The pictures above are from the reception to celebrate my receiving The Ford Distinguished Research Chair held on October 16, 2003. I cannot believe that it has been twenty years😳.
In recent years, I am being increasingly asked by many folks (who are not researchers or practitioners of Operations Management (OM), but are my neighbors, faculty members or graduate students in Humanities or are Transplant Surgeons or those who work in Quantum Computing) – especially since COVID, because Supply Chains are being constantly talked about in media and by US Presidents (both Trump and Biden) – about what research I do, the papers I publish, and how companies use my work (this even many OM researchers want to know!).
Why did The White House consult me during the infant formula crisis? Why am I an overseer or an external reviewer for National Academy Publications (NAP) on Post-Hurricane Supply Chain Resilience, and Policy Options for Emerging Technologies for Sustainable and Resilient Supply Chains, and Protecting US Technological Advantage?
How to communicate our research to a general audience?
Our professional vita is targeted towards our professional colleagues (or academic administrators), listing all our publications chronologically (by when they were accepted or have appeared online or print), emphasizing the academic quality of the journals, sometimes bucketed into sub-categories of research topics (understandable, again, largely only by fellow researchers), displaying funding (NSF, DARPA), and highlighting academic awards and high honors that we have received from our professional society. Similarly, our professional seminars at Universities and Conferences emphasize methodological enhancements and I particularly relish tailoring mathematics to applications (The Art (and Craft) of OM):
The point I am making is that we professors are largely preoccupied inwardly in our professional society and not communicating sufficiently externally to the broader society. This post explores how we may be able to do the latter by piggy-backing on the former. In particular:
Could we repurpose the Professional Vita into a Conversational Vita?
There are challenges, of course. (That is why it is fun! “We do things not because they are easy, but because they are hard.”) Most people are not knowledgeable of the various mathematical methods that we utilize, are unaware of the academic journals, nor have they previously thought about the nitty-gritty details of supply chain and factory operations. Furthermore, much of my manufacturing and supply chain work is in Business-to-Business (B2B) context that most (non-OM) people may not be very familiar with to begin with.
Where, then, to begin?
Since all of us are consumers who can relate to buying groceries, let me begin with:
STEP 1: Grocery Stores
Q1. Did you ever wonder how stuff gets to our local grocery store?
F. ERHUN AND S. TAYUR. Enterprise-wide Optimization of Total Landed Cost at a Grocery Retailer.
This is called inbound logistics (as against outbound logistics that folks may be familiar with, like Amazon Vans delivering parcels to our homes having picked them up from a warehouse, or a nearby airport (from its cargo terminal) to which it was flown from a far-away warehouse) into a warehouse (of Target, Amazon, Walmart or your grocer).
STEP 2: Factories
Q2. Or how the packaged foods that we buy are made?
M. MEHROTRA, M. DAWANDE, S. GAVIRNENI, M. DEMIRCI AND S. TAYUR. Production Planning with Patterns: A Problem from Processed Food Manufacturing.
Generally speaking, among other things, I study how to operate factories better (and that was my PhD thesis topic at Cornell, and I hold The Ford Distinguished Research Chair😏) and implement the findings in practice:
S. TAYUR. Structural Properties and a Heuristic for a Kanban Controlled Serial Manufacturing System.
S. TAYUR, R. THOMAS AND N. R. NATRAJ. An Algebraic Geometry Algorithm for Scheduling in Presence of Setups and Correlated Demands.
R. ANUPINDI AND S. TAYUR. Managing Stochastic Multi Product Systems: Model, Measures and Analysis.
D. J. MORRICE, R. S. GAJULAPALLI AND S. TAYUR. A Single Server Queue with Cyclically Indexed Arrival and Service Rates.
S. TAYUR. Improving Operations and Quoting Accurate Lead Times in a Laminate Plant.
STEP 3: Supply Chains (Part 1)
Q3. In a global supply chain, how to ensure that the supplier’s factories are not using child labor?
S.-H. CHO, X. FANG, S. TAYUR AND Y. XU. Combating Child Labor: Incentives and Information Disclosure in Global Supply Chains.
