A Machine Learning-Based System for Predicting Service-Level Failures in Supply Chains

2021 ◽  
Author(s):  
Gabrielle Gauthier Melançon ◽  
Philippe Grangier ◽  
Eric Prescott-Gagnon ◽  
Emmanuel Sabourin ◽  
Louis-Martin Rousseau
Keyword(s):  
Machine Learning ◽  
Supply Chain ◽  
Service Level ◽  
Learning System ◽  
Safety Stock ◽  
Service Levels ◽  
Sources Of Uncertainty ◽  
Supply Chain Efficiency ◽  
Percentage Points ◽  
Different Sources

Despite advanced supply chain planning and execution systems, manufacturers and distributors tend to observe service levels below their targets, owing to different sources of uncertainty and risks. These risks, such as drastic changes in demand, machine failures, or systems not properly configured, can lead to planning or execution issues in the supply chain. It is too expensive to have planners continually track all situations at a granular level to ensure that no deviations or configuration problems occur. We present a machine learning system that predicts service-level failures a few weeks in advance and alerts the planners. The system includes a user interface that explains the alerts and helps to identify failure fixes. We conducted this research in cooperation with Michelin. Through experiments carried out over the course of four phases, we confirmed that machine learning can help predict service-level failures. In our last experiment, planners were able to use these predictions to make adjustments on tires for which failures were predicted, resulting in an improvement in the service level of 10 percentage points. Additionally, the system enabled planners to identify recurrent issues in their supply chain, such as safety-stock computation problems, impacting the overall supply chain efficiency. The proposed system showcases the importance of reducing the silos in supply chain management.

Supply chain management and market responsiveness: a simulation study

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdulqadir Rahomee Ahmed Aljanabi ◽  
Karzan Mahdi Ghafour
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Supply And Demand ◽  
Service Level ◽  
Distribution Centers ◽  
Safety Stock ◽  
Content Type ◽  
Product Availability ◽  
Market Responsiveness ◽  
Number Of Customers

Purpose This study aims to provide a practical solution to the relationship between supply chain (SC) integration and market responsiveness (MR). A method is proposed to integrate SC and MR parameters, namely, product supply and demand in the context of low-value commodities (e.g. cement). Design/methodology/approach Simulation and forecasting approaches are adopted to develop a potential procedure for addressing demand during lead time. To establish inventory measurements (safety stock and reorder level) and increase MR and the satisfaction of customer’s needs, this study considers a downstream SC including manufacturers, depots and central distribution centers that satisfies an unbounded number of customers, which, in turn, transport the cement from the industrialist. Findings The demand during lead time is shown to follow a gamma distribution, a rare probability distribution that has not been considered in previous studies. Moreover, inventory measurements, such as the safety stock, depending on the safety factor under a certain service level (SL), which enables the SC to handle different responsiveness levels in accordance with customer requests. In addition, the quantities of the safety stock and reorder point represent an optimal value at each position to avoid over- or understocking. The role of SC characteristics in MR has largely been ignored in existing research. Originality/value This study applies SC flexibility analyzes to overcome the obstacles of analytical methods, especially when the production process involves probabilistic variables such as product availability and demand. The use of an efficient method for analyzing the forecasting results is an unprecedented idea that is proven efficacious in investigating non-dominated solutions. This approach provides near-optimal solutions to the trade-off between different levels of demand and the SC responsiveness (SLs) with minimal experimentation times.

scholarly journals The Effect of the Safety Stock on the Occurrence Probability of the Stock Shortage

2017 ◽  
Vol 8 (1) ◽  
pp. 69-77 ◽  
Author(s):  
János Korponai ◽  
Ágota Bányainé Tóth ◽  
Béla Illés
Keyword(s):  
Supply Chain ◽  
Service Level ◽  
Occurrence Probability ◽  
Operational Environment ◽  
Safety Stock ◽  
Stock Level ◽  
Continuous Review ◽  
Factors Influencing ◽  
Demand Changes ◽  
Production Company

Abstract The objective of the logistics management is to guarantee the stock level required for the adequate handling of production at the lowest possible level of costs and risks. The main purpose of the paper is to present the relations between stock level and risk of shortages. As a result of the research, the introduction of the safety stock is the solution to cover the effects of the uncertain factors in the supply chain. The theoretical approach of the model assumes a deterministic operational environment, in practice, however, there are several unpredictable factors influencing the operation of the production company. By using the periodic and continuous review models, the paper presents the effects of demand changes and stochastic length of replenishment time on the risk of stock availability. We need to quantify a service level which determines the accepted probability of the shortage occurrence.

scholarly journals Decision-Making of Electronic Commerce Supply Chain considering EW Service

