Simulating the performance of supply chain with various alliances

Many models of supply chain management (SCM) have been popularly developed in recent years. However, this study focuses on the supply chain (SC) performance with respect to various alliances among partners. First, this study explores the game theory for formulating the SCM problem as a multi-objective programming problem. Second, various alliances, e.g., union, extreme competition, and Stackelberg competition among partners will be considered in such a problem so as to compare the SC performance under different alliances. Third, a numerical example is illustrated by two material supplier partners, three manufacturing partners, two logistics partners, and three customers, where each partner in the SC has its own objective and constraints. This SC problem is resolved across three different time periods. Finally, study results show that the maximum global benefits can be obtained only when all partners form a single union, but the inefficient partners lose significantly in such a union. The minimal global benefits exist in the extreme competition.     

Mitigating the bullwhip effect by reducing demand variance in the supply chain

To coordinate an agile manufacturing system with the high-level requirements of marketing services, supply chain management (SCM) plays an important role in management activities for enterprise globalization. In SCM, a phenomenon called the “bullwhip effect” has attracted considerable attention. Beyond the previous studies, we consider multiple retailers with one supplier in the supply chain and examine ways in which the supplier can reduce the total demand variance by adjusting retailers’ order sizes. The results reveal that the total demand variance can be reduced by using portfolio theory to adjust the order sizes based on the variance of order of the retailer. Therefore, the bullwhip effect can be partially reduced by our proposed method .     

基于ASP平台的供应链协同运作模式研究

激烈的市场竞争环境给供应链管理模式下的制造企业提出了新的发展要求,供应链协同是改进消费者服务,减少库存,减少供应链成本,提升竞争力,提高消费者忠诚度的一条途径.为了实现供应链协同运作的目的,需要在跨平台、跨应用方面达成协同并实现协同管理.通过研究开发网络化制造环境下供应链协同的企业动态联盟运作模式,建立基于应用服务供应商(ASP)的供应链协同运作平台,实现集成企业中采购、库存生产计划等业务过程的管理协同和信息协同,增强对市场需求不确定性的快速反应能力,提高供应链的整体竞争力.     

Mass Customization: Metrics and Modularity

Mass customization as a competitive strategy is getting progressively increasing attention in business and academic arenas due to its high potential to provide sustained strategic advantage in a unique fashion. It is well documented that a manufacturing company competes with others in its industry on five dimensions: Price, quality, flexibility, delivery, and service. According to the existing literature, mass customization provides significant strategic advantage in two of these dimensions—price and customization. We, however, argue that when properly implemented, the cellular manufacturing structure associated with the appropriate implementation of mass customization strategy, provides additional competitive value in quality and delivery. Furthermore by virtue of the customer co-design as an integral aspect of mass customization, customer satisfaction also improves under this strategy. Mass customization strategy, therefore, provides competitive advantage in all five competitive dimensions simultaneously—a truly unique strategic accomplishment. We also propose, in this paper, new metrics for mass customization strategy that measure the “mass” as well as the “customization” aspects of this strategy. Finally, we describe in the clearest terms the modus operandi of modularity in product design and the role it plays in bringing about high levels of customization on one hand and economies of scale at component level, on the other. We conclude with remarks that underscore the need for conducting research in the areas at the interface of mass customization and supply chain management.     

Hybrid approach to distribution planning reflecting a stochastic supply chain

Today’s business environment is experiencing as a period of expansion and the globalization. Therefore, a distribution plan with low cost and high customer satisfaction in supply chain management (SCM) has been widely investigated. The purpose of this study is to establish optimal distribution planning in the supply chain. In this paper, a hybrid approach involving a genetic algorithm (GA) and simulation is presented to solve this problem. The GA is employed in order to quickly generate feasible distribution sequences. Considering uncertain factors such as queuing, breakdowns and repairing time in the supply chain, the simulation is used to minimize completion time for the distribution plan. The computational results for an example of a simple supply chain are given and discussed to validate the proposed approach. We obtained a more realistic distribution plan with optimal completion time by performing the iterative hybrid GA simulation procedure which reflects the stochastic nature of supply chains.     

