Managing Customer Order Decoupling Points in Supply Chains

The concept of a customer order decoupling point (CODP) has been discussed since 1984. The CODP refers to the point in the supply chain at which a product is linked to a specific customer. Consequently, make to stock (MTS), assemble to order (ATO), make to order (MTO), purchase and make to order (PMTO), and engineer to order (ETO) all refer to different positions of the CODP. The CODP separates the operations downstream of the CODP that are based on actual customer orders from those upstream that are forecast driven. We discuss the strategic importance of the CODP and the characteristics of upstream versus downstream operations. The CODP concept is applicable to all industries, and we illustrate it with examples from the food processing and service industries. We discuss how the CODP relates to bottlenecks, the product life cycle, leagility, mass customization, modular product designs, and postponement. With respect to the differentiating features of upstream versus downstream, the CODP is an important contingency variable for many operations and supply chain management areas, including performance measurement. We conclude this chapter with a discussion on theoretical perspectives

Supply chain visibility: A Delphi study on managerial perspectives and priorities

Visibility across supply chains has been a key concern for organisations for many years, but the tools and information systems to achieve real-time visibility have not been available until recently. In response to uncertainty and complexity, advanced information and communication technologies have been explored for supply chain visibility (SCV). However, managerial perspectives are largely absent from the current literature. In response, this paper systematically documents managerial factors influencing SCV and information that should be collected and shared among supply chain partners for better visibility. A multi-stage Delphi analysis was conducted with 26 supply chain experts from various globally recognised enterprises with manufacturing units located worldwide. The results provide details on prioritised managerial perspectives and experiences within (1) factors affecting SCV (drivers, enablers, challenges and contingencies), (2) SCV content (supplier, internal and customer information) and (3) implications of SCV (capabilities and performance effects). One observation was that forecasting is not deemed as important due to severe disruptions in supply chains. Real-time visibility for better predictability emerged as the top priority. This study is among the few that empirically explores factors influencing supply chain visibility and generates new insights into why barriers can be difficult to overcome in complex supply chain settings

Manufacturing facility location and sustainability: A literature review and research agenda.

(Jan Olhager), [email protected] (Ou Keywords: Corporate social responsibility (CSR), Environment, Facility location, Manufacturing, Sustainability 2 Introduction The facility location problem has been around for a long time. In general, it concerns the geographical positioning of facilities for a specific organizational entity, such as a company. As such, it is a strategic decision related to the configuration of the manufacturing network. As competition becomes global and the complexity of the environment in which companies operate is increasing, managing an integrated international network has become an increasingly important task for managers 1995) and Procter & Gamble ( The literature on facility location can be broadly classified into two areas: factor assessment and mathematical approaches. The factor assessment approach often has a focus on strategic issues in decision making and it can be generalized into four steps: (i) establish the critical success factors of the business, (ii) assess options for regional manufacturing configurations, (iii) define a number of potential sites, and (iv) rank the most suitable solutions (Reid and Sanders, 2010). Implicitly, economic performance has been the driver for selecting critical success factors. Also, the mathematical approaches are typically formulated as cost minimization and profit maximization problems; cf. e.g. Consequently, it is becoming increasingly necessary for manufacturing firms to include all aspects and dimensions of sustainability in their manufacturing facility location decisions. Even when a facility is selected locally, there is need to integrate sustainability factors to reach economic, social, and environmental benefits from local innovation and collaboration with local customers and suppliers The research literature on the combination of manufacturing facility location and sustainability is still at an early stage but growing. We first present an overview of the literature review methodology. We then present the search strategy and the classification scheme, based on a content analysis. Then, the results of the literature review are presented. Finally, we present a conceptual framework and a research agenda. Methodology The core idea with a literature review is to summarize the state of the art in the subject field, Below we discuss the key steps in conducting the literature review, in terms of (i) the search strategy, and the content analysis in terms of (ii) literature over time, (iii) literature across journals, and (iv) categorization with respect to topical areas as well as research methodologies; cf

