Showing papers on "Supply chain management published in 1997"
TL;DR: The authors analyzes four sources of the bullwhip effect: demand signal processing, rationing game, order batching, and price variations, and shows that the distortion tends to increase as one moves upstream.
Abstract: (This article originally appeared in Management Science, April 1997, Volume 43, Number 4, pp. 546-558, published by The Institute of Management Sciences.)
Consider a series of companies in a supply chain, each of whom orders from its immediate upstream member. In this setting, inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions. This paper claims that the information transferred in the form of "orders" tends to be distorted and can misguide upstream members in their inventory and production decisions. In particular, the variance of orders may be larger than that of sales, and distortion tends to increase as one moves upstream-a phenomenon termed "bullwhip effect." This paper analyzes four sources of the bullwhip effect: demand signal processing, rationing game, order batching, and price variations. Actions that can be taken to mitigate the detrimental impact of this distortion are also discussed.
4,124 citations
TL;DR: In this paper, a conceptual model that provides guidance for future supply chain decision-making and research is proposed, based on a review of the literature and management practice, it is clear that there is a need for some level of coordination of activities and processes within and between organizations in the supply chain that extends beyond logistics.
Abstract: Practitioners and educators have variously addressed the concept of supply chain management (SCM) as an extension of logistics, the same as logistics, or as an all‐encompassing approach to business integration. Based on a review of the literature and management practice, it is clear that there is a need for some level of coordination of activities and processes within and between organizations in the supply chain that extends beyond logistics. We believe that this is what should be called SCM. This article proposes a conceptual model that provides guidance for future supply chain decision‐making and research.
2,789 citations
Book•
28 Jul 1997
TL;DR: In this article, the authors present a survey of strategies for managing the procurement and sourcing process in the context of outsourcing and outsourced supply chain management, including legal issues and purchasing contracts.
Abstract: SECTION ONE: UNDERSTANDING THE PROCUREMENT AND SOURCING PROCESS. Introduction to Purchasing. The Purchasing Process. Purchasing Organization. Purchasing Policy and Procedures. Purchasing as a Boundary Spanning Function. SECTION TWO: STRATEGIC SUPPLY MANAGEMENT. Procurement and Sourcing Strategy Development. Insourcing/Outsourcing. Supplier Evaluation and Selection. Supplier Quality Management. Supplier Management and Development. Global Sourcing. SECTION THREE: APPROACHES FOR MANAGING THE PROCUREMENT AND SOURCING PROCESS. Purchasing Tools and Techniques. Cost/Price Analysis. Negotiation. Managing Contracts. SECTION FOUR: ACTIVITIES THAT SUPPORT THE PROCUREMENT AND SOURCING PROCESS. Legal Issues and Purchasing Contracts. Inventory Management for Purchasers. Purchasing and Transportation. Purchasing Information Systems. Performance Measurement and Evaluation. SECTION FIVE: FUTURE DIRECTIONS. Future Trends: Purchasing and Sourcing Strategy.
1,335 citations
TL;DR: In this paper, a conceptual model is provided which helps to identify certain assumptions made in the literature that must be challenged and a research agenda for the future of supply chain management is developed.
Abstract: In order to respond to competitive pressures, managers need to know more about the strategic aspects of supply chain management. This paper addresses this need by critically reviewing the supply chain management literature and by suggesting a research agenda for the future. A conceptual model is provided which helps to identify certain assumptions made in the literature that must be challenged. The model also provides a tool for identifying the major contributions in the literature. Finally, a research agenda is developed.
632 citations
TL;DR: In this paper, a series of companies in a supply chain are modeled as a set of supply chains, and the authors consider the problem of finding the optimal supply chain for each of them.
Abstract: (This article originally appeared in Management Science, April 1997, Volume 43, Number 4, pp. 546-558, published by The Institute of Management Sciences.) Consider a series of companies in a supply...
489 citations
TL;DR: A review of supply chain research from both the qualitative conceptual and analytical operations research perspectives is provided in this article, where the authors provide a review of the current conceptual based supply chain literature.