Simulation modeling for comparative evaluation of supply chain management strategies

Supply chain management (SCM) has become one of the most important strategies for achieving competitive advantage in different industries in the last decade. Researchers have investigated various processes in the planning and development of supply chains. However, increasing attention has been placed on performance, design and analysis of supply chain models. A supply chain is a complex model that is very difficult to analyze, in particular, with respect to performance. Simulation is one of the effective tools to evaluate the control mechanism for a supply chain. In this paper, five common supply chain models have been built and tested with the aid of simulation. Various performance measures such as transportation cost, resources utilization, inventory level, and order cycle time will be calculated for comparative indications. The methodology that is presented in this paper can be extended to any real life applications in SCM.     

The right time and place [strategic positioning and competitive space]

Increasingly in the UK, companies that have traditionally considered themselves as manufacturers are being advised to now see themselves as service providers and to reconsider whether to have any production capability. A key challenge is to translate this strategy into a selection of product and service-centred activities within the company's supply chain networks. Strategic positioning is concerned with the choice of business activities a company carries out itself, compared to those provided by suppliers, partners, distributors and even customers. In practice, strategic positioning is directly impacted by such decisions as outsourcing, off-shoring, partnering, technology innovation, acquisition and exploitation. If companies can better understand their strategic positioning, they can make more informed decisions about the adoption of alternative manufacturing and supply chain activities. Similarly, they are more likely to reject those that, like off-shoring, are currently en vogue but are highly likely to erode competitive edge and business success. Our research has developed a new concept we call 'competitive space' as a means of appreciating the strategic positioning of companies, along with a structured decision process for managing competitive space. Our ideas about competitive space, along with the decision process itself, have been developed and tested on a range of manufacturers. As more and more manufacturers are encouraged to move towards system integration and a serviceable business model, the challenge is to identify the appropriate strategic position for their organisations, or in other words, to identify their optimum competitive space for manufacture.     

Ontology-based semantic models for supply chain management

The efficiencies of supply chain management (SCM) are often impaired by inconsistent exchange and sharing of knowledge semantics among supply chain partners. To address this problem with semantic integration, this paper presents an approach to developing ontologies of supply chain management (Onto-SCM) as a common semantic model of the SCM domain. The Onto-SCM semantic model is constructed in a modular way in order to enhance its reusability and maintainability. The IDEF5 schematic language is employed to provide the graphical representation of Onto-SCM for intuitive communication between domain experts and users. Furthermore, Ontolingua is adopted to define formal semantics of Onto-SCM for effective knowledge interoperability. In addition, a case study of a printer supply chain is illustrated to demonstrate the proposed approach to semantic integration for SCM. Finally, a prototype is developed to support visualized knowledge modeling of the case system using the IDEF5 schematic language and to implement consistent knowledge transformation among heterogeneous applications in the supply chain.     

Analysis of inventory level under procurement constraints in supply chain

Because the inventory is one of the major factors that affect the performance of the supply chain system, efficient reduction of an inventory can effectively reduce the cost level of the total supply chain. Therefore, inventory management is an important means to optimize the operation of a supply chain and enhance the competitive advantage. Considering the (s, S) policy in an inventory management, this paper establishes a model of the inventory level. Then, the change of the inventory level with and without the procurement constraints is analyzed, and their expectation and variance calculated. Consequently, the order point can be determined accurately to reduce the inventory level and the operation risk. __________ Translated from Modern Manufacturing Engineering, 2006, (10): 1–3 [译自: 现代制造工程]     

Beyond lean [supply chain management]

Ever increasing competition, progressive internationalisation, acquisition and mergers, and the dawn of supply chain management (SCM) into the mainstream of industrial thinking has broadened the mindset of management to appreciate that one has to think business-wide in order to really define a plan that will drive operations forward. SCM has emerged to demonstrate an answer to the need to bring demand- and supply-side management to fruition. The author investigates supply chain management resources and techniques.     

