Showing papers on "Supply chain published in 2015"

The bullwhip effect in supply chains

Abstract: The bullwhip effect occurs when the demand order variabilities in the supply chain are amplified as they moved up the supply chain. Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies. Companies can effectively counteract the bullwhip effect by thoroughly understanding its underlying causes. Industry leaders are implementing innovative strategies that pose new challenges: 1. integrating new information systems, 2. defining new organizational relationships, and 3. implementing new incentive and measurement systems. Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies: excessive inventory investment, poor customer service, lost revenues, misguided capacity plans, inactive transportation, and missed production schedules. How do exaggerated order swings occur? What can companies do to mitigate them? Not long ago, logistics executives at Procter & Gamble (PG it, in turn, created additional exaggerations of order swings to suppliers. In the past few years, the Efficient Consumer Response (ECR) initiative has tried to redefine how the grocery supply chain should work. One motivation for the initiative was the excessive amount of inventory in the supply chain. Various industry studies found that the total supply chain, from when 1 Copyright Sloan Management Review Association, Alfred P. Sloan School of Management Spring 1997 The Bullwhip Effect In Supply Chains 2 products leave the manufacturers' production lines to when they arrive on the retailers' shelves, has more than 100 days of inventory supply. Distorted information has led every entity in the supply chain the plant warehouse, a manufacturer's shuttle warehouse, a manufacturer's market warehouse, a distributor's central warehouse, the distributor's regional warehouses, and the retail store's storage space to stockpile because of the high degree of demand uncertainties and variabilities. It's no wonder that the ECR reports estimated a potential $30 billion opportunity from streamlining the inefficiencies of the grocery supply chain. Figure 1 Increasing Variability of Orders up the Supply Chain Other industries are in a similar position. Computer factories and manufacturers' distribution centers, the distributors' warehouses, and store warehouses along the distribution channel have inventory stockpiles. And in the pharmaceutical industry, there are duplicated inventories in a supply chain of manufacturers such as Eli Lilly or Bristol-Myers Squibb, distributors such as McKesson, and retailers such as Longs Drug Stores. Again, information distortion can cause the total inventory in this supply chain to exceed 100 days of supply. With inventories of raw materials, such as integrated circuits and printed circuit boards in the computer industry and antibodies and vial manufacturing in the pharmaceutical industry, the total chain may contain more than one year's supply. In a supply chain for a typical consumer product, even when consumer sales do not seem to vary much, there is pronounced variability in the retailers' orders to the wholesalers (see Figure 1). Orders to the manufacturer and to the manufacturers' supplier spike even more. To solve the problem of distorted information, companies need to first understand what creates the bullwhip effect so they can counteract it. Innovative companies in different industries have found that they can control the bullwhip effect and improve their supply chain performance by coordinating information and planning along the supply chain. The Bullwhip Effect In Supply Chains 3 Causes of the Bullwhip Effect Perhaps the best illustration of the bullwhip effect is the well-known "beer game." In the game, participants (students, managers, analysts, and so on) play the roles of customers, retailers, wholesalers, and suppliers of a popular brand of beer. The participants cannot communicate with each other and must make order decisions based only on orders from the next downstream player. The ordering patterns share a common, recurring theme: the variabilities of an upstream site are always greater than those of the downstream site, a simple, yet powerful illustration of the bullwhip effect. This amplified order variability may be attributed to the players' irrational decision making. Indeed, Sterman's experiments showed that human behavior, such as misconceptions about inventory and demand information, may cause the bullwhip effect. In contrast, we show that the bullwhip effect is a consequence of the players' rational behavior within the supply chain's infrastructure. This important distinction implies that companies wanting to control the bullwhip effect have to focus on modifying the chain's infrastructure and related processes rather than the decision makers' behavior. We have identified four major causes of the bullwhip effect: 1. Demand forecast updating 2. Order batching 3. Price fluctuation 4. Rationing and shortage gaming Each of the four forces in concert with the chain's infrastructure and the order managers' rational decision making create the bullwhip effect. Understanding the causes helps managers design and develop strategies to counter it. Demand Forecast Updating Every company in a supply chain usually does product forecasting for its production scheduling, capacity planning, inventory control, and material requirements planning. Forecasting is often based on the order history from the company's immediate customers. The outcomes of the beer game are the consequence of many behavioral factors, such as the players' perceptions and mistrust. An important factor is each player's thought process in projecting the demand pattern based on what he or she observes. When a downstream operation places an order, the upstream manager processes that piece of information as a signal about future product demand. Based on this signal, the upstream manager readjusts his or her demand forecasts and, in turn, the orders placed with the suppliers of the upstream operation. We contend that demand signal processing is a major contributor to the bullwhip effect. For example, if you are a manager who has to determine how much to order from a supplier, you use a simple method to do demand forecasting, such as exponential smoothing. With exponential smoothing, future demands are continuously updated as the new daily demand data become available. The order you send to the supplier reflects the amount you need to replenish the stocks to meet the requirements of future demands, as well as the necessary safety stocks. The future demands and the associated safety stocks are updated using the smoothing technique. With long lead times, it is not uncommon to have weeks of safety stocks. The result is that the fluctuations in the order quantities over time can be much greater than those in the demand data. Now, one site up the supply chain, if you are the manager of the supplier, the daily orders from the manager of the previous site constitute your demand. If you are also using exponential smoothing to update your forecasts and safety stocks, the orders that you place with your supplier will have even bigger swings. For an example of such fluctuations in demand, see Figure 2. As we can see from the figure, the orders placed by the dealer to the manufacturer have much greater variability than the The Bullwhip Effect In Supply Chains 4 consumer demands. Because the amount of safety stock contributes to the bullwhip effect, it is intuitive that, when the lead times between the resupply of the items along the supply chain are longer, the fluctuation is even more significant.

