Showing papers on "Supply chain published in 2005"
TL;DR: Several limitations of revenue sharing are identified to (at least partially) explain why it is not prevalent in all industries, including cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract.
Abstract: Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more prevalent in the videocassette rental industry relative to the more conventional wholesale price contract. This paper studies revenue-sharing contracts in a general supply chain model with revenues determined by each retailer's purchase quantity and price. Demand can be deterministic or stochastic and revenue is generated either from rentals or outright sales. Our model includes the case of a supplier selling to a classical fixed-price newsvendor or a price-setting newsvendor. We demonstrate that revenue sharing coordinates a supply chain with a single retailer (i.e., the retailer chooses optimal price and quantity) and arbitrarily allocates the supply chain's profit. We compare revenue sharing to a number of other supply chain contracts (e.g., buy-back contracts, price-discount contracts, quantity-flexibility contracts, sales-rebate contracts, franchise contracts, and quantity discounts). We find that revenue sharing is equivalent to buybacks in the newsvendor case and equivalent to price discounts in the price-setting newsvendor case. Revenue sharing also coordinates a supply chain with retailers competing in quantities, e.g., Cournot competitors or competing newsvendors with fixed prices. Despite its numerous merits, we identify several limitations of revenue sharing to (at least partially) explain why it is not prevalent in all industries. In particular, we characterize cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract. Additionally, revenue sharing does not coordinate a supply chain with demand that depends on costly retail effort. We develop a variation on revenue sharing for this setting.
2,271 citations
TL;DR: In this article, a conceptual model was developed from literature sources and data collected using a structured questionnaire mailed to a sample of leading edge ISO14001 certified companies in South East Asia followed by structural equation modelling.
Abstract: Purpose – Green supply chain management is a concept that is gaining popularity in the South East Asian region. For many organizations in this region it is a way to demonstrate their sincere commitment to sustainability. However, if green supply chain management practices are to be fully adopted by all organizations in South East Asia, a demonstrable link between such measures and improving economic performance and competitiveness is necessary. This paper endeavors to identify potential linkages between green supply chain management, as an initiative for environmental enhancement, economic performance and competitiveness amongst a sample of companies in South East Asia.Design/methodology/approach – For this purpose a conceptual model was developed from literature sources and data collected using a structured questionnaire mailed to a sample of leading edge ISO14001 certified companies in South East Asia followed by structural equation modelling.Findings – The analysis identified that greening the differen...
2,099 citations
TL;DR: In this article, the authors review the sustainability themes covered in the first 50 issues of Production and Operations Management and conclude with some thoughts on future research challenges in sustainable operations management, including integrating environmental, health and safety concerns with green product design, lean and green operations, and closed-loop supply chains.
Abstract: Operations management researchers and practitioners face new challenges in integrating issues of sustainability with their traditional areas of interest. During the past 20 years, there has been growing pressure on businesses to pay more attention to the environmental and resource consequences of the products and services they offer and the processes they deploy. One symptom of this pressure is the movement towards triple bottom line reporting (3BL) concerning the relationship of profit, people and the planet. The resulting challenges include integrating environmental, health, and safety concerns with green product design, lean and green operations, and closed-loop supply chains. We review these and other 'sustainability' themes covered in the first 50 issues of Production and Operations Management and conclude with some thoughts on future research challenges in sustainable operations management.
1,444 citations
Journal Article•
TL;DR: In this article, the authors describe how resilient companies build flexibility into each of five essential supply chain elements: the supplier, conversion process, distribution channels, control systems and underlying corporate culture.
Abstract: Many companies leave risk management and business continuity to security professionals, business continuity planners or insurance professionals. However, the authors argue, building a resilient enterprise should be a strategic initiative that changes the way a company operates and increases its competitiveness. Reducing vulnerability means both reducing the likelihood of a disruption and increasing resilience. Resilience, in turn, can be achieved by either creating redundancy or increasing flexibility. Redundancy is the familiar concept of keeping some resources in reserve to be used in case of a disruption. The most common forms of redundancy are safety stock, the deliberate use of multiple suppliers even when the secondary suppliers have higher costs, and deliberately low capacity utilization rates. Although necessary to some degree, redundancy represents pure cost with no return except in the eventuality of disruption. The authors contend that significantly more leverage, not to mention operational advantages, can be achieved by making supply chains flexible. Flexibility requires building in organic capabilities that can sense threats and respond to them quickly.
