Integrating Closed-loop Supply Chains and Spare Parts Management at IBM

Ever more companies are recognizing the benefits of closed-loop supplychains that integrate product returns into business operations. IBMhas been among the pioneers seeking to unlock the value dormant inthese resources. We report on a project exploiting product returns asa source of spare parts. Key decisions include the choice of recoveryopportunities to use, the channel design, and the coordination ofalternative supply sources. We developed an analytic inventory controlmodel and a simulation model to address these issues. Our results showthat procurement cost savings largely outweigh reverse logistics costsand that information management is key to an efficient solution. Ourrecommendations provide a basis for significantly expanding the usageof the novel parts supply source, which allows for cutting procurementcosts.supply chain management;reverse logistics;product recovery;inventory management;service management

Supply Chain

Traditionally supply chain management has meant factories, assembly lines, warehouses, transportation vehicles, and time sheets. Modern supply chain management is a highly complex, multidimensional problem set with virtually endless number of variables for optimization. An Internet enabled supply chain may have just-in-time delivery, precise inventory visibility, and up-to-the-minute distribution-tracking capabilities. Technology advances have enabled supply chains to become strategic weapons that can help avoid disasters, lower costs, and make money. From internal enterprise processes to external business transactions with suppliers, transporters, channels and end-users marks the wide range of challenges researchers have to handle. The aim of this book is at revealing and illustrating this diversity in terms of scientific and theoretical fundamentals, prevailing concepts as well as current practical applications

An integrated production, inventory and transportation decision in a whole green manufacturing supply chain

This paper proposes model to integrate production, inventory and transportation decision in a whole green manufacturing supply chain. The integration includes reuse and remanufacturing of returned used products. The manufacturing supply chain consists of tier-2 and tier-1 suppliers, a manufacturer, distributors, retailers and a third party. The manufacturer dissembles used products into parts. Reusable parts are remanufactured and reused again in finished products. A mathematical model is developed to coordinate production, inventory and transportation decision which considers multiple products simultaneously with determination of number of transportation units needed to deliver the finished products subject to their own capacities. Solution methods for the model are proposed based on three types of coordination mechanisms, decentralised, semi-centralised and centralised decision processes. The model and solution methods are illustrated with two numerical examples and results and findings are discussed.Mr. Jonrinaldi would like to thank the Faculty of Engineering, Andalas University for supporting his research with Grant No. 007/PL/SPK/PNP/FT-Unand/2013

A review of non-cooperative newsvendor games with horizontal inventory interactions

There are numerous applications of game theory in the analysis of supply chains where multiple actors interact with each other in order to reach their own objectives. In this paper we review the use of non-cooperative game theory in inventory management within the newsvendor framework describing a single period inventory control model with the focus on horizontal interactions among multiple independent newsvendors. We develop a framework for identifying these types of horizontal interactions including, for example, the models with the possibility of inventory sharing via transshipments, and situations with substitutable products sold by multiple newsvendors. Based on this framework, we discuss and relate the results of prior research and identify future research opportunities

The impact of freight transport capacity limitations on supply chain dynamics

We investigate how capacity limitations in the transportation system affect the dynamic behaviour of supply chains. We are interested in the more recently defined, 'backlash' effect. Using a system dynamics simulation approach, we replicate the well-known Beer Game supply chain for different transport capacity management scenarios. The results indicate that transport capacity limitations negatively impact on inventory and backlog costs, although there is a positive impact on the 'backlash' effect. We show that it is possible for both backlog and inventory to simultaneous occur, a situation which does not arise with the uncapacitated scenario. A vertical collaborative approach to transport provision is able to overcome such a trade-off. © 2013 Taylor & Francis

Toward resilient humanitarian cooperation: examining the performance of horizontal cooperation among humanitarian organizations using an agent-based modeling (ABM) approach

This article proposes a multi-agent simulation model to examine how different operational environments and incentive mechanisms affect the collective performance of complex humanitarian response systems. Using the UN Humanitarian Response Depot (UNHRD) system as an example, a stylized model of one service provider, two member organizations and multiple humanitarian crises is developed to illustrate the changing uses of four alternative relief goods sourcing options, namely: i) own storage for own items ii) UN storage for own items iii) stock-swaps and iv) white stock uses. Under the plausible assumption that the past success of sourcing options influences member organizations' future resource allocation, the model indicates that the additional buffer stock capacity offered by horizontal cooperation induces undesirable system dependency: while it gives member organizations more flexibility to meet highly stochastic demands under uncertainty, it also encourage them to store less of their own relief goods as a result. This tendency was particularly notable under a flexible budgeting regime, highlighting the further need to understand and evaluate the details of the decision-making heuristics of individual member organizations

PERFORMANCE ASSESSMENT OF DISTRIBUTED INVENTORY IN PHYSICAL INTERNET

International audienceClassical supply chain design relies on a hierarchical organization to store and distribute products over a given geographical area. Within this framework a shortage in a stock affects the whole downstream of the supply chain regardless of the inventory kept in others locations. Within the Physical Internet approach, inventories are distributed in hubs towards the market and source substitution is allowed. The Physical Internet aims to integrate logistics networks into a universal system of interconnected services through the development of protocols and standards for the routing of smart containers of various sizes. This organization enables a distributed storage of goods in hubs thanks to containerization, thus the feasibility of multi-sourcing to one ordering point. This contribution measures the impact of such an organization on stock levels and inventory costs with service level set as a constraint. The analysis focuses on the resources levels (transportation and inventory) needed by the current supply model and by the Physical Internet in order to serve a market with a (Q,R) stock policy. Starting with two supply models and with the definition of cost models as well as inventory policy, the work is based on computer simulation. The analysis tested 3 different families of criterion in order to select dynamically the source when an order is requested: Source Substitution, Minimum Ratio and Minimum Sum. The source substitution, one of the simplest, was found the more efficient and stable according to different scenarios

A Decision Support System for Intermodal Logistics under Considerations for Costs of Security

Global supply chains have been challenged by the increased awareness of security risks, including those of terrorism, theft, and damage, and the potential in these risks for significant damages. Additionally, the pressure security initiatives and regulations, particularly at sea and air ports, threaten to add to congestion at these hubs in the international flow of goods and materials. Improving the efficiency of the flow of goods and materials, and therefore the stability and competitiveness of their supply chains, is the focus of this research. A decision support to combine strategic objectives with operational transport decision making is built to incorporate security considerations

A collaborative decision-making approach for supply chain based on a multi-agent system

To improve the supply chain's performance under demand uncertainty and exceptions, various levels of collaboration techniques based on information sharing were set up in real supply chains (VMI, CPR, CPFR...). The main principle of these methods is that the retailers do not need to place orders because wholesalers use information centralization to decide when to replenish them. Although these techniques could be extended to a whole supply chain, current implementations only work between two business partners. With these techniques, companies electronically exchange a series of written comments and supporting data, which includes past sales trends, scheduled promotions, and forecasts. This allows participants to coordinate joint forecasting by focusing on differences in forecasts. But if the supply chain consists of autonomous enterprises, sharing information becomes a critical obstacle, since each independent actor is typically not willing to share with the other nodes its own strategic data (as inventory levels); That is why researchers proposed different methods and information systems to let the members of the supply chain collaborate without sharing all their confidential data and information. In this chapter we analyze some of the existing approaches and works and describe an agent-based distributed architecture for the decision-making process. The agents in this architecture use a set of negotiation protocols (such as Firm Heuristic, Recursive Heuristic, CPFR Negotiation Protocol) to collectively make decisions in a short time. The architecture has been validated on an industrial case study

Global supply chains of high value low volume products

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