Q4. How to prevent counterfeiters from infiltrating the supply chain?
S.-H. CHO, X. FANG AND S. TAYUR. Combating Strategic Counterfeiters in Licit and Illicit Supply Chains.
STEP 4: Operations Strategy
Q5. How do firms decide what products and feature options to bring to the market in the first place? How are they bundled? At what prices are they offered? With what lead times?
T. YUNES, D. NAPOLITANO, A. SCHELLER-WOLF AND S. TAYUR. Building Efficient Product Portfolios at John Deere and Company.
M. SHUNKO, T. YUNES, G. FENU, A. SCHELLER-WOLF, V. TARDIF AND S. TAYUR. Product Portfolio Restructuring: Methodology and Application at Caterpillar.
STEP 5: Tactical Planning
The choices above in turn affect, and are affected by, whether a product is made-to-order (MTO), assemble(d)-to-order (ATO) or made-to-stock (MTS).
Q6a. If it is made-to-order, then, how to quote lead times?
R. KAPUSCINSKI AND S. TAYUR. Reliable Lead Time Quotation in a MTO Environment.
P. KESKINOCAK, R. RAVI AND S. TAYUR. Scheduling and Reliable Lead Time Quotation with Availability Intervals and Lead Time Sensitive Revenues.
Q6b. If it is assemble-to-order, what is it assembled from?
J. SWAMINATHAN AND S. TAYUR. Managing Broader Product Variety Through Delayed Differentiation using Vanilla Boxes.
Q6c. How to design the product family to better suited for assemble-to-order?
J. SWAMINATHAN AND S. TAYUR. Managing Design of Assembly Sequences for Product Lines that Delay Product Differentiation.
Q6d. Should you re-engineer your product so it can be manufactured in a different sequence (like Benneton did)?
R. KAPUSCINSKI AND S. TAYUR. 1999. Variance Reduction through Operations Reversal in Supply Chain Reengineering.
STEP 6: Supply Chains (Part 2)
Q7. If made-to-stock, how to design a supply chain that is at once efficient as it is responsive? Which suppliers to use? Is an item single-sourced or dual-sourced? What mode of transportation is used? Should new facilities be built? Where? How much finished goods inventory to keep in any location? Of what items? How is the inventory shared across locations through transshipments to avoid lost sales or through inventory pooling at an upstream warehouse for expedited replenishment?
U. RAO, A. SCHELLER-WOLF AND S. TAYUR. Development of a Rapid-Response Supply Chain at Caterpillar.
This work was the centerpiece article in Fortune that attracted wide-spread attention from the C-Suite at Fortune 500/Global 2000 companies (notably Deere.)
Q8. How can you adjust your supply chain by season?
V. TARDIF, S. TAYUR, J. REARDON, R. STINES AND P. ZIMMERMAN. Implementing Seasonal Logistics Tactics for Finished Goods Distribution at Deere and Company’s C&CE division.
Q9. How are the transportation providers managing their operations?
L. LI AND S. TAYUR. Medium-term Pricing and Operational Planning in Intermodal Transportation.
Q10. How to reserve production capacity (as a real option) when demand is incredibly unpredictable?
F. ERHUN, P. KESKINOCAK AND S. TAYUR. Dynamic Procurement in a Capacitated Supply Chain Facing Uncertain Demand.
Q11. How to physically (not just financially) hedge against exchange rate fluctuations?
A. SCHELLER-WOLF AND S. TAYUR. Risk Sharing in Supply Chains Using Order Bands: Analytical Results and Managerial Insights.
STEP 7: Fundamental Inventory Models
Q12. What is there is limited amount of historical data from which to make decisions?
A. AKCAY, B. BILLER AND S. TAYUR. Improved Inventory Targets in the Presence of Limited Historical Demand Data.
Q13. There are capacity constraints in production. So, how to handle that?
S. TAYUR. Computing the Optimal Policy for Capacitated Inventory Models.
The demands can be seasonal or, more generally, non-stationary.
