Electronic Part Total Cost Of Ownership And Sourcing Decisions For Long Life Cycle Products

The manufacture and support of long life cycle products rely on the availability of suitable parts from competent suppliers which, over long periods of time, leaves parts susceptible to a number of possible long-term supply chain disruptions. Potential supply chain failures can be supplier-related (e.g., bankruptcy, changes in manufacturing process, non-compliance), parts-related (e.g., obsolescence, reliability, design changes), logistical (e.g., transportation mishaps, natural disasters, accidental occurrences) and political/legislative (e.g., trade regulations, embargo, national conflict). Solutions to mitigating the risk of supply chain failure include the strategic formulation of suitable part sourcing strategies. Sourcing strategies refer to the selection of a set of suppliers from which to purchase parts; sourcing strategies include sole, single, dual, second and multi-sourcing. Utilizing various sourcing strategies offer one way of offsetting or avoiding the risk of part unavailability (and its associated penalties) as well as possible benefits from competitive pricing. Although supply chain risks and sourcing strategies have been extensively studied for high-volume, short life cycle products, the applicability of existing work to long life cycle products is unknown. Existing methods used to study part sourcing decisions in high-volume consumer oriented applications are procurement-centric where cost tradeoffs on the part level focus on part pricing, negotiation practices and purchase volumes. These studies are commonplace for strategic part management for short life cycle products; however, conventional procurement approaches offer only a limited view for parts used in long life cycle products. Procurement-driven decision making provides little to no insight into the accumulation of life cycle cost (attributed to the adoption, use and support of the part), which can be significantly larger than procurement costs in long life cycle products. This dissertation defines the sourcing constraints imposed by the shortage of suppliers as a part becomes obsolete or is subject to other long-term supply chain disruptions. A life cycle approach is presented to compare the total cost of ownership of introducing and supporting a set of suppliers, for electronic parts in long life cycle products, against the benefit of reduced long-term supply chain disruption risk. The estimation of risk combines the likelihood or probability of long-term supply chain disruptions (throughout the part's procurement and support life within an OEM's product portfolio) with the consequence of the disruption (impact on the part's total cost of ownership) to determine the "expected cost" associated with a particular sourcing strategy. This dissertation focuses on comparing sourcing strategies used in long life cycle systems and provides application-specific insight into the cost benefits of sourcing strategies towards proactively mitigating DMSMS type part obsolescence

Modeling Overstock

Two main problems have been emerging in supply chain management: the increasing pressure to reduce working capital and the growing variety of products. Most of the popular indicators have been developed based on a controlled environment. A new indicator is now proposed, based on the uncertainty of the demand, the flexibility of the supply chains, the evolution of the products lifecycle and the fulfillment of a required service level. The model to support the indicator will be developed within the real options approach.overstock, stock management, real options

Understanding supply chain disruption risk with the aid of social networks and information flows analysis

Supply Chain Risk Management (SCRM) has become a popular area of research and study in recent years. This can be highlighted by the number of peer reviewed articles that have appeared in academic literature. This coupled with the realisation by companies that SCRM strategies are required to mitigate the risks that they face, makes for challenging research questions in the field of risk management. The challenge that companies face today is not only to identify the types of risks that they face, but also to assess the indicators of risk that face them. This will allow them to mitigate that risk before any disruption to the supply chain occurs. The use of social network theory can aid in the identification of disruption risk. This thesis proposes the combination of social networks, behavioural risk indicators and information management, to uniquely identify disruption risk. The propositions that were developed from the literature review and exploratory case study in the aerospace OEM, in this thesis are:- By improving information flows, through the use of social networks, we can identify supply chain disruption risk. - The management of information to identify supply chain disruption risk can be explored using push and pull concepts. The propositions were further explored through four focus group sessions, two within the OEM and two within an academic setting. The literature review conducted by the researcher did not find any studies that have evaluated supply chain disruption risk management in terms of social network analysis or information management studies. The evaluation of SCRM using these methods is thought to be a unique way of understanding the issues in SCRM that practitioners face today in the aerospace industry

An Organizational-Economic Blueprint for Information Technology Outsourcing: Concepts and Evidence

The emergence of information technology (IT) as a critical determinant for business productivity brings a fundamental need to align the IT strategy with the corporate strategy. A basic issue arising from this imperative is the choice of effective structural mechanisms to govern the IT function. Our paper constructs and tests an integrated governance model of IT outsourcing at both the fm and the dyadic levels. Itextendsthetraditionalboundaryoforganizationaleconomicstodevelopemergingdomainssuch as bargaining costs, influence costs, management costs,and decision information costs. Within a context of IT outsourcing, key constructs and corresponding measures inherent in each cost domain are developed and tested. The data are drawn from surveys involving a large sample of 463 senior IT managers across 209 leading corporations in the U.S

The Contribution of Global Sourcing to the Economic Performance of Organizations: Analysis of the Points of View of the Supply Chain Participants

