( MULTI-AGENT BASE ) HOLONIC SUPPLY CHAIN MANAGEMENT

1
( MULTI-AGENT BASE ) HOLONIC SUPPLY CHAIN
MANAGEMENT

• By
• OMOJARO A. PETER
• MOSTAFA JAFARI
• MOHAMMAD KHAONJANI

2

• OUTLINE
• Abstract
• Introduction
• Defining supply chain management (SCM)
• . Integrated supply chain network
• . Basic Operation categories
• . Role of information Technology
• Holonic supply chain
• Characteristics of Holonic/Multi agent SCM
• Condition for implementation
• Comparing Holonic/Multi agent SCM with
  Conventional SCM
• Case study
• Application of Virtual Reality
• Conclusion

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ABSTRACT
This analysis presents the fields of
supply chain management, multi-agent systems, and
the merger of these two fields into multi-agent
based supply chain management. The
concept of supply chain management is to overlook
and manage the transition of raw goods in to
finished products. and thus, a synthesis of
supply chain management and multi-agent systems
introduce agents application to achieve this.
For this purpose, agents are firstly,
introduced as a new information technology for
supply chain management before focusing on how
agents can contribute to solving problems in
supply chains. A compairism of supply
chain management and a multi-agents base SCM is
then presented followed by a case study. A
look at the possibility of a virtual form of
simulating the proposed model is stated.
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INTRODUCTION

• Today ..
• Market place is increasingly demanding more in
  term of lower cost, faster time-to-market and
  better quality
• SO
• Forcing companies to become ever more reactive
  and agile in performing their business task.
• Modern manufacturing should be able to act like
  a cell in an organism (the market).
• The survival of manufacturing companies has
  become increasingly more depended on their
  ability to react promptly and flexibility to
  market variation and need .
• Flexibility appear to be the strategic success
  factor to satisfy the global competition need of
  worldwide manufacturing enterprise, allowing them
  to provide high- quality production at reasonable
  cost.

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TERMS DEFINATIONS

• Supply Chain Is the global network used to
  deliver products and services from raw material
  to end customers through an engineered flow of
  information, physical distribution, and cash. -
  The association for operation management, (APICS)
• Supply Chain is the set of firms acting to
  design, engineer, market, manufacture, and
  distribute products and services to
  end-consumers. In general, this set of firms is
  structured as a network, in which we can see a
  supply chain with five levels (raw material
  suppliers, tier suppliers, manufacturers,
  distribution centers and retailers). - Muckstadt
  and his colleague

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TERMS DEFINATIONS
Supply Chain Management The Design,
Maintenance, and operation of supply chain
processes, including those that make up extended
product features, for satisfaction of end-user
needs.- James B. Ayers
fig. 1 Supply Chain Operation Reference ( SCOR)
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Integrated SCM Over the years more
corporations have become increasingly flexible
and dependent on outsourcing the production of
their goods to other corporations, who are able
to do the job at a more affordable rate. This
explain the different links and merging of more
than one company to process and bring to
existence a desired product from the raw material
supplier, the tier supplier the manufacturer or
assembler, distributors and final consumer.
As previously explained, the concept of
inter-company collaboration is a way to create
such synergies in a supply chain.
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Raw material Tier suppliers
Manufacturers Distribution
Retailers suppliers

centers Fig .2 An example of
an integrated supply chain
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AN INTEGRATED SCM LAYERS
OEM The original equipment manufacturer e.g.
Mercedes, Suzuki, HP, Peugeot. SYSTEM
INTEGRATORS The integrator of the process in
most case not physical but are otherwise regarded
as the main suppliers to the OEM. SUPPLIERS
The different suppliers (manufacturers) of
separate parts.
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• THREE BASIC CATEGORICAL LEVELS OF SUPPLY CHAIN
  ACTIVITIES
• Strategic Optimization, and partnership with
  suppliers, distributors, and
• customers, creating communication channels for
  critical information and operational
• Improvements. Product design coordination, so
  that new and existing products can be
• optimally integrated into the supply chain, load
  management Information Technology
• infrastructure, to support supply chain
  operations. Where-to-make and what-to-make
• -or-buy decisions.
• 2. Tactical Sourcing contracts and other
  purchasing decisions. Production decisions
  including contracting, scheduling, and planning
  process definition. Inventory decisions,
  Transportation strategy, and Benchmarking of all
  operations against competitors as well as
  implementation of best practices throughout the
  enterprise. Focus is on customer demand.
• 3. Operational Daily production and
  distribution planning, including all nodes in the
  supply chain. Production scheduling for each
  manufacturing facility in the supply chain
  (minute by minute). Outbound operations,
  including all fulfillment activities and
  transportation to customers. Order promising,
  accounting for all constraints in the supply
  chain, including all suppliers, manufacturing
  facilities, distribution centers, and other
  customers.