R. KAPUSCINSKI AND S. TAYUR. A Capacitated Production-Inventory Model with Periodic Demand.
S. GAVIRNENI AND S. TAYUR. Managing a Customer using a Target Reverting Ordering Policy.
S. GAVIRNENI AND S. TAYUR. An Efficient Procedure for Non-stationary Inventory Control.
There are multiple stages of production required to make and distribute most products.
P. GLASSERMAN AND S. TAYUR. The Stability of a Capacitated, Multi-Echelon Production- Inventory System under a Base-Stock Policy.
P. GLASSERMAN AND S. TAYUR. Sensitivity Analysis for Base Stock Levels in Multi-Echelon Production-Inventory System.
P. GLASSERMAN AND S. TAYUR. A Simple Approximation for Multi-Stage Capacitated Production-Inventory System.
The production process could have a Re-entrant Structure (like in the case of semi-conductor manufacturing).
C. BISPO AND S. TAYUR. Re-Entrant Flow Lines: Theoretical Framework and Experimental Results.
Recalling George Dantzig:
The final test of a theory is its capacity to solve the problems that originated it.
STEP 8: Supply Chains (Part 3)
Q14. How to operate a multi-stage supply chain in an on-going manner?
S. KEENE, D. ALBERTI, G. HENBY, A. J. BROHINSKY AND S. TAYUR. Caterpillar’s Building Construction Products Division Improves and Stabilizes Product Availability.
It is done through the Sales, Inventory and Operations Planning (SI&OP) process.
This is something that pretty much every company that manufactures physical product does, and I noticed that they were doing it manually, with spreadsheets, making locally optimal decisions, not using the data they had in their systems effectively, and leaving a lot of money on the table.
So, I founded SmartOps, in 2000, became profitable in 2003 😊, and remained so, growing in revenues every year since founding, creating the market of Enterprise Inventory Optimization (EIO) software, that was acquired by SAP (in 2013) and is part of their Integrated Business Planning (IBP) suite, being used in over 700 global companies, across several industries (chemical, industrial machinery, hi-tech, consumer packaged goods, pharmaceuticals, medical devices) in over 50 countries, managing over trillion of dollars of inventory across tens (if not hundreds) of thousands of items (pretty much every consumer packaged product you see in the grocery store!).
Veni. Vidi. Vici. 😉
Folks ask me: Do I miss SmartOps? Sometimes 😏.
I miss the thrill of closing multi-million dollar deals, sometimes two of them in a day (Unilever and Sun Chemical), and sometimes having to wait until nearly midnight on 12/31 to get a signed contract (Medtronic). A sample of our European deals:
By the way, it was not all smooth sailing, and, as a motivation to Always Be Closing (ABC), I remember Bill Kassling (one of our Board members) once sent us this unsympathetic clip 😳 from:
Glengarry Glen Ross is a 1992 American drama film written for the screen by David Mamet from his 1984 Pulitzer Prize–winning play of the same name.
I miss the fulfillment ☺️ when the customers present their success stories at our Annual Forum. There are too many of these to relate here (see SmartOps Manufacturing!), but I will recount one that was particularly memorable. A sample of SmartOps customers from various industries:
Kohler (privately held) is famously secretive about their financials and initiatives, and had never presented in public fora. However, during the implementation of SmartOps there, a somewhat rocky beginning pulled me into the technical details of SAP connectivity and Data Structures and such, and I made a CEO level decision on how to proceed and what SmartOps would do (on our nickel), which led to a very successful outcome. In a Kohler senior executive meeting with CEO David Kohler, I was told of this exchange between him and their Chief Technology Officer (CTO) :
SmartOps. Is that founded by a professor?
Yes, from Carnegie Mellon University.
He is a Class Act. Ask him how we can help SmartOps.
So the CTO called me.
You know exactly how you can help. Present the value created at Kohler by SmartOps EIO at our customer forum.
That is not going to happen. Ask for something else.
Reminded me of the exchange between Yama and Nachiketa in Katha Upanishad! 😏 Like Nachiketa, I persisted, doubling down on my request.
You are the one who offered to help. This is what I want.