Drawing on ongoing research at the MIT Center for Transportation and Logistics involving detailed studies of dozens of cases of corporate disruption and response, the authors describe how resilient companies build flexibility into each of five essential supply chain elements: the supplier, conversion process, distribution channels, control systems and underlying corporate culture. Case examples of Land Rover, Aisin Seiki Co. (a supplier to Toyota), United Parcel Service, Dell, Baxter International, DHL and Nokia, among others, are offered to illustrate how building flexibility in these supply chain elements not only bolsters the resilience of an organization but also creates a competitive advantage in the marketplace.
1,427 citations
TL;DR: In this paper, the authors provide an overview of the various issues related to environmental (green) supply chain management performance measurement, and identify a number of issues that need to still be addressed.
Abstract: Purpose – To introduce and provide an overview of the various issues related to environmental (green) supply chain management performance measurement.Design/methodology/approach – The work relies on experiences, case studies and other literature related to performance measurement in environmental supply chains. It seeks to integrate works in supply chain management, environmental management, and performance management into one framework. A systems framework forms the discussion outline with a focus on controls/pressures, inputs, tools, and outputs as major categories for evaluation and review.Findings – Provides an integrative framework for study, design and evaluation of green supply chain management performance tools. The findings also identify a number of issues that need to still be addressed.Research limitations/implications – We have only one design of the issues in which numerous categorizations could be provided. There is limited research in this area and new and current models/developments can pr...
1,304 citations
TL;DR: In this paper, the authors examine whether supplier involvement in new product development can produce significant improvements in financial returns and/or product design performance and test these proposed relationships using survey data collected from a group of global organizations and find support for the relationships based on the results of a multiple regression analysis.
1,157 citations
TL;DR: This paper proposes a stochastic programming model and solution algorithm for solving supply chain network design problems of a realistic scale and integrates a recently proposed sampling strategy, the sample average approximation scheme, with an accelerated Benders decomposition algorithm to quickly compute high quality solutions.
1,044 citations
TL;DR: In this paper, business requirements for supply chain risk management (SCRM) from a practitioner perspective are presented from an exploratory quantitative survey and qualitative focus group discussions with supply chain managers, some issues of SCRM are derived and structured along the three conceptual levels of "philosophy", "principles" and "processes".
Abstract: – This paper seeks to understand business requirements for supply chain risk management (SCRM) from a practitioner perspective., – Based on the findings from an exploratory quantitative survey and qualitative focus group discussions with supply chain managers, some issues of SCRM are derived and structured along the three conceptual levels of “philosophy”, “principles” and “processes”., – The survey showed that 44 per cent of all eight responding companies expect the vulnerability of their supply chains to increase in the next five years. However, the concept of SCRM is still in its infancy., – The paper contributes to our knowledge on SCRM by presenting the business requirements from a practitioner perspective and by deriving a structure for an integrated approach to SCRM which can guide further research.
994 citations
TL;DR: This study uncovers and examines the variety of supply chain partnership configurations that exist based on differences in capability platforms, reflecting varying processes and information systems, and uses the absorptive capacity lens to build a conceptual framework that links these configurations with partner-enabled market knowledge creation.
Abstract: The need for continual value innovation is driving supply chains to evolve from a pure transactional focus to leveraging interorganizational partner ships for sharing information and, ultimately, market knowledge creation. Supply chain partners are (1) engaging in interlinked processes that enable rich (broad-ranging, high quality, and privileged) information sharing, and (2) building information technology infrastructures that allow them to process information obtained from their partners to create new knowledge. This study uncovers and examines the variety of supply chain partnership configurations that exist based on differences in capability platforms, reflecting varying processes and information systems. We use the absorptive capacity lens to build a conceptual framework that links these configurations with partner-enabled market knowledge creation. Absorptive capacity refers to the set of organizational routines and processes by which organizations acquire, assimilate, transform, and exploit knowledge to produce dynamic organizational capabilities.
