Showing papers on "Supply chain published in 1999"

Measuring supply chain performance

Abstract: The process of choosing appropriate supply chain performance measures is difficult due to the complexity of these systems. The paper presents an overview and evaluation of the performance measures used in supply chain models and also presents a framework for the selection of performance measurement systems for manufacturing supply chains. Three types of performance measures are identified as necessary components in any supply chain performance measurement system, and new flexibility measures for supply chains are developed.

Designing the green supply chain

Abstract: The supply chain has been traditionally defined as a one‐way, integrated manufacturing process wherein raw materials are converted into final products, then delivered to customers. Under this definition, the supply chain includes only those activities associated with manufacturing, from raw material acquisition to final product delivery. However, due to recent changing environmental requirements affecting manufacturing operations, increasing attention is given to developing environmental management (EM) strategies for the supply chain. This research: (1) investigates the environmental factors leading to the development of an extended environmental supply chain; (2) describes the elemental differences between the extended supply chain and the traditional supply chain; (3) describes the additional challenges presented by the extension; (4) presents performance measures appropriate for the extended supply chain; and (5) develops a general procedure towards achieving and maintaining the green supply chain.

Strategic outsourcing: leveraging knowledge capabilities

Abstract: Today's knowledge- and service-based economy offers companies a chance to increase profits through strategic outsourcing of intellectually based systems. As companies disaggregate intellectual activities internally and outsource more externally, they approach true virtual organization with knowledge centers interacting largely through mutual interest and electronic ? rather than authority ? systems. In this article, Quinn outlines an integrated knowledge and outsourcing strategy that can mitigate the risks and concerns associated with outsourcing. Companies with successful knowledge strategies follow these well-accepted principles: They concentrate on developing "best in world" capabilities that customers genuinely care about. An effective core competency strategy focuses on two to four cross-functional, intellectually based service activities or knowledge and skill sets that the company can build and maintain at best-in-world levels to provide a flexible platform for future innovations (at least one directly connected to understanding the customer). Such core competencies become "strategic blocks" that prevent a firm's suppliers from directly attacking its markets and increase the firm's bargaining power and security. They leverage the capabilities and investments of others by exploiting three areas of intellectual outsourcing: (1) traditional service or functional activities performed in-house (e.g., accounting, IT, or employee benefits); (2) complementary, integrative, or duplicative activities scattered throughout the company; and (3) disciplines, subsystems, or systems in which outsiders have greater expertise or capabilities for innovation. They innovate constantly. Links to outside knowledge sources that are able to assemble diverse expertise greatly affect the timing and amplitude of innovations. Sophisticated outsourcing supported by new electronic communications, modeling, and monitoring techniques enables companies to reduce innovation cycle times and costs by 60 percent to 90 percent and decrease investments and risks by equal amounts. They eliminate inflexibilities, such as fixed overhead, bureaucracy, and physical plant, by tapping the resources of the downstream customer chain and the upstream technology and supply chain. How can a company best manage risks and develop the full potential of intellectual outsourcing? Successful outsourcers carefully develop and implement certain crucial management controls that Quinn describes. Outsourcing also must become a top management issue because lower- to intermediate-level managers tend to be actively hostile to outsourcing ? fearing loss of jobs, prestige, or power.

Effective Supply Chain Management

Abstract: Purpose Reviews the latest management developments across the globe and pinpoints practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings As soon as the UK voted to leave the European Union (EU) in 2017, one of the key discussions among businesses throughout Europe centered on what the likely impact would be on supply chains involving UK companies. Whether you were a mainland European country with supply chain partners in the UK, or a UK manufacturer that depended on European companies for supplies, the uncertainty and potential disruption to well-grooved supply chain processes became a major headache. At first, it was the uncertainty that proved the major issue as governments played politics and refused to define the likely deal that would enable supply chain terms to be put in place. As the UK left the EU and the terms of the overall deal became clearer, firms then had to work out how whether any necessary changes to their supply chains were required. Practical implications Provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Original/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Value of Information in Capacitated Supply Chains

Abstract: We incorporate information flow between a supplier and a retailer in a two-echelon model that captures the capacitated setting of a typical supply chain We consider three situations: (1) a traditional model where there is no information to the supplier prior to a demand to him except for past data; (2) the supplier knows the (s, S) policy used by the retailer as well as the end-item demand distribution; and (3) the supplier has full information about the state of the retailer Order up-to policies continue to be optimal for models with information flow for the finite horizon, the infinite horizon discounted and the infinite horizon average cost cases Study of these three models enables us to understand the relationships between capacity, inventory, and information at the supplier level, as well as how they are affected by the retailer's (S - s) values and end-item demand distribution We estimate the savings at the supplier due to information flow and study when information is most beneficial

