Improving supply chain management in construction: what can be learned from the aerospace industry?

In order to provide for controllable delivery, reliable lead times and efficient customer response, lean manufacturing and platform assembly practices play an important role in supply chains in the aerospace industry. The adoption of lean manufacturing practices ensures an efficient delivery of products to the market. Benefits from the development of platform strategies are a more reliable materials supply and an improved logistics control. The aerospace industry is characterized by a small number of major global players and many small ones. A major part of the design and production has been contracted out to suppliers. In this paper the basic similarities and differences between the construction and aerospace industry and supply chains are analysed. A comparative study of aerospace and construction supply chains is presented to indicate and discuss the applicability of supply chain management concepts to construction, and the improvement potential of these concepts regarding supply chain management in construction. It is concluded that in particular the practice of platform assembly is a fruitful concept to be applied in the construction industry

Performance optimization of a leagility inspired supply chain model: a CFGTSA algorithm based approach

Lean and agile principles have attracted considerable interest in the past few decades. Industrial sectors throughout the world are upgrading to these principles to enhance their performance, since they have been proven to be efficient in handling supply chains. However, the present market trend demands a more robust strategy incorporating the salient features of both lean and agile principles. Inspired by these, the leagility principle has emerged, encapsulating both lean and agile features. The present work proposes a leagile supply chain based model for manufacturing industries. The paper emphasizes the various aspects of leagile supply chain modeling and implementation and proposes a new Hybrid Chaos-based Fast Genetic Tabu Simulated Annealing (CFGTSA) algorithm to solve the complex scheduling problem prevailing in the leagile environment. The proposed CFGTSA algorithm is compared with the GA, SA, TS and Hybrid Tabu SA algorithms to demonstrate its efficacy in handling complex scheduling problems

The strategic integration of agile and lean supply

Lean supply is closely associated with enabling flow and the elimination of wasteful variation within the supply chain. However, lean operations depend on level scheduling and the growing need to accommodate variety and demand uncertainty has resulted in the emergence of the concept of agility. This paper explores the role of inventory and capacity in accommodating such variation and identifies how TRIZ separation principles and TOC tools may be combined in the integrated development of responsive and efficient supply chains. A detailed apparel industry case study is used to illustrate the application of these concepts and tools

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

Revenue Management and Demand Fulfillment: Matching Applications, Models, and Software

Recent years have seen great successes of revenue management, notably in the airline, hotel, and car rental business. Currently, an increasing number of industries, including manufacturers and retailers, are exploring ways to adopt similar concepts. Software companies are taking an active role in promoting the broadening range of applications. Also technological advances, including smart shelves and radio frequency identification (RFID), are removing many of the barriers to extended revenue management. The rapid developments in Supply Chain Planning and Revenue Management software solutions, scientific models, and industry applications have created a complex picture, which appears not yet to be well understood. It is not evident which scientific models fit which industry applications and which aspects are still missing. The relation between available software solutions and applications as well as scientific models appears equally unclear. The goal of this paper is to help overcome this confusion. To this end, we structure and review three dimensions, namely applications, models, and software. Subsequently, we relate these dimensions to each other and highlight commonalities and discrepancies. This comparison also provides a basis for identifying future research needs.Manufacturing;Revenue Management;Software;Advanced Planning Systems;Demand Fulfillment

Buyer focus: evaluation of a new concept for supply chain integration

The goal of integrated supply chains is to remove barriers to ease the flow of materials and information. This article concentrates on an important barrier: shared resources in a supply chain. The removal of these shared resources is closely related to the recently introduced concept of buyer focus. Buyer focus is described as the singling out of resources in order to supply one buyer along the whole range of its products. The value of buyer focus for supply chain integration is evaluated and in two cases illustrated. This article suggests that there are two extreme configurations in supply chains. On the one hand, suppliers with buyer-focused operations to enable high levels of integration in order to cope with uncertainty in volume, mix and leadtime. On the other hand, shared resources and low levels of integration, which are more likely in supply chains that are dominantly cost driven.

Procurement push and marketing pull in supply chain management: the conceptual contribution of relationship marketing as a driver in project financial performance

? The agenda for supply management practices on construction projects originated from clients. It is largely procurement driven, the dominant strategy of contractors being to emulate the client approach, and hence push the procurement model along the chain.? This procurement push along the supply chain translates the intrinsic client interest in value into a contractor interest in repeat business from the same client or through referral markets, the consequence being: (i) loss of interest in adding further value along the chain, (ii) continuous improvement prematurely reaches the law of diminishing returns through a primary cost reduction focus, (iii) supply chains may be rationalised in terms of the number of suppliers for each link in the chain, yet the procurement push increases chain length in order to squeeze the lowest costs possible, hence those doing the work at the bottom of the chain will not have the resources to add value nor necessarily be aware of the strategic principles at the top of the chain. ? Marketing is the other side of the same ?procurement coin?; relationship marketing (RM) soliciting a pull in the supply chain, potentially adding value for continuous improvement. ? Finally, the RM approach will be related to the theoretical and actual decoupling point for construction, with the potential to move the point towards the start of the chain, hence increasing the potential for agile manufacturing

Variety Management in Assemble-to-Order Supply Chains

Assemble-to-order refers to a supply chain strategy in which products are not assembled until customer order arrives. It is based on the so-called form postponement that is to hold components at a generic form and to delay the point of product differentiation. The performance of an assem-ble-to-order supply chain depends on two main dimensions, which are responsiveness and achievement level of scale economies. Responsiveness refers to the capability of fulfilling customer requirements in a fast-paced manner, whereas the achievement of scale economies reflects the degree of operations efficiency. Assemble-to-order supply chains induce high product variety, which has adverse effects on performance. We use demand volumes as a proxy for scale economies and lead times as a proxy for responsiveness. A matrix that consists of both dimensions can be defined, in which we distinguish between short/long lead times and low/high demand volumes. This matrix is called performance matrix. On the other hand, the consequence that results from product variety is a high demand variability of end products, which also affects the demand variability of components. An analysis of component demand variability enables one to identify the components with low/high demand variability. These components can further be classified into supplied and in-house made components. Thus, a second matrix (called component matrix) with two dimensions, namely variability (low/high) and supply source (in-house/supplier) can be defined. Due to the supply source dimension in the component matrix, the supply chain perspective is also taken into ac-count. The combination of both matrixes into a single one provides the performance/component matrix for assemble-to-order supply chains. To use the final matrix, it is necessary to compute lead times, demand volumes and demand variability of the supplied and in-house made components. By plotting the components in the matrix, one can determine the problems induced by variety. In order to improve the performance of the assemble-to-order supply chain, the implementation of variety management strategies is necessary. The identified strategies are: commonality, component families, modularity, and platforms. Based on the performance/component matrix, we discuss how these strategies or a combination of them can contribute to derive recommendations that aim to alleviate variety impacts on the as-semble-to-order supply chain.Assemble-to-order; Supply Chain Management; Variety Management