The bullwhip effect in Brazilian supply chain of organic products: an analysis from the perspective of transaction cost theory

This paper deals with the to the supply chain strategic management of organic products. The objective of this study is to propose a model that integrates the concepts of supply chain management (SCM), transaction costs theory (TTC) and bullwhip effect in supply chain of organic products generating propositions that will direct future empirical research. Therefore, this paper proposes that the SCM and TTC can contribute in reducing the distortion of perception of demand along the supply chain of organic products. A conceptual model relating the three variables studied was elaborated and three theoretical future empirical investigations to propositions in order to solve the problem of the bullwhip effect, namely the distortion of perception of demand along the supply chain of organic products

Why do nonlinearities matter? The repercussions of linear assumptions on the dynamic behaviour of assemble-to-order systems

The hybrid assembly-to-order (ATO) supply chain, combining make-to-stock and make-to-order (MTS-MTO) production, separated by a customer order decoupling point (CODP), is well recognised in many sectors. Based on the well-established Inventory and Order Based Production Control Systems (the IOBPCS family), we develop a hybrid ATO system dynamics model and analytically study the impact of nonlinearities on its dynamic performance. Nonlinearities play an important, sometimes even a dominant, role in influencing the dynamic performance of supply chain systems. However, most IOBPCS based analytical studies assume supply chain systems are completely linear and thereby greatly limit the applicability of published results, making it difficult to fully explain and describe oscillations caused by internal factors. We address this gap by analytically exploring the non-negative order and capacity constraint nonlinearities present in an ATO system. By adopting nonlinear control engineering and simulation approaches, we reveal that, depending on the mean and amplitude of the demand, the non-negative order and capacity constraints in the ATO system may occur and their significant impact on system dynamics performance should be carefully considered. Failing to monitor non-negative order constraints may underestimate the mean level of inventory and overestimate the inventory recovery speed. Sub-assemblers may suffer increased inventory cost (i.e. the consequence of varying inventory levels and recovery speed) if capacity and non-negative order constraints are not considered at their production site. Future research should consider the optimal trade-off design between CODP inventory and capacity and the exploration of delivery lead-time dynamics

Push or pull? The impact of ordering policy choice on the dynamics of a hybrid closed-loop supply chain

We study the dynamic behaviour of a hybrid system where manufacturing and remanufacturing operations occur simultaneously to produce the same serviceable inventory for order fulfilment. Such a hybrid system, commonly found in the photocopier and personal computer industries, has received considerable attention in the literature. However, its dynamic performance and resulting bullwhip effect, under push and pull remanufacturing policies, remain unexplored. Relevant analysis would allow considering the adoption of appropriate control strategies, as some of the governing rules in a push-based environment may break down in pull-driven systems, and vice versa. Using nonlinear control theory and discrete-time simulation, we develop and linearise a nonlinear stylised model, and analytically assess bullwhip performance of push-and-pull controlled hybrid systems. We find the product return rate to be the key influencing factor of the order variance performance of pull-controlled hybrid systems, and thus, to play an important role towards push or pull policy selection. Product demand frequency is another important factor, since order variance has a U-shaped relation to it. Moreover, the product return delay shows a supplementary impact on the system’s dynamics. In particular, the traditional push-controlled hybrid system may be significantly influenced by this factor if the return rate is high. The results highlight the importance of jointly considering ordering structure and product demand characteristics for bullwhip avoidance

System dynamics modelling, analysis and design of assemble-to-order supply chains