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Information Technologies in Supply Chain
Management Information
technologies is an important enabler of
effective supply chain management. Much of the
current interest in supply chain management is
motivated by the possibilities that are
introduced by the abundance of data and the
savings inherent in sophisticated analysis of
these data. - Simchi-Levi and his colleagues,
Below is an illustration of interaction that
can only be attain by forward and respond
information and data flow. It can be in document
form and It follows that information
technologies in supply chains pursue three goals
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1 Collecting information on each product from
production to delivery or purchase point, and
providing complete visibility for all parties
involved. 2 Accessing any data in the system
from a single-point-of-contact, e.g. from a PDA
linked to the company information system through
a wireless link. 3 Analyzing data, planning
activities, and making trade-offs based on
information from the entire supply chain. To
achieve these activities, information
technologies use certain means Information
technology infrastructure (network, databases. .
.) E-commerce supply chain components,
which are the various systems directly involved
in supply chain planning, i.e., Decision Support
Systems (DSS). Concretely, information and
decision technologies take the form of
Enterprise Resource Planning (ERP) a class of
software systems organizing and managing
companies, e.g., PeopleSoft/Oracle, or SSA
Global E-commerce, and in particular
marketplaces, such as Commerce One and Ariba.
Advanced Planning and Scheduling (APS) a class
of software for Decision Support System (DSS) in
supply chains.
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According to Shapiros decomposition of
information technologies, the first two
applications (ERP and e-commerce) belong to
Transactional Information Technologies because
they are concerned with acquiring, processing and
Communicating raw data. On the other
hand, APS and DSS belong to Analytical
Information Technologies because they allow
analyzing raw data in order to help managers,
which is a task at a higher level. In
practice, companies first install transactional
tools, because analytical tools need them to be
fed with raw data. More and more, multi-agent
systems are seen as a new technology for
improving or replacing technologies used in both
transactional and analytical information
technologies. We now explain why agent technology
seems so promising in the context of supply
chains.
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HOLONIC SYSTEM (MULTI - AGENT SYSTEM)

• Stressing the concept of higher
  decentralized, coordination and control in
  production system.
• A holon is an autonomous and cooperative
  building block of a system (manufacturing or
  others) for transforming, transporting, storing
  and or validating information and physical
  objects.
• IT has the following as its attributes
• Integration
• Agility
• Synchronization
• Customer-centric Service
• Information Protection