Digital Transformation Strategies

Abstract: In recent years, firms in almost all industries have conducted a number of initiatives to explore new digital technologies and to exploit their benefits. This frequently involves transformations of key business operations and affects products and processes, as well as organizational structures and management concepts. Companies need to establish management practices to govern these complex transformations. An important approach is to formulate a digital transformation strategy that serves as a central concept to integrate the entire coordination, prioritization, and implementation of digital transformations within a firm. The exploitation and integration of digital technologies often affect large parts of companies and even go beyond their borders, by impacting products, business processes, sales channels, and supply chains. Potential benefits of digitization are manifold and include increases in sales or productivity, innovations in value creation, as well as novel forms of interaction with customers, among others. As a result, entire business models can be reshaped or replaced (Downes and Nunes 2013). Owing to this wide scope and the far-reaching consequences, digital transformation strategies seek to coordinate and prioritize the many independent threads of digital transformation. To account for their company-spanning characteristics, digital transformation strategies cut across other business strategies and should be aligned with them (Fig. 1). While there are various concepts of IT strategies (Teubner 2013), these mostly define the current and the future operational activities, the necessary application systems and infrastructures, and the adequate organizational and financial framework for providing IT to carry out business operations within a company. Hence, IT strategies usually focus on the management of the IT infrastructure within a firm, with rather limited impact on driving innovations in business development. To some degree, this restricts the product-centric and customer-centric opportunities that arise from new digital technologies, which often cross firms’ borders. Further, IT strategies present systemcentric road maps to the future uses of technologies in a firm, but they do not necessarily account for the transformation of products, processes, and structural aspects that go along with the integration of technologies. Digital transformation strategies take on a different perspective and pursue different goals. Coming from a business-centric perspective, these strategies focus on the transformation of products, processes, and organizational aspects owing to new technologies. Their scope is more broadly designed and explicitly includes digital activities at the interface with or fully on the side of customers, such as Accepted after one revision by Prof. Dr. Sinz.

Supply chain risk management: a literature review

Abstract: Risk management plays a vital role in effectively operating supply chains in the presence of a variety of uncertainties. Over the years, many researchers have focused on supply chain risk management (SCRM) by contributing in the areas of defining, operationalising and mitigating risks. In this paper, we review and synthesise the extant literature in SCRM in the past decade in a comprehensive manner. The purpose of this paper is threefold. First, we present and categorise SCRM research appearing between 2003 and 2013. Second, we undertake a detailed review associated with research developments in supply chain risk definitions, risk types, risk factors and risk management/mitigation strategies. Third, we analyse the SCRM literature in exploring potential gaps.

