Supply chain uncertainty:a review and theoretical foundation for future research

Supply-chain uncertainty is an issue with which every practising manager wrestles, deriving from the increasing complexity of global supply networks. Taking a broad view of supply-chain uncertainty (incorporating supply-chain risk), this paper seeks to review the literature in this area and develop a theoretical foundation for future research. The literature review identifies a comprehensive list of 14 sources of uncertainty, including those that have received much research attention, such as the bullwhip effect, and those more recently described, such as parallel interaction. Approaches to managing these sources of uncertainty are classified into: 10 approaches that seek to reduce uncertainty at its source; and, 11 approaches that seek to cope with it, thereby minimising its impact on performance. Manufacturing strategy theory, including the concepts of alignment and contingency, is then used to develop a model of supply-chain uncertainty, which is populated using the literature review to show alignment between uncertainty sources and management strategies. Future research proposed includes more empirical research in order to further investigate: which uncertainties occur in particular industrial contexts; the impact of appropriate sources/management strategy alignment on performance; and the complex interplay between management strategies and multiple sources of uncertainty (positive or negative)

The impact of supply chain performance measurement systems on dynamic behaviour in supply chains

The amplification of demand variation up a supply chain widely termed ‘the Bullwhip Effect’ is disruptive, costly and something that supply chain management generally seeks to minimise. Originally attributed to poor system design; deficiencies in policies, organisation structure and delays in material and information flow all lead to sub-optimal reorder point calculation. It has since been attributed to exogenous random factors such as: uncertainties in demand, supply and distribution lead time but these causes are not exclusive as academic and operational studies since have shown that orders and/or inventories can exhibit significant variability even if customer demand and lead time are deterministic. This increase in the range of possible causes of dynamic behaviour indicates that our understanding of the phenomenon is far from complete. One possible, yet previously unexplored, factor that may influence dynamic behaviour in supply chains is the application and operation of supply chain performance measures. Organisations monitoring and responding to their adopted key performance metrics will make operational changes and this action may influence the level of dynamics within the supply chain, possibly degrading the performance of the very system they were intended to measure. In order to explore this a plausible abstraction of the operational responses to the Supply Chain Council’s SCOR® (Supply Chain Operations Reference) model was incorporated into a classic Beer Game distribution representation, using the dynamic discrete event simulation software Simul8. During the simulation the five SCOR Supply Chain Performance Attributes: Reliability, Responsiveness, Flexibility, Cost and Utilisation were continuously monitored and compared to established targets. Operational adjustments to the; reorder point, transportation modes and production capacity (where appropriate) for three independent supply chain roles were made and the degree of dynamic behaviour in the Supply Chain measured, using the ratio of the standard deviation of upstream demand relative to the standard deviation of the downstream demand. Factors employed to build the detailed model include: variable retail demand, order transmission, transportation delays, production delays, capacity constraints demand multipliers and demand averaging periods. Five dimensions of supply chain performance were monitored independently in three autonomous supply chain roles and operational settings adjusted accordingly. Uniqueness of this research stems from the application of the five SCOR performance attributes with modelled operational responses in a dynamic discrete event simulation model. This project makes its primary contribution to knowledge by measuring the impact, on supply chain dynamics, of applying a representative performance measurement system

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

Development of an Approach for Analyzing Supply Chain Complexity

Supply chains are faced with a rising complexity of products, structures, and processes. Because of the strong link between a supply chain’s complexity and its efficiency the supply chain complexity management becomes a major challenge of today’s business management. A two dimensional driver concept is introduced and explained to comprehend the major causes of a supply chains’ complexity. To map the effects of the drivers and to understand the different dimensions of complexity, a general complexity model is introduced. A supply chain complexity analysis approach is presented, to evaluate the initial situation and to provide the necessary information for deriving the right actions and strategies for the management of complexity within a supply chain.complexity; supply chain; variety; model

Dampening variability by using smoothing replenishment rules.

A major cause of supply chain deficiencies is the bullwhip effect which can be substantial even over a single echelon. This effect refers to the tendency of the variance of the replenishment orders to increase as it moves up a supply chain. Supply chain managers experience this variance amplification in both inventory levels and replenishment orders. As a result, companies face shortages or bloated inventories, run-away transportation and warehousing costs and major production adjustment costs. In this article we analyse a major cause of the bullwhip effect and suggest a remedy. We focus on a smoothing replenishment rule that is able to reduce the bullwhip effect across a single echelon. In general, dampening variability in orders may have a negative impact on customer service due to inventory variance increases. We therefore quantify the variance of the net stock and compute the required safety stock as a function of the smoothing required. Our analysis shows that bullwhip can be satisfactorily managed without unduly increasing stock levels to maintain target fill rates.Bullwhip effect; Companies; Cost; Costs; Impact; Inventory; Managers; Order; Replenishment rule; Rules; Safety stock; Supply chain; Supply chain management; Variability; Variance; Variance reduction;

The Lean Concept in the Food Industry: A Case Study of Contract a Manufacturer

The paper discusses how the lean concept could be applied to a food-manufacturing company. The paper first presents the lean concept and value-stream mapping tools. The empirical section discusses how a case company, operating as a contract manufacturer in the food industry, has applied the lean production concept and tools. In the case study, three analysis tools are examined and the structures of demand chains of different customers are presented. The delivery times will decrease and more flexibility will be needed from the contract manufacturer. The case study shows that much movement is possible toward the lean supply chain and partnership-based cooperation. By implementing the lean concept, food companies can increase customer value through cost reduction or through provision of additional value-enhanced services.Agribusiness,

Collaborative supply chain modelling and performance measurement

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University, 11/12/2002.For many years, supply chain research focused on operational aspects and therefore mainly on the optimisation of parts of the production and distribution processes. Recently, there has been an increasing interest in supply chain management and collaboration between supply chain partners. However, there is no model that takes into consideration all aspects required to adequately represent and measure the performance of a collaborative supply chain. This thesis proposes a model of a collaborative supply chain, consisting of six constituents, all of which are required in order to provide a complete picture of such a collaborative supply chain. In conjunction with that, a collaborative supply chain performance indicator is developed. It is based on three types of measures to allow the adequate measurement of collaborative supply chain performance. The proposed model of a collaborative supply chain and the collaborative supply chain performance indicator are implemented as a computer simulation. This is done in the form of a decision support environment, whose purpose is to show how changes in any of the six constituents affect collaborative supply chain performance. The decision support environment is configured and populated with information and data obtained in a case study. Verification and validation testing in three different scenarios demonstrate that the decision support environment adequately fulfils it purpose