1 INTRODUCTION
In the age of increasing globalization, aspects of a collaborative production and logistics management are becoming more and more important because supply chains merge to form supply- nets in order to optimize their own processes by use of improvement methods. Therefore it is by far not sufficient to re-gard companies as independent units. Companies can only stay competitive if they are able to use the synergy effects of the global market (Busch 2002). This applies in particular to production companies and logistics service providers since it is especially important for them to react quickly to the market. The ever-new requirements for the production com-panies and the logistics service providers demand a production and logistics control system that reacts in real-time to changing requirements (Dangelmaier & Felser 2000). Considering collaborative production and logistics nets, all companies have to be regarded as autonomous units, which pass on sub-orders to other companies by corresponding network con-tracts. In this paper a concept is presented, which in-tegrates an existing computer network of a company into a superior total net of a collaborative IT-structure. In this it is to differentiate between basic-, planning-, and disposition- methods with different levels of information. In ge neral one can access all
relevant data in a closed company intra-network, whereas in the context of an external cooperating company only partial information is available. Thus, existing basic methods for the collaborative real-time control of production and logistics companies are to be transferred to more complex, collaborative, close to reality production and logistics companies but with a lower level of information. This lower level is compensated with a higher margin, which gives a logistics management the incentive to exceed the limits of his internal system and rather focus on using the synergy effects, by selective interactions with competing and cooperating companies.
Different scenarios are to be examined, which consider the possible interaction between production and logistics companies. A company has to con-sciously evaluate the (partial) external processing of orders for the execution of a customer inquiry if this is advantageous. For this aspect centralized and de-centralized basic methods are to be adapted and ap-plied for the production and logistics control for complex, real- time, collaborative networks. Due to this complex problem the use of massive parallelism is suggested. Internal distributed disposition meth-ods, which exist in most companies and are orga n-ized by distributed PC-clusters, are now to be cou-pled with PC-clusters of other companies. This not only leads to a network of IT- nets but also to the de-velopment of a scenario, in which the different dis-tributed disposition methods can be validated in a
Combined parallel and agent-based methods in distributed logistics
networks
W. Dangelmaier, H. Franke & P. Scheideler
Heinz Nixdorf Institute, University of Paderborn, Germany
ABSTRACT: Globalization and collaborative cooperation are key words for modern logistics management. Companies become “global players”, which have to react quickly to changing market conditions and which have additionally to cope with an intensive competition and an increase in flexibility. One possibility to face the increasing requirements of flexibility and reactivity to the market is the cooperation with formerly com-peting service providers in order to jointly offer a broad range of services. These services will be organized and managed in supply- nets. In those the independent cooperation partners can separately accept orders and under certain economic conditions can also pass these on to other partners against commission payments for sub-contracting. Thereby both partners would profit from the collaborative transport disposition because com-pany-specific, economically unprofitable orders do not have to be rejected but instead can be profitably passed on. This paper examines approaches for the technical realization of network formations of independent service providers.
close to reality environment so that each supply- net realizes its own logistics disposition.
2 PROBLEM STATEMENT
The problem of a lack of collaborative logistics con-trol is above all characterized by:
Different business areas of the logistics service pro-viders:
The majority of production companies and forward-ing agencies does not handle all inquiries alone but focuses on a certain range and accordingly assigns (sub-) orders to other companies. Thus, there are e.g. forwarding agencies, which are specia lized in the area of packaged goods, bulk goods, transport of liquid goods, or dangerous goods. Orders that do not concern this individual field of business are gener-ally assigned to an external company. All this takes place in an open interacting network of different competing service providers so that there is also an enormous information demand concerning the ques-tion which external service provider handles which (sub) orders. In this context it is nevertheless com-mon to give orders independently to others, due to own capacity bottlenecks or due to other advantages. These other advantages may include e.g. that an ex-ternal service provider can execute an order for lower costs because of the possibility to load spe-cific goods to an already existing transfer order and to pay the client logistics company a commission.
It is also possible that production companies and forwarding agencies cannot carry out certain orders due to a lack of its own infrastructure, in particular data processing infrastructure such as special soft-ware, and thus can only pass the order to another company. Also given fixed or narrow time windows force particularly smaller production companies and forwarding age ncies to “outsource” an order.
