A Review on Strategic Positioning of Bottleneck around the Customer Order Decoupling Point and Issues on Production Planning in Supply Chain

2016 ◽  
Vol 16 (4) ◽  
pp. 243-254
Author(s):  
Muhammad Saeed ◽  
Samiya Loya ◽  
Adil Loya
Keyword(s):  
Supply Chain ◽  
Capacity Planning ◽  
Strategic Positioning ◽  
Shifting Bottleneck ◽  
Customer Order ◽  
Make To Order ◽  
Make To Stock ◽  
Engineer To Order ◽  
Operational Constraints ◽  
Specific Part

AbstractThe decoupling point separates part of the supply chain oriented towards customer orders from the part based on forecast planning. This paper focuses on identification of bottlenecks and their positioning with respect to customer order decoupling point (CODP) in supply chain continuum. The research is based on a conceptual model that separates engineer to order (ETO), make to order (MTO), assemble to order (ATO) and make to stock (MTS) by a decoupling point. The important feature of this paper is that supply, demand and operational constraints are allocated in specific part of the supply chain, making it more versatile. Shifting bottleneck concepts, including impact of bottleneck position and issues concerning production and capacity planning, are studied extensively to stabilize the supply chain and reduce its complexity.

Introduction to Supply Chain Management and Multimodal Logistics

2019 ◽  
pp. 1-28
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Chain Management ◽  
Cost Leadership ◽  
Make To Order ◽  
Leadership Strategy ◽  
Make To Stock ◽  
Engineer To Order ◽  
Focus Strategy ◽  
Cost Leadership Strategy

This chapter provides an understanding of basic essence of supply chain management. It introduces a multi-dimensional facet of supply chain management. A typical supply chain has at least three entities, that is, the supplier, the firm, and its customer. The inter-link between these three entities comprises three primary components of a supply chain, namely, the inbound or upstream supply chain, internal supply chain, and outbound or downstream supply chain. However, in a real-life scenario, many firms (especially in case of large and complex firms), the suppliers, and production centres are more than one. This increases the complexity of the supply chain structure. This concept has been introduced in this chapter. The drivers of supply chain have been categorized under strategic and operational drivers. This aspect has been explained, with examples. The chapter discusses the enablers and inhibitors of a supply chain of a firm. It proceeds to explain the issues in assessing and integrating the drivers, enablers, and inhibitors in the supply chain planning process. Bull whip and snow ball effects are two important outcomes of an inefficient supply chain. These concepts have been introduced here. Finally, the chapter concludes by laying down the objectives and the strategies of supply chain management. It prioritizes the focus of supply chain management, stating that customers come first followed by cost optimization. The chapter discusses on the ways to make supply chain agile and flexible. Supply chains are always prone to disruptions; hence, this chapter talks about a resilient supply chain. Next to customer, cost is an important element that enables a firm to keep its price competitive and be profitable. Here the concept of a lean supply chain has been discussed, a way to minimize waste and hence reduce cost. Supply chain management varies with firms' business strategy. The firm may choose to follow either a cost-leadership strategy or a differentiation or a focus strategy and thus would accordingly adopt push or pull or push-pull (supply chain) strategy. In case of cost-leadership strategy, the firm is expected to follow “make-to-stock” (operations) strategy; in case of differentiation strategy it would adopt “make-to-order” strategy; and for focus strategy the firm embraces “engineer-to-order” strategy. This chapter discusses these aspects to correlate the different dimensions of business and its supply chain management. Firms now are focussing on global operation to leverage on opening up of economy, enabling them to lower the cost of operations and achieve the desired quality. Besides, globalisation has also led to widening of market coverage. A brief introduction to global logistics management has been made in this chapter to emphasise on operationalization of a firms' global supply chain.