Background and purpose: The assemble-to-order supply chains (ATO) is commonly-adopted in personal computer (PC) and semiconductor industries. However, the system dynamics of PC and semiconductor ATO systems, one of the main sources of disruption, is not well-explored. Thereby this thesis aims to 1) develop a nonlinear system dynamics model to represent the real-world PC and semiconductor ATO systems, 2) explore the underlying mechanisms of ATO system dynamics in the nonlinear environment and 3) assess the delivery lead times dynamics, along with bullwhip and inventory variance. Design/methods: Regarding the semiconductor industry, the Intel nonlinear ATO system dynamics model, is used as a base framework to study the underlying causes of system dynamics. The well-established Inventory and Order based Production Control System archetypes, or the IOBPCS family, are used as the benchmark models. Also, the IOBPCS family is used to develop the PC ATO system dynamics model. Control engineering theory, including linear (time and frequency response techniques) and nonlinear control (describing function, small perturbation theory) approaches, are exploited in the dynamic analysis. Furthermore, system dynamics simulation is undertaken for cross-checking results and experimentation. Findings: The ATO system can be modelled as a pull (order driven) and a push (forecasting driven) systems connected by the customer order decoupling point (CODP). A framework for dynamic performance assessment termed as the ‘performance triangle’, including customer order delivery lead times, CODP inventory and bullwhip (capacity variance), is developed. The dynamic analysis shows that, depending on the availability of CODP Abstract iii inventory, the hybrid ATO system state can be switched to the pure push state, creating poor delivery lead times dynamics and stock-out issues. Limitations: This study is limited to the analysis of a closely-coupled two-echelon ATO systems in PC and semiconductor industries. Also, the optimization of control policies is not considered. Practical implications: Maintaining a truly ATO system state is important for both customer service level and low supply chain dynamics cost, although the trade-off control design between CODP inventory and capacity variance should be considered. Demand characteristics, including variance and mean, play an important role in triggering the nonlinearities present in the ATO system, leading to significant change in the average level of inventory and the overall transient performance. Originality / value: This study developed system dynamics models of the ATO system and explored its dynamic performance within the context of PC and semiconductor industries. The main nonlinearities present in the ATO system, including capacity, non-negative order and CODP inventory constraints, are investigated. Furthermore, a methodological contribution has been provided, including the simplification of the high-order nonlinear model and the linearization of nonlinearities present in the ATO system, enhancing the understanding of the system dynamics and actual transient responses. The ‘performance triangle’ analysis is also a significant contribution as past analytical studies have neglected customer order lead time variance as an inclusive metric

Modelling an End-to-End Supply Chain System Using Simulation

Supply chains (SCs) are an important part of today’s world. Many businesses operate in the global marketplace where individual companies are no longer treated as separate entities, but as a vital part of an end-to-end supply chain (E2E-SC) system. Key challenges and issues in managing E2E-SCs are duly attributed to their extended, complex and systemic nature. In the era of uncertainty, risks and market volatility, decision makers are searching for modelling techniques to be able to understand, to control, design or evaluate their E2E-SC. This research aims to support academics and decision makers by defining a generic simulation modelling approach that can be used for any E2E-SC. This study considers the challenges and issues associated with modelling complex E2E-SC systems using simulation and underlines the key requirements for modelling an E2E-SC. The systematic literature review approach is applied to provide a twofold theoretical contribution [a] an insightful review of various contributions to knowledge surrounding simulation methods within the literature on end-to-end supply chains and [b] to propose a conceptual framework that suggests generic elements required for modelling such systems using simulation. The research adopts a simulation methodology and develops a generic guide to an E2E-SC simulation model creation process. It is a mindful inquiry into the implications relative to a simulation model development process in presence of generic elements from the proposed conceptual framework. The conceptual framework is validated with industry experts and insightful remarks are drawn. In conclusion, it is acknowledged that modelling an E2E-SC system using simulation is a challenge, and this area is not fully exploited by the business. A guide to an E2E-SC simulation model development is a theoretical and practical contribution of this research, immensely sought by businesses, which are continuously tackling day to day issues and challenges, hence often lacking resources and time to focus on modelling. The conceptual framework captures generic elements of the E2E-SC system; however, it also highlights multiple challenges around simulation model development process such as technical constraints and almost impracticability of a true reflection of an E2E-SC system simulation model. The significant contribution of this thesis is the evaluation of the proposed generic guide to E2E-SC simulate model development, which provides the architecture for better strategic supply and demand balancing as new products, price fluctuations, and options for physical network changes can be dynamically incorporated into the model. The research provides an insightful journey through key challenges and issues when modelling E2E-SC systems and contributes with key recommendations for mindful inquiries into E2E-SC simulation models