Optimising Supply Chain Performance via Information Sharing and Coordinated Management

Supply chain management has attracted much attention in the last decade. There has been a noticeable shift from a traditional individual organisation-based management to an integrated management across the supply chain network since the end of the last century. The shift contributes to better decision making in the supply chain context, as it is necessary for a company to cooperate with other supply chain members by utilising relevant information such as inventory, demand and resource capacity. In other words, information sharing and coordinated management are essential mechanisms to improve supply chain performance. Supply chains may differ significantly in terms of industry sectors, geographic locations, and firm sizes. This study was based on case studies from small and medium sized manufacturing supply chains in People Republic of China. The study was motivated by the following facts. Firstly, small and medium enterprises have made a big contribution to China’s economic growth. Several studies revealed that most of the Chinese manufacturing enterprises became aware of the importance of supply chain management, but compared to western firms, the supply chain management level of Chinese firms had been lagging behind. Research on supply chain management and performance optimisation in Chinese small and medium sized enterprises (SMEs) was very scarce. Secondly, there had been plenty of studies in the literature that focused on two or three level supply chains whilst considering a number of uncertain factors (e.g. customer demand) or a single supply chain performance indicator (e.g. cost). However, the research on multiple stage supply chain systems with multiple uncertainties and multiple objectives based on real industrial cases had been spared and deserved more attention. One reason was due to the lack of reliable industrial data that required an enormous effort to collect the primary data and there was a serious concern about data confidentiality from the industry aspect. This study employed two SME manufacturing companies as case studies. The first one was in the Aluminium industry and another was in the Chemical industry. The aim was to better understand the characteristics of the supply chains in Chinese SMEs through performing in-depth case studies, and built models and tools to evaluate different strategies for improving their supply chain performance. The main contributions of this study included the following aspects. Firstly, this study generalised a supply chain model including a domestic supply chain part and an international supply chain part based on deep case studies with the emphasis on identifying key characteristics in the case supply chains, such as uncertainties, constraints and cost elements in association with flows and activities in the domestic supply chain and the international supply chain. Secondly, two important SCM issues, i.e. the integrated raw material procurement and finished goods production planning, and the international sales planning, were identified. Thirdly, mathematical models were formulated to represent the supply chain model taking into account multiple uncertainties. Fourthly, several operational strategies utilising the concepts of just-in-time, safety-stock/capacity, Kanban, and vendor managed inventory, were evaluated and compared with the case company's original strategy in various scenarios through simulation methods, which enabled quantification of the impact of information sharing on supply chain performance. Fifthly, a single objective genetic algorithm was developed to optimise the integrated raw material ordering and finished goods production decisions under (s, S) policy (a dynamic inventory control policy), which enabled the impact of coordinated management on supply chain performance to be quantified. Finally, a multiple objectives genetic algorithm considering both total supply chain cost and customer service level was developed to optimise the integrated raw material ordering and finished goods production with the international sales plan decisions under (s, S) policy in various scenarios. This also enabled the quantification of the impact of coordinated management on supply chain performances

Supply Chain

Traditionally supply chain management has meant factories, assembly lines, warehouses, transportation vehicles, and time sheets. Modern supply chain management is a highly complex, multidimensional problem set with virtually endless number of variables for optimization. An Internet enabled supply chain may have just-in-time delivery, precise inventory visibility, and up-to-the-minute distribution-tracking capabilities. Technology advances have enabled supply chains to become strategic weapons that can help avoid disasters, lower costs, and make money. From internal enterprise processes to external business transactions with suppliers, transporters, channels and end-users marks the wide range of challenges researchers have to handle. The aim of this book is at revealing and illustrating this diversity in terms of scientific and theoretical fundamentals, prevailing concepts as well as current practical applications

The effects of data sharing on a perishable goods supply chain

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2012.Cataloged from PDF version of thesis.Includes bibliographical references (p. 65-68).This research project explores the benefits of retail data sharing in a high-velocity perishable goods supply chain. While this technique has been largely effective in improving supply chain performance in different industries, its benefits are unproven in the perishable goods business. Specifically, due to the short shelf life of produce, it remains to be seen whether data sharing can generate actionable plans for retailers to reduce out-of-stock events and shrinkage due to spoilage. As a result, suppliers and retailers alike have been reluctant to invest in the technology and cultivate the business relationship required to enable data sharing. The findings of this thesis could help companies determine whether a business case can be built for suppliers to invest in the necessary technology, as well as for retailers to share operational data for the greater good of overall supply chain efficiency and profitability. Ultimately, our research indicates that without some fundamental changes to the retailers' ordering process, data sharing does not provide substantial operational benefits for the perishable goods supply chain.by Darren Wilson and Gerald Yeung.M.Eng.in Logistic