425 citations
TL;DR: The supply chain operations reference model (SCOR) as mentioned in this paper is the first cross-industry framework for evaluating and improving enterprisewide supply chain performance and management, which is structured in four levels, based on a plan, source, make, deliver framework.
Abstract: The supply‐chain operations reference model (SCOR) is the first cross‐industry framework for evaluating and improving enterprise‐wide supply‐chain performance and management. The culmination of intensive work by 70 world‐class manufacturers, SCOR provides standard process definitions, terminology and metrics. It will enable companies to benchmark themselves against others, and influence future applications development efforts to ensure fit with manufacturers’ needs. The emerging process reference model concept is the logical extension of business process re‐engineering and other process improvement efforts. SCOR, which is structured in four levels, is based on a plan, source, make, deliver framework.
384 citations
TL;DR: In this paper, the authors present the beneficial dynamic effects of enriching each supply chain member's order decision with undistorted market sales, and conclude that tremendous benefits can result from adopting a holistic approach if the attitudinal problems associated with information sharing can be overcome.
Abstract: Speed of response to customer demand has long been recognized as a key attribute to business success since customer loyalty can be won or lost on product availability. With everyone implementing lean manufacturing philosophies, companies additionally need to become smart chain managers and ensure continuous improvement to stay competitive. Exploits further the concept of the “seamless supply chain”, by encouraging market place information to move through the supply chain with as little distortion as possible. The simulation model used to benchmark performance improvement is representative of both the MIT beer game and much experimental industrial practice. It is therefore realistic as an aid to the implementation of decision support systems (DSS). Presents the beneficial dynamic effects of enriching each supply chain member’s order decision with undistorted market sales. Concludes that tremendous benefits can result from adopting a holistic approach if the attitudinal problems associated with information sharing can be overcome.
351 citations
TL;DR: In this paper, the authors review the techniques available to "predators" seeking to gain competitive advantage for their supply chains, including industrial engineering, operations engineering, production engineering, and information technology.
Abstract: It is no longer sufficient for a winning organisation to operate in isolation, however effective it may be in performing its core business. To survive, let alone win, it must be part of one or more supply chains producing world class performance. Each company in the chain must be internally "lean" but additionally must operate in a "seamless" environment in which all information relevant to the efficient operation of the total system is available on time and in an undistorted form. The term "predator" has been coined in the literature to describe the supply chain leader with the vision, drive, and determination to re-engineer the entire supply chain so as to satisfy end-customer needs. The paper reviews the techniques available to "predators" seeking to gain competitive advantage for their supply chains, including industrial engineering, operations engineering, production engineering, and information technology. Not all conceivable improvements can be implemented overnight, however desirable they might appear, hence the advocacy of simulation models within a decision support system so that top management can prioritise proposed Improvement Programmes against the relevant performance metric. In the example used to indicate the approach, the technological, organisational, and attitudinal problems to be solved by top management in achieving the seamless supply chain are all highlighted.
296 citations
01 Jan 1997
TL;DR: An expanded scope for supply chain management research is advocated in this paper, which accounts for the social function and the political and economic implications of supply chain developments, arguing that the research agenda must not be driven by the notion of efficiency alone, but should also be developed around the concept of the just supply chain.
Abstract: An expanded scope for supply chain management research is advocated, which accounts for the social function and the political and economic implications of supply chain developments. It is argued that the research agenda must not be driven by the notion of efficiency alone, but should also be developed around the concept of the just supply chain.
250 citations
TL;DR: In this article, the authors advocate an expanded scope for supply chain management research which accounts for the social function and the political and economic implications of supply chain developments, arguing that the research agenda must not be driven by the notion of efficiency alone, but should also be developed around the concept of the just supply chain.
Abstract: Advocates an expanded scope for supply chain management research which accounts for the social function and the political and economic implications of supply chain developments. Argues that the research agenda must not be driven by the notion of efficiency alone, but should also be developed around the concept of the just supply chain. Provides a framework which sets out the range of issues which may contribute to this approach. Believes that the objectives and ideological assumptions of research need to be open to challenge and debate.
