Towards supply chain coordination and productivity in a three echelon supply chain

Abstract

Purpose– The purpose of this paper is to address the issue of supply management coordination among a prominent contact lens company (customer), its carton supplier (first tier), and paperboard supplier (second tier). Adopting concepts within the theory of swift and even flow, the authors integrate the physical (material) and information flow among these supply partners to ensure higher productivity through timely production and distribution of the cartons, which reduced the lead-times and inventory levels at the three companies in this supply chain.Design/methodology/approach– This study uses a longitudinal case study (action research (AR)), which combines qualitative and quantitative analyses. Observations over time, documents such as contracts, joint agreements, meeting agendas and minutes, personal conversations, and in-depth interviews were mainly used, with quantitative measurement of operational performance.Findings– The complete solution to eliminate waste and improve the existing system is provided, as well as the ordering process solution in the form of service level models. The results of the study proved supply management coordination to be a pioneering approach in reducing inventory, reducing the safety stock at the buyer’s facility, improving the forecasts, lowering the product delivery lead-times, and establishing an information system throughout the three tiers of the supply chain.Originality/value– The paper draws upon real-life data from a three echelon supply chain in the manufacturing industry. Combining this triadic focus with action-based research makes it a unique opportunity to reveal insights into the issue of coordination among supply chain members and consequent performance outcomes.