ABSTRACT
ABST R AC T Supply chain (SC) design involves making strategic decisions for the long term, e.g. location and capacity of facilities, ow of material between SC nodes, as well as choosing suppliers and markets. The forest biorenery is emerging as a promising opportunity for improving the business model of forest product companies, however introduces signicant challenges in terms of mitigating technology, economic and nancial riskseach of which must be systematically addressed, including in SC design. In
CONTENTS
Introduction ....................................................................................................... 1018 Methodology ..................................................................................................... 1021 First Step: Product/Process Portfolio Design ............................................... 1021
Product Portfolio Denition .................................................................. 1022 Large Block Analysis (LBA) .................................................................... 1023
Second Step: Designing the Manufacturing Flexibility ............................... 1025 SC Model ................................................................................................... 1025 Operations-Driven Cost Model ............................................................. 1026 Establishing the Range of Manufacturing Flexibility ......................... 1026 Designing the Established Target .......................................................... 1027
Third Step: SC Network Design ...................................................................... 1028 Decision Making Framework .......................................................................... 1029 Illustrative Example .......................................................................................... 1029 Conclusions ........................................................................................................ 1032 Acknowledgments ........................................................................................... 1032 References ........................................................................................................... 1032
this regard, product portfolio denition and technology selection are two important decisions that have rarely been considered in a systematic SC evaluation. This paper presents such a methodology, in which product/process portfolio design and SC design are linked in order to build a design decision making framework. According to this methodology, “manufacturing exibility” links product/process portfolio design to SC design, through a margins-centric SC operating policy. Techno-economic studies and advanced cost modeling along with scenario generation for price change representing market volatility are employed in the methodology.
