Customer Order Fulfillment Research Articles

Customer order decoupling point issues in a project environment

Nowadays, one of the most dynamically developing knowledge areas is the one of Project Management (PM) – both in the fields of Business and Public Administration. This is truth, partially because of constantly increasing customization of products and services, and the way to successfully cope with fulfilling customer orders, no matter if they are individual, industrial, or government ones. The key is the usage of Project Management tools and methods. On the other hand, the concept of Customer Order Decoupling Point (CODP) is a popular approach to increasing the diversity of end items, while taking advantage of standardization due to increased repetitiveness of operations devoted to producing components and/or subassemblies. It is widely used in Operations Management, but it could also be applied on a “secondary” level during the process of project implementation, and thus an increased customer customization could be achieved. In the present paper, the usage of methods and techniques such as Design Structure Matrix (DSM), Analytical Hierarchy Process (AHP) and others is discussed in a model developing, which helps in defining places throughout the project implementation process the interaction with the customer is to be realized, while avoiding undesirable violations in the project workflow.

An Application of ERM to Risk Management in the Logistics: A Case

Logistics in a supply chain network has become an important operational strategy in a competitive market. A number of internal and external risks involved in the logistics operations in a company tend to create problems in fulfilling customer orders. This research presents how ERM (enterprise risk management) can be used to identify, assess, and control logistics risks. An electronic company's logistics activities were used as an industry case to demonstrate a way to identify and assess risks surrounding global logistics function. This paper has further presented action plans to mitigate the impact of the risks that occur.

Medium-term multi-plant capacity planning problems considering auxiliary tools for the semiconductor foundry

The foundry is an industry whose demand varies rapidly and whose manufacturing process is quite complicated. This paper explores issues on mid-term capacity planning in the foundry. First, issues on capacity planning of the foundry are categorized. Second, focusing on multi-site planning, an increment strategy for the number of auxiliary tools—“photo mask”—is proposed to increase the flexibility of production. The related decisions include how to allocate appropriately the forecast demands of products among multiple sites and how to decide on the production quantities of products in each site after receiving customer-confirmed orders. By constructing the mathematical programming model of capacity planning, the rates of capacity utilization and customer order fulfillment are found to be effectively enhanced by adding new masks to increase production flexibility. Furthermore, from the sensitivity analysis, the importance of customers is shown to influence significantly the amount of reserved capacity of customers. Increasing the number of certified factories is also an indirect way to increase capacity. For long life cycle products, the verification of products in multiple factories in order to increase capacity utilization rate effectively is suggested.

Applying Agent-Based System and Negotiation Mechanism in Improvement of Inventory Management and Customer Order Fulfilment in Multi Echelon Supply Chain

A supply chain (SC) is a coordinated system involved in moving products or services from supplier to customer. With growing focus on supply chain management, it is realized that inventories across the supply chain should be efficiently managed through greater cooperation and better coordination. Multi-agent systems (MAS) offer a new dimension for cooperation and coordination. MAS consist of a collection of automated agents who can perform a specific task intelligently without any human supervision and communicate with each other cooperatively. In this research, a multi-agent system has been developed to simulate a multi echelon SC. These agents are coordinated to control inventories and minimize the total cost of SC by sharing information, forecasting knowledge and using negotiation mechanism in special situation. The result showed that in comparison to a traditional supply chain network, this system decreases the total cost and bullwhip effect.

A framework for semiconductor industry supply chain planning: perspectives of intelligent enterprise

Supply chain planning in the semiconductor industry integrates the complex network of wafer foundries, probe and assembly manufacturing sites together to enhance operational effectiveness. So, the supply chain planning system should aggregate data from multiple sources to provide visibility and interoperable collaboration to an extended network of stakeholders. While exploring buyer-supplier collaborative relationships and new procurement opportunities, the present work proposes the perspectives of business planning, supply management, demand management, multi-echelon inventory optimization, customer order fulfilment, and transportation and logistics management. The novelty of this work lies in the simultaneous consideration of six interrelated perspectives of supply chain planning along with the perspective of collaboration among supply chain enterprises on the basis of information sharing. The proposed framework captures the technological and business basis for integration of various elements for supply chain planning for cost-efficient intelligent enterprises.