Supply chain visibility for improving inbound logistics: a design science approach

Supply chain visibility (SCV) has been gaining recognition in recent years as a key factor for achieving analytical capabilities and improving supply chain performance. However, levels of SCV implementation lag behind current technological advances. This research was motivated by the lack of visibility in inbound logistics, which limits the possibility of managing deviation, in particular concerning changes in arrival time of incoming goods, in large industrial firms. We addressed this problem by adopting a design science approach. In particular, we followed context–intervention–mechanism–outcome (CIMO) logic to map and analyse material and information flows. The problems areas were successively translated via business and functional requirements into technological solutions. We evaluated alternative technologies using controlled experiments that mimicked real-life situations. This study provides guidance for manufacturing companies aiming to enhance deviation management and predictive capabilities by improving visibility in their inbound logistics and potentially extending visibility to other areas, such as internal and outbound fl

Hybrid Control of Supply Chains: a Structured Exploration from a Systems Perspective

[EN] Supply chains are becoming increasingly complex these days, both in the structure of the chains and in the need for fine-grained, real-time control. This development occurs in many industries, such as manufacturing, logistics, and the service industry. The increasing structural complexity is caused by larger numbers of participating companies in supply chains because of increasing complexity of products and services. Increasing requirements to control are caused by developments like mass-customization, pressure on delivery times, and smaller margins for waste. Maintaining well-structured strategic, tactic, and operational control over these complex supply chains is not an easy task ¿ certainly as they are pressured by end-to-end synchronization requirements and just-in-time demands. Things become even more complex when chains need to be flexible to react to changing requirements to the products or services they deliver. To enable design of well-structured control, clear models of control topologies are required. In this paper, we address this need by exploring supply chain control topologies in an organized fashion. The exploration is based on integrating a supply chain model and a control model in two alternative ways to obtain two extreme models for supply chain control. These two models are next combined to obtain a hybrid chain control model in which control parameters can be adapted to accommodate different circumstances, hence facilitating agility in supply chains and networks. We apply the developed model to a number of case studies to show its usability. The contribution of this paper is the structured analysis of the design space for chain-level control models - not the description of individual new models.Grefen, PWPJ.; Dijkman, RM. (2013). Hybrid Control of Supply Chains: a Structured Exploration from a Systems Perspective. International Journal of Production Management and Engineering. 1(1):39-54. doi:10.4995/ijpme.2013.1544.SWORD395411Alonso, G., Casati, F., Kuno, H., & Machiraju, V. (2004). Web Services. doi:10.1007/978-3-662-10876-5Beer, S. (1984). The Viable System Model: Its Provenance, Development, Methodology and Pathology. Journal of the Operational Research Society, 35(1), 7-25. doi:10.1057/jors.1984.2Camarinha-Matos, L. M., Boucher, X., & Afsarmanesh, H. (Eds.). (2010). Collaborative Networks for a Sustainable World. IFIP Advances in Information and Communication Technology. doi:10.1007/978-3-642-15961-9Von Corswant, F., & Fredriksson, P. (2002). Sourcing trends in the car industry. International Journal of Operations & Production Management, 22(7), 741-758. doi:10.1108/01443570210433526Grefen, P., Ludwig, H., & Angelov, S. (2003). A Three-Level Framework for Process and Data Management of Complex E-Services. International Journal of Cooperative Information Systems, 12(04), 487-531. doi:10.1142/s0218843003000838Grefen, P., Ludwig, H., Dan, A., & Angelov, S. (2006). An analysis of web services support for dynamic business process outsourcing. Information and Software Technology, 48(11), 