Why Companies are Leaving Money on the Table

We don’t normally think about how our Amazon packages get to our door so quickly – unless they show up late. And we definitely notice when we’re hungry and our DoorDash order is cold or takes too long to arrive.

Imagine a world where your deliveries are always on time and your food is never cold. Restaurants are able to coordinate when to cook orders and apps are able to efficiently assign drivers multiple orders or even ask customers picking up an order if they would be willing to drop off an order with their neighbor on the way back. This is the efficient world Maryland Smith professor Zhi-Long Chen and Ohio State University professor Nicholas G. Hall are hoping to help create through their newly published book, “Supply Chain Scheduling.”

“Through our models described in this book, we’re looking at the scheduling level of supply chains, which is where the daily operational decisions of firms are made,” says Chen. “We want to help firms determine an efficient way to deal with the very detailed level decisions of supply chain operations such as how to prioritize and schedule orders in fulfillment centers with limited capacity, and how to schedule order deliveries to customers’ homes.”

The mathematical models described help firms coordinate scheduling decisions across the supply chain, which ultimately minimizes costs and maximizes performance.

“The value of scheduling coordination in terms of cost savings, particularly for retailers, is huge,” Chen says. “These companies are often operating on thin margins and supply chain and logistics costs are often the only way for retailers to save in terms of costs. We’ve seen cost savings from using coordination models vary from a few percentage points to between 20-30% of original costs.”

Focusing on the value of effective coordination between different functions in a firm and efficient scheduling, Chen and Hall aim to shed light on the ever-changing field of supply chain management through their research.

“The field of supply chain scheduling is only about 15 years old,” says Chen. “Companies are used to performing operational tasks in isolation, but our research shows that there is real potential to improve business performance by using our coordination models.”

Thanks to the ever-growing popularity of e-commerce, a large number of manufacturers and retailers now sell customized products online. This has given rise to new operational challenges. Chen and Hall’s new book is intended to provide mathematical models and algorithms that can solve such challenges. They have applied and validated their models in a variety of real-world settings in various industries.

Overall, Chen hopes that their research, summarized in the book, will provide a foundation for future supply chain research.

“There aren’t currently a lot of books on the market that address scheduling issues in supply chains. We hope that this book outlines important areas for businesses to focus on in supply chain management and provides a future research direction.”