The Quantity Flexibility Contract and Supplier-Customer Incentives

Abstract: Consider a supply chain consisting of two independent agents, a supplier e.g., a manufacturer and its customer e.g., a retailer, the latter in turn serving an uncertain market demand. To reconcile manufacturing/procurement time lags with a need for timely response to the market, such supply chains often must commit resources to production quantities based on forecasted rather than realized demand. The customer typically provides a planning forecast of its intended purchase, which does not entail commitment. Benefiting from overproduction while not bearing the immediate costs, the customer has incentive to initially overforecast before eventually purchasing a lesser quantity. The supplier must in turn anticipate such behavior in its production quantity decision. This individually rational behavior results in an inefficient supply chain. This paper models the incentives of the two parties, identifying causes of inefficiency and suggesting remedies. Particular attention is given to the Quantity Flexibility QF contract, which couples the customer's commitment to purchase no less than a certain percentage below the forecast with the supplier's guarantee to deliver up to a certain percentage above. Under certain conditions, this method can allocate the costs of market demand uncertainty so as to lead the individually motivated supplier and customer to the systemwide optimal outcome. We characterize the implications of QF contracts for the behavior and performance of both parties, and the supply chain as a whole.

Portfolios of Buyer-Supplier Relationships

Abstract: A survey on supplier relationships administered to 447 managers from the major U.S. and Japanese automobile manufacturers showed that these firms do not manage primarily by strategic partnerships, but instead participate in various types of relationships. The author proposes and empirically validates a framework for managing a portfolio of relationships that will help senior managers answer two key questions: Which governance structure or relational design should a firm choose under certain external contingencies? What is the appropriate way to manage each type of relationship? The survey examined the specific investment of buyers and suppliers from both national samples in four types of relationships: strategic partnership, market exchange, captive buyer, and captive supplier. Interestingly, the level of investment made by either party in every type of relationship significantly correlated with practices commonly associated with strategic partnerships, such as long-term relationships, mutual trust, cooperation, and wide-scope relationships that include multiple components. No one type of buyer-supplier relationship ? not even the strategic partnership ? was inherently superior, which suggests that each can be well or poorly managed. Firms successfully manage supply chains by matching relationship type to specific product, market, and supplier conditions and by adopting an appropriate management approach for each type of relationship. Findings also countered the popular belief that Japanese firms tend to manage their suppliers using highly dedicated relationships or strategic partnerships. They appear to conduct business with a smaller ratio of strategic partnerships than is commonly believed (19 percent of the sample) and to extensively use market-exchange relationships (31 percent) ? a practice usually associated with Western manufacturers. The author provides a contextual profile of product and market conditions most conducive to each type of relationship and discusses the management features common to the best performers in each category. By consciously and systematically matching the design of each relationship to its external context, product executives can stifle the urge to join the sweeping fad of strategic partnerships and avoid underdesigning and overdesigning external relationships.

Defining supply chain management: a historical perspective and practical guidelines

Abstract: Interest in supply chain management has steadily increased since the 1980s when firms saw the benefits of collaborative relationships within and beyond their own organization. Firms are finding that they can no longer compete effectively in isolation of their suppliers or other entities in the supply chain. A number of definitions of supply chain management have been proposed in the literature and in practice. This paper defines the concept of supply chain management and discusses its historical evolution. The term does not replace supplier partnerships, nor is it a description of the logistics function. The competitive importance of linking a firm’s supply chain strategy to its overall business strategy and some practical guidelines are offered for successful supply chain management.

Modeling Supply Chain Contracts: A Review

Abstract: In this review, we summarize model-based research on contracts in the supply chain setting and provide a taxonomy for work in this area. During our discussions it became clear that the field has developed in many directions at once. Furthermore, as we surveyed the Uterature, it was not obvious what constitutes a contract in this context. While the nomenclature “supply chain management” is relatively new, many of the problems that are addressed are not. In particular, mathematical models for optimizing inventory control have a long history as a significant part of the mainstream of operations research and operations management. Inventory modeling, per se, dates to the early part of the century and the ideas of a Westinghouse engineer named Ford Harris (1915). A natural issue to address first is what is meant by supply chain management (SCM) research and how it relates to the vast body of work constituting classical inventory theory.

