Abstract for: The Dynamics of Multi-Tier, Multi-Channel Supply Chains for High-Value Government Aviation Parts
Multi-tier, multi-channel supply chains are now common in many industries including aviation. Such supply chains provide high-value aviation parts to the Government, and many have been plagued recently by shortages. A system dynamics model has been developed of an aviation supply chain producing a major sub-assembly composed of eight components, each component coming from a three tier supply chain. These components are used in new production as well as overhaul of damaged parts. It was found that in the face of varying demands substantial bullwhip was produced and that it became especially pronounced at the lower levels of the supply chain. Moreover, it was shown that the government ordering process is extremely sensitive to common data errors such as the production lead-time and that production constraints, not included in the ordering algorithms, created deep and prolonged shortages. On going research is developing improvements to the formulation of the ordering process and developing optimum inventory strategies for creating push-pull boundaries in the manufacturing process.