TL;DR: In this paper, the authors enumerate a number of these levers and present a model whereby they might be combined into effective response capability, which is illustrated by data obtained from a skiwear manufacturer that did so.
Abstract: Reducing lead time enables a company to react more quickly to demand information and, hence, to better match supply with uncertain demand. But it is only one lever for improving response capability. Managers are familiar with others (e.g., excess capacity, supplier choice, and so forth) but lack techniques to quantify the impact of adjusting these levers. Here, we enumerate a number of these levers and present a model whereby they might be combined into effective response capability. The impact of adjusting these levers is illustrated by data obtained from a skiwear manufacturer that did so. Some of the insights that resulted run counter to intuition.
TL;DR: In this paper, the relationship between business process reengineering and channel performance for firms implementing electronic data interchange (EDI) linkages within the U.S. grocery industry is discussed.
Abstract: This paper discusses the relationship between business process reengineering and channel performance for firms implementing electronic data interchange (EDI) linkages within the U.S. grocery industry. Both quantitative and qualitative data sources are combined to test the hypothesis that channel transformation involving adoption of EDI and redesign of replenishment processes enables performance improvements more than an order of magnitude greater than implementation of EDI alone. This new process, enabled by EDI, provides retailers with 50- 100% higher inventory turns for products on continuous replenishment processes (CRP) relative to retailer performance using traditional ordering processes. Firms adopting EDI without using CRP to reengineer the ordering processes have failed to realize any statistically significant improvements in either inventory levels or warehouse stockouts. This research provides evidence to support the claims of process reengineering that are common in the popular business press, but for which statistically significant empirical evidence is minimal. The findings of the research also demonstrate the potential improvements that firms can realize through extending the business process reengineering concept to include the firms' entire supply chain.
TL;DR: In this article, the authors developed a model to determine optimal lot sizes and the optimal number of suppliers when the yield of the product delivered from each supplier is random, where the suppliers are identical as well as non-identical.
Abstract: An important aspect of supply chain management is the optimal configuration of the supplier base. We develop a model to determine optimal lot sizes and the optimal number of suppliers when the yield of the product delivered from each supplier is random. While small orders from a large number of suppliers can reduce yield uncertainty, fixed costs associated with each supplier provide a penalty for having too many suppliers. This is the key tradeoff addressed by our model. We look at the cases when the suppliers are identical as well as nonidentical.
TL;DR: In this article, the concept of time-based competitive strategies within the context of supply chain management is proposed. And the authors explore the current interest in supplier integration as a source of competitive advantage in consumer markets and propose that the Japanese influenced network sourcing model provides a method whereby the advantages of vertical integration can be achieved without reducing the flexibility of product and material outsourcing.
Abstract: Develops the concept of time‐based competitive strategies within the context of supply‐chain management. Explores the current interest in supplier integration as a source of competitive advantage in consumer markets and proposes that the Japanese influenced network sourcing model provides a method whereby the advantages of vertical integration can be achieved without reducing the flexibility of product and material outsourcing. A central feature of the network sourcing approach is the use of supplier co‐ordination and development, facilitated by a supplier forum known as a supplier association. These associations represent a series of linking pins, extending from the focal purchasing organization, whereby the joint determination of supply chain improvements can be formulated and shared between a focal customer organization and entire groups of suppliers. Argues that the successful exploitation of these associations is a major pillar in developing and sustaining continuous improvement on a supply‐chain sca...
Book•
03 Apr 1997
TL;DR: In this paper, the authors present an overview of the supply chain management and logistics strategy. But, they focus on the extended value chain and do not address the challenges associated with the Extended Value Chain.
