The impact of supply base complexity on disruptions and performance: the moderating effects of slack and visibility

In the face of increasing supply base complexity, organisations have to develop new ways to manage or mitigate risk. This paper investigates the impact of four dimensions of complexity on the frequency of disruptions and plant performance. We apply insights from organisational information processing theory to understand how organisations can mitigate against the impact of more frequent disruptions. We test the moderating effects of slack resources as a means to absorb the effects of disruptions and supply visibility as a means to improve the ability to handle disruptions. The model is tested with data from 264 supply chain management professionals. Our findings broadly support the original hypotheses and suggest that supply base complexity can increase the frequency of disruptions and reduce plant performance but that slack resources and visibility can help to mitigate the effects. The study offers valuable insights into the management of supply base complexity.     

A survey of semiconductor supply chain models Part II: demand planning,inventory management,and capacity planning

Part I of this three-part series described semiconductor supply chains from the decision-making and functional perspectives, using this as a framework to review the industrial engineering and operations research literature on the problems arising in these supply chains. Part I then reviewed the literature on Strategic Network Design, supply chain coordination, sustainability and simulation-based decision support. This paper, Part II, reviews the areas of Demand Planning, Inventory Management and Capacity Planning in semiconductor supply chains. Part III concludes the series by discussing models to support Master Planning, Production Planning and Demand Fulfilment in this industry.     

Multi-period channel coordination in vendor-managed inventory for deteriorating goods

This study examines the problem of optimally dynamic joint decisions, including replenishment scheduling/quantity, retail price, wholesale price, and revenue-sharing allocation, in a vertically decentralised single-manufacturer Stackelberg and single-retailer channel over a multi-period planning horizon, subject to deteriorating goods and multivariate demand function. This study uses a calculus-based formulation combined with dynamic programming techniques to solve the channel coordination decision problem. Additionally, three arrangements, namely price-only contract, revenue-sharing contract, and revenue-sharing plus linear rebate and side-payment contract for channel coordination, are developed under retailer-managed inventory (RMI) and vendor-managed inventory (VMI) systems, respectively. The analysis reveals that the proposed policy under the VMI system with the revenue-sharing plus linear rebate and side-payment contract tends to obtain low retail prices and large demand quantity, and results in near-perfect coordination, including greater system efficiency and Pareto improvements, for the vertically decentralised dynamic channel.     

Joint pricing and inventory strategies in a supply chain subject to inventory inaccuracy

This paper focuses on pricing strategies, inventory policies for a supply chain when Radio Frequency Identification (RFID) technology is adopted to cope with inventory inaccuracy. The supply chain consists of one supplier and one retailer, in which the RFID tag price is shared between the supplier and the retailer. We present and compare the performance differences between a wholesale price contract and a consignment contract when the retailer is the Stackelberg leader and the supplier is the follower. Based on the optimal pricing and inventory decisions, an interesting observation of contract selection is that there are two critical values of inventory available rate such that when the inventory availability is less than the lower value, both the supplier and the retailer prefer a consignment contract; when the inventory availability is greater than the upper value, a wholesale price contract is their best choice; when the inventory availability is between the two values, the supplier prefers a wholesale price contract and the retailer prefers a consignment contract. Additionally, there exist threshold values of RFID tag price and sharing rate to determine the contract preference for the retailer. Furthermore, the profits of both the supplier and the retailer are independent of the RFID tag price sharing rate in a wholesale price contract, and the supplier has the incentive to invest in RFID tag cost in a consignment contract.     

Supply chain models with corporate social responsibility

Currently, corporate social responsibility (CSR) has become a critical issue because more than 88% of consumers think companies should try to achieve their business goals while improving society and the environment. This paper focuses on a CSR supply chain where an Original Equipment Manufacturer’s (OEM’s) sales can be significantly reduced because of its oversea supplier’s social misconduct. Specifically, as in a conventional wholesale price contract the supplier determines its wholesale price and the OEM decides its order quantity, but in a CSR supply chain, the supplier can autonomously change its CSR cost once a minimum requirement is satisfied. A higher CSR cost means that the supplier invests more in its corporate social responsibility and the OEM’s sales will be less likely to be influenced by negative CSR events. The equilibrium solutions show an important dilemma – although the supplier’s profit increases in the basic CSR requirement, the supplier will always use the minimum CSR cost under the conventional wholesale price contract, which eventually leads to a low supply chain profit. Thus, we introduce two different contracts to handle this problem: the flexible quantity contract and the wholesale price incentive contract, which are, respectively, a ‘tough’ way and a ‘beneficent’ way for the OEM to solve the problem. Although the two ways cannot (always) coordinate the supply chain, we show that they both will significantly improve the supply chain performance. Our results also show that in some conditions, one strategy will dominate, whereas in different conditions the other strategy dominates.     