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-13
Author(s):  
Yuyan Wang ◽  
Zhaoqing Yu ◽  
Liang Shen ◽  
Runjie Fan
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Electronic Commerce ◽  
Service Providers ◽  
Rapid Development ◽  
Service Level ◽  
Network Economy ◽  
Service Levels ◽  
Decision Making Models ◽  
The One

With the rapid development of the network economy, it is a marketing strategy to provide an extended warranty (EW) service. Considering the differences in the EW service providers and dominant enterprises, this paper proposes four kinds of decision-making models and aims to study decisions of the electronic commerce supply chain, including EW price, sales price, and service level of e-platform. Through comparative analysis and numerical analysis, this research shows that, among four decision-making models, the highest system profit can be achieved when the seller provides the EW service and the e-platform dominates the system. For electronic commerce supply chain enterprises, whether to dominate the system or to provide EW service, it is conducive to the increase of profits. When the e-platform provides the EW service, the conclusion is that who dominates the system is the one who gets more profit. However, when the seller provides the EW service, the conclusion is that who dominates the system is the one who gets less profit. When the EW service is offered by the dominating enterprise, service levels of the e-platform are lower.

Retail supply chain service levels: the role of inventory storage

2016 ◽  
Vol 29 (6) ◽  
pp. 887-902 ◽  
Author(s):  
Asif Salam ◽  
Farhad Panahifar ◽  
P.J. Byrne
Keyword(s):  
Supply Chain ◽  
Customer Service ◽  
Service Level ◽  
Retail Industry ◽  
Inventory Level ◽  
Content Type ◽  
Service Levels ◽  
Product Availability ◽  
Customer Service Level ◽  
The Relationship

Purpose In today’s competitive retail industry the most critical success factor is customer service which is indicated by product availability. It is argued that in the retail industry, product availability is an important measure of quality. The single most vital decision that every retailer needs to make is, how to maximize service level while keeping minimum inventory level. The purpose of this paper is to explain and demonstrate the relationship between inventory level and customer service level. Design/methodology/approach This study examines an inventory system utilizing a simulation model based on company data obtained from a retail fast-moving-consumer goods chain operating in Thailand. Findings The results suggest that the achievement of a responsive service level is dependent on managing an efficient supply chain in addition to logistics cost reductions. The findings also reveal the effect the inventory level has on the service level. From the findings of this study, demand variability and service level have been found to have the most significant influence on the inventory level. From the findings, it can also be shown that real and accurate information is very important for service supply chains. Practical implications The paper promotes the importance of having an appropriate inventory management policy for a retail chain which should be driven by retail companies in order to better balance inventory and service levels. Originality/value The relationship between the inventory level and customer service level lead to different outcomes at different combinations of inventory and service levels. Significant relationships were found between inventory and service levels.

Pareto Improvement Strategy for Service-Based Free-Riding in a Dual-Channel Supply Chain

2014 ◽  
Vol 31 (06) ◽  
pp. 1450050 ◽  
Author(s):  
Bin Dan ◽  
Can Liu ◽  
Guangye Xu ◽  
Xumei Zhang
Keyword(s):  
Supply Chain ◽  
Rapid Development ◽  
Relative Size ◽  
System Optimization ◽  
Service Level ◽  
Free Riding ◽  
Pareto Improvement ◽  
Service Levels ◽  
Dual Channel ◽  
Dual Channel Supply Chain

With the rapid development of the Internet, many manufacturers nowadays are increasingly adopting a dual-channel strategy to sell their products. In this paper, we present an analytical framework in a single-channel supply chain and a dual-channel supply chain, respectively. We compare the optimal service levels under different scenarios to investigate the impacts of bidirectional free-riding and service competition on members' decisions. In order to realize system optimization, we propose contracts to coordinate the decentralized supply chain under different cases. We find that when a new channel is added, the retailer will always increase his service level to compete with the manufacturer, while the manufacturer needs to take the relationship with the retailer into consideration and decides whether to increase or decrease her service level. We also find that the contracts for different cases can make the optimal solutions the same as those under the centralized scenario by adjusting service levels based on the relative size of competition effect and spillover effect. Finally, we conduct numerical examples to verify the existence of Pareto improvement intervals and derive some managerial insights.

scholarly journals A way for reducing drug supply chain cost for a hospital district: A case study

2016 ◽  
Vol 9 (1) ◽  
pp. 207
Author(s):  
Leonardo Postacchini ◽  
Filippo Emanuele Ciarapica ◽  
Maurizio Bevilacqua ◽  
Giovanni Mazzuto ◽  
Claudia Paciarotti
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Bullwhip Effect ◽  
Service Level ◽  
Economic Order ◽  
Drug Supply ◽  
Service Levels ◽  
Management Policies ◽  
Drug Supply Chain

