Analysis on Design of Supply Chain Embedding Supply-Hub with BOM

Considering relationship between supply chain design and bill of material (BOM), the 3PL is introduced to design supply chain. On basis of this, this paper established the distributed inventory /transportation supply chain design model with non supply hub, and the centralized inventory/transportation supply chain design model with supply hub. Through analysis and comparison, it is found that the supply-hub can significantly reduce the total cost of the supply chain, especially more near to upstream in supply chain, more cost can be saved. At the same time, the supply chain with supply-hub can more efficiently reduce bullwhip effect than that for the supply chain with non supply-hub.