co-author: Maximiliano Udenio (Eindhoven University of Technology, Netherlands)
Jan C. Fransoo is a Professor of Operations Management and Logistics in the School of Industrial Engineering at Eindhoven University of Technology in the Netherlands. He holds an MSc in Industrial Engineering and a PhD in Operations Management & Logistics from Eindhoven University of Technology. He also serves as Research Director of the European Supply Chain Forum, a collaborative effort with about 25 large multinational companies. He is currently also vice-president of Dinalog (Dutch Institute for Advanced Logistics), a national center of excellence in the area of supply chain management. Professor Fransoo held various visiting appointments at US universities, including Clemson University, the University of California at Los Angeles, Stanford University, and most recently, in 2011, at MIT’s Center for Transportation & Logistics. He currently serves as Associate Editor of Operations Research, as Senior Editor of Production and Operations Management and is editorial board member of six other academic journals in the fields of operations and supply chain management. He has published over 70 papers in academic journals and presented at many academic and industry conferences, on topics such production planning, supply chain and inventory management, and transportation planning. His most recent work is addressing issues such as synchromodal transportation, distribution in megacities, and carbon-efficient supply chain management. As part from his academic activities, Professor Fransoo has conducted dozens of projects with industry. He also serves on various governmental and nationwide committees in the Netherlands, such as the Strategisch Platform Logistiek (Strategic Platform on Logistics), and the Logistics Strategy Taskforce for the Province of Brabant.
More about Professor Jan C. Fransoo
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The KLU Lecture Series is a forum for scientists and practitioners to talk and discuss on state-of-the art topics related loosely to logistics and entrepreneurship.