A quantitative analysis of relationships between product types and supply chain strategies

Abstract

Supply chain management has been given so much attention that various technologies and concepts have been applied to improving and optimising supply chain performance. However, failures in supply chain management are still not uncommon in today's industries. One important reason is the failure to sort different products into categories related to appropriate supply chain management strategies. Qualitative analyses on the characteristics of products and their impacts on supply chain performance have been reported in the literature. Whereas quantitative analysis of matching products to supply chain strategies has so far not been sufficient to assist decision-making significantly in supply chain management. This paper is focused on a quantitative analysis to match types of products to supply chains based on a mathematical model. Using a multiple objective optimisation model, a sensitivity analysis has been conducted to detect variance of performance in relation to three typical supply chain strategies (manufacturing to order, manufacturing from stocks and manufacturing to stocks), and based on different product characteristics (value-adding and demand uncertainty). The model is particularly designed for evaluating performance of supply chain strategies with the product characteristics mentioned above. The analytic results disclosed some quantitative relationships between the performance of the supply chain strategies and product attributes, which could provide assistance to decision making on operational and strategic supply chain management.