Through an exploratory field study conducted in the context of the RosettaNet consortium effort in the IT industry supply chain, we use cluster analysis to uncover and characterize five supply chain partnership configurations (collectors, connectors, crunchers, coercers, and collaborators). We compare their partner-enabled knowledge creation and operational efficiency, as well as the shortcomings in their capability platforms and the nature of information exchange. Through the characterization of each of the configurations, we are able to derive research propositions focused on enterprise absorptive capacity elements. These propositions provide insight into how partner-enabled market knowledge creation and operational efficiency can be affected, and highlight the interconnected roles of coordination information and rich information. The paper concludes by drawing implications for research and practice from the uncovering of these configurations and the resultant research propositions. It also highlights fertile opportunities for advances in research on knowledge management through the study of supply chain contexts and other interorganizational partnering arrangements.
974 citations
TL;DR: In this paper, the authors conceptualized, developed, and validated six dimensions of SCM practices (strategic supplier partnership, customer relationship, information sharing, information quality, internal lean practices, and postponement).
918 citations
Book•
01 Jan 2005
TL;DR: In this paper, the authors focus on the ways in which customer value can be created and delivered through the supply chain and the differences between "lean" and "agile" will be discussed.
Abstract: ToC (new and updated chapters in bold) Chapter 1 : Logistics & Competitive Strategy This chapter will look at how logistics capabilities and supply chain excellence can help companies gain a competitive advantage. It will also look at the relationship between logistics and financial performance. Case Study : Dell (updated from 1998 version) Chapter 2 : Logistics & Customer Value This chapter focuses on the ways in which customer value can be created and delivered through the supply chain. The theme will be demand-driven and responsive supply chain strategies. Case Study : Zara (updated from 1998 version) Chapter 3 : Measuring Logistics Costs and Performance The content of this chapter will be about the need to understand the 'costs-to-serve'. Issues such as customer profitability analysis and benchmarking will be included. Case Study : Wal-Mart/K-Mart (new) Chapter 4 : Creating the Agile Supply Chain The concept of the agile supply chain is developed in this chapter and the building blocks of the agile paradigm explained. The differences between 'lean' and 'agile' will be discussed. Case Study : The challenge of the 3-day car (new) Chapter 5 : Strategic Lead-Time Management Time compression is the focus of this chapter including the search for ways in which non-value adding time can be removed from the pipeline. Case Study : Hewlett Packard CD/RW (new) Chapter 6 : Managing the Global Pipeline The particular challenges of global supply chains will be discussed in this chapter. The pros and cons of global sourcing and offshore manufacturing will be presented. The need to understand the total supply chain impact of globalisations will be emphasised. Case Study : Dyson (new) Chapter 7 : Managing the Supply Chain in an Era of Uncertainty This chapter will examine the ideas of supply chain risk and vulnerability and will explore ways in which supply chain resilience can be improved. Case Study : Nokia/Ericsson (new) Chapter 8 : Managing Networks and Relationships The idea of the supply chain as an interdependent network of organisations that jointly combine to deliver customer value is introduced. The idea of supply chain 'orchestration' is discussed. Case Study : Li & Fung (new) Chapter 9 : Overcoming the Barriers to Supply Chain Integration The fundamental business transformations that are required to enable supply chain integration to become a reality are examined. The characteristics of effective supply chains will be presented. Case Study : GM/Vectra (new)
TL;DR: This publication contains reprint articles for which IEEE does not hold copyright and which are likely to be copyrighted.
Abstract: RFID technologies hold the promise of closing some of the information gaps in the supply chain, especially in retailing and logistics. As a mobile technology, RFID can enable “process freedoms” and real-time visibility into supply chains. This article provides an introduction to the technology, several case examples, and implementation guidelines for managers based on published reports.
TL;DR: In this paper, the effects of power on factors of supplier satisfaction were empirically tested to understand the power-satisfaction link in supply chain relationships, and the results showed that power-affected buyer-seller relationship had a significant positive effect on both performance and satisfaction.
TL;DR: It is concluded that although most models resolve a difficult feature associated with globalization, few models address the practical global supply chain design problem in its entirety.