Lack of information for a centralized logistics opti-mization:
For the submission of a sub-order a logistics ser-vice provider needs a multitude of information, which is generally only available to a limited extent as already mentioned above. Thus, one or more lo-gistics service provider can be picked out by internal data or “yellow pages” in order to make a submis-sion for a sub-order1. Thereby often data formats are used which require less storage in order to interact close to real-time and guarantee fast information flow-rates. If an offer is submitted to a potential ser-vice provider, he can generally only accept or reject the offer and cannot give further specifications,
1
At present it is not yet possible to find all logistics ser-vice providers who correspond to a given branch of busi-ness.
which enable the contracting logistics service pro-vider to carry out a total logistics optimization. A logistics improvement could rather be based on the placement of repeated inquiries to different sub-service providers in order to initiate new improve-ments with this new information. The problem of a collaborative logistics disposition is the limited will-ingness of potential (sub-) service providers to dis-close their relevant company-specific information to the public. Within a company all information is known which allows for the use of centralized im-provement methods in closed logistics processes.
Changing logistics processes:
If an inquiry for the execution of a logistics order is planned, it is still possible that some requirements are not met. Thereby it is irrelevant if a failure arises due to the untrustworthiness of a (sub-) service pro-vider or due to other external circumstances. It is well known that especially in the logistics area there are a lot of changes. A close to real-time disposition in the going concern is indispensable so that a pro-cedure model has to be developed which clarifies how a change between improvement process and processing of changed requirements has to take place. Improvement processes for logistics disposi-tion routines are generally to be developed, espe-cially if previously arranged promises of (sub-) ser-vice providers cannot be kept. The demand for different goods, which is announced by service cus-tomers in the short or long term, is to be optimally planned within the production and logistics network (and possibly to order the execution of the transac-tion). This paper emphasizes the close to real-time coordination of collaborative real company networks in the logistics disposition. This field of research jus-tifies clearly the application of both centralized and decentralized close to real-time control methods. The results could also be easily transferred to pro-duction processes or any other kind of collaborative process.
3 STATE OF THE ART
In the very extensive literature of the controlling of distributed production and logistics networks (Busch et al. 2002), there is no approach known, which proposes the use of distributed systems, both for controlling of sub-networks and for the control-ling of the total net. This is quit understandable since sub-problems of distributed production and transpor-tation logistics are already NP-complete (Oertel 2001) and therefore sequential problem solutions are overextended with the guarantee of a real time capa-bility (Zäpfel and Wasner 2002). Thus problems in the controlling of distributed logistics systems are hardly to run parallel. However, there is much un-used computation power within a company in form
of PCs, which do not operate at full capacity. By us-ing these additional resources aspeedup (Censor and Zenois 1997, p.23), i.e. the absolute gain of comput-ing time by emplo ycomput-ing distributed systems, could be achieved. In (Florian 1993; p.23 ff.) researches on supply chain management provide a solid basis in particular for merely business aspects of this paper.
(Fischer et al. 1993) describe the possibility of enormous savings both for business and economic assets by modifying the actual order processing by forwarding agencies with the objective of an inte-grated supply chain management. A study on the improvement of the efficiency in the transportation sector aims therefore at the utilization of obviously unused transportation capacities. Supply chain man-agement is currently considered as one of the most effective instruments for the optimization of distrib-uted logistics processes. It includes all methods and resources for the organization and co-ordination of logistics ne tworks by the organization of the value-added network, flow orientation of individual com-panies, integration of the information basis and the collaboration in planning and control processes. (Kühner 2002) (Baumgarten 2002) (Bretzke 2002) The philosophy of the SCM is based on a continuous and efficient integration of all goods, information and flow of values from the first supplier to the final customer. Customer integration is thereby as impor-tant as the integration of the intra-corporate func-tions and the integration of suppliers. (Wagner 2002) Against this background SCM aims at bridging the interfaces that emerge due to labor division and si-multaneously benefits from the expertise of external partners by their frictionless coordination and/or in-tegration into internal processes. The ind ividual companies within a network are thereby to be coor-dinated under cost restrictions in such a way that product and waiting queues become as small as pos-sible and the respective customer is still optimally supplied. (Bodendorf et al 2001) (Straube 2002) (Weber 2002) (Zäpfel and Wasner 2002) In order to solve these distributed problems, which are addi-tionally subject to many restrictions, partly unrealis-tic simplifications have to be made in order to use central algorithms. A possible solution is the use of partial- intelligent agents (PIAs). PIAs are defined as relatively small computer units that allow employing standard models for well-defined fields of functions as modules of simple algorithms. The agents negoti-ate with one another, whereby they can coopernegoti-ate or compete (market mechanism) (Falk et al. 1993)(Kirsch 2002).