Purpose: This work aims at providing insights to optimise healthcare logistic of the drug management, in order to deal with the healthcare expenditure cut. In this paper the effects of different drug supply chain configurations, on the resulting average stock, service level and Bullwhip effect, of the studied supply chain, is quantitatively assessed. Design/methodology/approach: A case study of an Italian district has been studied, taking into account three echelons: suppliers, central stock, and hospitals. A model of the various supply chain configurations has been created with the use of the simulation. Specifically, 24 supply chain configurations have been examined, stemming from the combination of several supply chain design parameters, namely: transshipment policies (Emergency Lateral Transshipment or Total Inventory Equalization); re-order and inventory management policies (Economic Order Quantity or Economic Order Interval); required service levels (90% or 95%); the number of available vans (one or two). For each configuration, hospital average stock, service level and a “Bullwhip effect” analysis are computed. To know which input variables are statistically significant, a DoE (Design of Experiments) analysis has been executed. Findings: The output of this paper provides useful insights and suggestions to optimize the healthcare logistic and drug supply chain. According to the developed DoE analysis, it can be stated that the introduction of transshipment policies provides important improvement in terms of service and stock levels. To reduce the Bullwhip effect, which results in a service level decreasing, and in a managing stock costs increasing, it is worth to adopt an EOQ re-order policy. Practical implications: This research gives practical recommendations to the studied system, in order to reduce costs and maintain a very satisfactory service level. Originality/value: This paper fulfils an identified need to study which combination of transshipment policies, re-order/inventory management policies and required service levels, can be the best one to reduce costs and maintain a very satisfactory service level, in the specific logistic system.

scholarly journals Misplaced Inventory and Lead-Time in the Supply Chain: Analysis of Decision-Making on RFID Investment with Service Level

2014 ◽  
Vol 2014 ◽  
pp. 1-17
Author(s):  
Li-Hao Zhang ◽  
Ti-Jun Fan ◽  
Wen-Chyuan Chiang ◽  
Feng Tao
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Lead Time ◽  
Service Level ◽  
Transfer Payment ◽  
Rfid Technology ◽  
Widespread Application ◽  
Service Levels ◽  
Rfid Tag ◽  
The Cost

Radio-frequency identification (RFID), as the key technology of Internet of Things (IoT), has been hailed as a major innovation to solve misplaced inventory and reduce lead-time. Many retailers have been pushing their suppliers to invest this technology. However, its associated costs seem to prohibit its widespread application. This paper analyzes the situation of service level in a retail supply chain, which has resulted from misplaced inventory and lead-time. By newsvendor model, we analyze the difference between with- and without-RFID technologies in service level of centralized and decentralized supply chains, respectively. Then with different service levels, we determine the tag cost thresholds at which RFID technology investment becomes profitable in centralized and decentralized supply chains, respectively. Furthermore, we apply a linear transfer payment coefficient strategy to coordinate with the decentralized supply chain. It is found that whether the adoption of RFID technology improves the service level depends on the cost of RFID tag in the centralized system, but it improves the service level in the decentralized system when only the supplier bears the cost of RFID tag. Moreover, the same cost thresholds of RFID tag with different service levels exist in both the centralized and the decentralized cases.

Classification of Operational and Financial Variables Affecting the Bullwhip Effect in Indian Sectors: A Machine Learning Approach

2019 ◽  
Vol 12 (3) ◽  
pp. 171-179 ◽  
Author(s):  
Sachin Gupta ◽  
Anurag Saxena
Keyword(s):  
Machine Learning ◽  
Data Mining ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Product Life Cycle ◽  
Consumer Preference ◽  
Bullwhip Effect ◽  
Machine Learning Techniques ◽  
Chain Management ◽  
Financial Variables

Background: The increased variability in production or procurement with respect to less increase of variability in demand or sales is considered as bullwhip effect. Bullwhip effect is considered as an encumbrance in optimization of supply chain as it causes inadequacy in the supply chain. Various operations and supply chain management consultants, managers and researchers are doing a rigorous study to find the causes behind the dynamic nature of the supply chain management and have listed shorter product life cycle, change in technology, change in consumer preference and era of globalization, to name a few. Most of the literature that explored bullwhip effect is found to be based on simulations and mathematical models. Exploring bullwhip effect using machine learning is the novel approach of the present study. Methods: Present study explores the operational and financial variables affecting the bullwhip effect on the basis of secondary data. Data mining and machine learning techniques are used to explore the variables affecting bullwhip effect in Indian sectors. Rapid Miner tool has been used for data mining and 10-fold cross validation has been performed. Weka Alternating Decision Tree (w-ADT) has been built for decision makers to mitigate bullwhip effect after the classification. Results: Out of the 19 selected variables affecting bullwhip effect 7 variables have been selected which have highest accuracy level with minimum deviation. Conclusion: Classification technique using machine learning provides an effective tool and techniques to explore bullwhip effect in supply chain management.

Sign in / Sign up

Export Citation Format

Share Document