Managing supplier flexibility performance as a relational exchange investment in make-to-stock versus make-to-order production environments

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Divesh Ojha ◽  
Jeff Shockley ◽  
Pamela P. Rogers ◽  
Danielle Cooper ◽  
Pankaj C. Patel
Keyword(s):  
Supply Chain ◽  
Information Quality ◽  
Supply Chain Integration ◽  
Equation Modeling ◽  
Relational Exchange ◽  
Relative Importance ◽  
Content Type ◽  
Make To Order ◽  
Production Environments ◽  
Make To Stock

Purpose This paper aims to develop and test a model of buyer–supplier relational investment that links supply chain integration (SCI) to supplier flexibility performance (SFLEX) advantages in different manufacturing environments. Relational stability (RS) and information quality (IQL) are viewed as key indicators of intermediating commitment investments in supplier relationships to help support supplier accommodations for special requests for order flexibility. The model is applied to investigate the relative importance of manufacturer relational investments with suppliers in both make-to-stock (MTS) and make-to-order (MTO) production environments. Design/methodology/approach A survey of 206 US manufacturing firms was used to test the proposed research model using structural equation modeling and multiple-group analysis techniques. Findings Social exchange investments in relationship stability and information quality are found to fully mediate the positive performance relationship between supply chain integration and supplier flexibility performance for manufacturers. However, the relative importance of each form of investment in enhancing supplier flexibility performance varies based on the buyer’s (manufacturer’s) order fulfillment environment (make-to-stock versus make-to-order). Originality/value The proposed model may assist manufacturers make more informed relational exchange investments and supply chain configuration decisions that most conducive to enhancing supplier flexibility performance for different production environments.

scholarly journals Capacity coordination in hybrid make-to-stock/make-to-order contexts using an enhanced multi-stage model

2017 ◽  
Vol 14 (3) ◽  
pp. 396
Author(s):  
Masoud Rabbani ◽  
Sara Motevali Haghighi ◽  
Hamed Farrokhi-Asl ◽  
Neda Manavizadeh
Keyword(s):  
Capacity Planning ◽  
Production Systems ◽  
Lot Sizing ◽  
Service Level ◽  
Stage Model ◽  
Order Acceptance ◽  
Industrial Case Study ◽  
Make To Order ◽  
Multi Stage ◽  
Make To Stock

One of the most attracting production systems that has recently been vastly explored by practitioners and academicians is hybrid make-to-stock/make-to-order. Having a hierarchical production planning structure considered, this paper develops a multi-stage model to cope with the operational decisions, including order acceptance/rejection, product lot sizing, overtime capacity planning, outsourcing, and due date setting. Moreover, the proposed framework also comprises providing alternative products for the coming orders in order to enhance service level of the firm to the customers. In order to validate the presented framework, it is applied in a real industrial case study and the obtained results approve validity of the proposed framework. 

Improving Supply Chain Delivery Performance Using Lean Six Sigma

2017 ◽  
pp. 958-980
Author(s):  
Alfred L. Guiffrida ◽  
Kelly O. Weeks ◽  
Lihua Chen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Six Sigma ◽  
Lean Six Sigma ◽  
Performance Model ◽  
Delivery Performance ◽  
Make To Order ◽  
Make To Stock ◽  
Delivery Models ◽  
Static Point

Models for evaluating and improving delivery performance play an important role in the management of supply chains. A review of supply chain delivery models that use Six Sigma methodologies indicate that the models are limited to only make-to-order supply chains where improvement in delivery performance occurs at a fixed (static) point in time. In this chapter, the authors present a generalized delivery performance model that overcomes these limitations. The model presented here can be used to measure delivery performance in both make-to-order and make-to-stock supply chains and supports improvement in delivery performance over a planned time horizon with definable milestones for attaining targeted levels of improvement. Numerical illustrations of the model are presented.