Abstract: In this paper, we review decision support models for the design of global supply chains, and assess the fit between the research literature in this area and the practical issues of global supply chain design The classification scheme for this review is based on ongoing and emerging issues in global supply chain management and includes review dimensions for (1) decisions addressed in the model, (2) performance metrics, (3) the degree to which the model supports integrated decision processes, and (4) globalization considerations We conclude that although most models resolve a difficult feature associated with globalization, few models address the practical global supply chain design problem in its entirety We close the paper with recommendations for future research in global supply chain modeling that is both forward-looking and practically oriented
TL;DR: In this paper, the authors classify collaboration initiatives using a conceptual water-tank analogy, and discuss their dynamic behavior and key characteristics, concluding that the effectiveness of supply chain collaboration relies upon two factors: the level to which it integrates internal and external operations, and the efforts are aligned to the supply chain settings in terms of the geographical dispersion, the demand pattern, and product characteristics.
TL;DR: In this paper, the authors extract the essence of SCM and advanced planning in the form of two conceptual frameworks: the house of supply chain management and the supply chain planning matrix.
TL;DR: In this article, the authors empirically examined the extent to which just-in-time, supply chain management, and quality management are correlated, and how they impact business performance, finding that at both strategic and operational levels, linkages exist between how just in time, total quality management and supply-chain management are viewed by organizations as part of their operations strategy.
Abstract: In recent years, numerous approaches have been proposed to improve operations performance. Three in particular, just in time, supply chain management, and quality management, have received considerable attention. While the three are sometimes viewed and implemented as if they were independent and distinct, they can also be used as three prongs of an integrated operations strategy. This study empirically examines the extent to which just in time, supply chain management, and quality management are correlated, and how they impact business performance. Results demonstrate that at both strategic and operational levels, linkages exist between how just in time, total quality management, and supply chain management are viewed by organizations as part of their operations strategy. Results also indicate that a commitment to quality and an understanding of supply chain dynamics have the greatest effect on performance.
TL;DR: In this article, the authors report on findings of a cross-sector empirical study of the sources and drivers of supply chain vulnerability, highlighting the absence of any widespread understanding of the scope of and dynamic nature of the problem.
Abstract: Purpose – This paper aims to report on findings of a cross‐sector empirical study of the sources and drivers of supply chain vulnerability.Design/methodology/approach – The research was undertaken in accordance with the realist tradition. It begins with a descriptive exploratory stage involving an in‐depth exploratory case study of aerospace industry supply chains, validated through in‐depth interviews with managers representing other “critical sectors” of the UK economy. This is followed by an explanatory theoretical stage. The work is supported throughout with reference to relevant literature sources.Findings – The findings highlight the absence of any widespread understanding of the scope of and dynamic nature of the problem, which should be considered from multiple perspectives and at four levels of analysis: value stream/product or process; asset and infrastructure dependencies; organisations and inter‐organisational networks; and social and natural environment.Research limitations/implications – The...
TL;DR: In this article, a review of the literature relating to the integration and implementation of supply chain management practices from a strategic viewpoint is presented, focusing on three perspectives: supply chain integration, strategy and planning.
Abstract: Purpose – The purpose of this paper is to review a sample of the literature relating to the integration and implementation of supply chain management practices from a strategic viewpoint.Design/methodology/approach – The literature is examined from three perspectives. First, supply chain integration covers issues relating to integration of core processes across organizational boundaries through improved communication, partnerships, alliances and cooperation. Second, strategy and planning examines supply chain management as a strategic matter for trading partners, along with factors relating to the amount of planning required. Third, implementation issues concern factors critical for successful implementation, as well as issues specific to inter and intra‐organizational aspects of supply chain initiatives are contained in this sub‐groupFindings – An important emergent theme from the literature is the importance of taking a holistic view, and the systemic nature of interactions between the participants. At ...
TL;DR: In this paper, a study was undertaken to assess the current level of supply chain collaboration and identify best practice, and positive collaboration-related outcomes include enhancements to efficiency, effectiveness, and market positions for the respondents' firms.
Abstract: Purpose – Collaboration has been referred to as the driving force behind effective supply chain management and may be the ultimate core capability. However, there is a fairly widespread belief that few firms have truly capitalized on its potential. A study was undertaken to assess the current level of supply chain collaboration and identify best practice.Design/methodology/approach – Supply chain executives provided insights into collaboration. Survey data, personal interviews, and a review of the collaboration literature were used to develop a conceptual model profiling behavior, culture, and relational interactions associated with successful collaboration.Findings – Positive collaboration‐related outcomes include enhancements to efficiency, effectiveness, and market positions for the respondents' firms.Research limitations/implications – The small sample size represents a limitation, but is balanced by the quality of the respondent base and their expertise/experience. Another limitation involves securin...