A critical review on supply chain risk – Definition, measure and modeling ☆

Abstract: Economic systems are increasingly prone to complexity and uncertainty. Therefore, making well-informed decisions requires risk analysis, control and mitigation. In some areas such as finance, insurance, crisis management and health care, the importance of considering risk is largely acknowledged and well-elaborated, yet rather heterogeneous concepts and approaches for risk management have been developed. The increased frequency and the severe consequences of past supply chain disruptions have resulted in an increasing interest in risk. This development has led to the adoption of the risk concepts, terminologies and methods from related fields. In this paper, existing approaches for quantitative supply chain risk management are reviewed by setting the focus on the definition of supply chain risk and related concepts.

Digital Transformation Strategies

Abstract: In recent years, firms in almost all industries have conducted a number of initiatives to explore new digital technologies and to exploit their benefits. This frequently involves transformations of key business operations and affects products and processes, as well as organizational structures and management concepts. Companies need to establish management practices to govern these complex transformations. An important approach is to formulate a digital transformation strategy that serves as a central concept to integrate the entire coordination, prioritization, and implementation of digital transformations within a firm. The exploitation and integration of digital technologies often affect large parts of companies and even go beyond their borders, by impacting products, business processes, sales channels, and supply chains. Potential benefits of digitization are manifold and include increases in sales or productivity, innovations in value creation, as well as novel forms of interaction with customers, among others. As a result, entire business models can be reshaped or replaced (Downes and Nunes 2013). Owing to this wide scope and the far-reaching consequences, digital transformation strategies seek to coordinate and prioritize the many independent threads of digital transformation. To account for their company-spanning characteristics, digital transformation strategies cut across other business strategies and should be aligned with them (Fig. 1). While there are various concepts of IT strategies (Teubner 2013), these mostly define the current and the future operational activities, the necessary application systems and infrastructures, and the adequate organizational and financial framework for providing IT to carry out business operations within a company. Hence, IT strategies usually focus on the management of the IT infrastructure within a firm, with rather limited impact on driving innovations in business development. To some degree, this restricts the product-centric and customer-centric opportunities that arise from new digital technologies, which often cross firms’ borders. Further, IT strategies present systemcentric road maps to the future uses of technologies in a firm, but they do not necessarily account for the transformation of products, processes, and structural aspects that go along with the integration of technologies. Digital transformation strategies take on a different perspective and pursue different goals. Coming from a business-centric perspective, these strategies focus on the transformation of products, processes, and organizational aspects owing to new technologies. Their scope is more broadly designed and explicitly includes digital activities at the interface with or fully on the side of customers, such as Accepted after one revision by Prof. Dr. Sinz.

Supply chain resilience: definition, review and theoretical foundations for further study

Abstract: There has been considerable academic interest in recent years in supply chain resilience (SCRES). This paper presents a timely review of the available literature on SCRES based on a three-stage systematic search that identified 91 articles/sources. We provide a comprehensive definition of SCRES before strategies proposed for improving resilience are identified and the contributions to the literature are critiqued, e.g. in terms of research method and use of theory. We take stock of the field and identify the most important future research directions. A wide range of strategies for improving resilience are identified, but most attention has been on increasing flexibility, creating redundancy, forming collaborative supply chain relationships and improving supply chain agility. We also find that only limited research has been conducted into choosing and implementing an appropriate set of strategies for improving SCRES. Much of the literature is conceptual, theoretical and normative; the few available empirical studies are mainly cross-sectional and confined to a large firm, developed country context; and, there has been limited use of theory frames to improve understanding. We propose Complex Adaptive Systems (CAS) theory as an appropriate lens for studying SCRES. We demonstrate that SCRES mirrors many characteristics of a CAS – including adaptation and coevolution, non-linearity, self-organisation and emergence – with implications for the direction of both future research and practice.

The role of collaboration in supply chain resilience

Abstract: Purpose – This paper aims to explore how collaboration influences supply chain resilience. Collaborative activities and their underlying mechanisms in relation to visibility, velocity and flexibility are investigated. Design/methodology/approach – An exploratory case study consisting of eight buyer–supplier relationships in the food processing industry was conducted. Findings – Key findings show how specific collaborative activities (information-sharing, collaborative communication, mutually created knowledge and joint relationship efforts) increase supply chain resilience via increased visibility, velocity and flexibility. Underlying mechanisms and interdependencies of these factors within the supply chain network are identified. Originality/value – This is one of the first papers to provide in-depth insights into collaboration as a formative element of resilience in a supply chain setting. A series of propositions explain the specific influence of collaborative activities on supply chain resilience beyond a single company perspective.