Abstract: Introduction and Overview Overview of Supply Chain Management and Logistics Strategy Definitions Links with the Extended Value Chain The Supply Chain Planning Process Positioning the Supply Chain and Logistics within your Company Supply Chain Management and Logistics in the Competitive Context Gaining Strategic and Competitive Advantage from Logistics and Supply Chain Management Structuring Supply Chain Capabilities Customer Service Understanding the Customer Building a Customer Focused Supply Chain Functional Excellence Logistics as a Process Forecasting and Inventory Control Transportation and Warehousing Purchasing Information Technology Techniques for Supply Chain Excellence Understanding the Supply Chain Process Cost Analysis and Measurement Analytic Technologies Future Trends and Issues/Broader Context Emerging Logistics Directions Industry and Related Developments Globalization Index
TL;DR: In this paper, the authors consider the global news vendor problem and propose a decentralized production control structure with a nonlinear pricing scheme for production coordination among centers administered through an intermediate organizational unit.
Abstract: The global markets of today offer to the "style goods" producer more selling opportunities and pose new challenges in production planning and coordination. From a production management standpoint the opportunity to exploit the difference in timing of the selling season of geographically dispersed markets for "style goods" is important for improving the firm's profitability. In this paper we examine the above issue with an insightful model of a producer of "style goods" selling the goods to two markets a primary and a secondary market with nonoverlapping selling seasons. We refer to this problem as the "global newsvendor" problem. For the above two market stochastic inventory systems we first develop optimal centralized control policies. Then we demonstrate the suboptimality of decentralized production control policies, with the production centers at each market treated as independent profit centers and a constant transfer price being used to coordinate their production. We propose as an effective alternative a decentralized production control structure with a nonlinear pricing scheme for production coordination among centers administered through an intermediate organizational unit. In our modeling, we explicitly consider the effects of exchange rate uncertainty on the production planning decisions.
Journal Article•
TL;DR: In this paper, the authors compare the supply chain structures and capabilities of about 2,000 firms from four industrialized nations: Australia, Japan, Korea, and the U.S.
Abstract: Although definitions vary, supply chain structure is often considered to represent the organizational efforts by three or more firms to manage and integrate material and related information flows in order to get closer to customers. To minimize total costs and maximize customer value, transportation integration is essential within the supply chain. In general, integrative transportation involves getting the right assortments to the right place in perfect condition at the right time throughout the supply chain. Specifically, the supply chain structure defines and drives the transportation capabilities of time compression, reliability, standardization, just-in-time delivery, information systems support, flexibility, and customization. In this paper, each of these operational transportation capabilities is briefly discussed along with internal and external structural integration. This is followed by a description of the methodology used in this study to compare the supply chain structures and capabilities of about 2,000 firms from four industrialized nations: Australia, Japan, Korea, and the U.S.
TL;DR: In this article, the authors present the need for the European agribusiness and food industries to redesign and reposition their activities in the food supply chain, both at a technical and organizational level, in order to achieve customer satisfaction and business efficiency.
Abstract: Presents the need for the European agribusiness and food industries to redesign and reposition their activities in the food supply chain, both at a technical and organizational level, in order to achieve customer satisfaction and business efficiency. Focuses on the findings of ten supply chain projects in the Dutch horticultural sector and on the results of a benchmarking project in five different European countries. Describes the activities of the “Agri Chain Competence” programme in The Netherlands. Stresses that more attention should be paid to international food supply chains and that chain reversal asks for new methods, tools and expertise on chain analysis and chain management.
TL;DR: In this paper, a trade-off between locating those activities close to corporate design and production functions is discussed, and managers can evaluate the tradeoff between placing those activities in close proximity to design and manufacturing functions.
Abstract: Looks at globalization and lean production and their possible interaction. Depicts production as ‘a tightly coupled, flexible system’ centred on JIT (just‐in‐time) delivery and low inventories, which requires continuous improvement as a component quality necessary in the process. Describes global supply chain strategy's conflicting goals as: JIT delivery; low inventory; lead times; flexible manufacturing; and close relationships with suppliers. Concludes that managers can evaluate the trade‐off between locating those activities close to corporate design and production functions.
