Managing product availability in an assemble-to-order supply chain with multiple customer segments |
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Authors: | Thomas R Ervolina Markus Ettl Young M Lee Daniel J Peters |
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Affiliation: | (1) IBM T.J. Watson Research Center, P.O. Box 218, Yorktown Heights, NY 10598, USA;(2) Real Estate Operations, 294 Route 100, Somers, NY 10598, USA |
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Abstract: | In this article, we propose a novel availability management process called Available-to-Sell (ATS) that incorporates demand
shaping and profitable demand response to drive better supply chain efficiency. The proposed process aims at finding marketable
product alternatives in a quest to maintain a financially viable and profitable product portfolio, and to avoid costly inventory
overages and shortages. The process is directly supported by a mathematical optimization model that enables on demand up-selling,
alternative-selling and down-selling to better integrate the supply chain horizontally, connecting the interaction of customers,
business partners and sales teams to procurement and manufacturing capabilities of a firm. We outline the business requirements
for incorporating such a process into supply chain operations, and highlight the advantages of ATS through simulations with
realistic production data in a computer manufacturing environment. The models featured in this paper have contributed to substantial
business improvements in industry-size supply chains, including over $100M of inventory reduction in IBM’s server computer
supply chain. |
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Keywords: | Availability management Assemble-to-order Demand shaping Configure-to-order |
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