4 CONCEPT OF A COLLABORATIVE TRANSPORT DISPOSITION
The above- mentioned procedure is to be realized by means of a chosen example scenario. For this
pur-pose competing forwarding agencies are regarded which assign sub-orders to external companies if an execution of the order is not profitable enough for the company. The individual cost functions of each forwarder determines precisely when an execution of the sub-order is not sufficiently profitable. In this scenario it is possible that there is a reloading of goods during the execution of a transfer order if or-ders are only partly carried out and partial oror-ders are handled by (sub-) service providers. If this is the case, there is a need for a strong coordination among the various flow of goods. Otherwise the process would generate an increase in the stock keeping of goods, which would enhance the capital lockup costs.
Figure 1: Example for the disposition of competing logistics service providers
According to figure 1 the following steps charac-terize an order process. A forwarding agency re-ceives a transfer request by a customer.
Inquiry Agent Agent FA A Desired transport Agent Agent Agent FA B FA C ....FA Z Agent Agent Agent Agent Agent Agent Agent Information exchange FA A FA B FA C ....FA Z FA A FA - Forwarding Agency Agent Agent Order confirmation customer FA A Agent contract Agent Agent Agent FA A FA B FA C ..FA Z Agent offer Agent Agent Agent FA A FA B FA C ....FA Z Inquiry
Figure 2: Sub-order assigned to external service providers
The forwarder calculates the costs for the execu-tion of the order. If the costs are above a threshold, external service providers are contracted.
The costs can be above the threshold e.g. if the order falls below or exceeds a certain volume (e.g.
deliv-ery of small quantities), if the infrastructure is un-suitable for this order (transport of dangerous goods, or special goods such as bulk goods or liquid goods), if there are capacity bottlenecks (e.g. no trucks available) or if the passing on of an order is expected to result in a higher profit than carrying out the order itself (e.g. there is a company which regularly drives a special route and has free cargo capacities. So this company could offer a price below market average). Every forwarding agency executes the transport dis-position for incoming transfer inquiries. According to the complex execution of the transport disposi-tion, an execution via distributed computer systems by use of massive parallel algorithms is proposed. An additional scenario is possible in which a for-warding agency acts as a network of cooperating lo-gistics service providers in order to use the results of the previous project phases. If the costs of an order process exceed the threshold, sub service providers are contacted. The following chart shows a negotia-tion scenario between a forwarding agency and a possible sub service provider.
Contacting the sub service provider:
According to a given lists of (sub-) service pro-viders (e.g. yellow pages, internal address lists) and a given order size, a certain number of potential sub service providers is chosen. Sub service providers can accept the whole sub-order or only parts of the order (The acceptance of fulfilling only parts of the orders can result in the reloading of goods). Sub ser-vice providers submit their offer for the execution of the sub-order. In the context of a continuative nego-tiation or a direct choice, the forwarding agency chooses a sub service provider or possibly carries out the order itself. Sub service providers themselves have the possibility to pass on an order, as far as it is contractually determined that the general conditions given by the main contractor are not violated.
The in-house disposition of a customer inquiry can be realized by means of a centralized improve-ment procedure within a company. For this purpose distributed computer architectures are proposed. For the interaction with sub service providers decentral-ized models are suggested which can be realdecentral-ized e.g. in form of an agent system by means of selective in-quiries for execution by sub service providers. An agent can represent in general forwarding agencies whereas internally it is a global closed information structure in which all information is available at any time.
