Approximate Analysis and Optimization of Batch Ordering Policies in Capacitated Supply Chains

Devising manufacturing/distribution strategies for supply chains and determining their parameter values have been challenging problems. Linking production management to stock keeping processes improves the planning of the supply chain activities, including material management, culminating in improved customer service levels. In this study, we investigate a multi-echelon supply chain consisting of a supplier, a plant, a distribution center and a retailer. Material flow between stages is driven by reorder point/order quantity inventory control policies. We develop a model to analyze supply chain behavior using some key performance metrics such as the time averages of inventory and backorder levels, as well as customer service levels at each echelon. The model is validated against simulation, yielding good agreement of robust performance metrics. The metrics are then used within an optimization framework to design the supply chain so as to minimize expected total system costs. The outcome of the optimization framework specifies how to move inventory throughout the supply chain and how to set inventory control parameters, reorder levels and replenishment batch sizes.

Source : Abdullah Karaman, Tayfur Altiok

Organizational Viewpoint of the Relationships in Supply Chains

A supply chain is a strand, or chain, of operations that passes through an organization's supply network. Many different terms (and the concepts described by them - e.g., purchasing and supply management, physical distribution management, logistics, merchandising, material management, and SCM), some of which overlap are used to describes various parts of the SC. They represent an increasing degree of integration among the SC linkages.

SCM is a broader and strategically more significant concept that includes the entire SC, from the supply of raw materials through manufacture, assembly, and distribution, to the end customer. It includes the strategic and long-term consideration of SCM issues as well as the shorter term control of flow throughout the SC.

The exact nature of the relationship among the different linkages within the SC can be viewed on a continuum that goes from highly integrated at one extreme to temporary and short-term trading commitments at the other. The organization tries to define the totality of working tasks, their mutual relationships, connections and synergies, as well as mechanisms for the suitable connection and coordination of organizational factors.

For the formation of the working structure, the organization is able to use different starting points. Modern conditions of work demand that organizations include into the structure plans the characteristics of the informational process needed for the realization of organizational aims. The organization can use the traditional or modern plan for the formation of the structure. The traditional access to the formation of the structure is based on considering vertical informational connections. But for most organizations, the vertical connections are not enough, so they fulfill them with horizontal connections.

For the formation of the organizational structure, the organization can use functional grouping, divisional grouping, grouping with more viewpoints, and horizontal grouping. Different structures in the frame of functional, divisional, and horizontal structures define different levels of coordination and integration of an organization.

In the frame of functional and divisional structures, the management is able to create total business support by forming whole vertical and horizontal connections. In such a way, the efficiency of present vertical connections will increase and the integration of the organizational work will improve. In horizontal structures, the activities are organized horizontally around the basic (or key) working process. Most organizations form specific hybrid structures, which include characteristics of two or more structure types, on these starting points.

Source Dr. Vojko Potocan, University of Maribor, Slovenia

Developing a Knowledge Management Platform for Automotive Build-To-Order Production Network

Modern global companies have to build a supply chain network strategy that provides maximum flexibility and can optimally respond to changes in their environment. The emergence of automotive build-to-order production networks is one of the consequences of these changes in the automotive industry. Production networks can be seen as a step beyond the linear supply chain topography. However, when dealing with multiple organizations and multiple processes within a complicated production network, identifying and locating a member that has responsibility and/or competence in a particular part of the network can be a laborious, time-consuming process. Developing and maintaining a competence directory of all the relevant parties associated with troubleshooting and potential problem solving can significantly reduce the production lead time. Moreover, linking this directory to key decision points and frequent problems can further enhance its effectiveness. Consequently, the problem of semantic interoperability between members of such organizations is of major importance. Developing a knowledge management platform for automotive build-to-order production network proposes an approach to developing a knowledge management platform for a build-to-order production network to solve the above problem. The approach is based on application of such technologies as ontology management, context management and profiling.

Sourece

Knowledge creation in a supply chain

Knowledge creation in a supply chain aims to analyze how organizational conditions, technology adoption, supplier relationship management and customer relationship management affect knowledge creation through socialization-externalization combination, internalization (SECI) modes, and various ba, as proposed by Nonaka and Konno, in a supply chain. A qualitative inquiry with thematic analysis, which focuses on a thin film transistor-liquid crystal display (TFT-LCD) panel manufacturer and an integrated circuits (IC) packaging and testing manufacturer, is presented in order to identify how these key factors affect knowledge creation in a supply chain environment through the SECI modes and ba. The results show that these critical factors facilitate different types of knowledge conversion process in order to achieve successful knowledge creation in a supply chain. Knowledge of the significant factors that were found in this study may be applicable to countries or areas such as Hong Kong, Korea, Singapore or other developing countries, whose dominant businesses are similar to the original equipment manufacturers)/original design manufacturers in Taiwan. This paper considers the case study only as one empirical illustration of many other possible implementation processes. The study does not assume that these companies are a paradigm or that the specific situation is applicable to all other business enterprises. Future researchers interested in this field are therefore encouraged to triangulate its findings by examining variables generated from this study.

Source : Chuni Wu

How do Suppliers Benefit From Information Technology Use in Supply Chain Relationship?

Supply chain management systems (SCMS) championed by network leaders in their supplier networks are now ubiquitous. While prior studies have examined the benefits to network leaders from these systems, little attention has been paid to the benefits to supplier firms. It proposes that two patterns of SCMS use by suppliers-exploitation and exploration-create contexts for suppliers to make relationship-specific investments in business processes and domain knowledge. These, in turn, enable suppliers to both create value and retain a portion of the value created by the use of these systems in interfirm relationships. Data from 131 suppliers using an SCMS implemented by one large retailer support hypotheses that relationship-specific intangible investments play a mediating role linking SCMS use to benefits. Evidence that patterns of information technology use are significant determinants of relationship-specific investments in business processes and domain expertise provides a finer-grained explanation of the logic of IT-enabled electronic integration. The results support the vendors-to-partners thesis that IT deployments in supply chains lead to closer buyer-supplier relationships (Bakos and Brynjyolfsson 1993). The results also suggest the complementarity of the transaction-cost and resource-based views, elaborating the logic by which specialized assets can also be strategic assets.

Source : Mani Subramani

Sharing Global Supply Chain Knowledge

There are two categories of supply chain partners: those that buy and those that sell. Depending on which group they identify with, managers have different perspectives on the value of sharing critical knowledge resources with their supply chain partners. Both groups agree that sharing knowledge makes for more efficient supply chains (with lower costs and quicker speeds) and more effective organizations (with higher quality outputs and enhanced customer service). But the benefits of knowledge sharing don't always accrue equally or simultaneously to all participants. What type of information or knowledge should suppliers and buyers share with each other? How does knowledge sharing provide value to buyers and suppliers, and under what circumstances can it help both? How do cross-cultural differences between global buyers and suppliers influence the value of sharing information? To answer these questions, we studied more than 100 cross-national supply chain partnerships in the industrial chemicals, consumer durables, industrial packaging, toy and apparel industries in 19 country locations. We examined how different types of knowledge sharing can benefit buyers or sellers individually. But more importantly, we studied how knowledge sharing can enhance the performance of partnerships and build stronger supply chains in the global marketplace

Source : Matthew B Myers, Mee-Shew Cheung