Socially responsible purchasing practices and supply chain performance in the food and beverage industry

Companies have policy for including social aspects in purchasing, however, it is believed that some barriers would hinder this and that it does not have impact on supply chain performance. This paper identifies socially responsible purchasing practices, the main drivers and barriers facing the implementation efforts and relation to performance

Delivery time dynamics in an assemble-to-order inventory and order based production control system

System dynamics play a critical role in influencing supply chain performance. However, the dynamic property of the assemble-to-order (ATO) system remain unexplored. Based on control theory, the inventory and order based production control system (IOBPCS) family, can be utilized as a base framework for assessing system dynamics. However, the underlying assumption in traditional IOBPCS-based analytical studies is that the system is linear and the delivery time to end customers is negligible or backlog is used as a surrogate indicator. Our aim is to incorporate customer delivery lead-time variance as the third assessment measure alongside capacity availability and inventory variance as part of the so-called ‘performance triangle’– capacity at the supplier, the customer order decoupling point (CODP) inventory and the delivery lead-time. Using the ‘performance triangle’ and adopting non-linear control engineering techniques, we assess the dynamic behaviour of an ATO system in the electronics sector. We benchmark the ATO system dynamics model against the IOBPCS family. We exploit frequency response analysis to ensure a robust system design by considering three measures of the ‘performance triangle’. The findings suggest delivery LT variance can be minimised by maintaining the ATO system as a true Push-Pull hybrid state with sufficient CODP stock, although increased operational cost driven by bullwhip and CODP variance need to be considered. However, if the hybrid ATO system 'switches' to the pure Push state, the mean and variance of delivery LT can be significantly increased

IOBPCS based models and decoupling thinking

The inventory and order based production control system (IOBPCS) is mainly a model of a forecast driven production system where the production decision is based on the forecast in combination with the deviation between target inventory and actual inventory. The model has been extended in various directions by including e.g. WIP feedback but also by interpreting the inventory as an order book and hence representing a customer order driven system. In practice a system usually consists of one forecast driven subsystem in tandem with a customer order driven subsystem and the interface between the two subsystems is represented by information flows and a stock point associated with the customer order decoupling point (CODP). The CODP may be positioned late in the flow, as in make to stock systems, or early, as in make to order systems, but in any case the model should be able to capture the properties of both subsystems in combination. A challenge in separating forecast driven from customer order driven is that neither the inventory nor the order book should be allowed to take on negative values, and hence non-linearities are introduced making the model more difficult to solve analytically unless the model is first linearized. In summary the model presented here is based on two derivatives of IOBPCS that are in tandem, and interfaces between them related to where the demand information flow is decoupled and the position of the CODP

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

Supply chain risk management under environmental turbulences

This study aimed to investigate how Brazilian supply chains (SCs) were affected by the economic and political crisis (2014 to 2016) and how supply chain risk management and resilience capabilities were used by these organizations to mitigate the consequences of this environmental turbulences. To accomplish with our goals, a qualitative research was conducted within three supply chains. Our findings indicated that the main impacts to the supply chains were demand volatility, suppliers’ financial health issues and cost increase. Those impacts affected differently companies depending on their position in the supply chain and revealed that organizations mainly adopt flexibility and visibility as resilience capabilities

The value of nonlinear control theory in investigating the underlying dynamics and resilience of a grocery supply chain

In an empirical context, a method to use nonlinear control theory in the dynamic analysis of supply chain resilience is developed and tested. The method utilises block diagram development, transfer function formulation, describing function representation of nonlinearities and simulation. Using both ‘shock’ or step response and ‘filter’ or frequency response lenses, a system dynamics model is created to analyse the resilience performance of a distribution centre replenishment system at a large grocery retailer. Potential risks for the retailer’s resilience performance include the possibility of a mismatch between supply and demand, as well as serving the store inefficiently and causing on-shelf stock-outs. Thus, resilience is determined by investigating the dynamic behaviour of stock and shipment responses. The method allows insights into the nonlinear system control structures that would not be evident using simulation alone, including a better understanding of the influence of control parameters on dynamic behaviour, the identification of inventory offsets potentially leading to ‘drift’, the impact of nonlinearities on supply chain performance and the minimisation of simulation experiments

Lead-time disturbance and uncertainty on production and inventory control: a review