Supply chain focus dependent safety stock placement

Increasing globalization, growing product range diversity, and rising consumer awareness are making markets highly competitive, forcing supply chains to adapt constantly to different stimuli. Growing competition between supply chains (as well as players within them) is also warranting a priority for overall supply chain performance over the goals of individual players. It is now well established in the literature that, among the many order winners, both overall supply chain cost and responsiveness (i.e., supply chain lead time) are the most significant determinants of supply chain competitiveness. The literature, however, mostly focuses on supply chain cost minimization with rather simplistic treatment of responsiveness. By introducing the concept of a coefficient of inverse responsiveness (CIR), we facilitate efficient introduction of responsiveness related costs into the scheme of supply chain (SC) performance evaluation and/or optimization. Thus, our model aids supply chain managers in achieving better strategic fit between individual business unit strategies and overall supply chain requirements in terms of cost efficiency and responsiveness. In particular, it aids in strategic placement of safety stocks at different stages in the supply chain. Our model also offers managerial insights that help improve our intuitions into supply chain dynamics. The model is more suited for strategic SC alignment, for example, when dealing with product changeovers or introduction of new product, rather than for operational control.     

Costing the supply chain

Supply chains, as well as individual organisations have two sources of competitive advantage, value and costs. Improving value to the customer, by offering better products and services. On the other hand, reducing costs can lead to improvements in profitability or market share, by offering lower prices to the customer. All of these benefits, if appropriately shared, can improve the competitive position of both the individual partners and the complete supply chain. The authors offer solutions to some increasingly complex supply network accounting problems.     

A neural network model for the assessment of partners’ performance in virtual enterprises

In response to increasing international competition, enterprises have been investigating new ways of cooperating with each other to cope with today’s unpredictable market behaviour. Advanced developments in information & communication technology (ICT) enabled reliable and fast cooperation to support real-time alliances. In this context, the virtual enterprise (VE) represents an appropriate cooperation alternative and competitive advantage for the enterprises. VE is a temporary network of independent companies or enterprises that can quickly bring together a set of core competencies to take advantage of market opportunity. In this emerging business model of VE, the key to enhancing the quality of decision making in the partner companies’ performance evaluation function is to take advantage of the powerful computer-related concepts, tools and technique that have become available in the last few years. This paper attempts to introduce a neural network model, which is able to contribute to the extrapolation of the probable outcomes based on available pattern of events in a virtual enterprise. Quality, delivery and progress were selected as determinant factors effecting the performance assessment. Considering the features of partner performance assessment and neural network models, a back-propagation neural network that includes a two hidden layers was used to evaluate the partner performance.     

Developing an integrated inventory management model for multi-item multi-echelon supply chain

As the industrial environment becomes more competitive, supply chain management (SCM) has attained growing attention from practical and academic societies as a crucial discipline. Among the involved decisions in the field of SCM, integrated inventory management is addressed in this paper. In this regards, this paper proposes an integrated inventory management model within a multi-item, multi-echelon supply chain (SC). The considered SC comprises multiple agents in upper layers supplying those of lower layer to enhance flexibility of the SC. Furthermore, three inventory models are developed with respect to different layers of SC in an integrated manner, seeking to optimize total cost of the whole SC. Due to nonlinear structure of the proposed model; high level of computational complexity is resulted. To cope with the complexity of proposed model, a differential evolution algorithm is adopted. Conducted numerical results indicate validity of the developed algorithm.     

