ISyE Seminar - David Simchi-Levi

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TITLE: Understanding the Effectiveness of Sparse Process Flexibility


In this talk, we review new theory that explains the effectiveness of sparse flexibility design in any finite size manufacturing network. Under stochastic demand, we establish two fundamental properties of sparse designs, a supermodularity property and a decomposition property. These properties are then used to provide the first theoretical justification for several well-known observations in the process flexibility literature, and to derive new insights into designing flexible processes in large systems. Under worst-case demand, we propose the plant cover index and establish its relation with the worst-case sales. Applying this relation, we demonstrate the effectiveness of a certain sparse design, called the long chain. Finally, we discuss the combination of process flexibility and strategic inventory as an effective disruption mitigation strategy.


David Simchi-Levi is a Professor of Engineering Systems at MIT and Chairman of Opalytics, a cloud analytics platform company.  He is considered one of the premier thought leaders in supply chain management and business analytics.  His research focuses on developing and implementing robust and efficient techniques for operations management. He has published widely in professional journals on both practical and theoretical aspects of supply chain and revenue management.

His Ph.D. students have accepted faculty positions in leading academic institutes including U. of California Berkeley, Columbia U., Cornell U., Duke U., Georgia Tech, Harvard U., U. of Illinois Urbana-Champaign, U. of Michigan, Purdue U. and Virginia Tech.

Professor Simchi-Levi co-authored the books Managing the Supply Chain (McGraw-Hill, 2004), the award winning Designing and Managing the Supply Chain (McGraw-Hill, 2007) and The Logic of Logistics (3rd edition, Springer 2013). He also published Operations Rules: Delivering Customer Value through Flexible Operations (MIT Press, 2011).

He served as the Editor-in-Chief for Operations Research (2006-2012), the flagship journal of INFORMS and for Naval Research Logistics (2003-2005). He is an INFORMS Fellow, MSOM Distinguished Fellow and the recipient of the 2014 INFORMS Daniel H. Wagner Prize for Excellence in Operations Research Practice; 2014 INFORMS Revenue Management and Pricing Section Practice Award; 2009 INFORMS Revenue Management and Pricing Section Prize and Ford 2015 Engineering Excellence Award.

Professor Simchi-Levi has consulted and collaborated extensively with private and public organizations. He was the founder of LogicTools which provided software solutions and professional services for supply chain optimization. LogicTools became part of IBM in 2009. In 2012 he co-founded OPS Rules, an operations analytics consulting company. The company became part of Accenture in 2016.


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