Integrating Machine Learning, Radio Frequency Identification, and Consignment Policy for Reducing Unreliability in Smart Supply Chain Management

Adopting smart technologies for supply chain management leads to higher profits. The manufacturer and retailer are two supply chain players, where the retailer is unreliable and may not send accurate demand information to the manufacturer. As an advanced smart technology, Radio Frequency Identification (RFID) is implemented to track and trace each product’s movement on a real-time basis in the inventory. It takes this supply chain to a smart supply chain management. This research proposes a Machine Learning (ML) approach for on-demand forecasting under smart supply chain management. Using Long-Short-Term Memory (LSTM), the demand is forecasted to obtain the exact demand information to reduce the overstock or understock situation. A measurement for the environmental effect is also incorporated with the model. A consignment policy is applied where the manufacturer controls the inventory, and the retailer gets a fixed fee along with a commission for selling each product. The manufacturer installs RFID technology at the retailer’s place. Two mathematical models are solved using a classical optimization technique. The results from those two models show that the ML-RFID model gives a higher profit than the existing traditional system.

New Strategy and Thinking in Global Business System

Because of the necessity of adopting the product and service to the rapidly changing needs of current customers, specialization in each supply chain has become more important. The companies from the same supply chain benefited from the collaboration in order to gain competitive advantage. This chapter first of all explains the current changes in business environment and define the new global business system and summarizes the common strategies to survive in this environment from related literature. It proposes a model of a smart supply chain management including agile organizations and mutual goal achievement of the firms and the members of the same supply chain at the end of the chapter. The aim of this chapter is providing a road map to todays and future organizations to be more competitive. It is believed that the chapter will be helpful for both professionals and academicians who have interest in strategy building process and creating competitive advantage.