A decision support system to facilitate warehouse order fulfillment in cross‐border supply chain

PurposeThe purpose of this paper is to provide a decision support system (DSS) to enhance the performance of cross‐border supply chain, the goal of which is to improve order planning and fulfill customer orders within the warehouse.Design/methodology/approachAn intelligent DSS, namely order picking planning system (OPPS) with the adoption of case‐based reasoning, is proposed to support managers in making appropriate order fulfilling decisions when an order involves cross‐border activities. Similar cases in the past are retrieved and adapted in reference to the new order. A case study is then conducted to illustrate the feasibility and effectiveness of the system.FindingsRecommendations are given to replace the objective decision‐making process in cross‐border supply chain with the help of the DSS. The warehouse order planning time has been reduced and useful information from past order records can be applied to solve new problems.Originality/valueWith the increasing demand for material sourcing across different places, cross‐border supply chain has raised the concern for manufacturers to seek lower material and rental costs. The focus on warehouse operations can increase efficiency in order delivery by considering cross‐border requirements.

Constraint priority scheduling using an agent‐based approach

PurposeScheduling needs to be concise and well‐determined but able to respond to the ever‐changing and uncertain market or environment against the constraints of production capacity, resources, time frame, etc. The purpose of this paper is to model and solve a scheduling problem with another domain perspective that adopts the concept of agent, and an agent‐based scheduling environment is proposed for solving the scheduling problem, in which three agents are developed, i.e. a sales agent, a scheduling agent, and a production agent.Design/methodology/approachThe modeling and development of the proposed agent‐based scheduling environment and its agents under constraints are discussed. Constraint priority scheduling concepts are applied to the environment and its agents, and the feature of responding to customer change orders is included in the model. The proposed agent‐based scheduling environment with three agents is applied to a lamp‐manufacturing company in China as a case study, and the integrated agent‐based approach is also illustrated in the case study.FindingsThroughout the autonomous communication between agents in the proposed model, a constraint‐prioritized schedule is generated to fulfill customer orders and customer change orders, as well as to achieve a better scheduling performance result. From the simulation results and analysis in the case study, satisfactory results show that the proposed model can generate a constraint‐prioritized schedule for the studied company that can completely fulfill customer orders, adjust and fulfill customer change orders, and achieve a better scheduling result.Originality/valueIn this paper, the scheduling problem is modeled and solved by using the domain perspective of agent‐based approach. By using an agent‐based approach, the agents can be implemented to represent manufacturing resources or aggregations of resources. Under the proposed modeling approach, the collaboration across the entire scheduling activities can be enhanced, and the efficiency and effectiveness in the scheduling activities can also be increased.

Integrative purchasing and inventory control at sawnwood retailer – case study

Purchasing order methods and inventory control are vital elements in fulfilling customer orders and building internal performance; this is particularly the case in retailing operations. In this manuscript, we develop different scenarios for various order methods for a wood retailer, where the performance of the different methods is evaluated through simulation, whereupon the fit between environments and methods is compared. Our results indicate that only simple environments follow analytical cost and service level calculations, while increasing complexity increases the synchronisation need between forecasts and reordering methods. In our research we also compare different ordering methods, and find that while the reorder point method is the most robust solution from the retailer’s perspective, it could lead to distortion within entire wood supply chain.

An Algorithm for Customer Order Fulfillment in a Make-to-Stock Manufacturing System

<p>In the competitive environment, many manufacturers are increasingly focusing on designing the systems that help them to manage variable demand and supply situations. Dynamic allocation of demands is very important in case of customer order allocations. Order promising and allocation can be based on the simple sequence that enables a manufacturing company to receive orders unless there are some other priority orders. Manufacturing company can also manage allocations of supply to key customers and channels, thereby ensuring that they can meet contractual agreements and service levels in the priority that yields better profit. This paper will focus on a Maketo- Stock order fulfillment system facing random demand with random orders from different classes of customers. Available-to-promise (ATP) calculating from master production schedule (MPS) exhibits availability of finished goods that can be used to support customer order allocation. This order allocation system is adapted in MTS (make-to-stock) production model and all orders are treated according to maximization of customer service policy. It allows incoming purchase orders as well as existing inventory on hand to be selected and allocated to customer sale orders and back orders. The system then automatically allocates the available stock to the selected sales orders. We developed an integrated system for allocation of inventory in anticipation of customer service of high priority customers and for order promising in real-time. Our research exhibits three distinct features:<br />(1) We explicitly classified customers in groups based on target customer service level;<br />(2) We defined higher level of customer selection directly defined according to company strategy to develop small and medium customers;<br />(3) We considered backorders that manufacturing company has to fulfill in order to maximize overall customer service for certain customers.</p>

Ergonomics improvement in a harsh environment using an audio feedback system

The study aimed to improve ergonomics, i.e. to increase productivity, quality, and work satisfaction of operators working in a harsh environment (i.e. freezer storage facilities) through the use of an audio feedback system. The operators’ job was to select ice-cream products from a distribution warehouse to fulfill customer orders. A field experiment was carried out to compare the conventional method (the use of paper pick list) and the new method (the use of an audio pick list system). The audio system included audio feedback which enabled the operator to verify the correct storage location before selecting product from its location. Results showed that the use of the audio system was more effective as productivity of picking task increased by 43%, quality improved through reduction of more than two-thirds picking errors, and work satisfaction increased as hand motions used in the paper pick list system with gloved hands were eliminated. The impact of this study suggests that harsh environments with similar work flows can be aided with an audio feedback system, weighing the costs and benefits of the system from the perspective of ergonomics, quality, and productivity.