Power, value and supply chain management

Abstract: Explains some of the thinking that informs both the case study articles that appear in the same issue of Supply Chain Management: An International Journal and the EPSRC funded research project currently being undertaken at the Centre for Business Strategy and Procurement. A review is provided of the dominant ideas that currently inform “supply chain management thinking”. This paradigm is characterised as operational effectiveness and efficiency. A case is made for understanding supply chains from a strategic as well as from an operational perspective. Current supply chain management thinking is criticised for being atheoretical and descriptive, and a case is made for an analytical approach to supply chain thinking based around the concepts of power and value appropriation. A more analytically robust way of understanding supply chains is laid out.

Supply Chain Flexibility: An Empirical Study

Abstract: SUMMARY This article examines dimensions of supply chain flexibility and their relationships with environmental uncertainty, business performance, and functional interfaces. The findings indicate that volume flexibility and launch flexibility are key responses to marketing practices uncertainty and product uncertainty, respectively, in the highly cyclical furniture industry. Volume flexibility is also positively related to all measures of overall firm performance and highly related to market share and market share growth. Overall, excellent performers on supply chain flexibility are rewarded at the bottomline. However, performance with respect to volume, launch, and target market flexibilities has the widest ranging impact on financial and market performance.

Problem isolation through translating and filtering events into a standard object format in a network based supply chain

Abstract: A system, method and article of manufacture are provided for life cycle network asset management in a network based supply chain. In accordance with an embodiment of the present invention, the supply chain network is monitored, and events from network assets are received, filtered, and correlated, whereby problems with network assets are further isolated. The filtered and isolated events problems are then translated into a standard object format for facilitating the determination of the life cycle of problem network assets, wherein the events are translated by a comprehensive library of all possible message types provided by the custom software interfaces. In accordance with an embodiment of the present invention, the network assets include both packet-switched and circuit-switched network assets, and the events are received by custom software interfaces which communicate directly with the network assets.

Asset tracking in a network-based supply chain environment

Abstract: The present disclosure controls the network and manages resources for managing network assets through in a network-based supply chain framework. Network assets are available to network users. One user may submit information reguarding potential for growth, the capacity, or the technological level of one of the network assets. Another user may submit similar information about another network asset. Based on the information from the users, the system may determine the optimal set of network assets. When network events about the assets are recieved, the events can be filtered, correlated and isolated. These events can then be translated into a standard object form for facilitating the determination of the problem causing the network event.

From reversed logistics to green supply chains

Abstract: To lower the environmental damage of business we need to examine our “ecological footprint”. We need to move forward with the business at the same time. In order to solve that dilemma, a value‐seeking and proactive approach to greening is proposed in the (general) management literature. However, literature on the role of supply chain operations, mostly published in the area of reversed logistics, has failed to develop grounded theory and frameworks to support the application of such an approach. Furthermore, research is needed that goes beyond the partial and fragmented contribution of reversed logistics. This research note looks at challenges for research on green steps to take, and green supply chains to make in practice, as a step up to lowering the ecologic footprint of supply chains.

Competitive and Cooperative Inventory Policies in a Two-Stage Supply Chain

Abstract: We investigate a two-stage serial supply chain with stationary stochastic demand and fixed transportation times. Inventory holding costs are charged at each stage, and each stage may incur a consumer backorder penalty cost, e.g. the upper stage (the supplier) may dislike backorders at the lower stage (the retailer). We consider two games. In both, the stages independently choose base stock policies to minimize their costs. The games differ in how the firms track their inventory levels (in one, the firms are committed to tracking echelon inventory; in the other they track local inventory). We compare the policies chosen under this competitive regime to those selected to minimize total supply chain costs, i.e., the optimal solution. We show that the games (nearly always) have a unique Nash equilibrium, and it differs from the optimal solution. Hence, competition reduces efficiency. Furthermore, the two games' equilibria are different, so the tracking method influences strategic behavior. We show that the system optimal solution can be achieved as a Nash equilibrium using simple linear transfer payments. The value of cooperation is context specific: In some settings competition increases total cost by only a fraction of a percent, whereas in other settings the cost increase is enormous. We also discuss Stackelberg equilibria.