Research on the phenomenon of supply chain resilience

Abstract: Purpose – This paper provides a robust and structured literature review on supply chain resilience (SCRES), the supply chain’s ability to be prepared for unexpected risk events, responding and recovering quickly to potential disruptions to return to its original situation or grow by moving to a new, more desirable state. The purpose of this paper is to analyze the extant research through focussed questions and provide an insightful framework with propositions to guide further publications and identify future research needs. Design/methodology/approach – The findings underlie a systematic literature review methodology requiring a robust method of literature analysis. The sand cone model is adopted to develop a comprehensive SCRES framework. Findings – The literature review reveals a strong need for an overarching SCRES definition and a clear terminology for its building elements. It indicates that most research has been qualitative and lacks in assessing and measuring SCRES performance. Originality/value –...

Toward the Theory of the Supply Chain

Abstract: As our discipline has matured, we have begun to develop theories of supply chain management. However, we submit that a major omission of theory development in the supply chain management discipline is that we have failed to develop a theory of what we are managing—a theory of the supply chain. Using a conceptual theory building approach, we introduce foundational premises about the structure and boundary of the supply chain, which can serve as the basis for much needed, additional development of the theory of the supply chain.

Intuitionistic fuzzy based DEMATEL method for developing green practices and performances in a green supply chain

Abstract: Proposed a intuitionistic fuzzy based DEMATEL method for developing green practices.A case study from automotive industry is used for validation.Sensitivity analysis is performed to check the robustness of the method. Environmental topics have gained much consideration in corporate green operations. Globalization, stakeholder pressures, and stricter environmental regulations have made organizations develop environmental practices. Thus, green supply chain management (GSCM) is now a proactive approach for organizations to enhance their environmental performance and achieve competitive advantages. This study pioneers using the decision-making trial and evaluation laboratory (DEMATEL) method with intuitionistic fuzzy sets to handle the important and causal relationships between GSCM practices and performances. DEMATEL evaluates GSCM practices to find the main practices to improve both environmental and economic performances. This study uses intuitionistic fuzzy set theory to handle the linguistic imprecision and the ambiguity of human being's judgment. A case study from the automotive industry is presented to evaluate the efficiency of the proposed method. The results reveal "internal management support", "green purchasing" and "ISO 14001 certification" are the most significant GSCM practices. The practical results of this study offer useful insights for managers to become more environmentally responsible, while improving their economic and environmental performance goals. Further, a sensitivity analysis of results, managerial implications, conclusions, limitations and future research opportunities are provided.

Risk analysis in green supply chain using fuzzy AHP approach: A case study

Abstract: Due to increase in customer environmental awareness, competitiveness and strict governmental policies, the approach of incorporating green supply chain management (GSCM), to conserve resources and sustainable production, is gradually becoming more imperative for organizations. However, the successful accomplishment of green supply chain (GSC) production and business activities is relatively difficult due to involvement of different risks. These risks and their respective sources have a tendency to disturb the GSC functioning, and thereby, decline in the ecological-economic performance. Therefore, identification of risks and their subsequent analysis in the GSC are very important to know and understand. The present research analyzes the risks relevant to adoption and effective implementation of GSC practices at industrial viewpoint. A two-phase research approach has been proposed and used in this study. In the first phase, six categories of risks and twenty-five specific risks, associated with the GSC, were identified. The basis of identification of the risks was literature and inputs received from experts from industries. Experts’ opinion has been collected from the officials and managers of four Indian poly product-manufacturing companies. In the second phase, the fuzzy analytic hierarchy process (fuzzy AHP), a qualitative and quantitative analysis was used to analyze the identified risks for determining of their priority of concern. The used fuzzy AHP approach is also useful in dealing with the human subjectivity and ambiguity involved in the process of risk analysis. In this research, an effort has been made to know the most important risk in GSC context, and the findings would be useful for industries in managing and reducing the consequences of the risks in GSC. The analysis of the results indicates that operational category risks are the most important risks in GSC. Sensitivity analysis is also conducted to examine the priority ranking stability.

