Assigned Article Reading 5 Event - Driven Optimization a New Model for Supply ChainThe article proposes a new supply chain model called event-driven optimization (EDO) time that accurately represents the current instance state of the execution space upon automatic notification of an adverse event, then re-optimizing those parts of the supply chain affected by the event. The benefits from this model of supply chain can be listed as below: Exception-based reporting from multiple suppliers coordinated with specific purchase orders to determine if shipments will meet target delivery times and dates Visibility of the supply chain in real time Reduction/elimination of human processes and associated reduction of costs and errors Increased speed of complex decision- process making Improved communications between stores and distribution centers about shipment of goods Consolidation of multiple shipments from multiple suppliers in a geographic proximity to reduce shipping costsAccording to a recent IDC survey of U.S. retailers, almost two-thirds of retailers currently use inventory management applications and out of remaining, 21% are either planning to implement or currently evaluating this type of application. However when it comes to supply chain management applications only around 21% use these. This is because most of the small retailers rely on UPS, FedEx and other third party logistics to manage the shipment of the goods to stores.After conducting a series of in depth phone interviews with the supply chain executives at retailers and consumer packaged goods companies, IDC came up with the below list of challenges being faced: End-to-end visibility of the supply chain to create better predictability around the movement and arrival of products Creation of a global supply chain network map to determine optimal warehouse locations and distribution channels and partnerships Ability to get the right products to the right customers in the least amount of time and with the least amount of cost Difficulty of forecasting sales and inventory requirements of a new product or those based on a new marketing promotion Establishment of trust and reliability with suppliersBelow are IT specific supply chain challenges: Simplifying the complexity of the supply chains various applications and disparate systems to eliminate duplication and manual reconciliation of data Getting information across disparate systems to a large number of decision makers as soon as possible Smaller suppliers lack of tools or technology to facilitate integrated communication and product trackingThe below are the strategies adopted by some of the companies to overcome the unforeseen circumstances:The Bear Creek Company adopts a strategy to look for an alternative available substitution. Cooking.com asked its suppliers who themselves might have been waiting for goods on stranded containers to ship all of their current orders and not to wait for the purchase orders.To implement EDO, Catalyst International a leading provider of warehouse management systems, and Symbol Technologies, a global leader in secure mobile information systems have partnered. A combination of technologies like XML, GPS, barcodes, mobile devices and communications, Web services and RFID are being used to implement EDO. Below is the process flow: At the distribution center as pallets are received, their tags are scanned and information is directly input into the warehouse management system. The warehouse management system tracks the pallets movements throughout the warehouse using barcodes, mobile scanners, and/or RFID antennae placed throughout the structure. The pallet is located in the warehouse using the warehouse management system and tags and picked for shipment. The pallet of goods is scanned again as it is loaded onto a truck. This information is then used to automatically create the advanced shipping notice to ensure accuracy for the retailer receiving the shipment. In conjunction with GPS technology embedded on vehicles, retail supply chain participants can identify both the location and the contents of a particular vehicle.As the supply chains have become more and more complex, in case of any problem the pre-defined rules might not be able to exactly replicate the current problem scenario- hence Catalyst International has collaborated with AdaptiveTrade (world leader in object-oriented optimization and constraint database design) to make an Adaptive Enterprise Optimization Server containing a library of supply chain execution classes, such as trucks, SKUs, warehouses, people, trading partners, stores, and loading docks. In case of a problem, the required object is then instantiated and initialized through Web services powered by RFID and GPS technology. Once the supply chain instant state has been created by the AEO server, the program will optimize the execution space according to business model goals and then passes on the action plan, financial and operational impact to each affected trading partner through standard XML collaborative process. AEO also provides security with the partner financial and other crucial data by encrypting them to a binary format.Thus the development of object-oriented optimization modeling along with secure collaborative communication and high-performance constraint database technology has solved the modern day need for real time automated optimization.