Developing supply chain maturity

This study introduces an empirical model of supply chain maturity and assesses its impact upon performance. Findings suggest that supply chain maturity is multi-dimensional including the areas of planning, sourcing, making, delivering, new product development, and returning. Valid and reliable measures, scales and supply chain maturity constructs were formulated and significant positive links found with multiple objective performance measures. The supply chain maturity framework is thus concluded to be robust for answering questions relating to where a supply chain is in developmental terms and what may be done to continue improving upon the design. Possible areas for further research and implications for managers are also raised.Supply Chain Design; Supply Chain Coordination;

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

Adoption of web-based order-processing systems: experiences from tier-1 suppliers in the automotive supply chain

This research studies automobile industry suppliers in Thailand, who have implemented VMI using web-based order-processing technology. It examines their motivations and barriers for implementing the technology, and identifies the enabling factors with greatest impact on the outcomes of such implementation. Data was obtained from 70 tier-1 suppliers of the two biggest automobile assemblers in Thailand. Exploratory factor analysis was used to construct motivation, enabling factors, difficulties/barriers and outcomes of web-based order-processing technology implementation. Multiple linear regression was then used to examine the relationships between enabling factors and operational outcomes. The results show that improving customer responsiveness and the need to retain competitive advantage rather than cost-based orientation were the primary drivers of implementation of web-based order processing. This case provides insights to enable successful implementation by organisations that are planning to deploy the technology, particularly in the early stages of technological diffusion in emerging economies

MODELING PRODUCTIVITY IN SUPERMARKET OPERATIONS: INCORPORATING THE IMPACTS OF STORE CHARACTERISTICS AND INFORMATION TECHNOLOGIES

Data from the 2002 Supermarket Panel are used to estimate a supermarket production function with weekly gross margin as the output measure and store selling area and total labor hours as variable inputs. The model also includes productivity shifters describing format and service offerings, store ownership structure, unionization, and adoption of new information technologies and related business practices. The null hypothesis of constant returns to scale cannot be rejected. Increases in ownership-group size, warehouse and supercenter formats, unionization of the workforce, and adoption of vendor-managed inventory and a frequent-shopper program are all associated with significantly higher productivity.Productivity Analysis,

Information Sharing in Improving Supply Chain Performance

This thesis studies the benefits of sharing information in supply chains. The information used is transaction and forecast data, which are collected by the sharing party’s ERP systems. The research method used was literature review and the results of the thesis, building upon several academic articles and studies, suggest that information improves supply chain performance and decreases its costs. The motivation for information sharing and supply chain management (SCM) come from the ever-complicating and global business environment. Focus on core competencies has led to lengthy sup-ply chains and dependency on multiple suppliers. Subcontractors account for most of a product’s value nowadays, increasing the need for good supplier relations. Information sharing is a cooperation method, which also helps reduce supply chain costs too. Based on an empirical study, using information sharing alone can provide supply chain costs savings of 3,3 to 9,7 per cent. The thesis also presents value adding applications of information sharing, which can help reduce costs and improve performance even more. These applications include vendor managed inventory (VMI) and continuous replenishment program (CRP). In return for the benefits, deeper cooperation and absolute trust is required from the parties

A Case Study of VMI using TOC

A vendor managed inventory (VMI) is a process whereby a supplier maintains an inventory for a retailer by generating orders for the retailer based on its demand information. In this relationship, the supplier is responsible for maintaining the retailers’ inventory levels and transportation and transaction costs. The performance measurements that are associated with the theory of constraints (TOC) have been widely advocated as a mechanism of linking operational objectives to the global goals of an organization. In this paper, we use a case study of the Procter & Gamble to illustrate the application of TOC in VMI. The results show that the quality of service and the inventory level can be improved

One vendor-one retailer in vendor managed inventory problem with stochastic demand

