One such project deals with how product and process design can facilitate supply chain management. Benefits from principles like standardization, modularity, postponement, commonality and product line restructuring are modeled. This research brings faculty from industrial engineering, business and mechanical engineering. In a supply chain, the relationship with suppliers is a crucial element of success. A recent research project has looked at how this form of contract changes as a function of the characteristics of the product and the nature of the supply chain.
Demand management is critical in a supply chain involving multiple companies.
Often, supply chains are subjected to information distortion as demand information is processed and passed on from one part of the chain to another. Stanford researchers have studied what causes the bullwhip effect, and what are some effective measures to mitigate the effect. Effective management of inventory in a supply chain is what is known in the literature as multi-echelon inventory theory. Stanford researchers have studied how the optimal allocation of inventory and capacity can be determined in a supply chain. In addition, since supply chains are usually managed in a decentralized way, the issue of what kind of incentive systems that could induce a decentralized controlled supply chain to perform effectively is another topic of research.