Supporting Demand Supply Network Optimization with Petri Nets

The present study implements a generic methodology for describing and analyzing demand supply networks, that is, networks from a company’s suppliers to its customers. There can be many possible demand supply networks with different logistics costs for a product. Therefore, we introduce a Petri Net-based formalism, and a reachability analysis based algorithm that finds the optimum demand supply network for a user-specified product structure. The method has been implemented and is currently in production use inside all Nokia business groups. It is used in demand supply planning of both network elements and handsets. An example of the method’s application to a concrete Nokia product is included. INtrODUctION Logistics refers to the flow of materials, information, and money between the suppliers and customers. A demand supply network refers to the manner in which components flow from suppliers to the manufacturer’s plants, and finally to the end customers. The logistics cost associated with a demand supply network include such costs as freight, warehousing, interest rate, duties, and taxes. A typical problem that logistics professionals face in a global corporation is finding the cheapest and most reliable way of producing a product and delivering it to customers. Often, the product structures and supplier bases vary considerably during a product design phase. The logistics manager must decide the most economical component suppliers and the best-positioned assembly facto-