Threats and benefits of power discrepancies between organisations: a supply chain perspective

The discrepancy of power between organisations has raised concerns over the abuse of power in inter-organisational relationships, especially in the supply chain where parties often have different power positions. In this study, we develop and test a model that explains how the less powerful party may react to different forms of power exercised by the power source. Nowadays, customers are typically more powerful than manufacturers in supply chains. Specifically, based on data from 617 manufacturers representing various organisational sizes and industries, we examine the impact of customer coercive and expert power on the manufacturer’s information sharing behaviours (information systems and content) as well as the performance implications for both the manufacturer and the customer. Structural equation modelling reveals that customer expert power positively predicts the establishment of information systems and the extent to which information is actively shared. In contrast, customer coercive power is negatively associated with the establishment of information systems, while it is positively related to information content. Information systems, in turn, predict the extent to which information is effectively exchanged, which ultimately relates positively to flexibility and delivery performance. Flexibility performance is positively related to financial performance, while delivery performance is not. Taken together, these findings enrich our understanding of inter-organisational power dynamics by offering important insights into differential reactions that the power target may choose to counter power imbalances.     

A fractal perspective-based methodological framework for supply chain modelling and distributed simulation with multi-agent system

With the development of global economy, supply chain, as a recognised complex system, is becoming more complex for analysis. In this context, it is worth introducing the perspective of complex system in perceiving and modelling of supply chain system to address its dynamic, stochastic and uncertain characteristics. Therefore, this paper proposes a methodological framework of supply chain modelling and simulation based on the fractal perspective, and presents an all-round and systematic exposition of concept modelling and distributed simulation by means of multi-agent technology. In this framework, different supply chain scenarios focusing on manufacturing, inventory and transportation can be easily modelled and simulated at different scales and levels. In addition, a prototype system which implements the methodological framework and the key implementation techniques are presented as well. Finally, a supply chain example, which supposes manufacturer as the core member, is modelled and simulated with the prototype system to illustrate the effectiveness of the proposed framework.     

Consignment and vendor managed inventory in single-vendor multiple buyers supply chains

In this paper we model a consignment (CS) and vendor-managed inventory (VMI) policy for a single vendor and multiple buyers supply chain with known demand. We study three vendor–buyers partnerships: (i) the vendor and the buyers act independently, (ii) the vendor enters in a vendor-managed inventory consignment (VMI&CS) partnership with the buyers and (iii) the vendor and the buyer belong to a vertically integrated firm where a single decision maker decides about the ordering policies. We use relationships (i) and (ii) to study the benefits of the VMI&CS agreement. We provide analytical and numerical results. We find that such an agreement is more beneficial when the vendor has a flexible capacity. It is also more attractive to buyers when they have significant order costs and the vendor's setup cost is not large. Finally we find that under VMI&CS the vendor will tend to make more frequent shipments with smaller lots.     

Warehouse location and two-echelon inventory management with concave operating cost

In this paper, we study a location–inventory network design problem which jointly optimises the warehouse location, the warehouse–retailer assignments, the warehouse–retailer echelon inventory replenishment and the safety stock-level decisions over an infinite planning horizon. The consideration of the facility operating cost, the safety stock cost and the two-echelon inventory cost results in an MIP model with several nonlinear terms. Due to the complex trade-offs among the various costs and multiple nonlinear terms in the model, traditional solution approaches no longer work for this problem. We outline a polymatroid cutting-plane approach based on the submodular property of the cost terms to address this problem. Computational results demonstrate that the cutting-plane method based on polymatroid inequalities can efficiently solve randomly generated instances with moderate sizes.     

供应链的文化整合:动因、模式、原则、风险及对策

在对供应链文化整合进行定义的基础上,分析论证了整合的动因与模式,提出了供应链文化整合的原则,并对我国企业供应链文化整合过程中可能发生的风险提出了对策.     

基于VMI的医院供应管理

医院大部分药品及相关用品属于易逝品,针对该类产品的特点,将VMI(Vender Managed Inventory)方法引入到医院供应管理研究中,通过建立两级供应链库存定量模型(即供应商-医院关系模型),比较实施VMI方法前后,医院、供应商以及供应链总库存成本的变化情况.通过定量比较证实,实施VMI方法可以有效降低医院及供应链总库存成本,供应商的库存成本虽有所升高,但是可以通过转移支付方法,使供应商与医院达到利益均衡点,从而降低供应链总库存成本,获得pareto均衡.     