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Motivations For Using Holonic OR Multi-Agent
Systems in Supply Chain Management
Researchers have already applied agent technology
in industry to concurrent engineering,
manufacturing enterprise integration, supply
chain management, manufacturing planning,
scheduling and control and holonic manufacturing
systems. Concerning supply chain
organized as a network of intelligent agents, it
is noted to be made up of heterogeneous
(Different types) production subsystems gathered
in vast dynamic and virtual coalitions.
Intelligent distributed systems, e.g. multi-agent
systems, enable increased autonomy of each member
in the supply chain. Each partner (or production
subsystem) pursues individual goals while
satisfying both local and external constraints.
Therefore, one or several agents can be
used to represent each partner in the supply
chain (plant, workshop, etc.). Moreover, the
agent paradigm (standard) is a natural metaphor
for network organizations.
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CHARACTERISTICS OF HOLONIC/MULTI AGENTS SCM
SYSTEMS AUTONOMY a company carries out tasks by
itself without external intervention and has some
kind of control over its action and internal
state INTEGRATION this is an attribute that
links all the participants and activities
involved in converting raw materials into
products and delivering them to consumers at the
right time and at the right place. i.e. interacts
with other companies e.g. by placing orders for
products or services (social ability) SYNCHRONIZ
ATION synchronizing supplier planning,
production planning, logistics planning, and
demand planning will provide a comprehensive view
of all supply chain activities and enable
management to make more informed trade off
decisions. AGILITY SCM systems must be able to
process transactions rapidly and accurately. in
today's business environment organizations must
focus on moving information and products quickly
through the entire supply chain, distribution,
assembly manufacture and supply. the faster
information, and decisions flow through an
organization, the quicker it can respond to
customer needs and orders. FLEXIBILITY OR
REACTIVITY a company perceives its environment,
i.e., the market and the other companies, and
responds in a timely fashion to changes that
occur in it. In particular, each firm modifies
its behaviour and customize its services to meet
the needs of distinct customer segments or
individual accounts. to adapt to market and
competition evolutions. PRO-ACTIVENESS a
company not only simply acts in response to its
environment it can also initiate new activities,
e.g. launch new products into it.
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BASIC TYPES OF HOLON BUILDING BLOCKS IN A HOLONIC
MANUFACTURING SYSTEM (HMS) 1) Product holons
A product Holon holds the process and product
knowledge to ensure the correct fabrication of
the product with sufficient quality. It acts as
an information server to the other Holon's in the
HMS. A product Holon provides consistent and
up-to-date information on the product life-cycle,
user requirements, design, and process plan and
bill of material. 2) Order holons An order
holon represents a manufacturing order. It is an
active entity responsible for performing the work
correctly and on time. It explicitly captures all
information and information processing of a job
(Valckenaers, 1996). 3) Resource holons A
resource Holon consists of a physical part,
namely a production resource in the HMS, and of
an information processing part that controls the
resource. It offers production capacity and
functionality to the surrounding Holon's (Wyns,
1996). It holds the methods to allocate the
production resources, and the knowledge and
procedures to organize, use and control these
production resources to drive production. A
resource Holon is an abstraction for the
production means such as machines, furnaces,
conveyors, pipelines, pallets, components, raw
materials, tools, tool holders, material storage,
personnel, energy, floor space, etc.
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Depending on the situation of the environment in
which an holonic approach is to be implemented.
different types of holon can be created and each
holon has a specific role it will be carrying out
and cooperating with other holons to achieve the
set objective at the same time.
Product Holon
Order Holon
Resource Holon
Cell Holon
Cell Holon
AVG Holon
Machine Holon
Machine Holon
AVG Holon
Robot Holon
Robot Holon
Fig. 4 Types of holons and their relation with
each other
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CONDITION FOR IMPLEMENTATION Multi-agent systems
offer a way to elaborate production systems that
are 1 Decentralized rather than centralized.
2 Emergent rather than planned. 3 Concurrent
rather than sequential. It must be used
for problems whose characteristics require its
capacities. According to Parunak, five
characteristics are particularly salient. In
fact, agents are best suited for applications
that are 1 Modular 2
Decentralized 3 Changeable
4 Ill-structured 5 Complex
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COMPARING MULTI-AGENT SCM WITH CONVENTIONAL SCM
To judge relevance for supply chains
of autonomous agents, multi-agent systems are
identified as biological (ecosystems) and
economical (markets) models, whereas traditional
approaches are compared with military patterns of
hierarchical organization.
ISSUE AUTONOMOUS AGENTS (HOLONIC) CONVENTIONAL SYSTEMS
Model Economical, Biological Military
Issues favouring conventional system 1. Theoretical optimization? 2. Level of prediction 3. Computational stability No Aggregate Low Yes Individual High
Issues favouring autonomous agents 4. Match to reality 5. Requires central data? 6. Response to change 7. System re-configurability 8. Nature of software 9. Time required to schedule High No Robust Easy Short, simple Real time Low Yes Fragile Hard Lengthy, complex Slow
Table 1 . Agent-based (Holonic) vs. Conventional
technologies.
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1. Theoretical optima cannot be guaranteed,
because there is no global view of the
system 2. Predictions for autonomous agents can
usually be made only at the aggregate level 3.
In principle, systems of autonomous agents can
become computationally unstable, since, according
to System Dynamics, any system is potentially
unstable. But on the other hand, the autonomous,
agent-based approach has advantages like 4.
Because each agent is close to the point of
contact with the real world, the systems
computational state tracks the state of the world
very closely. . . 5 . . . . And this tracking is
without need for a centralized database. 6.
Because overall system behavior emerges from
local decisions, the system readjusts itself
automatically to environmental noise . . . 7 . .
. . Or to the removal or addition of agents 8.
The software for each agent is much shorter and
simpler than would be required for a centralized
approach, and as a result is easier to write,
debug and maintain. 9. Because the system
schedules itself as it runs, there is no separate
scheduling phase of operation, and thus no need
to wait for the scheduler to complete. Moreover,
the optima computed by conventional systems may
not be realizable in practice, and the more
detailed predictions permitted by conventional
approaches are often invalidated by the real
world.
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CASE STUDY
For a piston manufacturing company with a
dynamic and complex market demand that is very
high. How can we utilize Multi-agents system to
improve the shop floor in coping and meeting with
demand at the lowest adjustments on machine,
shortest possible time and easy decision making?
Fig.5
Increase the production capacity by satisfying
the aftermath customers.
Lower the effects on machines
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MULTI ENTERPRISE LAYER
ENTERPRISE LAYER
Fig.6
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Fig.7
CELL LAYER
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• CURRENT STATE
• Piston of up to 3,000,000 are produced.
• There is over 3,000 aftermath customer. (i.e.
  excluding main brand customer which are SAIPA
  KIA motor and IRAN KHODRO Peugeot motor).
• Over 500 employers.
• Location in the North-west of Iran.
• It is a private own company.
• Under pioneer license from MAHLE Brand Germany .

