Book Description

This thesis focuses on the interface of project and supply Chain Management. Supply chain decisions (e.g., material planning, network design, supply management) and project management decisions (e.g., resource planning, expediting, and project scheduling) are intertwined in many firms. The objective of this thesis is to construct and analyze new models and methods that can help firms integrate supply chain and project management. Specifically, we addressed the following issues: (1) Joint optimization of inventory and project planning decisions for recurrent projects subject to random material delays (Chapter 2), often found in construction industries. (2) Designing and managing the development chain for one-of-a-kind R & D projects with an extensive workload outsourced (Chapters 3,4), representing the recent trend in the aerospace and defense industries. In Chapter 2, we study a new class of problems -- recurrent projects with random material delays, at the interface between project and supply chain management. Recurrent projects are those similar in schedule and material requirements. We present the model of project-driven supply chain (PDSC) to jointly optimize the safety-stock decisions in material supply chains and the crashing decisions in projects. We prove certain convexity properties which allow us to characterize the optimal crashing policy. We study the interaction between supply chain inventory decisions and project crashing decisions, and demonstrate the impact of the PDSC model using examples based on real-world practice. In Chapter 3, we study incentive and coordination issues in development chains. Collaboration and partnership are the way of life for large complex projects in many industries. While they offer irresistible benefits in market expansion, technological innovation, and cost reduction, they also present a significant challenge in incentives and coordination of the project supply chains. In this chapter, we study strategic behaviors of firms under the popular loss-sharing partnership in joint projects by a novel model that applies the economic theory of teamwork to project management specifics. We provide insights into the impact of collaboration on the project performance. For a general project network with both parallel and sequential tasks where each firm faces a time-cost trade-off, we find an inherent conflict of interests between individual firms and the project. Depending on the cost and network structure, we made a few surprising discoveries, such as, the Prisoners' Dilemma, the Supplier's Dilemma, and the Coauthors' Dilemma; these dilemmas reveal scenarios in which individual firms are motivated to take actions against the best interests of the project and exactly how collaboration can hurt. As remedy, we enhance collaboration by a set of new provisions into a ``fair sharing" partnership and prove its effectiveness in aligning individual firms' interests with that of the project. In Chapter 4, we extend the model in Chapter 3 in two directions. First, we extend the discrete-time model to a continuous-time model and show that the Coauthor's Dilemma still holds and thus the project will never be finished earlier under the loss-sharing partnership than the centralized control system. Second, we consider stochastic task durations and find that the uncertainty increases the probability of project delay.