Integrated Production Planning, Scheduling and Shop Floor Tracking System for High-Mix Low-Volume Manufacturing - A Consortium Approach

In Singapore, the Precision Engineering (PE) industry is the backbone of the manufacturing sector; it supports a large number of manufacturing industries such as Electronics, Chemicals, Pharmaceuticals, Biotechnology, Aerospace, Oil & Gas and Automotive. From our recent visits to companies in the PE industry, it was observed that given such a dynamic and stochastic manufacturing environment, most of these PE companies are still predominantly using Microsoft Excel as their planning & scheduling tool, shop floor tracking is normally performed manually through paper traveler, and production status is only updated at the end of the day or as and when demanded by customer. The common problems highlighted include inability to provide realistic delivery commitment, machine and manpower resources are not optimally utilized to fulfill customer orders, unacceptable order cycle time and lack of production visibility. Therefore, there is an increasing demand and impending need for a computerized integrated production planning/scheduling and shop floor tracking system. In this paper, a consortium approach for the development of an integrated production planning/scheduling and shop floor tracking system for the High-Mix Low-Volume (HMLV) PE environment is presented. An illustration through the implementation of the proposed system in a PE company is highlighted. With this system, companies would be able to improve their delivery performance through effective handling of ad-hoc customer orders and the ability to react to deviations or unplanned events in production.

Supporting framework to improve Engineer-To-Order product lead-times

Company's competitive advantage can be achieved through its agile capability to satisfy customers’ needs by developing and manufacturing efficiently customized products. So performing ETO (Engineer-To-Order) product with lower lead-times is a real challenge that requires new approaches. This paper investigates a new framework to help decision-makers in adopting the right management systems to organize customer order fulfillment from request to delivery. The European Project “ESTIMATE”, Eurostars Program, is lead to sustain successful ETO processes. The ESTIMATE framework aims at providing guidelines to perform successful ETO product. Main drivers for ETO product fulfillment are identified regarding several dimensions and a strategy of decreasing lead-times is explored and discussed in detail. This strategy is called “shifting strategy“.

Engineering models for fuel cell production management

Membrane electrode assemblies are the key components of proton exchange membrane fuel cells. The future demand for this product could grow exponentially if key technical challenges are successfully addressed including low cost mass production and reliable customer order fulfilment. This study reports on a multidisciplinary team effort to formulate and apply engineering models for managing the fabrication and shipping of this product at a global supplier. With the goal of assessing the cost effectiveness of scheduling a new, semi-automated production flow line system to meet an order of magnitude increase in demand, a specialised schedule building logic is proposed to support what-if analyses to inform a major technology investment decision for this supplier. The results of the study provide a decision support tool to generate cost estimates for meeting increased market demand using the new production technology.

A queueing model of delayed product differentiation

We consider a production system in which a supplier produces semi-finished items on a make-to-stock basis for a manufacturer that will customize the items on a make-to-order basis. The proportion of total processing time undertaken by the supplier determines how suitable the semi-finished items will be to meet customer demand. The manufacturer wishes to determine the optimal point of differentiation (the proportion of processing completed by the supplier) and its optimal semi-finished goods buffer size. We use matrix geometric methods to evaluate various performance measures for this system, and then, with enumeration techniques, obtain optimal solutions. We find that delayed product differentiation is attractive when the manufacturer can balance the costs of customer order fulfillment delay with the costs associated with unsuitable items.

Supply chain configuration with co-ordinated product, process and logistics decisions: an approach based on Petri nets

Supply chain configuration lends itself to be an effective means to deal with product differentiation and customisation throughout a supply chain network. It essentially entails the instantiation of a generic supply chain network to specific supply chains in accordance with diverse customer requirements. The lynchpin of supply chain configuration lies in the co-ordination of product, process and logistics decisions in relation to a variety of customer orders. This paper aims to provide modelling support to supply chain configuration. The ultimate goal is to assist companies to form appropriate supply chains with the most added-value to customer order fulfillment. A formalism based on coloured Petri nets is developed for configuring supply chains. System models are built upon the coloured Petri nets and used to incorporate product and process concerns into the supply chain configuration process. An industrial case study is reported to illustrate the potential of the coloured Petri net modelling formalism and the built system models for supply chain configuration.

