Data Analytics and Optimization in Supply Chain

and Logistics

Metin TürkayDepartment of Industrial Engineering

Koç-IBM Tedarik Zinciri Araştırma MerkeziKoç University

ICT LEIT in H2020 Info Day December 6, 2013, İstanbul

SustainabilityEnergy EfficiencyOptimality

Logic-BasedHybridMulti-Scale

RESEARCH PHILOSOPHY

CONCEPTS

MODELS

ALGORITHMS

REAL-LIFE APPLICATIONS

RobustEfficientScalable

SynthesisDesignAnalysis

Optimization: MINLP, MILP, MIDOData Driven:Numerical or categorical

Math ProgrammingDisjunctive Progr.Multi-Criteria Opt.

EnergySustainable Fossil FuelsSmart Electricity GridRenewable Energy

SCM&LogisticsStrategic, Tactical, OperationalSustainable SCMSustainable Logistics

Systems BiologyMulti-Group Data ClassificationStructure-Based Drug DesignDynamics of Genetic Networks

"Knowing is not enough; we must apply. Willing is not enough; we must do."   -Goethe

WHAT IS A SUPPLY CHAIN?

TWO FACTORS

BALANCING ACT

Competitive Strategy

Supply Chain Strategy

Efficiency Responsiveness

Facilities Inventory Transportation

Information

Supply chain structure

Cross Functional Drivers

Sourcing Pricing

Logistical Drivers

EFFICIENCY RESPONSIVENESS

CONCERNS Complexity: supply chains include many activities involving many

entities at different time-resolutions• Design-Plan-Execute: Divide decisions into 3 levels• Strategy-Planning-Operation: Divide decisions into 3 levels

Multi-Scale: span over a vast geography, sectors, players Multi-Echelon Decomposition: Divide into levels

Multi-Faceted: collaboration/competition at threats from different sources

2-Stage: Consider interaction between 2 adjacent players in the supply chain Uncertainty: many sources of uncertainty

Scenario Analysis: Sample a number of possible outcomes and calculate the expectation

Disruptions: everything can go wrong Preparation: overdesign, buffers, safety stock

WHAT IS THE STATE-OF-THE-ART Everything is based on Divide and Conquer strategies Fixed Recipes through policy analysis Little or no work on Rational/Extensible/Coherent approaches

PAST-PRESENT

REAL TIME Uncertainty realization Deviation management Real time optimization Configurability and flexibility

SYNCHRONOUS Do not divide, define new paradigms and mechanisms

DATA INTEGRATED (DRIVEN) Data Information Knowledge no longer the Holy Grail for

Supply ChainsHOPE

IoT: data from everywhere, everything, all the time Big Data: data analytics 3D Printing & Additive Manufacturing: postponement, eliminate

demand uncertainty

CYBER PHYSICAL SYSTEM

FUTURE

BIG DATAD

eman

d

Prices

Decisio

ns/R

eliability

DEMAND ESTIMATION

Periods 1 2 3 4 5Error 0.0116 0.0167 0.0238 0.0215 0.0313

PRICE ESTIMATION

Futures and OptionsLeading Macroeconomic IndicatorsJump DetectionEstimate Horizon: accuracy is sensitive to longer horizonsSuccessfully applied to Steel and Electricity prices

DATA CLASSIFICATION

Dagliyan, O., F. Uney-Yuksektepe, I.H. Kavakli and M. Turkay, Optimization Based Tumor Classification from Microarray Gene Expression Data, PLoS ONE, 6(2), e14579 (2011).

Dagliyan, O., Kavakli, I.H., Turkay, M., Classification of Cytochrome P450 Inhibitors with Respect to Binding Free Energy and pIC(50) Using Common Molecular Descriptors, J. of Chem. Inf & Mod., 49(10), 2403-2411 (2009).

Armutlu,P., M.E. Ozdemir, S. Ozdas, I.H. Kavakli and M. Turkay, "Discovery of Novel CYP17 Inhibitors for the Treatment of Prostate Cancer with Structure-Based Drug Design", Letters in Drug Design and Discovery, 6(5), 337-344 (2009).

Armutlu, P.,  M.E. Ozdemir, F. Uney-Yuksektepe, I.H. Kavakli and M. Turkay, Classification of drug molecules considering their IC50 values using mixed-integer linear programming based hyper-boxes method, BMC Bioinformatics, 9, 411 (2008). 

Uney Yuksektepe, F., O. Yilmaz and M. Turkay, "Prediction of Secondary Structures of Proteins using a Two-Stage Method", Comput. Chem. Eng., 32(1-2), 78-88 (2008).

Kahraman, P. and M. Turkay, "Classification of 1,4-Dihydropyridine Calcium Channel Antagonists using Hyper-Box Approach", Ind. Eng. Chem. Res., 46(14), 4921-4929 (2007).

Uney, F. and M. Turkay, "A Mixed-Integer Programming Approach to Multi-Class Data Classification Problem", European Journal of Operational Research, 173(3), 910-920 (2006)

ill

ikk

il ikl k

l lkk

lk ili

lk iki

ilmn ilmn

ilm ikm

ik ik ik

ik ik ik

YPB i

YPC i

YPB YPC i

YB YBC l

YBC YPB lk

YBC YPC lk

YPBN YPBM ilm

YPBM YPC ilk

YPC YP1 ik D

YPC YP2 ik D

Concepts, Models & Algorithms IBM: the first IBM SUR Award in Turkey-2007, IBM Faculty Award-2009, IBM OCR

Award with Haifa Lab, 2012 TÜBİTAK – 5 projects NSF – 2 projects (joint with Carnegie Mellon, UofAkron) European Commission-FP7 – 2 projects (50% for concepts, models & algorithms) European Science Foundation – 1 project TÜPRAŞ – 1 project (50% for concepts, models & algorithms)

Energy and Supply Chains TÜBİTAK – 2 projects KoçSistem – 1 project Mitsubishi Corporation – 1 project TÜPRAŞ – 1 project (50% for energy supply chains) İstanbul Ulaşım – 1 project

Transportation Systems TÜBİTAK – 2 projects Turkish Automotive Manufacturers Association – 1 project European Commission – 3 projects + 1 approved (starting in 2014) KoçSistem – 1 project İstanbul Ulaşım – 1 project Mitsubishi Corporation – 1 project

PROJECT PORTFOLIO

OUR SPONSORS

EC PROJECTS

LOG4GREEN: Green Logistics

IntRaRegio: Intermodal Logistics

OSIRIS: Holistic Approach to Energy Efficiency in Urban Rail

[MapDriver] MapDriver: ICT Innovation Uptake by SMEsfinalizing the Consortium Agreement, will start in 2014

SUMMARY

AT THE INTERFACE ICT Transport Energy Smart Cities and Communities

EXPERTISE Solutions methodology to complex problems Big Data and analytics tools Modeling complex systems Optimization-based solution algorithms

EXPERIENCE Concepts & Models Solution Algorithms A number of real-life projects