Global Supply Chain Management at Digital Equipment Corporation

TLDR

Digital Equipment Corporation evaluates global supply chain alternatives to devise a worldwide manufacturing and distribution strategy using the Global Supply Chain Model (GSCM). GSCM is a large mixed‑integer linear program that minimizes cost or weighted production and distribution times while meeting demand, local‑content, trade, and capacity constraints, incorporating fixed and variable production charges, inventory, distribution, taxes, duties, and a global multi‑product bill of materials. The restructuring achieved savings of more than $100 million.

Abstract

Digital Equipment Corporation evaluates global supply chain alternatives and determines worldwide manufacturing and distribution strategy, using the Global Supply Chain Model (GSCM) which recommends a production, distribution, and vendor network. GSCM minimizes cost or weighted cumulative production and distribution times or both subject to meeting estimated demand and restrictions on local content, offset trade, and joint capacity for multiple products, echelons, and time periods. Cost factors include fixed and variable production charges, inventory charges, distribution expenses via multiple modes, taxes, duties, and duty drawback. GSCM is a large mixed-integer linear program that incorporates a global, multi-product bill of materials for supply chains with arbitrary echelon structure and a comprehensive model of integrated global manufacturing and distribution decisions. The supply chain restructuring has saved over $100 million (US).