Collaborative replenishment in the presence of intermediaries

In complex supply chains, downstream buyers would often replenish individually from intermediaries instead of directly dealing with original manufacturers. Although collaborative replenishment from intermediaries might generate benefits, significant cost reductions could be achieved when direct replenishments from manufacturers are considered. This paper constructs a general model to study collaborative replenishment in multi-product chains with alternative sources of supply—i.e., manufacturers and intermediaries. A collaborative organization determines the optimal choices of replenishment sources on behalf of its members to minimize collective costs. We introduce a class of cooperative games associated with these situations and give sufficient conditions for their concavity. We investigate the choice of allocation rule and its effect on supply chain efficiency when buyers strategically participate in the collaborative organization. We prove that the Shapley value coordinates the supply chain, i.e., it makes complete participation the best strategy for buyers even under asymmetric information. This setting is compared with an alternative structure where buyers can only collaborate in source-specific replenishment organizations that purchase all requested products either from intermediaries or manufacturers. Although there are always participation strategies that result in minimum collective cost, it is impossible to find allocation rules for source-specific replenishment organizations that always motivate the buyers to choose such strategies.</p

Collaborative replenishment in the presence of intermediaries

In complex supply chains, downstream buyers would often replenish individually from intermediaries instead of directly dealing with original manufacturers. Although collaborative replenishment from intermediaries might generate benefits, significant cost reductions could be achieved when direct replenishments from manufacturers are considered. This paper constructs a general model to study collaborative replenishment in multi-product chains with alternative sources of supply—i.e., manufacturers and intermediaries. A collaborative organization determines the optimal choices of replenishment sources on behalf of its members to minimize collective costs. We introduce a class of cooperative games associated with these situations and give sufficient conditions for their concavity. We investigate the choice of allocation rule and its effect on supply chain efficiency when buyers strategically participate in the collaborative organization. We prove that the Shapley value coordinates the supply chain, i.e., it makes complete participation the best strategy for buyers even under asymmetric information. This setting is compared with an alternative structure where buyers can only collaborate in source-specific replenishment organizations that purchase all requested products either from intermediaries or manufacturers. Although there are always participation strategies that result in minimum collective cost, it is impossible to find allocation rules for source-specific replenishment organizations that always motivate the buyers to choose such strategies

Scheduling Coordination in a Supply Chain Using Advance Demand Information.

In an environment of mass customization where demand information can be placed in advance with sequencing orders, the question of the best use of this information arises in a supply chain. This situation led the authors to analyze the efficiency of current mechanisms of scheduling coordination when suppliers' processes are not completely reliable. Policies such as periodic replenishment or the kanban system, characterized by a replacement of the items to consume, cannot be exploited effectively with the current rules. This paper presents and justifies new scheduling coordination rules allowing synchronous production in an unreliable environment. This new approach has been benchmarked in the automotive industry as an appropriate method to avoid stockouts and decrease the safety stock.Chaîne logistique; Synchronisation de la production dans une chaîne logistique; kanban; Production synchrone; Point de Pénétration de commande;

An analysis of current supply chain best practices in the retail industry with case studies of Wal-Mart and Amazon.com

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2005.Includes bibliographical references (leaves 184-188).In support of the Supply Chain 2020 Project at MIT, this thesis identifies current best practices in retail industry supply chains, with a specific focus on mass merchandising and Internet retailing. Using a survey of current literature for context and industry expert interviews, this thesis assesses the current state of the retail industry and analyzes case studies of Wal-Mart and Amazon.com to illustrate retail supply chain best practices. Topics covered in each case study include supply chain strategy and business strategy linkage, operating models, supply chain design, replenishment and distribution processes, and ongoing supply chain improvement initiatives. Wal-Mart and Amazon.com are found to have very different supply chains in terms of structure and processes, based on their different operating models. However, there are many supply chain themes that are common among the two companies. Both case study companies have supply chain strategies, designs, and processes that clearly support their business strategies. Additionally, these companies tailor processes to fit specific product and demand profiles, collaborate extensively with supply chain partners, invest significantly in information technology, focus on operational efficiency, and leverage scale to facilitate competitive advantage through supply chain management. Based on the common and unique aspects of Wal- Mart and Amazon.com's supply chains, we provide recommendations for the potential transferability of Wal-Mart and Amazon.com practices within the retail industry and to other industries.by Colby Ronald Chiles and Marguarette Thi Dau.M.Eng.in Logistic

An open standard for the exchange of information in the Australian timber sector

The purpose of this paper is to describe business-to-business (B2B) communication and the characteristics of an open standard for electronic communication within the Australian timber and wood products industry. Current issues, future goals and strategies for using business-to-business communication will be considered. From the perspective of the Timber industry sector, this study is important because supply chain efficiency is a key component in an organisation's strategy to gain a competitive advantage in the marketplace. Strong improvement in supply chain performance is possible with improved business-to-business communication which is used both for building trust and providing real time marketing data. Traditional methods such as electronic data interchange (EDI) used to facilitate B2B communication have a number of disadvantages, such as high implementation and running costs and a rigid and inflexible messaging standard. Information and communications technologies (ICT) have supported the emergence of web-based EDI which maintains the advantages of the traditional paradigm while negating the disadvantages. This has been further extended by the advent of the Semantic web which rests on the fundamental idea that web resources should be annotated with semantic markup that captures information about their meaning and facilitates meaningful machine-to-machine communication. This paper provides an ontology using OWL (Web Ontology Language) for the Australian Timber sector that can be used in conjunction with semantic web services to provide effective and cheap B2B communications