Ripple effect modelling of supplier disruption: integrated Markov chain and dynamic Bayesian network approach

The ripple effect can occur when a supplier base disruption cannot be localised and consequently propagates downstream the supply chain (SC), adversely affecting performance. While stress-testing of SC designs and assessment of their vulnerability to disruptions in a single-echelon-single-event setting is desirable and indeed critical for some firms, modelling the ripple effect impact in multi-echelon-correlated-events systems is becoming increasingly important. Notably, ripple effect assessment in multi-stage SCs is particularly challenged by the need to consider both vulnerability and recoverability capabilities at individual firms in the network. We construct a new model based on integration of Discrete-Time Markov Chain (DTMC) and a Dynamic Bayesian Network (DBN) to quantify the ripple effect. We use the DTMC to model the recovery and vulnerability of suppliers. The proposed DTMC model is then equalised with a DBN model in order to simulate the propagation behaviour of supplier disruption in the SC. Finally, we propose a metric that quantifies the ripple effect of supplier disruption on manufacturers in terms of total expected utility and service level. This ripple effect metric is applied to two case studies and analysed. The findings suggest that our model can be of value in uncovering latent high-risk paths in the SC, analysing the performance impact of both a disruption and its propagation, and prioritising contingency and recovery policies.     

港口群/腹地区域供应链系统物流财务管理的国民经济动态性分析

以系统动力学理论和方法,通过建立港口群/腹地区域供应链系统物流财务管理与国民经济发展关系的数理模型,研究港口群/腹地区域供应链系统物流财务要素管理对区域经济和国民经济发展的影响。结果表明:港口群/腹地区域供应链系统物流财务管理顺畅和财务要素匹配,仓储量处于适度状态,将持续地促进腹地区域经济有序增长,进而推进国民经济发展。港口群供应链系统物流阻滞,仓储物流将处于积压状态,延缓腹地区域经济发展,最终将导致国民经济衰退。同时,可运用该模型思想,排解实际物流系统库存仓储积压的困境。     

Pre-positioning inventory and service outsourcing of relief material supply chain

Service outsourcing is very common in a commercial supply chain, and in humanitarian relief area, the transportation service is usually outsourced. To practice relief supply more effectively, it seems essential to enlarge outsourcing from shipping to more areas, and private enterprises could play a vital role. This paper examines the optimal pre-disaster order quantity of a certain relief commodity, based on a two-stage coordinated approach. Our findings show that the delay cost, shortage penalty cost, risk of supply shortage, salvage value, expected perishable rate, unit inventory cost and reactive price have significant impacts on the optimal amount of propositioned inventory. Moreover, the outsourcing strategies differ by types of relief commodities. For perishable supplies, proactive or reactive outsourcing would improve the benefits of buyer and supplier simultaneously. As for imperishable supplies, it is better to combine proactive insourcing approach and reactive outsourcing strategy. In view of some supplies whose monitoring cost is high, the insourcing approach is much better than the outsourcing approach.     

Effect of firm characteristics,supplier relationships and techniques used on Supply Chain Risk Management (SCRM): an empirical investigation on French industrial firms

Recent years have witnessed a focus on managing risks in supply chains. On the one hand, there are many cases where events like natural disasters, strikes and terrorism have significantly influenced the performance of organisational supply chains and in turn their competitiveness. And on the other hand, operational activities and strategic decisions of the firms (concerning, for e.g. supply, procurement, production, delivery, commercialisation, demand management, planning, etc.) can be different than expected and so create uncertainties. Uncertainties, whether they are external or internal, impact organisations leading to increased supply chain risk. Realising the potential implications of these situations on supply chain competitiveness, an attempt has been made to define risks and their sources and to identify the management that can help reduce the negative impact of risks on supply chains. In this paper, a framework for supply chain risk management (SCRM) is proposed and is applied using the data collected from 164 French companies, in manufacturing sector. The literature review, theoretical framework and empirical research undertaken in this work have led to identifying critical success management for SCRM. The focus of this paper is the inter-organisational management of supply chain risk: the collaborative relationship (with industrial and supply partners) can be considered as an efficient way to make SCRM. The paper finishes with a summary of the findings and conclusions, along with suggestions for future research projects.     

Supplier credit guarantee loan in supply chain with financial constraint and bargaining

This paper adopts a multiunit bilateral bargaining framework on financial decision. In a two-echelon supply chain, the supplier sells products through a financial constraint retailer. If needed, the retailer gets a short-term financing from a bank by supplier credit guarantee loan (CGL). Through applying the Nash bargaining framework, we formulate two-level game models, i.e. Retailer-Supply System negotiation and Supplier-Bank negotiation. In this paper, we study and discuss the equilibrium order quantity which is affected by initial working capital and interest rate, the retailer-supply system negotiation and upstream wholesale price effects for supply chain performance, the supplier-bank negotiation and interest rate decisions with different capital markets. The results show: (i) there exists loan size limit for financial constraint retailer under CGL. (ii) The upstream wholesale price increase will weaken retailer’s bargaining position, and the supply system may gain or lose depending on the bargaining power. (iii) There exists unique equilibrium sharing ratio in supply system, which means CGL can achieve risk sharing. (iv) Within a supply system, the upstream wholesale price advantage will weaken bank’s profit, whereas supplier may gain or lose depending on his bargaining power.