A Queueing-Game Model for Making Decisions About Order Penetration Point in Supply Chain in Competitive Environment

2013 ◽  
Vol 4 (4) ◽  
pp. 1-24 ◽  
Author(s):  
Ebrahim Teimoury ◽  
Mahdi Fathi
Keyword(s):  
Supply Chain ◽  
Strategic Decision ◽  
Sensitivity Analyses ◽  
Buffer Size ◽  
Inventory Level ◽  
Game Model ◽  
Profit Function ◽  
Make To Order ◽  
Capacity Model ◽  
Make To Stock

This study is dedicated to Order Penetration Point (OPP) strategic decision making which is the boundary between Make-To-Order (MTO) and Make-To-Stock (MTS) policies. This paper considers two competing supply chains in which a manufacturer produces semi-finished items on a MTS basis for a retailer that will customize the items on a MTO basis. The two-echelon supply chain offers multi-product to a market comprised of homogenous customers who have different preferences and willingness to pay. The retailer wishes to determine the optimal OPP, the optimal semi-finished goods buffer size, and the price of the products. Moreover, the authors consider both integrated scenario (shared capacity model) and competition scenario (Stackelberg queueing-game model) in this paper. A matrix geometric method is utilized to evaluate various performance measures for this system and then, optimal solutions are obtained by enumeration techniques. The suggested queueing approach is based on a new perspective between the operation and marketing functions which captures the interactions between several factors including inventory level, price, OPP, and delivery lead time. Finally, parameter sensitivity analyses are carried out and the effect of demand on the profit function, the effect of prices ratio on completion rates ratio and buffer sizes ratio and the variations of profit function for different prices, completion percents, and buffer sizes are examined in both scenarios.

Demand Fluctuation and Supply Chain Integration: Case Studies of Japanese Firms

2017 ◽  
Vol 16 (5) ◽  
pp. 564-586
Author(s):  
Mizuki Kobayashi ◽  
Takahiro Tomino ◽  
Junjiro Shintaku ◽  
YoungWon Park
Keyword(s):  
Supply Chain ◽  
Case Studies ◽  
Manufacturing Firms ◽  
Marketing Channels ◽  
Supply Chain Integration ◽  
Japanese Firms ◽  
Make To Order ◽  
Make To Stock ◽  
And Control ◽  
Tremendous Challenge

Abstract Current Japanese oems utilize both make-to-stock (mts) and make-to-order (mto) to cope with demand fluctuation. In this article, we study how leading manufacturing firms utilize mts and mto by observing two case studies, Toyota’s and Omron’s operations in China. Production and delivery of component suppliers are based on the advance notification from their manufacturers. For this, most automotive firms integrate marketing channels internally, however, most healthcare firms do not. Consequently, it is difficult to forecast and control demand accurately like automotive firms. In this sense, for healthcare firms, it is a tremendous challenge to respond to demand fluctuation through integration with external marketing agencies. We show both companies strategies to mix mts and mto along with integrating internal and external parties.

Supply Chain Design Approaches for Dual Demand Management Strategies

2016 ◽  
pp. 161-200
Author(s):  
Can Celikbilek ◽  
Gürsel A. Süer
Keyword(s):  
Supply Chain ◽  
Demand Management ◽  
Management Strategies ◽  
High Volume ◽  
Construction Sector ◽  
Supply Chain System ◽  
Make To Order ◽  
New Construction ◽  
Manufacturing Facilities ◽  
Engineer To Order

