THE ROLE OF QUANTITATIVE METHODS IN SUPPLY CHAIN MANAGEMENT Introduction

The supply chain of both manufacturing and commercial enterprises comprises a highly distributed environment, in which complex processes evolve in a network of companies (see Figure 1). Such processes include materials procurement and storage, production of intermediate and final products, warehousing, sales, customer service, and distribution. The role of the supply chain in a company’s competitiveness is critical, since the supply chain affects directly customer satisfaction, inventory and distribution costs, and responsiveness to the ever changing markets. This role becomes more critical in today’s distributed manufacturing environment, in which companies focus on core competencies and outsource supportive tasks, thus creating large supply networks. Within this environment, there are strong interactions of multiple entities, processes, and data. For each process in isolation, it is usually feasible to identify those decisions that are locally optimal, especially in a deterministic setting. However, decision making in supply chain systems should consider intrinsic uncertainties, while coordinating the interests and goals of the multitude of processes involved. Operational Research-based Management Science (OR/MS) methods as well as Computational Intelligence (i.e. nature inspired techniques), offer effective techniques for modelling, analyzing and