Framework and Development of a Collaborative Supply Chain Model (original) (raw)
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A collaborating inventory model in a supply chain
Economic Modelling, 2012
The present article investigates an economic order quantity/ economic production quantity model in threelayer (manufacturer, vendor and retailer) supply chain management. In each stage, the products may undergo non-conforming quality items which have less value in the market. This model maximizes a collaborating expected profit function while production rate, order quantity, number of shipments with equal sizes are decision variables and unit production cost is a function of production rate. Numerical example is illustrated to test the model.
The issue of how to integrate external collaboration with internal processes is identified as a gap in the body of supply chain knowledge. The question is how to link external sources of information into the vendor production and inventory control process when the same level of detailed information cannot be obtained from all of its supply chain partners. The objective of this paper is to present a simple framework to guide the research on the barriers to external and internal integration in different collaborative supply chain configurations. Five different supply chain configurations will be discussed and compared in the paper. These configurations are distinguished by the differences in the control of material flows; information flows; and the decision taking processes. Each configuration is discussed in terms of industrial practice to highlight from a supplier perspective the opportunities and challenges to benefit in production and inventory control.
European Management Journal, 2005
Collaboration in the supply chain has been widely discussed, and a wealth of concepts is at hand. Large-scale projects like the Efficient Consumer Response (ECR) in the fast moving consumer goods sector, for example, or Vendor Managed Inventory (VMI) and Collaborative Planning, Forecasting and Replenishment (CPFR) initiatives more generally provide a rich continuum of strategies for collaborating amongst supply chain partners. While individual successful implementations of the latter have already been reported, there has not yet been the widespread adoption that was originally hoped for. In our research, we looked at implementations across several industries and countries, and our findings show that the slow progress to date may be due to a lack of common understanding of these concepts, and the difficulty of integrating external collaboration with internal production and inventory control. In this paper, we set out to classify collaboration initiatives using a conceptual water-tank analogy, and discuss their dynamic behavior and key characteristics. We draw upon case studies from both successful and less successful implementations to illustrate what companies need to do to fully benefit from their collaborative efforts, given their particular circumstances. We conclude that the effectiveness of supply chain collaboration relies upon two factors: the level to which it integrates internal and external operations, and the level to which the efforts are aligned to the supply chain settings in terms of the geographical dispersion, the demand pattern, and the product characteristics.
Supply chain management: a framework to characterize the collaborative strategies
International Journal of …, 2008
The current intense competition forces enterprises to pay attention to supply chain collaboration with their upstream and downstream partners. Different collaborative strategies such as Quick Response (QR), Efficient Consumer Response (ECR), Vendor Managed Inventory (VMI) or Collaborative Planning, Forecasting and Replenishment (CPFR) have been already proposed. The key to ensuring that the supply chain partners are progressing on the right track of creating the best-in-class practice lays on their ability to choose the appropriate strategy. The current paper proposes a framework, based on analysis grids and graphical representations, which help better characterizing these strategies. The analysis grids use several characterization criteria to express the collaboration nature and its extent. For a better understanding, this framework is then applied to the CPFR strategy.
Supply-side collaboration and its value in supply chains
European Journal of Operational Research, 2004
Collaboration has been recognized as a significant process that holds the value creation opportunity in supply chain management. Evaluating the value of collaboration is thus necessary for developing the effective collaboration mechanisms. This paper presents the evaluation approach specifically focusing on the supply-side collaboration on inventory decisions between a supplier and a distributor in a two-echelon supply chain. Two scenarios are compared. In the traditional scenario, the distributor is unaware of the supplierÕs inventory decisions and merely makes its own inventory decisions according to the available information. In the second scenario with supply-side collaboration, the distributor considers the supplierÕs inventory policy ðr; QÞ and the planned service level as provided by the supplier. The numerical experiments show that the supply-side collaboration has the ability to improve the supply chain performance in terms of better stabilizing effect and service level.
Coordinating decisions by supply chain partners in a vendor-managed inventory relationship
Journal of Manufacturing Systems, 2010
We look into the linked decision making in the vendor-managed inventory (VMI) relationship. It is a supply chain management model, where the retailer decides the retail price while the vendor determines its capacity commitment. In this model, the retailer and the vendor should coordinate their decisions in order to maximize their individual profit or the total profit combining the two participants together. The vendor has to take into account the demand pattern throughout the product life cycle (PLC) when it decides its capacity commitment, which will affect its inventory management cost during the PLC, while the retailer should change the retail price over the PLC so as to maximize the revenues and minimize the inventory cost at the same time. Employing a system dynamics simulation approach based on differential game theory, which also takes into account the product characteristics such as the demand's innovation and imitation effects, we analyze and confirm the dynamic coordination of key decision variables by the supply chain partners in the VMI relationship.
Business Process Management Journal, 2007
Purpose -The aim of this paper is to provide an overview of contemporary supply-chain management systems. Design/methodology/approach -The paper highlights the examples of state-of-the-art practice in supply-chain management, and speculates about where this movement is headed. Some of the collaborative supply chain management products generating the most interest will also be examined. Findings -Collaborative planning, forecasting and replenishment (CPFR) is the most recent prolific management initiative that provides supply chain collaboration and visibility. By following CPFR, companies can dramatically improve supply chain effectiveness with demand planning, synchronized production scheduling, logistic planning, and new product design. CPFR will force suppliers to innovate, building on strong one-to-one relationships that will drive smarter ways of doing things. Most companies and industries can benefit from CPFR. However, companies that experience variation in demand, buy or sell a product on a periodic basis, and those that deal in highly differentiated or branded products will benefit the most. Practical implications -Practitioners can gain first-hand knowledge of the CPFR model, technology and factors influencing adoption. Practitioners can also find examples of state-of-the-art practice in supply-chain management, and study some of the collaborative supply chain management products generating the most interest. Originality/value -The paper is valuable to practitioners interested in implementing CPFR in their organizations.
Guidelines for collaborative supply chain system design and operation
Information Systems …, 2001
Over the past decade, firms have adopted supply chain management as a critical element of their corporate strategies. Despite these efforts, it is our observation that many firms do not realize the anticipated benefits of constructing collaborative operating relationships with supply chain partners. Our purpose in this paper is to establish a set of guiding principles for the effective design and execution of supply chain systems. These principles suggest why, what, and how collaborative relationships should be constructed.