TL;DR: This paper investigates the equilibrium behavior of decentralized supply chains with competing retailers under demand uncertainty and designs contractual arrangements between the parties that allow the decentralized chain to perform as well as a centralized one.
Abstract: In this paper, we investigate the equilibrium behavior of decentralized supply chains with competing retailers under demand uncertainty. We also design contractual arrangements between the parties that allow the decentralized chain to perform as well as a centralized one. We address these questions in the context of two-echelon supply chains with a single supplier servicing a network of (competing) retailers, considering the following general model: Retailers face random demands, the distribution of which may depend only on its own retail price ( noncompeting retailers) or on its own price as well as those of the other retailers ( competing retailers), according to general stochastic demand functions.
TL;DR: In this paper, the authors explored the relationship between the dimensions of supply chain flexibility and firm performance in a sample of automotive suppliers and found a positive relation between a superior performance in flexibility capabilities and firm performances, although flexibility dimensions are not equally important for firm performance.
Abstract: Purpose – To explore the relationship between the dimensions of supply chain flexibility and firm performance in a sample of automotive suppliers.Design/methodology/approach – Empirical survey of a representative sample of 126 Spanish automotive suppliers during the months of September and October 2003. Data gathered through a mail survey to purchasing managers by using a structured questionnaire. Spearman correlation coefficients were used to analyse the relationship between the different supply chain flexibility dimensions, between supply chain flexibility dimensions and firm performance dimensions, and between supply chain flexibility dimensions and environmental uncertainty dimensions. A multivariate analysis studied the determinants of supply chain flexibility.Findings – The research has found a positive relation between a superior performance in flexibility capabilities and firm performance, although flexibility dimensions are not equally important for firm performance. On the other hand, the result...
TL;DR: In this article, the authors present a framework for environmental supply chain strategy decision-making and suggest guidelines for how companies might change their current supply chain practices to successfully integrate environmental issues into their supply chain strategies.
Abstract: The decisions related to managing the supply chain and supply chain strategy are already considered important in many organizations. As more executives adopt environmental practices, supply chain strategies will only increase in importance. In this paper, we review how companies develop environmental supply chain strategies. Our interviews with companies from The United States, The United Kingdom, Japan and Korea, along with prior research, are used to develop a framework for environmental supply chain strategy decision-making. We then use this framework to suggest guidelines for how companies might change their current supply chain practices to successfully integrate environmental issues into their supply chain strategy. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.
TL;DR: In this article, the authors proposed an instrument to measure the extent of collaboration in a supply chain consisting of two members, suppliers and retailers, and a survey of companies in New Zealand was conducted to obtain data to test and evaluate the index.
Abstract: Purpose – This paper proposes an instrument to measure the extent of collaboration in a supply chain consisting of two members, suppliers and retailers.Design/methodology/approach – The proposed model for collaboration incorporates collaborative practices in information sharing, decision synchronisation and incentive alignment. A collaboration index is introduced to measure the level of collaborative practices. A survey of companies in New Zealand was conducted to obtain data to test and evaluate the collaboration index.Findings – The survey results confirmed the reliability and validity of the proposed collaboration index measure for measuring collaboration. The findings also showed that the collaboration index was positively associated with operational performance.Research limitations/implications – Future research could consider larger sample sizes and cover other industry types.Practical implications – Supply chain participants will be able to measure the extent of their collaboration and seek improve...
TL;DR: The encroachment of the performance measurement literature into the processes related to performance management is examined, and areas for future research are suggested.
TL;DR: In this paper, the authors look at the impact of information technology and complexity in the context of supply-chain networks, and the challenges that arise from the lack of principles that govern how supply chains with complex organizational structure and function arise and develop, and what organizations and functionality are attainable, given specific kinds of lower-level constituent entities.
Abstract: In this era, information technology is revolutionizing almost every domain of technology and society, whereas the ‘complexity revolution’ is occurring in science at a silent pace. In this paper, we look at the impact of the two, in the context of supply-chain networks. With the advent of information technology, supply chains have acquired a complexity almost equivalent to that of biological systems. However, one of the major challenges that we are facing in supply-chain management is the deployment of coordination strategies that lead to adaptive, flexible and coherent collective behaviour in supply chains. The main hurdle has been the lack of the principles that govern how supply chains with complex organizational structure and function arise and develop, and what organizations and functionality are attainable, given specific kinds of lower-level constituent entities. The study of Complex Adaptive Systems (CAS), has been a research effort attempting to find common characteristics and/or formal distinctio...