TL;DR: In this paper, the authors describe findings from empirical research in European automotive aftermarket supply chains performed under the EC ESPRIT initiative in the CMSO (CIM for Multi-Supplier Operations) project.
Abstract: Takes a holistic view of supply chain management tracing supply chains ultimately to end customers. Describes findings from empirical research in European automotive aftermarket supply chains performed under the EC ESPRIT initiative in the CMSO (CIM for Multi‐Supplier Operations) project. The field research was carried out in non‐vertically integrated supply chains in the UK and Spain. The main findings are: chains in different territories exhibited different operational requirements; and position in the supply chain gave rise to different operational requirements. From these findings concludes that, in order to manage supply chains, we must identify each chain player’s role in contributing to satisfying end customer requirements, recognizing that these roles may differ depending on the international environmental context and position in the supply chain.
TL;DR: In this article, the feasibility of postponed manufacturing applications for the food industry is investigated in the context of a wine producer, and a set of operating characteristics are developed to determine the viability of postponement manufacturing in a decision model.
Abstract: Explains that postponed manufacturing applications are a combination of form, time and place postponement in which final processing of generic base products to meet customer specifications at central locations in the supply chain is followed by delivery to customers. Postponed manufacturing has been coming to the forefront as an innovative supply chain arrangement in a multitude of industries, including the food industry. As little is known about the implementation of the concept by manufacturers, the feasibility of such operating systems for the food industry warrants analysis. Aims to develop a set of operating characteristics which help determine the viability of postponed manufacturing in a decision model. Demonstrates, via case results of a wine producer, that postponed manufacturing applications can contribute to integral supply chain improvements.
TL;DR: In this paper, the authors focus on the issue of product range management in European supply chain operations and its role in achieving efficient consumer response in the many regional markets within the EU, and assess the supply chain performance of a European supplier from the perspective of a regional market.
Abstract: A particular problem for European suppliers to the grocery trade is the requirement for country or region specific product variants. A large number of local variants dramatically reduces the supply chain performance of a European supplier in the smaller markets. Focuses on the issue of product range management in European supply chain operations and its role in achieving efficient consumer response in the many regional markets within the EU. Discusses the importance for supply chain management of well‐defined roles for the product range in different markets and for different customers. Assesses the supply chain performance of a European supplier from the perspective of a regional market. Presents some alternative tactics for achieving the strategic goal of continuous supply in small regional markets.
Book•
01 Jan 1997
TL;DR: In this article, the authors present an overview of International Logistics and International Market Entry Strategies (IMES) and International Distribution Planning and Strategy (IDPS) for the supply chain.
Abstract: Introduction. 1. Logistics and Supply Chain Strategy. 2. Purchasing and Supplies Management. 3. Manufacturing Logistics. 4. Distribution Planning and Strategy. 5. Warehouse Planning and Operations Management. 6. Inventory Management. 7. Transport Management. 8. International Logistics and International Market-Entry Strategies. References. Maps.
TL;DR: The fashion industry has been beset by the problems of volatile and difficult to predict demand as mentioned in this paper, and it was assumed that the problem lay with inaccurate forecasts and that if only those forecasts could be improved then everything would be fine.
Abstract: The fashion industry has been beset by the problems of volatile and difficult to predict demand. Many companies involved in manufacturing and retailing in fashion markets have seen the profitability severely affected by their inability to match supply with demand. Traditionally, it was assumed that the problem lay with inaccurate forecasts and that if only those forecasts could be improved then everything would be fine. In fact, experience seems to suggest that even though forecasting techniques and methodology have continued to develop in their sophistication, they can never deliver the accuracy required for managing logistics in fast moving markets. The answer, we would suggest, lies not in better forecasts but in reducing the dependency on the forecast. The way to bringing this about, it can be argued, is through lead‐time management.
TL;DR: In this paper, a survey based study of matched buyer and supplier pairs over time was conducted to examine negative and positive trend relationships for predictive and explanatory causes, finding that negative trend relationships appear to be predictable based on overly optimistic expectations that the benefits from such efforts will be forthcoming and reluctance on the part of buying firms to share information.