VMI-type Supply Chains: a Brief Review

The primary purpose of this paper is to highlight for the research community and practitioners the various aspects of using VMI-type supply chains in today’s business environment as well as a number of directions for future studies. In this regard, fifty articles published in major international journals, beginning in 1995, which contribute to the VMI-type supply chains are reviewed via a systematic review methodology. Our findings show there is an incremental growth in employing of VMI strategies in logistic and supply chains. This paper characterizes the design aspects required to configure and establish a VMI-type supply chain in the industry including demand pattern, number of products, contract type between two parties, and profit sharing scheme. Moreover, the current gaps on the current state of VMI-type supply chain in literature are highlighted in last section of this paper that may motivate future studies

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

Energy and Carbon Dioxide Impacts from Lean Logistics and Retailing Systems: A Discrete-event Simulation Approach for the Consumer Goods Industry

abstract: Consumer goods supply chains have gradually incorporated lean manufacturing principles to identify and reduce non-value-added activities. Companies implementing lean practices have experienced improvements in cost, quality, and demand responsiveness. However certain elements of these practices, especially those related to transportation and distribution may have detrimental impact on the environment. This study asks: What impact do current best practices in lean logistics and retailing have on environmental performance? The research hypothesis of this dissertation establishes that lean distribution of durable and consumable goods can result in an increased amount of carbon dioxide emissions, leading to climate change and natural resource depletion impacts, while lean retailing operations can reduce carbon emissions. Distribution and retailing phases of the life cycle are characterized in a two-echelon supply chain discrete-event simulation modeled after current operations from leading organizations based in the U.S. Southwest. By conducting an overview of critical sustainability issues and their relationship with consumer products, it is possible to address the environmental implications of lean logistics and retailing operations. Provided the waste reduction nature from lean manufacturing, four lean best practices are examined in detail in order to formulate specific research propositions. These propositions are integrated into an experimental design linking annual carbon dioxide equivalent emissions to: (1) shipment frequency between supply chain partners, (2) proximity between decoupling point of products and final customers, (3) inventory turns at the warehousing level, and (4) degree of supplier integration. All propositions are tested through the use of the simulation model. Results confirmed the four research propositions. Furthermore, they suggest synergy between product shipment frequency among supply chain partners and product management due to lean retailing practices. In addition, the study confirms prior research speculations about the potential carbon intensity from transportation operations subject to lean principles.Dissertation/ThesisPh.D. Sustainability 201

The influence of promotional activity on supply chain stability: a fast moving consumer goods (FMCG) perspective.

Master of Commerce. University of KwaZulu-Natal, Pietermaritzburg, 2014.Today, most sales are stimulated at the point of purchase, so sales promotions are becoming a crucial element of any marketing campaign. The consequence of these promotions is the creation of unpredictable demand. The resultant instability has been termed the “Bullwhip Effect” (BWE). The BWE has a negative effect on business performance as it creates information distortions that cause excessive inventory holdings, higher overall costs, poor customer service and lost sales. An important strategy to achieve a smooth flowing supply chain is to mitigate or preferably eliminate the BWE. The aim of this research was to monitor the stock levels of a high value product flowing through the supply chain to determine whether marketing activities, such as promotions, contribute to increased instability in the chain. The study followed a case study approach and analysed the business activities of consumer packaged goods company (CPGC) “X” promoting their product “X”, an item of high value, with retailer “X”. The promotion was monitored in three phases. The phases included pre-promotion planning, execution of the promotion and post promotion analysis. The researcher employed both qualitative and quantitative research methods. The research established that the ROI on the promotion was greater than the target and that the retailer made an additional profit. However, when the assessment of ROI included more of the supply chain, there was a negative operating profit due to excess upstream inventory. The study confirmed that promotional activities contribute to the BWE and that this effect may be more pronounced with products of higher value. The phenomenon worsened as the distance of supply chain nodes from the real demand increased. This caused a major shift in ordering patterns and an altered total inventory pipe fill in the chain. The recommendations arising from this study are that the CPGC and retailer should implement a true scorecard and a joint business plan for those brands that have products of high value. Subsequently, a vendor managed inventory (VMI) system should be implemented. This will remove the retailer’s need to forecast and may prevent unstable ordering and delays due to cost avoidance. Shrinkage will be reduced as the CPGC would directly own, control and supply stock in the retailer’s DCs

Supply Chain Management and Management Science: A Successful Marriage

The last century has witnessed extant studies on the applications of Management Science (MS) to a diverse set of Supply Chain Management (SCM) issues. This paper provides an overview of the contribution of MS within SCM. A framework is developed in this paper with a sampling of MS contributions to major SCM dimensions. Future research directions are presented