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FACTORY AND SHOP FLOOR SYSTEM
EVENTS COMMON WITH THIS SYSTEM 1. Rely heavily
on the maintenance department 2. The production
manager will have to be informed before any major
decision are take from the 2 minute,15 minute
and 30 minute stipulated machine breakdown
tolerance 3. The sales have a constraint of
giving customer an immediate feed back for
meeting an urgent demand. 4. Each machine buffer
has a schedule task it must deliver.
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PROBLEM STATEMENT A. VARIATIONS IN DEMAND 1
AFTERMATH very high un-predictable demand
With over 30 different models, quantities demand
of different models varies and is high. 2
OEMs The issues of customized demand at
unplanned time is highly possible and
constant. B. HIGH ADJUSTMENTS ON MACHINES 1
Effects of continuous changing of machine affects
machine performance. 2 Risk of quality
depreciation as machine specified tolerance and
precision level can be affected by adjustments.
3 Human error tend to increase with much
adjustments. C. INCREASEMENT IN PRODUCTION 30
Available capacity to meet high demand. D.
INTEGRATION AND HARMONIZATION 1 Need for
quick and on time accurate information and
support on the shop floor.
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PROPOSED AGENT TECHNOLOGY MODEL FOR THE SUPPLY
SCHAIN
Detailed Agents SCM roles Holon and sub-holon
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• IMPLEMENTATION RE-ADJUSTMENTS CHALLENGES
• Training or hiring of personnel to function as a
  reliable agent.
• The same machines can be effectively put into
  use without increasing production line.

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RESOURCE. HOLON 1 M/C
COOPERATIVE NEGOTIATION created any time an
order arise
L T OUTGOING ORDER HOLON
RESOURCE. HOLON 2 M/C
RESOURCE. HOLON 3 M/C
RESOURCE. HOLON 4 M/C
SALES INCOMING ORDER HOLON
RESOURCE. HOLON 5 M/C
CUSTOMER 1 CUSTOMER 2 CUSTOMER 3
Details decision making Holon
PRODUCT HOLON PD.M
Overall decision making Holon
RESOURCE HOLON TPM
SUPPLIER 1 SCM HOLON
PRODUCT HOLON SU- M
SUPPLIER 2 SCM HOLON
PRODUCT HOLON I-T . M
Fig.10
ABC Agents SCM domain data flow diagram Design
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• BENEFITS
• Easy decision making that is cooperative and
  autonomous.
• Readjust the change in the system with the least
  change constraint.
• There is consistent up to date information
  available to all agents in the data pool.
• Overall general decision can be made with within
  the shortest possible time.
• High flexibility that meets the satisfying need
  of the aftermath market/demand.
• Transportation issues are addressed as assurance
  can be given for a prompt response to demand and
  delivery.

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APPLICATION OF VIRTUAL REALITY
The ability of Virtual Reality to provide
realistic simulations of data, objects and
environments, with which users can interact and
manipulate in an intuitive and realistic manner
is very possible. This has been provided in
situations like layout planning and concept
creation, operation use, production simulation,
operators training. Because of complex
structures of Supply Chain and project team
major business driver for the use of virtual
reality by its professionals is to visualize
and understand engineering problems and hence
reducing risk and uncertainty. It is basically
used by companies to address and show their
technical competency and expertise.
It should be noted that the better a simulation
platform corresponds to their application
environment, the easier the development process
will be.
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Before taking a new order from a customer, a
simulation model can show when the order will be
completed because just taking the new order can
affect other orders in the facility. Simulation
can be used to augment the tasks of planers and
schedulers to run the operation with better
efficiency. The aims usually are to test and
verify plans, check the material flow routing and
control principle, verify the buffer size and
location and search for bottlenecks. The data
should be real production data if available, or
data from similar products or variants in the
same product family. This is an interactive
analysis, the engineers should return back to
cell level studies, if some parameter need more
detail study, for example cycle time need to be
shorter. Models can be used to plan, design
and process day-to-day operation of manufacturing
facilities. These as build models provide
manufacturers with the ability to evaluate the
capacity of the system for new orders, unforeseen
events such as equipment downtime and changes in
operations. Some operations models also provide
schedules that manufacturers can use to run their
facilities. planning and scheduling systems plans
can be complimented.
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CONCLUSIONS All these reasons
show the relevance to use agents in supply chain
management. In other words, thanks to their
adaptability, their autonomy and their social
ability, agent-based systems is a viable
technology for the implementation of
communication and decision-making in real-time.
Each agent would represent a part of the
decision-making process, hence creating a tight
network of decision makers, who react in
real-time to customer requirements, in opposition
to the flood of current processes, which is
decided before and after a customers place an
order.
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Polytechnic Institute of Bragança, Quinta Sta
Apolónia, Apartado 134, 5301-857 Bragança 2
Instituto Desenv. e Inovação Tecnológica, Rua do
IDIT, Espargo, 4520-102 Sta Maria da Feira 3
Faculty of Engineering, University of Porto, Rua
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