Supply Chain Resource Planning Systems: A Scenario of Future Enterprise Systems

To envisage possible future enterprise systems, we describe four scenarios that all respond to the increasing need for better supply chain-wide coordination of resource allocation decisions. We use two drivers to derive these scenarios; namely “normal form of providing corporate computing resources” and “stance of regulators towards explicit forms of industry-wide coordination”, the latter of which includes cooperation among competitors. While three of our scenarios are familiar to contemporary readers, the fourth, supply chain resource planning (SCRP) systems, marks a radical break with current practice. We describe the operating principle of SCRP systems and discuss possible governance structures for organizations supporting SCRP systems. We hope to encourage discussion about the future of enterprise systems that moves beyond extrapolating past and current trends. The paper concludes by outlining four areas for promising future research

Two Studies on The Use of Information Technology in Collaborative Planning, Forecasting & Replenishment (CPFR)

In the 1st study, I seek to determine whether there are trends in the coverage of the use of Information Technology in CPFR in support of Supply Chain Management. I look at the way technology is studied along two dimensions. The first dimension is the function within CPFR—Planning, Forecasting or Replenishment. The second dimension is level at which the study addresses use of the technology, whether at the Operational, Tactical or Strategic level. Within this 3x3 matrix, I seek to prove that studies would primarily fall along a line where the higher the level functions should be served by systems which have a longer-term orientation. This was broadly true, along with an emphasis on studies at the strategic level. Additionally, I find an underrepresentation of Forecasting, especially at the strategic level. The 2nd study seeks to determine the factors affecting IT system use for CPFR, in the real world. I examine the factors affecting system use along two dimensions. The first is along the company-level dimension. There are 3 points along the company-level dimension, defined as follows. Strategic use is defined as use by upper level management who are interested in the long term view of the organization and its processes and products. The Tactical use of IT for CPFR includes use by middle managers at a departmental level for medium term decision making. Operational level IT use covers functions which directly affect individual customers and keep the business running day to day. The second dimension along which system use is examined, is the functional-dimension. There are 3 points along this dimension and they are defined as follows. Use of IT for Planning, based on the VICS standard, is usually, but not exclusively under the purview of senior managers to determine what products to manufacture and the features they should have. Forecasting is done mainly by middle-managers in order to move enough products at the right time, to the right paces, while avoiding over-stocking each product. The Replenishment function is the actual process of moving items to the customer as they are ordered on-line or bought from the shelf. This is typically the job of operational logistics personnel such as purchasing and, shipping and delivery, as well as front-line staff such as customer service, shop-floor attendants or cashiers who interface directly with customers. In examining real world IT use for CPFR, I build on Simmonds, Haines & Li (2013) which looks at the trends and gaps in the IT literature as far as use of IT in CPFR was concerned. The aim is to determine whether the literature lines up with reality, or whether researchers are inherently biased when studying how Information Technology is used to support CPFR. A survey instrument was sent to 4000 senior managers in manufacturing and distribution companies. IT use along the STO dimension (Haines, Hough, & Haines, 2010) and its relationship with Industry characteristics (clock-speed of the industry and technological orientation) will be investigated in the context of the Technology Acceptance Model (TAM) (Fred D. Davis, 1989). Product factors (such as demand variability & luxury nature of the product) which drive IT use (Attaran & Attaran, 2007) along the PFR dimension will be investigated in the context of Technology Task Fit Theory (Goodhue & Thompson, 1995). Intra-firm trust (Frazier, Johnson, Gavin, Gooty, & Bradley Snow, 2010) and its effect on use on the PFR dimension, will be looked at with managerial influence within Innovation Diffusion theory (Rogers, 2010) as a basis. Trust issues including confidence of management in competence of workers and confidence of employees in dependability of IT

Global dynamic E-marketplaces, and their role in the internet-based economy

Collaboration capabilities are what will most probably create the gap between winners and losers in business-to-business (B2B) commerce. In this context, the electronic marketplace (EM) comes as a medium for trade and collaboration, and a common entry point where partners can share business processes and adopt a decentralized business model fuelled by market evolution. The thesis illustrates the advantages of collaborative business and presents the information technologies that support it. The purpose of this thesis is to educate both the author and the reader on the technology and infrastructure that supports collaborative business and to posit that among the three major information technology infrastructures that enable B2B commerce, the EM model provides significant advantages for individual companies and industries compared to Electronic Data Interchange (EDI) and Peer-to-Peer (P2P). The thesis identifies key tools and value-added services EM\u27s should provide their participants to meet the requirements of modern companies and the Internet-based economy. Finally, the thesis suggests potential impacts of EM\u27s on the modern business ecosystem