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  • Eindhoven, April 2013

    BSc Genie Industriel INPG 2011

    Student identity number 0786439

    in partial fulfilment of the requirements for the degree of

    Master of Science

    in Operations Management and Logistics

    Supervisors:

    dr.ir. S.D.P. Flapper, TU/e, OPAC

    dr. J.P. Gayon, INPG, ICL

    Integral Multi Echelon planning VS

    Integral Single Echelon Planning to

    cope with uncertainties in the Animal

    Health Supply Chain

    By

    G.D.C DAVID (Guillaume)

    G.D.C DAVID (Guillaume)

  • -Integral Single Echelon planning VS Integral Multi Echelon planning to cope with uncertainties-

    2 -Guillaume DAVID-

  • -Integral Single Echelon planning VS Integral Multi Echelon planning to cope with uncertainties-

    3 -Guillaume DAVID-

    TUE. School of Industrial Engineering.

    Series Master Theses Operations Management and Logistics

    Subject headings: Integral Planning, Single Echelon, Multi Echelon, Simulation,

    Pharmaceutical supply chain, supply uncertainties

  • -Integral Single Echelon planning VS Integral Multi Echelon planning to cope with uncertainties-

    4 -Guillaume DAVID-

    Integral Multi Echelon planning VS Integral Single Echelon Planning to cope with uncertainties in the Animal Health Supply Chain

    Master thesis report

    G.D.C DAVID (786439)

    10/04/2013

    Supervisors:

    Ir. Dr. S.D.P. Flapper, TU/e OPAC

    Dr. J.Waanders, MSD Animal Health

    Dr. JP.Gayon, INP of Grenoble-Gnie Industriel

    Key words : Integral Planning, Single Echelon, Multi Echelon, Simulation, Pharmaceutical supply chain, supply uncertainties

  • -Integral Single Echelon planning VS Integral Multi Echelon planning to cope with uncertainties-

    5 -Guillaume DAVID-

    Table of content Glossary ................................................................................................................................................... 7

    Abstract ................................................................................................................................................... 8

    Preface ..................................................................................................................................................... 9

    Management summary ......................................................................................................................... 10

    Introduction ........................................................................................................................................... 14

    I. MSD animal Healths description .................................................................................................. 16

    II. Supply chain description ............................................................................................................... 18

    II.A Supply chains structure and activities ................................................................................... 18

    Pharmaceutical supply chain ......................................................................................................... 18

    Biological supply chain .................................................................................................................. 19

    II.B Supply chain coordination ..................................................................................................... 21

    II.C Supply chain uncertainties .................................................................................................... 22

    Demand uncertainties ................................................................................................................... 22

    Supply uncertainties ...................................................................................................................... 22

    III. Project context .......................................................................................................................... 25

    III.A Project definition ................................................................................................................... 25

    III.B Multi Echelon concept versus Single Echelon concept ......................................................... 25

    III.C Research questions................................................................................................................ 27

    III.D Research approach ................................................................................................................ 28

    Conceptualization .......................................................................................................................... 28

    Modeling........................................................................................................................................ 28

    Model Solving ................................................................................................................................ 29

    Implementation ............................................................................................................................. 29

    III.E Project scope ......................................................................................................................... 29

    IV. Conceptual model ..................................................................................................................... 31

    IV.A Supply chain in scope ............................................................................................................ 31

    IV.B Single Echelon concept characterization ............................................................................... 33

    IV.C Multi Echelon concept characterization................................................................................ 34

    IV.D Planning process and characteristics .................................................................................... 35

    IV.E Planning policy....................................................................................................................... 37

    IV.F Model characteristics ............................................................................................................ 38

    The customer demand .................................................................................................................. 38

    The supply uncertainties ............................................................................................................... 38

  • -Integral Single Echelon planning VS Integral Multi Echelon planning to cope with uncertainties-

    6 -Guillaume DAVID-

    Service level ................................................................................................................................... 39

    Objective function ......................................................................................................................... 40

    Decisions variables ........................................................................................................................ 41

    IV.G Model summary .................................................................................................................... 42

    V. Simulation models ......................................................................................................................... 43

    V.A Simulation assumptions ........................................................................................................ 43

    V.B Multi Echelon Planning .......................................................................................................... 44

    V.C Single Echelon Planning ......................................................................................................... 51

    VI. Verification and Validation ........................................................................................................ 57

    VI.A Verification ............................................................................................................................ 57

    VI.B Validation .............................................................................................................................. 57

    VII. Results ....................................................................................................................................... 59

    VII.A Answer to the first research question: SE versus ME ........................................................... 59

    VII.B Answer to the second research question: Scenario analysis ................................................ 65

    Conclusion/discussion ........................................................................................................................... 77

    Recommendations ............................................................................................................................ 77

    Limitations of my project .................................................................................................................. 78

    Further research ................................................................................................................................ 78

    Table of Figures ..................................................................................................................................... 80

    Table of Tables....................................................................................................................................... 80

    References .................................................