1115-1134. doi:10.1016/j.infsof.2006.03.010Grefen, P., Mehandjiev, N., Kouvas, G., Weichhart, G., & Eshuis, R. (2009). Dynamic business network process management in instant virtual enterprises. Computers in Industry, 60(2), 86-103. doi:10.1016/j.compind.2008.06.006Grefen, P. (2010). Mastering E-Business: Routledge.Gunasekaran, A., & Ngai, E. W. . (2004). Information systems in supply chain integration and management. European Journal of Operational Research, 159(2), 269-295. doi:10.1016/j.ejor.2003.08.016Hoen, K., Tan, T., Fransoo, J., van Houtum, J. (2012). Effect of Carbon Emission Regulations on Transport Mode Selection under Stochastic Demand. Flexible Services and Manufacturing Journal Jansen, B., Swinkels, P., Teeuwen, G., van Antwerpen de Fluiter, B., Fleuren, H. (2004). Operational Planning of a Large-Scale Multi-Modal Transportation System. European Journal of Operational Research 156(1):41-53.Luftenegger, E., Grefen, P., Weisleder, C. (2012). The Service Dominant Strategy Canvas: Towards Networked Business Models. Proceedings 13th IFIP Working Conference on Virtual Enterprises: 207-215.Lusch, R. F., Vargo, S. L., & O’Brien, M. (2007). Competing through service: Insights from service-dominant logic. Journal of Retailing, 83(1), 5-18. doi:10.1016/j.jretai.2006.10.002Maxton, G. P., & Wormald, J. (2004). Time for a Model Change. doi:10.1017/cbo9780511488535Mehandjiev, N., & Grefen, P. (Eds.). (2010). Dynamic Business Process Formation for Instant Virtual Enterprises. Advanced Information and Knowledge Processing. doi:10.1007/978-1-84882-691-5Muckstadt, J. A., Murray, D. H., Rappold, J. A., & Collins, D. E. (2001). Information Systems Frontiers, 3(4), 427-453. doi:10.1023/a:1012824820895Olhager, J. (2012). The Role of Decoupling Points in Value Chain Management. In: Jodlbauer, H., Olhager, J., Schonberger, R. (2012). Modelling Value: Springer.Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance: Free Press.Sarkis, J., & Talluri, S. (2004). Evaluating and selecting e-commerce software and communication systems for a supply chain. European Journal of Operational Research, 159(2), 318-329. doi:10.1016/j.ejor.2003.08.018Schulte, S., Schuller, D., Steinmetz, R., & Abels, S. (2012). Plug-and-Play Virtual Factories. IEEE Internet Computing, 16(5), 78-82. doi:10.1109/mic.2012.114Upton, D., McAfee, A. (1996). The Real Virtual Factory. Harvard Business Review 74(4):123-133.Verdouw, C. N., Beulens, A. J. M., Trienekens, J. H., & van der Vorst, J. G. A. J. (2010). A framework for modelling business processes in demand-driven supply chains. Production Planning & Control, 22(4), 365-388. doi:10.1080/09537287.2010.48638

Optimizing make-to-stock policies through a robust lot-sizing model

In this paper we consider a practical lot-sizing problem faced by an industrial company. The company plans the production for a set of products following a Make-To-Order policy. When the productive capacity is not fully used, the remaining capacity is devoted to the production of those products whose orders are typically quite below the established minimum production level. For these products the company follows a Make-To-Stock (MTS) policy since part of the production is to fulfill future estimated orders. This yields a particular lot-sizing problem aiming to decide which products should be produced and the corresponding batch sizes. These lot-sizing problems typically face uncertain demands, which we address here through the lens of robust optimization. First we provide a mixed integer formulation assuming the future demands are deterministic and we tighten the model with valid inequalities. Then, in order to account for uncertainty of the demands, we propose a robust approach where demands are assumed to belong to given intervals and the number of deviations to the nominal estimated value is limited. As the number of products can be large and some instances may not be solved to optimality, we propose two heuristics. Computational tests are conducted on a set of instances generated from real data provided by our industrial partner. The heuristics proposed are fast and provide good quality solutions for the tested instances. Moreover, since they are based on the mathematical model and use simple strategies to reduce the instances size, these heuristics could be extended to solve other multi-item lot-sizing problems where demands are uncertain.publishe