Supply chain management involves efficiently integrating suppliers, manufacturers, warehouses, stores, and customers. To survive in a highly competitive business environment, manufacturing, resource planning and scheduling and distribution operations are the significant drivers that need to be optimized within supply chain management. In this chapter, we design the supply chain system considering dual demand management strategies simultaneously for the same company, both engineer-to-order (ETO) and make-to-order (MTO). This research has been inspired from the window manufacturer which manufactures and distributes vinyl windows to meet new construction and replacement/remodeling sector demand in the State of Ohio. The company manufacturers windows based on make-to-order strategy for new construction projects and at the same time builds replacement windows to individual customer specifications in very small quantities to be used for replacement in homes. In this study, a total of 174 individual customers and six big contractors are considered throughout the State of Ohio. This paper proposes to separate products based on demand management strategy and develop different supply chain networks for each group. The idea is to design bigger facilities for high volume (make-to-order products) as transportation cost per unit is reduced due to economies of scale whereas to place smaller and more facilities for low volume engineer-to-order products to be closer to the clients where it may not feasible to carry a only few products over long distances. All in all, this study provides nested models to integrate both design and operational aspects of supply chain system in the presence high-volume and low-volume of window products. Moreover, all location, design and manufacturing operations are performed by considering new mathematical models (mixed-integer and integer mathematical models) and heuristics in engineer-to-order demand management environment. Normally-distributed, probabilistic demand environment is considered in our design and operational phase of the study. Preliminary results show that, each design has its own strategic advantage and outcome and the ultimate objective has been accomplished in our design in this study. Briefly, four manufacturing facilities are established to meet the demand of replacement/remodeling sector and two manufacturing facilities are situated to meet the demand of new construction sector. The results revealed that, 29 layered-cells and a total of 200 machines are opened and utilized for replacement/remodeling sector. Additionally, 15 layered-cells and a total of 104 machines are needed to cover the entire demand of new construction sector. Also for the new construction sector, three distribution centers are needed to facilitate the products over the region. In terms of daily cell loading and scheduling phase, the results are almost doubled in replacement/remodeling sector demand compared to new construction sector demand volume due to having more cells and machines in the new construction design strategy. The supply chain work involves location and number of manufacturing facilities, number and location of distribution centers, detailed design of manufacturing systems and performing scheduling to confirm the validity of the manufacturing system design.

Improving Supply Chain Delivery Performance Using Lean Six Sigma

2015 ◽  
pp. 89-117 ◽  
Author(s):  
Alfred L. Guiffrida ◽  
Kelly O. Weeks ◽  
Lihua Chen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Six Sigma ◽  
Lean Six Sigma ◽  
Performance Model ◽  
Delivery Performance ◽  
Make To Order ◽  
Make To Stock ◽  
Delivery Models ◽  
Static Point

Models for evaluating and improving delivery performance play an important role in the management of supply chains. A review of supply chain delivery models that use Six Sigma methodologies indicate that the models are limited to only make-to-order supply chains where improvement in delivery performance occurs at a fixed (static) point in time. In this chapter, the authors present a generalized delivery performance model that overcomes these limitations. The model presented here can be used to measure delivery performance in both make-to-order and make-to-stock supply chains and supports improvement in delivery performance over a planned time horizon with definable milestones for attaining targeted levels of improvement. Numerical illustrations of the model are presented.

scholarly journals Information Sharing in a Closed-Loop Supply Chain with Asymmetric Demand Forecasts

2017 ◽  
Vol 2017 ◽  
pp. 1-12 ◽  
Author(s):  
Pan Zhang ◽  
Zhongkai Xiong
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Closed Loop ◽  
Collection Efficiency ◽  
Demand Forecast ◽  
Closed Loop Supply Chain ◽  
Make To Order ◽  
Make To Stock ◽  
The Impact ◽  
Demand Forecasts

This paper studies the problem of sharing demand forecast information in a closed-loop supply chain with the manufacturer collecting and remanufacturing. We investigate two scenarios: the “make-to-order” scenario, in which the manufacturer schedules production based on the realized demand, and the “make-to-stock” scenario, in which the manufacturer schedules production before the demand is known. For each scenario, we find that it is possible for the retailer to share his forecast without incentives when the collection efficiency of the manufacturer is high. When the efficiency is moderate, information sharing can be realized by a bargaining mechanism, and when the efficiency is low, non-information sharing is a unique equilibrium. Moreover, the possibility of information sharing in the make-to-stock scenario is higher than that in the make-to-order scenario. In addition, we analyze the impact of demand forecasts’ characteristics on the value of information sharing in both scenarios.

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