TL;DR: In this paper, the authors examine the relationship between the level of trust and several relevant constructs drawn from transaction cost analysis (such as asset specificity, behavioral uncertainty, and partner's opportunism) and social exchange theory (informational sharing).
Abstract: Purpose – The primary purpose of this study is to examine the relationships between the level of trust and several relevant constructs drawn from transaction cost analysis (such as asset specificity, behavioral uncertainty, and partner's opportunism) and social exchange theory (informational sharing).Design/methodology/approach – A comprehensive questionnaire based on various theories on trust and commitment was mailed in 2001 to supply chain practitioners in the Midwest region. A total of 171 valid returns were received out of 1,800 mailings (9.5 percent). A path analysis was used to estimate parameters or relationship between relevant constructs and trust, and trust with the level of commitment.Findings – A firm's trust in their supply chain partner is highly associated with both parties’ specific asset investments and social exchange theory. Information sharing has a primary impact on reducing (improving a partner's uncertainty behavior which, in turn, would improve the level of trust. Finally, the lev...
TL;DR: In this paper, the authors proposed to reduce the bullwhip effect in supply chains by strategic partnership, which leads to increased information flows, reduced uncertainty, and a more profitable supply chain.
Abstract: Supply chain is defined as a system of suppliers, manufacturers, distributors, retailers and customers where material, financial and information flows connect participants in both directions. Most supply chains are composed of independent agents with individual preferences. It is expected that no single agent has the power to optimise the supply chain. Supply chain management is now seen as a governing element in strategy and as an effective way of creating value for customers. The so-called bullwhip effect, describing growing variation upstream in a supply chain, is probably the most famous demonstration that decentralised decision making can lead to poor supply chain performance. Information asymmetry is one of the most powerful sources of the bullwhip effect. Information sharing of customer demand has an impact on the bullwhip effect. Information technology has lead to centralised information, shorter lead times and smaller batch sizes. The analysis of causes of the bullwhip effect has lead to suggestions for reducing the bullwhip effect in supply chains by strategic partnership. Supply chain partnership leads to increased information flows, reduced uncertainty, and a more profitable supply chain. The cooperation is based on contacts and formal agreements. Information exchange is very important issue for coordinating actions of units. New business practices and information technology make the coordination even closer. Information sharing and strategic partnerships of units can be modelled by different network structures.
TL;DR: In this paper, the authors define the concept of supply chain quality management (SCQM), and evaluate its relevance in academic and industrial practice by comprehensively reviewing prior quality and SCM literature in major journals and inductively identifying the themes that emerge within it.
TL;DR: In this article, the authors present a new emerging area that lies at the interface of chemical engineering and operations research, and has become a major goal in the process industries due to the increasing pressures for remaining competitive in the global marketplace.
Abstract: Enterprise-wide optimization (EWO) is a new emerging area that lies at the interface of chemical engineering and operations research, and has become a major goal in the process industries due to the increasing pressures for remaining competitive in the global marketplace. EWO involves optimizing the operations of supply, manufacturing and distribution activities of a company to reduce costs and inventories. A major focus in EWO is the optimal operation of manufacturing facilities, which often requires the use of nonlinear process models. Major operational items include planning, scheduling, realtime optimization and inventory control. One of the key features of EWO is integration of the information and the decision-making among the various functions that comprise the supply chain of the company. This can be achieved with modern IT tools, which together with the internet, have promoted e-commerce. However, as will be discussed, to fully realize the potential of transactional IT tools, the development of sophisticated deterministic and stochastic linear/nonlinear optimization models and algorithms (analytical IT tools) is needed to explore and analyze alternatives of the supply chain to yield overall optimum economic performance, as well as high levels of customer satisfaction. An additional challenge is the integrated and coordinated decision-making across the various functions in a company (purchasing, manufacturing, distribution, sales), across various geographically distributed organizations (vendors, facilities and markets), and across various levels of decision-making (strategic, tactical and operational). © 2005 American Institute of Chemical Engineers AIChE J, 51: 1846 –1857, 2005