Let me go back to David. But I am telling you, he is going to say no.
A day later, I got another call from the CTO.
David approved it.
See y’all in Miami!
Our event was held at the Ritz Carlton (South Beach).
On the opening night, we chartered a luxury yacht for a wine and cheese reception. On the closing night, we rented out the Versace Mansion for a private dinner. As you know from Slumming It? our events were enjoyable, exclusive and exquisite!
And I miss all the folks who worked at SmartOps who made it all possible. Thank you!
The reason I decided to do a PhD in OR in the first place – Portrait of an Academic Capitalist as a Young Man – was to develop mathematical models and algorithms that would be useful in practice. Indeed, I have repeatedly stated, in my plenary talks and elsewhere, my view about the Purpose of OM Research:
Improving OM Practice is not the main goal.
Improving OM Practice is the only goal.
STEP 9: Supply Chains (Part 4)
Q15. How to get (business) customers (who have their own objectives and metrics) to implement what you want (as the manufacturer of products)?
L.TROYER, J. SMITH, S. MARSHALL, E. YANIV, S. TAYUR, M. BARKMAN, A. KAYA AND Y. LIU. Improving Asset Management and Order Fulfillment at Deere’s C&CE Division.
Q16. What is the value of information from your customers, about their inventory levels, policies they use and point-of-sales (POS) data that can be made available via Electronic Data Interchange (EDI)?
S. GAVIRNENI, R. KAPUSCINSKI AND S. TAYUR. Value of Information in Capacitated Supply Chains.
Q17. How to provide incentives to influence the purchase behavior of your customers (to improve your profits)?
N. ALTINTAS, F. ERHUN AND S. TAYUR. Quantity Discounts under Demand Uncertainty.
STEP 10: Demand Fulfillment
Q18. How to fulfill demand effectively from available inventory?
M. DAWANDE, S. GAVIRNENI AND S. TAYUR. Effective Heuristics for Multi-Product Partial Shipment Models.
Q19. What if it is an omni-channel setting?
J. KARP, S. JIA, R. RAVI AND S. TAYUR. Effective Online Order Acceptance Policies for Omni-Channel Fulfillment.
Q20. What if the products are being rented out and not purchased?
V. SLAUGH, B. BILLER AND S. TAYUR. Managing Rentals with Usage-Based Loss.
Hope this gives folks a better understanding of what this OM professor has done in the areas of Manufacturing and Supply Chain Management.
Indeed, the next time you go to a grocery store (to buy allergy medication, cereal, chapstick, cooking oil, cough medicine, ketchup, pop-tarts, shampoo, soap, soup or toothpaste), or to a liquor store (loved Diageo Headquarters, that has a bar in the main lobby 👍), or to a drug store (GSK House in London is astonishing!), hope you will smile 😉 as the product most likely got there with its journey optimized by SmartOps!
Putting it in 007 lingo, we’ve got people everywhere ☺️ using SmartOps EIO.
M : When someone says “We’ve got people everywhere”, you expect it to be hyperbole! Lots of people say that. Florists use that expression. It doesn’t mean that they’ve got somebody working for them inside the bloody room!
This was Judy Dench as M speaking with Daniel Craig playing James Bond from:
Quantum of Solace is a 2008 spy film and the twenty-second in the James Bond series produced by Eon Productions. The Aston Martin DBS V12 returned for the film’s car chase (around Lake Garda) which is considered among the Top-10 greatest movie car chases of all time. The film had box office receipts of nearly $590 million (on a budget of around $230 million).
The citation for my election to the National Academy of Engineering (NAE) – chartered in 1963, signed by President Kennedy, on the 100th Anniversary of the charter of NAS, signed by President Lincoln – summarizes this post succinctly, for:
What about a conversation on Healthcare Operations? What about fun stuff with new business models and novel operations like Private Jets, Video Games and Streaming Services? Or Quantum? Plan to cover these in a companion post.
PS. I am dedicating this post to my PhD student Srinagesh Gavirneni. I also want to take this opportunity to thank all my co-authors, several of them who were my PhD students.