The main goal of supply chain managers is to match customer demand with supply effectively, in order to minimise stockout rate as well as to reduce operating costs. Uncertainties and disturbances in the lead-time can lead to supply chain inefficiencies and risks. Notwithstanding the relevance of lead-time changes, previous research has focused on understanding the impact of demand uncertainty and on improving demand forecasting methods. In this paper, we review the body of knowledge in relation to the impact of lead-time disturbance and uncertainty on the planning and control of production and inventory systems. Articles are classified according to the applied methodology, performance criteria, type of mathematical model (linear/nonlinear, discrete/continuous, deterministic/stochastic) and venues for future research are outlined. We found a number of articles using analytical modelling techniques to investigate the impact of stochastic lead-time on supply chain performance. However, there is lack of understanding on the impact of deterministic disturbances triggered, for instance, by known sudden changes in lead-time. The literature recognises the importance of estimating lead-time with accuracy since a mismatch between actual and estimated lead-times may lead to an inventory drift, but it fails to capture the underlying mechanisms of lead-time disturbances, which are fundamental for an effective system design

The supply chain integration - supply chain sustainability relationship in the UK and Ghana pharmaceutical industry: A stakeholder and contingency perspective

In this research, the objective is to develop and test a model which provides understanding into the supply chain integration (SCI)-supply chain sustainability (SCS) relationship. The paper also explores how the SCI-SCS relationship is mediated by customer satisfaction and moderated by external uncertainty (EU) through the lenses of stakeholder and contingency theory by considering the pharmaceutical industry in Ghana and the UK. Empirical survey data were gathered from 231 pharmaceutical firms in Ghana and UK. We used structural equation modelling, multi-group analysis, and hierarchical regression to analyse the SCI-SCS relationship. We argue that through SCI, the economic, social and environmental performances can be simultaneously improved. However, the SCI-SCS relationship differs among the UK and Ghana context. Testing for mediation found that by increasing levels of customer satisfaction through customer integration (UK) and internal integration (Ghana), pharmaceutical companies can improve their SCS performances. However, testing moderation showed that the mediating effect is affected in both high and low EU. Drawing on stakeholder and contingency theory, our study is among the first to understand the influence of customer satisfaction and EU on the SCI-SCS relationship from a developing country (Ghana) and developed country (UK) perspective. Practitioners are provided with guidance on how to effectively/efficiently operationalise SCI to achieve SCS

A control engineering approach to the assessment of supply chain resilience

There is no consensus on the supply chain management definition of resilience. To aid in evaluating the dynamic behaviour of such systems we need to establish clearly elucidated performance criteria that encapsulate the attributes of resilience. A literature review establishes the latter as readiness, responsiveness and recovery. We also identify robustness as a necessary condition that would complement resilience. We find that the Integral of the Time Absolute Error (ITAE) is an appropriate control engineering measure of resilience when it is applied to inventory levels and shipment rates. We use the ITAE to evaluate an often used benchmark model of make-to-stock supply chains consisting of three decision parameters. We use both linear and nonlinear forms of the model in our evaluation. Our findings suggest that optimum solutions for resilience do not yield a system that is robust to uncertainties in lead-time. Hence supply chains will experience drastic changes in their resilience performance when lead-time changes. © 2012 Copyright Taylor and Francis Group, LLC

On the analysis of lead-time disturbances in production and inventory control models

Changes in the lead-time can lead to supply chain inefficiencies and risks. In this paper, we investigate the effects of lead-time disturbances on the system’s output responses of a production and inventory control model. In the adaption process of the control system for lead-time disturbance analysis, the resulting model becomes nonlinear. Hence nonlinear control theory in combination with simulation is used to analyse the impact of leadtime changes on the transient and steady state responses of order rate, inventory and work in process. Assuming constant customer demand, small perturbation theory is applied to linearise the model and to find the transfer functions relating the system’s outputs to the lead-time input. We find that the order rate, inventory and work in process transfer functions are input-dependent. In order words, the output responses depend on the input type, amplitude and direction of changes in the lead-time. When leadtime increases, the system has a relatively slow transient response and, as expected, work in process inventory levels increase and order rates are higher. However, step decreases in the lead-time can cause significant underdamped dynamics in the system. This work demonstrates that, although lead-time reduction is associated with service level improvement, increased flexibility and cost reductions, its implementation has to be carefully planned since a quick time compression may lead to undesirable oscillations in the supply chain system. In contrast, increased lead-times, associated say with a disturbance, yield slow recovery requiring adjustment of control parameters to increase resilience