基于采购条件限制的供应链库存水平分析

库存是影响供应链系统成本性能的主要因素之一,有效地减少库存可以降低整个供应链系统的成本水平,因此库存管理是优化供应链运作、提高竞争优势的重要手段。针对库存管理中的(s,S)策略,建立了库存水平变化的模型,分别分析了无采购条件限制和有采购条件限制下的库存水平的变化,并分别给出了其期望值和方差。     

A modeling approach for designing a value chain of virtual enterprise

As the advent of digital economy changes business environment dramatically, virtual enterprise (VE), in general the interactions among business partners in a value chain, has become a key factor to survive under the competitive business environment. VE reveals that more complex and dynamic business processes should be considered as assembled service components in order to integrate the collaborative business processes. Therefore, a formal standard schema for describing and managing the business processes is required. In this paper, we propose a consistent modeling approach that combines enterprise modeling and simulation modeling to design a value chain of a VE. This methodology will provide designers with insight into the business processes of a VE and help identify and resolve unpredictable bottlenecks on the execution of virtual business processes. This paper also illustrates an implemented modeling tool which is based on the generalized model suggested by the working group of the international conference on enterprise integration and modeling technology (ICEIMT) and notations by the object management group (OMG)’s unified modeling language (UML) profile for enterprise distributed object computing (EDOC).     

供应链关系建模的面向对象分析

利用面向对象技术和统一建模语言对供应链系统建模，通过分析供应链中各组成元素之间的关系，刻画了供应链体系结构中的对象间关系，关联对象和关联类，建立了基于统一建模语言的供应链节点类的框架模型，得到了供应链的关系架构，创建关系，消息关系，代理关系，只有通过关系管理集成内外关系，创建战略合作伙伴，最终建立协调，合作，互利的长期关系，才能使供应链节点企业关注其核心竞争力，从而提高整个供应链的效率。     

The impacts of component commonality on integrated supply chain network performance: a state and resource-based simulation study

This paper is geared toward developing an integrated modeling framework and simulation models for understanding decision-making issues of the supply chain network configuration in an integrated environment. To achieve this objective, first, this paper presents an integrated modeling framework for multistage supply chains, in which the interdependencies between model components are captured. Second, the state and resource-based simulation concepts are used to model the supply chain network configurations. The employment of state and resource-based simulation techniques facilitates the implementation procedure, since they are strong in modeling dynamic supply chain networks with highly interdependent components subject to activity start-up conditions. To investigate the impacts of component commonality on integrated supply chain network performance effectively, a new analytical measure of component commonality that consists of a component-level commonality index and a product-level commonality index is defined. The results of analysis-of-variance and Tukey’s tests reveal that there is a significant difference in performance measures, such as delivery time and order fill rates, when comparing an integrated supply chain with higher component commonality to an integrated supply chain with lower component commonality.     

Formulation of Manufacturing Strategy

With customers demanding high quality, low cost and shorter lead time, the manufacturing function plays a vital role in attaining a competitive advantage. Thus, to compete effectively, it is important to formulate and implement the appropriate manufacturing strategy. This paper presents the author’s experience and the resulting generic methodology which has been successfully used in several organisations.     

Aligning demand and supply flexibility in custom product co-design

Flexibility of supply and demand is essential for successful implementation of a mass customization strategy that delivers sustained competitive advantage. Supply flexibility, i.e., a choice of alternative products designed to perform the same basic function, is made possible by the range of capabilities available in flexible and agile manufacturing systems and in supply chains. Demand flexibility is derived from the degree to which a customer is willing to compromise on product features or performance levels in order to meet budgetary (reflected in price) or schedule (reflected in delivery) constraints. Flexibility of both supply and demand can have significant strategic and financial value if they are properly aligned. However, customers are mostly unaware of mapping of demand flexibility on to supply flexibility and its impact on production cost and time. Recent advances in information technology have made it possible to co-design a product that involves customer on one end and the manufacturer on the other. This creates an aura and an opportunity where a middle ground between the supply and demand flexibility can be explored and a “deal” can be struck where both parties settle for a product that is beneficial to both through a negotiated settlement. In this paper, we develop a framework for such negotiations. The customer requirements are treated as a range of negotiable options instead of a set of fixed inputs. Demand and supply for customization is then matched by aligning the flexibility of manufacturing systems with customers’ requirement options. Based on this framework, a negotiation scheme is developed to assist customers and manufacturers in exploring and utilizing demand and supply flexibility information in co-design. The negotiation scheme is formulated using goal programming. Finally, an interactive problem-solving procedure is developed and implemented with an illustrative example.