Purpose: This paper aims at investigating the reasons for the complex and long lead time from global suppliers that causes inventory shortages. It focuses on supply chain risk management in global sourcing. This study has revealed all the specific risks of a global sourcing project and has provided some solutions for risk management: three-step risk management, safety stock, data sharing and driving supplier performance. Design/methodology/approach: A qualitative study is conducted to propose concrete recommendations on three topics: risk management, safety stock and information sharing. A semistructured survey-guided interview was used to collect related data, and the answers were assessed using syntactic, lexical, thematical and NVivo software analysis. Findings: This study has revealed all the specific risks of a global sourcing project and has provided some solutions for risk management: three-step risk management, safety stock, data sharing and driving supplier performance. Originality/value: Through research work, we have noticed that the world of the Supply Chain is constantly evolving and that it is becoming more and more complex. Through these interviews, we have noticed that the role of purchasing is changing differently in each sector.Peer Reviewe

A Hierarchical Core Reference Ontology for New Technology Insertion Design in Long Life Cycle, Complex Mission Critical Systems

Organizations, including government, commercial and others, face numerous challenges in maintaining and upgrading long life-cycle, complex, mission critical systems. Maintaining and upgrading these systems requires the insertion and integration of new technology to avoid obsolescence of hardware software, and human skills, to improve performance, to maintain and improve security, and to extend useful life. This is particularly true of information technology (IT) intensive systems. The lack of a coherent body of knowledge to organize new technology insertion theory and practice is a significant contributor to this difficulty. This research organized the existing design, technology road mapping, obsolescence, and sustainability literature into an ontology of theory and application as the foundation for a technology design and technology insertion design hierarchical core reference ontology and laid the foundation for body of knowledge that better integrates the new technology insertion problem into the technology design architecture

Managing suppy chain risk through collaboration

In an increasingly uncertain, complex, and global supply chain environment, supply chains face a greater multitude of risks. Information sharing and collaboration between supply chain players can reduce risk within the supply chain. This project discusses emerging supply chain risk management (SCRM) strategies pertaining to the distribution of products and how purchasing and logistics departments can work to build a resilient and agile supply chain

Improving Retail Supply Flexibility using Buyer-Supplier Relational Capabilities

Purpose This study investigates the mediating role of three important relational capabilities - Absorptive Capacity, Transactive Memory Systems, and Organizational Interoperability; on the flexibility of buyer-supplier relationships and performance in retail supply chains. Drawing on the Relational view of strategic management, the impact of relational capabilities on two forms of supply chain flexibility is examined – (a) Configuration Flexibility for switching suppliers with minimal penalties and (b) Planning and Control Flexibility for altering supply schedules, quality, and delivery lead-time. Design/methodology/approach Strategic and tactical level managers from 211 retail stores in the UK were surveyed. We validated a measurement model with structural equation modeling, and tested four hypotheses on the mediating role of relational capabilities on supply chain flexibility and retail performance, controlling for size, duration of relationship and market segment. Findings Results showed that the three relational capabilities partially mediated the positive effect of configuration flexibility and planning and control flexibility on operational performance in big-middle and niche retailers. Examining the interaction effect of the forms of flexibility on the relational capabilities and performance, we found positive interaction effects on Transactive Memory Systems and Organizational Interoperability but a non-significant effect on Absorptive Capacity. Practical Implications In addition to providing novel theoretical insights on supply chain flexibility, our findings have practical implications for supplier selection and buyer-supplier relationship management. Originality/value Overall, the study highlights the impacts of relational capabilities on adopted operational strategies such as flexibility, buyer-supplier relationships, and retail performanc

A new approach for supply chain risk management: Mapping SCOR into Bayesian network

Purpose: Increase of costs and complexities in organizations beside the increase of uncertainty and risks have led the managers to use the risk management in order to decrease risk taking and deviation from goals. SCRM has a close relationship with supply chain performance. During the years different methods have been used by researchers in order to manage supply chain risk but most of them are either qualitative or quantitative. Supply chain operation reference (SCOR) is a standard model for SCP evaluation which have uncertainty in its metrics. In This paper by combining qualitative and quantitative metrics of SCOR, supply chain performance will be measured by Bayesian Networks. Design/methodology/approach: First qualitative assessment will be done by recognizing uncertain metrics of SCOR model and then by quantifying them, supply chain performance will be measured by Bayesian Networks (BNs) and supply chain operations reference (SCOR) in which making decision on uncertain variables will be done by predictive and diagnostic capabilities. Findings: After applying the proposed method in one of the biggest automotive companies in Iran, we identified key factors of supply chain performance based on SCOR model through predictive and diagnostic capability of Bayesian Networks. After sensitivity analysis, we find out that ‘Total cost’ and its criteria that include costs of labors, warranty, transportation and inventory have the widest range and most effect on supply chain performance. So, managers should take their importance into account for decision making. We can make decisions simply by running model in different situations. Research limitations/implications: A more precise model consisted of numerous factors but it is difficult and sometimes impossible to solve big models, if we insert all of them in a Bayesian model. We have adopted real world characteristics with our software and method abilities. On the other hand, fewer data exist for some of the performance metrics. Practical implications: Mangers often use simple qualitative metrics for SCRM. However, combining qualitative and quantitative metrics will be more useful. Industries can recognize the important uncertain metrics by predicting supply chain performance and diagnosing possible happenings. Originality/value: This paper proposed a Bayesian method based on SCOR metrics which has the ability to manage supply chain risks and improve supply chain performance. This is the only presented case study for measuring supply chain performance by SCOR metrics.Peer Reviewe