As decentralized and centralized methods are combined for the planned logistics disposition, espe-cially in order to carry out continuous improvements of existing solutions within a cooperating logistics network, mechanisms are required to support con-stant small response times of the sub service provid-ers for a real-time operation. We aim for a
“genera-tion of the first solu“genera-tion” and “improvement procedure for the existing solution”. During an im-provement procedure new incoming inquiries cannot be handled so that there is the danger that disposition methods of sub service providers are in a “solution improvement phase” and thus a response can only be sent back to the contractor at the end of this phase, which is associated with unacceptable time delays for the whole system.
G G I G G G G G I I I I I A B I inquiry order inquiry order
Legend:V = improvement of existing solution G = generation of a new solution
= incoming orders A = time level for enterprise A B = time level for enterprise B
C
G
Figure 3: Time flow of assigning a sub-order to another sub service provider
According to figure 3 a procedure is necessary which labors on a direct response at contacting a sub service provider. In this context a model is possible that uses an actual plan, i.e. the last generated solu-tion. If a change of this last solution should have consequences for the actual improvement, it is still possible to again read in the original inquiry in the end of the improvement phase. In this context a fur-ther passing on of sub orders to additional external service providers is analogous possible.
5 CALCULATIONS OF COSTS IN A NETWORK
Let
CE= CStD,E +CTrd,E +CSD,E
be the total costs of a specific logistics company E, whereby CStD, E are the station and reloading
costs, CTrd,E the costs depending on the route and
CTrd,E the vehicle operating costs.
Let C(Ei) also be the total costs of all companies
with
C(Ei)= CStD +CTrd +CSD(Ei).
Then the main objective is to minimize the total costs C(Ei) of all companies Ei. Each company E
computes in consideration of his individual cost functions the total costs C(Ei). Thereby all
C(Ei)= Min{CE(i)| CE(i) are the total costs, which
were computed by company E(i) ∀i∈{1,..|E|}}
is realized afterwards and communicated to all companies for further improvement routines.
Guaranteeing that no company has disadvan-tages by the global improvement routines:
Let
R=(st1, tr1,st2, tr2,...,stn-1,trn-1,stn)
be a route from station st1 to station stn via the
route tr1 to trn, which serve as a basis for the pricing
of a transfer order.
Let IE,0 be the total revenues of the company E for
the regarded planning horizon at the underlying ini-tial solution. Let IE,i be the computed total revenue
of an company E after i iterations. Let CE,0 be the
to-tal costs of an company E of the initial solution. Let GE,0 = IE,0 – CE,0
be the first computed profit of an company E. Then it is to be guaranteed that the new solution distrib-utes the transport volume fairly in all improvement steps to all transportation ne tworks involved (e.g. each individua l company is not been worse off than in his initial solution): Then the following applies to all regarded transport companies E:
If GE,0 > IE,i – CE,i for any i ∈ N with i > 0,
then E must get a monetary compensation from the company that obtained a profit by the improve-ment.
This could take place in form of a premium paid by those companies, which benefit from the total op-timization. Let P(IA,0) be the commission that
com-pany A must pay to comcom-pany B which was disad-vantaged by the optimization, then the profit allocation after i+1 iterations is:
GA,i+1 = GA,i + IB,i + CB,i – P(IA,i)
GB,i+1 = GB,i – IB,i – CB,i + P(IA,i)
Here it is assumed that all companies incur the same operating costs.
6 CONCLUSION
In a global economy the collaborative logistics ma n-agement becomes more and more important. The here-presented concept of network formation offers a possibility to strengthen the competitive environ-ment of companies. Each partner of a company net-work can bring in his own strengths and thus
in-creases the flexibility of the network. Thus scenarios are possible where companies merge intersectorally and can therefore serve whole market segments.
The combination of agent-based disposition and parallel improvement methods offers on the one hand a fast reaction to customer inquiries and on the other hand a continuous optimizing disposition. The assignment of sub-orders to external service provid-ers is realized by standard communication protocols both internally and externally. Thereby the majority of customer inquiries can be realized in an economi-cally profitable way since a company can increase its own margin by efficiently passing on order to other companies. In order to realize such a system the network partners do not have to know the com-plete data of the other partners. However if an order were assigned to an external party, it would lead to certain knowledge about the network partner’s pos-sibility to “outsource” efficiently.
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