Integrated Vehicle Configuration System—Connecting the domains of mass customization

Configuration design for mass customized vehicles necessitates the coordination of customer requirements, product characteristics, production processes, and logistics networks, in order to achieve rapid response to customer orders. Existing product configurators are mainly used as sales tools, and fail to account for the requirements of the entire customer order fulfillment process. In this regard, this paper proposes an Integrated Vehicle Configuration System (IVCS) to facilitate customer order processing based on information from multiple domains in a mass customization environment. An IVCS business model is proposed to incorporate the decision factors for configuration design related to different planning stages. The business model is supported by a comprehensive ontology framework, which enhances communications between different stakeholders involved in the order fulfillment process. The configuration approach is based on combinations of selective and generative rules and can be integrated with existing ERP systems. It also provides mechanisms to handle configuration rules that allow users to convert soft preferences into product specifications, bill-of-materials, and, furthermore, into logistics configurations. An example of a computerized configuration system showcases the process from customer engineering to design and production.

Optimal decision-making on product allocation for crossdocking and warehousing operations

Many companies search for efficient distribution alternatives, as the lead times for customer order fulfilment need to be shortened while the costs and risks of warehousing need to be minimised. Crossdocking is an operation strategy that moves items through consolidation centres or crossdocks without putting them into storage. A distribution centre normally is a combination of crossdocking and warehousing facilities. The operator of the centre needs to be clear on what products should go through by crossdocking or warehousing. Industry needs guidelines and models to support decision-making and produce alternative plan for allocating products to crossdocking and warehousing operations. This paper presents a systematic approach and optimisation model for producing product allocation plan in FMCG supply chains. A case study based on the proposed model and a prototyping system is introduced. Testing analysis is also given in the paper.

LOGISTICS IN ESTONIAN BUSINESS COMPANIES

The article describes logistics survey in Estonia carried out in 2007 as a part of the LogOnBaltic project. The level of logistics in Estonian manufacturing, trading and logistics companies is explored through logistics costs, performance indicators, outsourcing, ICT use and logistics self‐estimation of the companies responded. Responses from 186 Estonian companies were gathered through a web‐based survey (38% of manufacturing, 38% of trading and 24% of logistics sector). Logistics costs as the percentage of turnover make in average 13.8% in manufacturing and 13.3% in trading. Transportation and inventory carrying cost form around 70% of overall logistics costs. Considering the logistics indicators surveyed, Estonian companies show up with relatively low perfect order fulfillment rates, short customer order fulfillment cycles and effective management of cash flows. The most widely outsourced logistics function is international transportation followed by domestic transportation, freight forwarding and reverse logistics. By 2010, the outsourcing of IT systems in logistics followed by inventory management, warehousing and product customization is expected to increase more substantially. The awareness of logistics importance is still low among Estonian companies. Only 27–44% of those agree that logistics has a considerable impact on profitability, competitive advantage, top management or customer service level.

Operational planning framework for multisite production and distribution networks

The operational planning of a multisite production and distribution network, which entails making operational-level decisions for efficient production facility utilitization and customer-order fulfillment over a time horizon of several months, is of great importance but has received considerably less attention compared to operational planning approaches for a single production site. The inherent complexities of simultaneously optimizing the allocation of production tasks at each facility, as well as the interplay between several production and distribution centers make operational planning of a multisite production and distribution network challenging especially when addressing large-scale, industrial applications. The proposed multisite planning with production disaggregation model (Multisite-PPDM) has been formulated in order to address industrially relevant supply chains and determine both the production and shipment profiles for the supply chain of interest.

A generalized approach to demand buffering and production levelling for JIT make‐to‐stock applications

AbstractHeijunka is a Just‐In‐Time scheduling technique that strives to level variety and/or volume over a fixed period in order to maintain low inventories and to avoid excessive batching of product types and/or volume fluctuations. Businesses that use heijunka scheduling and immediately fulfill customer orders upon receipt require a finished goods inventory to service that demand. This inventory must be appropriately sized to adequately balance the customers' variable demand against the level production rate from manufacturing. However, even producing for long periods of time at the true mean demand rate will not guarantee low inventories due to the random walk nature by which inventories are unavoidably generated. The production process must be willing and able to flex their production to eliminate this random walk. This paper develops the simple production control law that will allow manufacturing to reliably operate their JIT heijunka process. It determines the trade offs that must be made between: the time between fixed production rate changes (N), the finished goods inventory needed to provide a user specified level of backorders, and the flex needed in production capacity to guarantee that the process will continue to function effectively.