The performance impact of supply chain agility and supply chain adaptability: the moderation effect of product complexity

Abstract: Even though research has suggested that supply chain agility and supply chain adaptability are distinct capabilities, little is known about their performance effects and about the contextual conditions under which they are effective. Based on a sample of 143 German firms, we empirically investigate the effects of supply chain agility and supply chain adaptability on cost performance and operational performance using hierarchical regression analysis. We ground our investigation in the dynamic capabilities view and contingency theory. We find that supply chain agility and supply chain adaptability positively affect both cost performance and operational performance. We further find evidence for a mediating role of supply chain agility in the links between supply chain adaptability and performance. Product complexity positively moderates the links between supply chain adaptability and cost performance, and supply chain adaptability and operational performance. The results contribute to the literature by offer...

Method and system to use a block chain infrastructure and Smart Contracts to monetize data transactions involving changes to data included into a data supply chain.

Abstract: A method and system to use a block chain infrastructure and smart contracts to monetize data transactions involving changes to data included into a data supply chain. The invention describes a system and method to use smart contracts to monetize changes to data using a block chain infrastructure. The system and method matches a data producer's data with a data buyer's specifications, and enables micropayments for changed data responsive to observation of changes to data included into a data supply chain on a granular level. The implementation of block chain infrastructure for data transfer enables a new class of business methods that enables the maintenance of privacy of personal information while giving access to actionable data and implementing a fair and transparent market for data producers and data buyers to use redundant distributed ledgers of transactions on peer to peer networks.

Stakeholder pressure in sustainable supply chain management

Abstract: – The purpose of this paper is to summarize and analyze what is known regarding the ways in which stakeholder pressure may influence supply chain sustainability. The authors extend this understanding to develop a number of research questions and propositions for future investigation on this topic. , – The authors used a systematic review process to study the empirical evidence pertaining to how a stakeholder perspective helps to understand sustainability in the supply chain management domain. , – The review has three main findings: stakeholder pressure on sustainability in supply chain management may result in sustainability awareness, adoption of sustainability goals, and/or implementation of sustainability practices; different types of stakeholders have dissimilar influence in the sustainable supply chain decision areas; different stakeholders appears to be more or less influential depending on whether the sustainability issue is environmental or social. , – This synthesis contributes to the literature by developing insight into the processes by which stakeholder pressure influences SSCM decisions.

Sustainable supplier selection and order lot-sizing: an integrated multi-objective decision-making process

Abstract: Within supply chains activities, selecting appropriate suppliers based on the sustainability criteria (economic, environmental and social) can help companies move toward sustainable development. Although several studies have recently been accomplished to incorporate sustainability criteria into supplier selection problem, much less attention has been devoted to developing a comprehensive mathematical model that allocates the optimal quantities of orders to suppliers considering lot-sizing problems. In this research, we propose an integrated approach of rule-based weighted fuzzy method, fuzzy analytical hierarchy process and multi-objective mathematical programming for sustainable supplier selection and order allocation combined with multi-period multi-product lot-sizing problem. The mathematical programming model consists of four objective functions which are minimising total cost, maximising total social score, maximising total environmental score and maximising total economic qualitative score. The prop...

A decade of supply chain collaboration and directions for future research

Abstract: Purpose – This paper aims to conduct a systematic review of the literature on supply chain collaboration published over a 10-year period from 2005 to 2014. It explores the nature and extent of research undertaken to identify key themes emerging in the field and gaps that need to be addressed. Design/methodology/approach – The authors review a sample of 207 articles from 69 journals, after using an iterative cycle of defining appropriate search keywords, searching the literature and conducting the analysis. Findings – Key themes include the meaning of collaboration; considerations for supply chain collaboration theory; emerging areas in collaboration for sustainability, technology-enabled supply chains and humanitarian supply chains; and the need for a more holistic approach, multi-tier perspectives and research into B2C collaborations. Research limitations/implications – The paper provides discussion and scope for future research into the area which would contribute to the field tremendously. Originality/value – There have been very few reviews in the past on supply chain collaboration, and this is one of the first extensive reviews conducted to address how well the body of knowledge on supply chain collaboration corresponds with our contemporary society.