One of the basic problems in supply chain operation is lack of information exchanges related to inventory between vendor and retailer. Vendor managed inventory (VMI) provides a good approach to handle this problem. VMI has been proven to reduce cost and improve customer service level. This research aim is to develop a VMI model for the system with one vendor and one retailer to minimise the total system cost. The model is developed for (t, q) policy where the retailer’s cycle time is fixed. Due to the complexity nature of the model, simulation-optimisation using genetic algorithm is employed to determine the decision variables which are the retailer’s lot size, the vendor’s lot size, and the number of replenishments in a vendor cycle. Numerical experiments are conducted to show how the proposed model works. Sensitivity analysis is also conducted to understand the effects of some input parameters

Optimal Supply Network with Vendor Managed Inventory in a Healthcare System with RFID Investment Consideration

Supply Chain Management in the healthcare sector faces several significant challenges, including complexity in healthcare systems, high supply chain costs, balancing quality and costs, delay in delivery, product availability from vendors, inventory waste, and unpredictability and uncertainty. Among those challenges, having an effective inventory management system with an optimal supply network is important to improve the match between supply and demand, which would improve the performance of for healthcare firms. Vendor Managed Inventory (VMI) system is a replenishment solution in which the vendor monitors and decides the time and the quantity of the inventory replenishment of their customers subject to their demand information exchange. A VMI contract in the location-inventory assignment problem is a decision tool for management in the healthcare industry, in which it enables the management to have a cost and service effective decision tool to critically re-evaluate and examine all areas of operations in a SC network looking for avenues of optimization. This dissertation is based on a real-world problem arising from one of the world\u27s leading medical implant supply company applied to a chain of hospitals in the province of Ontario. The chain of hospitals under study consists of 147 hospitals located in Ontario, Canada. The vendor is a supplier of three types of medical implants (a heart valve, an artificial knee, and a hip). In Chapter 2 of this dissertation, we present an optimal supply healthcare network with VMI and with RFID consideration, in which we shed light on the role of the VMI contract in the location-inventory assignment problem and integrate it with both the replenishment policy assignment and the Radio Frequency Identification (RFID) investment allocation assignment in healthcare SC networks using both VMI and direct delivery policies. A numerical solution approach is developed in the case of the deterministic demand environment, and we end up with computational results and sensitivity analysis for a real-world problem to highlight the usefulness and validate the proposed model. We extend our research of integrating the VMI contract in the location-inventory assignment problem with the replenishment policy assignment under a deterministic demand environment to include the stochastic demand environment. The impact of the uncertainty of the demand as a random variable following two types of distributions, normal and uniform distributions, is studied in Chapter 3. Motivated by the lack of investigations and comparative studies dealing with the preference of dealing with VMI contracts to other traditional Retailer Managed Inventory (RMI) systems, we provide in Chapter 4 of this dissertation a comparative study in which we compare the total cost of the VMI system with another two situations of traditional RMI systems: first, a traditional RMI system with a continuous replenishment policy for all hospitals and with assigned storage facilities and second, a traditional RMI system with a direct delivery policy for all hospitals without assigning a storage facility. Computational results, managerial insights, sensitivity analysis, and solution methodologies are provided in this dissertation. Keywords: Vendor Managed Inventory, healthcare system, location-inventory, RFID technology, supply-chain network, stochastic demand, location-inventory assignment problem, and retailer managed Inventory

The value of coordination in manufacturer-customer relationships

This paper studies the relationship between a manufacturer and his customer. In the traditional setting, the customer manages her own inventory and places replenishment orders that are made-to-order by the manufacturer. Recently, supply chain initiatives such as Vendor Managed Inventory (VMI) have changed the traditional customer-manufacturer relationship. In a VMI relationship, the manufacturer becomes responsible for the management of his customer¿s inventory. Often, costs associated with inventory keeping are transferred from the customer to the manufacturer. Because of this cost transfer, VMI typically is more expensive for the manufacturer. However, being responsible for the inventory management, the manufacturer can coordinate the production and inventory control decisions. It is the goal of this paper to show how the manufacturer can realize this coordination. Moreover, we present a framework to categorize several VMI relationship types. We give insights on the structure of the problem as well as some insights on opportunities for cost savings. The insights are illustrated by numerical examples, which show that the value of coordination can be subtantial in many cases