Multi-site tactical production planning integrating financial flow and supply chain risk management
Desheng WU1, David LEMOINE2, Yuan BIAN1
1University of Chinese Academy of Sciences
2IMT-Atlantique
Keywords: Lot-sizing, Working capital requirement, Multi-site, Supply chain risk.
CONTEXT
According to the Ernst & Young annual Working Capital Management (WCM) report of 2012 devoted to the leading 1000 US companies in year 2011, on average, $330 billion dollars of Net Working Capital (NWC) is unnecessarily immobilized [1]. Buchmann [2] also stress that savings on Working capital Requirement (WCR) as a potential source of cash to fund growth is often neglected by companies. A company needs to carefully manage its WCR in order to ensure financial liquidity or reduce the insolvency risk. Finally optimal WCM can unlock internal capital and provide financial resources to financially constrained firms. Especially during the last financial crisis, bank loans were extremely difficult to obtain by companies especially those in the development phase. Many companies suffer from lack of credit and insufficient working capital. Small suppliers have to accept unfavorable payment terms from their customers, exacerbating their financial situation. Moreover, tight or unavailable bank credit reduces the working capital level of these companies. As a result, some companies have to suspend their operations which can disrupt the whole supply chain as reported in [3].
The separation of operational decision (minimizing operational costs or maximizing operational profits) and financial decision (minimizing financial costs or maximizing financial profit) was theoretically grounded on the famous theorem of Modigliani and Miller [4] and practically by the functional organization of companies. However, in recent years, the literature on operation and supply chain management, following the original work of Babich[5], became aware of the fact that financing and operational problems are imbricated and that optimizing globally the two dimensions could improve the global performance of the company. Nevertheless, in the production planning field majority of models typically ignore the financial consequences of production planning decisions. Further description can be found in [6].
PHD OBJECTIVES
In an attempt to fill this gap, the aim of this thesis paper is to follow and extend the work of [6] by proposing multi-site tactical production models integrating not only the aspect of the working capital requirement, but also the risks that exist in the supply chain.
The organization of the work during the PhD can proceed as follows: 1) Literature review of existing method, both exact and meta-heuristic, for multi-site tactical production planning problem. Development of resolution method for multi-site model for both physical and financial flow with different chain structures; 2) State-of-the-art on risks associated with the physical and financial flow in the supply chain. Investigate how these risks can be integrated in single-level model for both physical and financial flow. Propose efficient resolution method; 3) Generalizations to multi-site cases.
PRACTICAL INFORMATION
This thesis is funded by the "CAS-TWAS President's Fellowship Programme" for students that do not hold a Chinese citizenship. Please read carefully other conditions in detail: http://www.fellowship.cas.cn/dms/Announcement/2000.jhtml.
The PhD student will join the department of the economy and management within University of Chinese Academy of Sciences (UCAS), campus zhongguancun, Beijing, China. The duration of the PhD is 3 years, and it is expected to start during the last trimester of 2018.
REQUIRED SKILLS
Willingness to complete a Ph.D. thesis in China is very much necessary. Applicants must hold a Master's degree (or be about to earn one) or equivalent before the beginning of the thesis.
The ideal candidate for this position must have a solid background on operations research and good knowledge in mathematics and programming. Also, good communication skills, both oral and written English, are required; Chinese is not mandatory. Some backgrounds in machine/reinforcement learning, simulations, and scientific language are a plus. Ability to work both independently and as part of a team,
UCAS
The University of Chinese Academy of Sciences (UCAS) (Chinese: 中国科学院大学), is a higher education institution focusing on graduate education, under the direct leadership of the Chinese Academy of Sciences (CAS). The predecessor of UCAS was the Graduate University of Chinese Academy of Sciences (GUCAS) and the Graduate School of University of Science and Technology of China (USTC), which was founded in 1978 as the first graduate school in China by approval of the State Council. UCAS graduated the first doctoral student in science, first doctoral student in engineering, first female doctoral student and first student with double doctoral degrees in China. In 2014, UCAS began to recruit undergraduates.
HOW TO APPLY
Interested candidates must send a CV and a motivation letter in PDF along with 2 references, before 25th March 2018, to the email addresses: yuan.bian@vip.163.com, and c.c. to dwu@ucas.ac.cnand david.lemoine@imt-atlantique.fr
References
[1] Ernst, Y. (2012), 'All tied up', White paper, working capital management report.
[2] Buchmann, P., Roos, A., Jung, U. & Martin, A. (2008), 'Cash for growth: The neglected power of working-capital management', BCG Opportunities for Actions. Available Online: http://www.bcg. com. cn/en/files/publications/articles_pdf/Cash_for_Growth_May_2008. pdf
[3] Benito, A., Neiss, K. S., Price, S. & Rachel, L. (2010), 'The impact of the financial crisis on supply', Bank of England Quarterly Bulletin p. Q2.
[4]Modigliani, F. & Miller, M. H. (1958), 'The cost of capital, corporation finance and the theory of investment', The American economic review 48(3), 261–297.
[5]Babich, V. & Sobel, M. J. (2004), 'Pre-ipo operational and financial decisions', Management Science 50(7), 935–948.
[6] Yuan, B., Lemoine, D., Yeung, T. G., Bostel, N., Hovelaque, V., & Viviani, J. L., et al. (2018), 'A dynamic lot-sizing-based profit maximization discounted cash flow model considering working capital requirement financing cost with infinite production capacity', International journal of production economics 196:319-332.
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