The impact of stochastic lead times on the bullwhip effect – An empirical insight

In this article, we review the research state of the bullwhip effect in supply chains with stochastic lead times. We analyze problems arising in a supply chain when lead times are not deterministic. Using real data from a supply chain, we confirm that lead times are stochastic and can be modeled by a sequence of independent identically distributed random variables. This underlines the need to further study supply chains with stochastic lead times and model the behavior of such chains

Solar electric supply chain disruption

This research project focuses on solar electric supply chain disruption and examines the case of Continental Energy, a company specialized in the management and installation of solar PV panels. The project aims to identify and address key challenges within the supply chain to ensure smooth operations, efficient delivery of PV panels, and customer satisfaction. Through a comprehensive analysis of the supply chain network, inventory management techniques, and the implementation of appropriate supply contracts, the project proposes solutions to optimize processes and mitigate disruptions. Furthermore, the economic and environmental impacts of these proposed solutions are evaluated, considering factors such as cost savings, energy efficiency, and sustainability. The project concludes with a comprehensive assessment of the improvements implemented and their potential benefits for Continental Energy's solar electric supply chain. The findings contribute to the understanding of supply chain management strategies in the renewable energy sector and provide insights for companies aiming to enhance their operational efficiency and sustainability in a rapidly evolving industr

Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

Theory and Practice of Supply Chain Synchronization

In this dissertation, we develop strategies to synchronize component procurement in assemble-to-order (ATO) production and overhaul operations. We focus on the high-tech and mass customization industries which are not only considered to be very important to create or keep U.S. manufacturing jobs, but also suffer most from component inventory burden. In the second chapter, we address the deterministic joint replenishment inventory problem with batch size constraints (JRPB). We characterize system regeneration points, derive a closed-form expression of the average product inventory, and formulate the problem of finding the optimal joint reorder interval to minimize inventory and ordering costs per unit of time. Thereafter, we discuss exact solution approaches and the case of variable reorder intervals. Computational examples demonstrate the power of our methodology. In the third chapter, we incorporate stochastic demand to the JRPB. We propose a joint part replenishment policy that balances inventory and ordering costs while providing a desired service level. A case study and guided computational experiments show the magnitudes of savings that are possible using our methodology. In the fourth chapter, we show how lack of synchronization in assembly systems with long and highly variable component supply lead times can rapidly deteriorate system performance. We develop a full synchronization strategy through time buffering of component orders, which not only guarantees meeting planned production dates but also drastically reduces inventory holding costs. A case study has been carried out to prove the practical relevance, assess potential risks, and evaluate phased implementation policies. The fifth chapter explores the use of condition information from a large number of distributed working units in the field to improve the management of the inventory of spare parts required to maintain those units. Synchronization is again paramount here since spare part inventory needs to adapt to the condition of the engine fleet. All needed parts must be available to complete the overhaul of a unit. We develop a complex simulation environment to assess the performance of different inventory policies and the value of health monitoring. The sixth chapter concludes this dissertation and outlines future research plans as well as opportunities

Warehousing and Inventory Management in Dual Channel and Global Supply Chains

More firms are adopting the dual-channel supply chain business model where firms offer their products to customers using dual-channel sales (to offer the item to customers online and offline). The development periods of innovative products have been shortened, especially for high-tech companies, which leads to products with short life cycles. This means that companies need to put their new products on the market as soon as possible. The dual-channel supply chain is a perfect tool to increase the customer’s awareness of new products and to keep customers’ loyalty; firms can offer new products online to the customer faster compared to the traditional retail sales channel. The emergence of dual-channel firms was mainly driven by the expansion in internet use and the advances in information and manufacturing technologies. No existing research has examined inventory strategies, warehouse structure, operations, and capacity in a dual-channel context. Additionally, firms are in need to integrate their global suppliers base; where the lower parts costs compensate for the much higher procurement and cross-border costs; in their supply chain operations. The most common method used to integrate the global supplier base is the use of cross-dock, also known as Third Party Logistic (3PL). This study is motivated by real-world problem, no existing research has considered the optimization of cross-dock operations in terms of dock assignment, storage locations, inventory strategies, and lead time uncertainty in the context of a cross-docking system. In this dissertation, we first study the dual-channel warehouse in the dual-channel supply chain. One of the challenges in running the dual-channel warehouse is how to organize the warehouse and manage inventory to fulfill both online and offline (retailer) orders, where the orders from different channels have different features. A model for a dual-channel warehouse in a dual-channel supply chain is proposed, and a solution approach is developed in the case of deterministic and stochastic lead times. Ending up with numerical examples to highlight the model’s validity and its usefulness as a decision support tool. Second, we extend the first problem to include the global supplier and the cross-border time. The impact of global suppliers and the effect of the cross-border time on the dual-channel warehouse are studied. A cross-border dual-channel warehouse model in a dual-channel supply chain context is proposed. In addition to demand and lead time uncertainty, the cross-border time is included as stochastic parameter. Numerical results and managerial insights are also presented for this problem. Third, motivated by a real-world cross-dock problem, we perform a study at one of the big 3 automotive companies in the USA. The company faces the challenges of optimizing their operations and managing the items in the 3PL when introducing new products. Thus, we investigate a dock assignment problem that considers the dock capacity and storage space and a cross-dock layout. We propose an integrated model to combine the cross-dock assignment problem with cross-dock layout problem so that cross-dock operations can be coordinated effectively. In addition to lead time uncertainty, the cross-border time is included as stochastic parameter. Real case study and numerical results and managerial insights are also presented for this problem highlighting the cross-border effect. Solution methodologies, managerial insights, numerical analysis as well as conclusions and potential future study topics are also provided in this dissertation

Investigating the feasibility of supply chain-centric business models in 3D chocolate printing: a simulation study

This is the author accepted manuscript. The final version is available from Science Direct via the DOI in this record.3D chocolate printing provides the technology for manufacturing chocolates layer-by-layer, thus offering customers enhanced product value and personalized consumption experience. As business models in the chocolate industry are closely associated with the profitability of the supply chain constituents, it seems appropriate to investigate the financial viability of these supply-chain centric business models prior to their introduction in the real world. In this paper we present two business models pertaining to the supply chain for 3D printed chocolates; we evaluate the financial viability of these innovative models through the use of computer modelling and simulation. The study is based on the commercialization efforts of a UK based 3D chocolate printing technology provider (Choc Edge). The results of the study indicate that 1) the retailer dominant supply chain model is a potentially disruptive business model innovations that are enabled by the 3D food printing technology, and as such, may pose a challenge to traditional high end chocolate products; 2) the manufacturer dominant model helps manufacturers gain more profits while retailer profits tend to be stagnant.We would like to thank the financial support of Chartered Institute of Logistics and Transport (CILT) and the Bridging the gap of EPSRC in the UK and Humanities and Social Sciences Foundation of Ministry of Education in China (Grant number: 14YJC630130)