Abstract: Many firms have entered into strategic supplier alliances as a means of leveraging technology and as part of their continuous improvement efforts. The advantages and disadvantages from such an approach and the implementation problems are well known. However, knowledge of how these relationships evolve and dissolve over time is weak, hindered in part by cross‐sectional and a one‐perspective approach to empirical research. Presents the results from a survey based study of matched buyer and supplier pairs over time. Examines negative and positive trend relationships for predictive and explanatory causes. Data did not support the theory that the subordinated use of power can help to explain continued success and satisfaction with the relationship nor did negative trend relationships necessarily mean dissatisfaction. However, negative trend relationships appear to be predictable based on overly optimistic expectations that the benefits from such efforts will be forthcoming and reluctance on the part of buying firms to share information.
TL;DR: Exel Logistics' experience in a number of industry sectors, product profiles, operational techniques and technology suggests that the outputs of cross-docking can appear magical, even though they result from fairly standard operational inputs as mentioned in this paper.
Abstract: Exel Logistics’ experience in a number of industry sectors, product profiles, operational techniques and technology suggests that the outputs of cross‐docking can appear magical, even though they result from fairly standard operational inputs. Explains the origins of cross‐docking and explores the operational aspects of switching from a traditional stockholding supply chain system to a cross‐docking system, using a case study from the motor industry. States that key benefits resulting from the adoption of cross‐docking techniques relate to improvements in service levels, inventory levels, stock returns and unit costs.
TL;DR: In this article, the authors provide a critique of the present state of the art of productivity and performance measurement and management in logistics, and discuss the challenges of such integrated approaches, accentuating the effectiveness of the productivity philosophy in logistics.
Abstract: Provides a critique of the present state of the art of productivity and performance measurement and management in logistics. The nature of logistics makes normal measures of productivity, based on an output/input concept, not always appropriate. Indicator or proxy approaches can be more suitable and would relate the quality of the system to total cost, complementing conventional total productivity thinking. Highlights the main ingredients of strategic logistics performance. Develops analytical frameworks and models to aid management in planning and decision making, both operationally and strategically. Discusses the challenges of such integrated approaches, accentuating the effectiveness of the productivity philosophy in logistics. The competitive key battlegrounds include quality, productivity, speed and innovation, all linked to good business ethics. Compares Japanese and Western logistics management approaches to productivity and performance.
TL;DR: In this paper, the authors focus on simple evaluations of transactions at each level of a marketing system for a fresh product from Egypt to the UK, using methods derived from the transaction cost and marketing literatures.
Abstract: Marketing systems for fresh food products are frequently analysed in the economics and marketing literature, most often either in terms of a quantitative model reflecting some policy or environmental concern, or in terms of a simple description of the shape and size of the system. Considers explicitly the nature of the relationships at each level of a marketing system, using methods derived from the transaction cost and marketing literatures. The methods focus on simple evaluations of transactions at each level of a system, and are applied to the marketing system for a fresh product from Egypt to the UK.
TL;DR: In this paper, the use of pipeline feedback to ensure good control of material flow systems has been developed over the years on a pragmatic basis, which has led to recommendations for good parameter settings which may be used with confidence when applied to a particular generic decision support system (DDS) known as the To-Make model.
Abstract: The use of pipeline feedback to ensure good control of material flow systems has been developed over the years on a pragmatic basis. More recently, the mechanism by which the improved control is achieved has been the subject of theoretical analysis. In turn, this has led to recommendations for good parameter settings which may be used with confidence when applied to a particular generic decision support system (DDS) known as the “to make” model. One consequence of utilizing pipeline feedback is the enhanced damping capability of this system. In our experience, many supply chains may be represented by the coupling together of a series of To‐Make models. In this paper, we show that the use of supply chain feedback within each echelon greatly reduces the order amplification as it proceeds upstream from the market place. Using as an example a model of the Beer Game Supply chain, it is concluded that demand amplification is readily reduced by a factor of 2:1.