21st Century Logistics: Making Supply chain Integration a Reality

Abstract: This book is presented for managers who have embarked along the road to logistical and supply chain excellence but have not yet realized its full benefits. The book presents a framework to help recognize and overcome common obstacles that undermine both internal and external integration of value-added logistical operations. Integration is an essential element for providing maximum value to end-customers. The book provides a narrative interpretation of empirical research that identifies critical areas of integration needed to boost supply chain effectiveness. A research-based methodology and diagnostic assessment software is also presented in the book. These aid provide a framework for facilitating improved integrative management among internal business unit and corporate operations, external material and service suppliers as well as customers.

Decentralized Multi-Echelon Supply Chains: Incentives and Information

Abstract: Consider a supply chain in which a product must pass through multiple sites located in series before it is finally delivered to outside customers. Incentive problems may arise in this system when decisions are delegated to corresponding site managers, each maximizing his/her own performance metric. From the overall system's point of view, the decentralized supply chain may not be as efficient as the centralized one. In practice, alternative performance mechanisms are often used to align the incentives of the different managers in a supply chain. This paper discusses the cost conservation, incentive compatibility, and informational decentralizability properties of these mechanisms. In particular, for a special type of supply chain, we show that a performance measurement scheme involving transfer pricing, consignment, shortage reimbursement, and an additional backlog penalty at the last downstream site satisfies all these properties.

Capacity Choice and Allocation: Strategic Behavior and Supply Chain Performance

Abstract: We consider a simple supply chain in which a single supplier sells to several downstream retailers. The supplier has limited capacity, and retailers are privately informed of their optimal stocking levels. If retailer orders exceed available capacity, the supplier allocates capacity using a publicly known allocation mechanism, a mapping from retailer orders to capacity assignments. We show that a broad class of mechanisms are prone to manipulation: Retailers will order more than they need to gain a more favorable allocation. Another class of mechanisms induces the retailers to order exactly their needs, thereby revealing their private information. However, there does not exist a truth-inducing mechanism that maximizes total retailer profits. We also consider the supplier's capacity choice. We show that a manipulable mechanism may lead the supplier to choose a higher level of capacity than she would under a truth-inducing mechanism. Nevertheless, her choice will appear excessively restrictive relative to the prevailing distribution of orders. Furthermore, switching to a truth-inducing mechanism can lower profits for the supplier, the supply chain, and even her retailers. Hence, truth-telling is not a universally desirable goal.

Supply Chain Contracting and Coordination with Stochastic Demand

Abstract: Recent years have seen a growing interest among both academics and practitioners in the field of supply chain management. With that has come a growing body of work on supply chain contracts. Few firms are so large and few products so simple that one organization can manage the entire provision of the good. Rather, most supply chains require the coordination of independently managed entities who seek to maximize their own profits. Issues of who controls what decisions and how parties will be compensated become critical. An understanding of contractual forms and their economic implications is therefore an important part of evaluating supply chain performance.

Quantity Flexibility Contracts and Supply Chain Performance

Abstract: The Quantity Flexibility (QF) contract is a method for coordinating materials and infor- mation flows in supply chains operating under rolling-horizon planning. It stipulates a maximum percentage revision each element of the period-by-period replenishment schedule is allowed per planning iteration. The supplier is obligated to cover any requests that remain within the upside limits. The bounds on reductions are a form of minimum purchase commitment which discourages the customer from overstating its needs. While QF contracts are being implemented in industrial practice, the academic literature has thus far had little guidance to offer a firm interested in structuring its supply relationships in this way. This paper seeks to address this need, by developing rigorous conclusions about the behavioral consequences of QF contracts, and hence about the implications for the performance and design of supply chains with linkages possessing this structure. Issues explored include the impact of system flexibility on inventory characteristics and the patterns by which forecast and order variability propagate along the supply chain. The ultimate goal is to provide insights as to where to position flexibility for the greatest benefit, and how much to pay for it.

Coordinating Investment, Production, and Subcontracting

Abstract: We value the option of subcontracting to improve financial performance and system coordination by analyzing a competitive stochastic investment game with recourse. The manufacturer and subcontractor decide separately on their capacity investment levels. Then demand uncertainty is resolved and both parties have the option to subcontract when deciding on their production and sales. We analyze and present outsourcing conditions for three contract types: (1) price-only contracts where an ex-ante transfer price is set for each unit supplied by the subcontractor; (2) incomplete contracts, where both parties negotiate over the subcontracting transfer; and (3) state-dependent price-only and incomplete contracts for which we show an equivalence result. While subcontracting with these three contract types can coordinate production decisions in the supply system, only state-dependent contracts can eliminate all decentralization costs and coordinate capacity investment decisions. The minimally sufficient price-only contract that coordinates our supply chain specifies transfer prices for a small number (6 in our model) of contingent scenarios. Our game-theoretic model allows the analysis of the role of transfer prices and of the bargaining power of buyer and supplier. We find that sometimes firms may be better off leaving some contract parameters unspecified ex-ante and agreeing to negotiate ex-post. Also, a price-focused strategy for managing subcontractors can backfire because a lower transfer price may decrease the manufacturer's profit. Finally, as with financial options, the option value of subcontracting increases as markets are more volatile or more negatively correlated.

