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Center for Polymer Microfabrication (CPM)

MIT Laboratory for Manufacturing Productivity

NTU Biochemical Process Engineering Laboratory

systems, the factory and enterprise

Design of Supply Chains

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The supply chain for micro-and nano-scale devices, such as microfluidic devices, will entail at least two major process stages. The first stage will fabricate the device from its raw material while the second stage packages the device so that it can interact with the rest of the world. In the first stage, the basic functionality of the device is established, while at the second stage, the product is customized for various application contexts. This two-stage structure is found in many industries, such as semi-conductors, pharmaceuticals, and electronics

When a firm introduces a new family of microfluidic devices, the firm must determine its supply chain. The design of the supply chain will determine the ultimate commercial success of the product, that is, the ability to meet market demand with high quality products in a timely fashion at competitive prices. Particular decisions include the make-buy decisions for both the fabrication stage and the packaging and customization stage. These decisions entail how much fabrication capacity to have in house, and how much to outsource to a foundry. Similar decisions are made for packaging and customization. These decisions are made under uncertainty both uncertainty about the market demand for the product, and uncertainty about the manufacturing capabilities of the various sourcing options.

Concurrent with the make-buy decisions, the firm must decide the operating tactics for the supply chain. The firm must decide how to evolve the supply chain as a new family of products is introduced and goes through its life cycle. For instance, the firm must decide which supply sources provide the base volume as the product is rolled out, which sources are to be added as the product ramps, and which are to be held in reserve for demand surges or supply failures. These decisions are complicated by the need to coordinate the two stages of the supply chain, where different sources have different cost structures and capabilities. In addition the firm must decide on inventory tactics such as the placement and sizing of strategic inventories to protect against both inflexibilities in the supply chain and demand uncertainties.

We envision a series of research projects to address these design challenges. The intent of these research projects will be to develop the fundamental mathematical models and methods for providing decision support for the design of supply chains for emerging industries. One set of research questions includes finding the amount and type of capacity to procure over the life cycle of the product for each manufacturing stage, as well as the contractual terms with suppliers. These decisions must account for uncertainties in demand and process, and must balance all of the relevant costs and revenues. A second set of research questions focuses on the evaluation and optimization of the operational plans for the supply chain, in terms of how best to deploy both the supply sources and inventory so as to meet demand at the least cost with the appropriate level of service.

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