Flexibility Planning in Distribution Networks

Companies, especially in the consumer goods industry, have realized the importance of flexibility in their distribution networks for the provision of high customer service levels. The challenge is to determine how flexibility potentials such as excess capacities in storage and transport should be set up and utilized as an integral part of distribution planning. Flexibility planning shall avoid unused flexibility potentials that represent cost drivers and insufficient flexibility alike. It needs to consider constraints such as lead times and dependencies between different adaptation measures. In addition, flexibility is a property which depends on future conditions, and anticipating the future development of the demand complicates the planning task and increases the complexity of the planning problem.

The author presents a planning model that incorporates flexibility decisions into the distribution planning. The use of a stochastic model allows for the consideration of demand scenarios and enables a flexible reaction to unforeseen changes. The planning model anticipates the development of the material flow and accounts for the temporal gap between the periods in which flexibility measures are implemented and the periods in which the beneficial effects in terms of high service levels develop. Its contribution to theory and practice could be demonstrated by means of different evaluation cases with involvement of companies from the consumer goods industry.

Dominik Pfeiffer, born 1985, studied Information Systems at the University of Münster, Germany. During his doctoral studies he worked as a Research Assistant at the European Research Center for Information Systems (ERCIS). In May 2014 he obtained the degree of Doctor of Economics (Dr rer. pol.) from the School of Business and Economics at the University of Münster. Since 2014 he works as an IT Architect in the Strategy and Architecture division of a German utility.