An intelligent approach for optimizing supply chain operations

Abstract

Companies are striving to gain an appropriate percentage of the market share in today's competitive industrial environment, as they understand that the key of success in the competitive market is to generate substantial profit by operating the company in the lowest possible costs. Logistic costs is one of the largest part of the total costs which is difficult to identify it, and many organizations are surprised by their scale and start to look for savings from logistic costs (1). Deloitte and Touche (1999) indicated that 98 percent of respondents agreed that logistics and supply chain management is either critical or very important to their company. Moreover, reducing operating costs has become the initial incentive for companies to examine their logistics and supply chain management strategies (2). More and more companies are forming close relationships with their suppliers through strategic alliance and integration to ensure best quality of the sources and lower costs. Strategic alliance and integration with suppliers are considered as a win-win situation for the joint parties and can bring mutual benefits and open relationships wherein the needs of both parties are satisfied (3). This paper aims to discuss the framework of supply chain management, embracing the principle of fuzzy logic to analyze and monitor the performance of suppliers based on the criteria of product quality and delivery time. By indicating the possible issues with the relevant suppliers prior to final confirmation, the proposed system is used to recommend the purchasing quantity to be placed in the next purchase order.