Concurrent Design of Assembly Plans and Supply Chain Configurations Using AND/OR Graphs and Dynamic Programming

Making concurrent decisions on assembly plans and supply chain configurations is a desirable strategy in today’s competitive global market. Such concurrent decisions help reduce decision iterations for shortened lead time, and lower the total cost for manufacturers and their supply chains. However, there lacks deep understanding of the interaction of assembly plans and supply chain configurations, as well as methodologies for integrating them. In this paper, we consider the problem of simultaneously decomposing an assembly product to modules and assigning the modules to suppliers. The joint decision is formulated as an optimization problem of finding the assembly decomposition and the corresponding supply chain network with the lowest total supply chain cost. We develop a coordinated decision making method by integrating assembly AND/OR graphs with supply chain cost information. A Dynamic Programming (DP) based algorithm is developed to efficiently solve the combined optimization problem. Case studies demonstrate that the proposed method can find optimal solutions to the integrated decision making problem efficiently and provide a tool to plan assemblies from the perspective of the total supply chain cost in the early stages of product development.