“My thesis tackles a complex network design and transshipment problem observed at a leading German automotive manufacturing company. It’s about designing and optimizing the supply chain of a certain type of product called ‘kits’,” said Stepanovich. “I am very happy about receiving this prestigious award – it means a lot to me.”
Kits are groups of components that work together in rotational systems, for example, the belts and related components found in cars. Over the years, customers have realized that it makes more sense to change all the rotational parts at once rather than one by one. Packaging and selling components as a bundle (or kit) rather than individually has become a flourishing business for the company.
As a result, the company is interested in redesigning and optimizing its kit supply chain, especially with the option of a new production facility abroad. The new supply chain design involves strategic and tactical decisions; the parts are produced and distributed throughout Europe. The issues that Kristina analyzed in her thesis were: which parts should be supplied from where, at which locations should they be assembled, and which customers should be served by which locations.
“Kristina analyzed this problem by formulating a mathematical model (a transshipment and facility location model based on mixed-integer programming) and optimizing the network design and transshipment decisions for different scenarios,” explained Prof. Dr. Çerağ Pinçe, Assistant Professor of Operations and Supply Chain Management at Kühne Logistics University. “Next, she compared the solutions by taking into account the firm’s future strategic goals and made recommendations.” By implementing the recommended methods, it is possible to achieve cost reductions of up to 70 percent.