Information Technology Reference
In-Depth Information
Chapter XIX
Supporting Demand Supply
Network Optimization with Petri
Nets
Teemu Tynjala
Nokia Group, Finland
aBstract
The present study implements a generic methodology for describing and analyzing demand supply networks
(i.e. networks from a company's suppliers through to its customers). There can be many possible demand
supply networks with different logistics costs for a product. Therefore, we introduced a Petri Net-based
formalism, and a reachability analysis-based algorithm that finds the optimum demand supply network
for a user-specified product structure. The method has been implemented and is currently in production
use inside all Nokia business groups. It is used in demand supply planning of both network elements and
handsets. An example of the method's application to a concrete Nokia product is included.
introduction
Logistics
refers to the flow of materials, information and money between the suppliers and custom-
ers. A
demand supply network
refers to the manner in which components flow from suppliers to the
manufacturer's plants, and finally to the end customers. The logistics costs associated with a demand
supply network include such costs as freight, warehousing, interest rate, duties and taxes.
A typical problem that logistics professionals face in a global corporation is to find the cheapest and
most reliable way of producing a product and delivering it to customers. Often the product structures
and supplier bases vary considerably during a product design phase. The logistics manager must decide
the most economical component suppliers and the best-positioned assembly factories over the product's
lifecycle. Typically there are hundreds or thousands of different demand supply network setup options
for a given product. Therefore, manual analysis of demand supply networks is practically impossible.
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