Managing the Global Supply Chain

Abstract: Preface1 Introduction to the Supply Chain2 Structure and Process3 Inter-Organizational Relationships4 The Information System for the Supply Chain5 Distribution6 Production Issues for the Supply Chain7 Innovation Management in Supply Chains8 Procurement9 Transport and Logistic Services10 Reverse Logistics and Supply Chain Management in the Supply Chain11 Performance Measurement and Management in the Supply Chain12 Strategy and the Supply Chain13 Supply Chain Planning - Modeling Considerations14 Managing the Complexity of the Global Supply ChainReferencesIndex

Supply chain management: an empirical study of its impact on performance

Abstract: Total quality management, supply base management, customer driven corporate policy, and other elements of supply chain management are frequently cited as strategic options to achieve competitive success in the 1990s. However, attempts by companies to implement these options have not been universally successful and have in many cases failed to yield the desired results. This study presents details of a survey carried out to determine whether particular quality management, supply base management, and customer relations practices can impact corporate performance. In addition it examines the impact analyzing the competitive environment has on performance. Regression models identify several factors that directly and positively impact corporate performance. These include the extent to which companies analyze the strategies of competitors and determine future customer requirements, and the commitment they have to evaluating performance throughout the supply chain.

Business logistics management : planning, organizing, and controlling the supply chain

Abstract: I. INTRODUCTION AND PLANNING. 1. Business Logistics-A Vital Subject. 2. Logistics Strategy and Planning. II. CUSTOMER SERVICE GOALS. 3. The Logistics Product. 4. Logistics Customer Service. 5. Order Processing and Information Systems. III. TRANSPORT STRATEGY. 6. Transport Fundamentals. 7. Transport Decisions. IV. INVENTORY STRATEGY. 8. The Storage and Handling System. 9. Forecasting Logistics Requirements. 10. Inventory Policy Decisions. 11. Purchasing and Supply Scheduling Decisions. 12. Storage and Handling Decisions. V. LOCATION STRATEGY. 13. Facility Location Decisions. 14. The Network Planning Process. VI. ORGANIZATION AND CONTROL. 15. Logistics Organization. 16. Logistics Audit and Control.

Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service (Second Edition)

Abstract: (1999). Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service (Second Edition) International Journal of Logistics Research and Applications: Vol. 2, No. 1, pp. 103-104.

Decentralized supply chains subject to information delays

Abstract: We consider a supply chain whose members are divisions of the same firm. The divisions are managed by different individuals with only local inventory information. Both the material and information flows in the supply chain are subject to delays. Under the assumption that the division managers share a common goal to optimize the overall performance of the supply chain (i.e., they act as a team), we characterize the optimal decision rules for the divisions. The team solution reveals the role of information leadtimes in determining the optimal replenishment strategies. We then show that the owner of the firm can manage the divisions as cost centers without compromising the systemwide performance. This is achieved by using an incentive-compatible measurement scheme based on accounting inventory levels. Finally, we investigate the impact of irrational behavior on supply chain performance and demonstrate that it is important for the upstream members of the supply chain to have access to accurate customer demand information.

Scheduling and planning maintenance and service in a network-based supply chain environment

Abstract: A system, method and article of manufacture are provided for administrating a network-based supply chain on a network. Operation of entities is monitored. Entities include server processes, disk space, memory availability, CPU utilization, access time to a server, and/or a number of connections in a network-based supply chain. Items including merchandising content, currency exchange rates, tax rates, and/or pricing in the network-based supply chain are updated at predetermined intervals. In addition, external data stored separately from the network-based supply chain is synchronized with internal data stored on the network-based supply chain. Contact information received from users of the network-based supply chain is also managed. Users include service providers and manufacturer utilizing the network-based supply chain. The items are altered based on profiles of the users of the network-based supply chain.