Today's Supply Research Articles

An analysis of risks and vulnerabilities in supply networks

Today's supply networks have become more and more efficient but also complex and prone to strong disturbances that may generate blocking and starving effects. This study provides a risk analysis of supply networks based on a stochastic model of product flows subject to strong disturbances and threshold constraints. The main objective is to construct vulnerability indices from simulation of the multistage system, both in nominal conditions when an ARIMA model describes the system dynamics and in disturbed running conditions when one or several state variables are subject to saturation effects.

Reverse logistics: past research, current management issues, and future directions

Purpose – The purpose of this paper is to identify the key issues faced by today's supply chain professionals when managing reverse logistics (RL) processes and compare these issues with the topics examined in extant research. By making such a comparison, the paper identifies areas of practical relevance that are being adequately addressed in the literature, as well as areas that may need further attention. Design/methodology/approach – The paper employed a Delphi method in order to uncover the most salient RL issues faced in industry, as viewed by practitioners. The paper then completed a systematic analysis of the RL literature in order to examine the degree to which topics addressed in the extant literature correspond with the framework proposed by Carter and Ellram (1998). Finally, the paper compared and contrasted the findings of the content analysis and Delphi study, which highlights areas for future investigation that may help to better align research with practice. Findings – In the Delphi study, the paper uncovered and ranked seven key issues for RL managers. These are: customer support, top-management support, communication, costs, formalization, timing of operations, and environmental issues. When compared to Carter and Ellram's (1998) framework, three of the seven factors coincide with factors described in the framework and two factors indirectly relate to the framework. The two factors not specifically represented are costs and formalization. Practical implications – The findings provide practitioners with an understanding of what factors are most important to consider when managing RL programs. The discussion of the comparison between the Delphi results and extant literature provides guidance as to how to address the RL issues uncovered in this study. Originality/value – This research effort suggests directions for future research that will better align academic topics with current managerial issues. Although the paper offers many suggestions for future research, the paper proposes that investigating ways to increase formalization of RL programs and establish RL as a profit center within organizations may be the areas in greatest need for additional scholarly research.

A Vendor-Buyers Integrated Inventory Model Involving Quality Improvement Investment in a Supply Chain

Today's supply chain environment requires a new spirit of cooperation between the buyer and the vendor. So the characteristics of current manufacturing systems are consistent high quality, small lot sizes, frequent delivery, and close supplier ties. Just-in-time (JIT) production is an integrated set of activities to achieve those objects by adopting continuous quality improvement and developing a long-term partnership. This paper presents the optimum joint economic lot size in a case where multiple buyers are demanding one type of item from a single vendor by summing the ordering/setup cost, holding cost and quality improvement investment. This model is useful particularly for integrated inventory systems where the vendor and the buyer form a strategic alliance for profit sharing.

Critical supply network protection against intentional attacks: A game-theoretical model

A crucial issue in today's critical supply chains is how to protect facilities against intentional attacks, since it has become unacceptable to ignore the high impact of low probability disruptions caused by these attacks. This article develops a game-theoretical model to deal with the protection of facilities, in the context of the uncapacitated fixed-charge location problem. Given a set of investment alternatives for protecting the facilities against identified threats, the objective is to select the optimal defence strategy. The attacker is considered as a player who tries to maximise the expected damage while weighing against the attacks expenditures. The conflict on facilities vulnerability is modelled using the concept of contest. The vulnerability of a facility is defined by its destruction probability. Contest success functions determine the vulnerability of each facility dependent on the relative investments of the defender and the attacker on each facility, and on the characteristics of the contest. A method is developed to evaluate the utilities of the players (i.e., the defender and the attacker). This method evaluates many expected costs, including the cost needed to restore disabled facilities, the backorder cost, and the cost incurred because of the increase in transportation costs after attacks. In fact, when one or several facilities are unavailable, transportation costs will increase since reassigned customers may receive shipments from facilities which are farther away. The model considers a non-cooperative two-period game between the players, and an algorithm is presented to determine the equilibrium solution and the optimal defence strategy. An illustrative example is presented. The approach is compared to other suggested strategies, and some managerial insights are provided in the context of facility location.

How do Information Technology and Integrative Planning drive performance in today's supply chains?

Prior studies suggest that integrating information technology and planning plays an important role in operational performance. But how do Information Technology and Integrative Planning (ITIP) drive performance in today's supply chains? How do these capabilities interact with each other? In order to fill this research gap, this study applies Transaction Cost Theory (TCT) and Resource-Based View (RBV) to investigate integration resources within the supply chain. The paper demonstrates with a sample of 124 supply chain experts and structural equation modelling that internal communication and connectivity do not have a direct impact on operational performance. However, these resources are antecedents of performance-related integration. In contrast, inter-company integration in ITIP are resources with significant influence on operational performance. These findings encourage supply chain managers to focus attention on antecedents and performance drivers in order to realise the advantages of integrated information technology and planning in the supply chain.

Decision support system for AS/RS investments: real benefits out of Monte Carlo simulation

Warehousing plays an important role in the efficiency of today's international supply chains. Optimal configuration of warehouse activities depends on several design criteria. Basic alterative system designs are based either on manual labour or automated systems. While manual systems typically require smaller investments, automated systems in turn enable increased efficiency in space utilisation, advanced flexibility, as well as reduction in spoilage and administration cost. In this research, we combine static spreadsheet modelling with Monte Carlo simulation to estimate the payback time of two suggested automatic storage and retrieval system (AS/RS) investments as well as for identifying the main factors affecting their economic feasibility. By offering a rapid tool for evaluating the potential of an AS/RS, detailed time consuming analyses need to be performed only for the most potential configurations.

In This Issue

In This Issue

Antecedents and Evolution of the Green Supply Chain

Supply chains have been developing over time since the inception of commercial trade and barter. The purpose of this paper is to describe the emergence of the Green Supply Chain, the newest entry in supply chain evolution. As a foundation for this, historical perspectives of manufacturing chronology, along with supply chain modifications resulting from changing market conditions are discussed. Managerial implications are offered reflecting pathways towards sustainability.As production power shifted from manual operation to steam, technology became the main driver for supply chain development leading to a variety of types seen in industry today. Today's supply chain types emerged due to increasing market complexity and competitive pressure. More recently, an additional driver occurred catalyzing the Green Supply Chain - the Environmental Movement. This chain is positioned as the next step in today's supply chain evolution, balancing environmental, economic, and societal needs with customer growth.

A comparison of supply chain vulnerability indices for different categories of firms

Given the high vulnerability of today's supply chains to disruptions, measuring and managing supply chain vulnerability has become critical. In the attempt to support practice in reducing supply chain vulnerability, we (1) discuss and define the concept of supply chain vulnerability and (2) measure and compare supply chain vulnerability for various categories of firms. Normal Accident Theory and High Reliability Theory provide the theoretical foundations for the empirical study, and graph modelling is the method used to construct a measure for supply chain vulnerability. The empirical data largely confirm that there is a negative relationship between supply chain vulnerability and supply chain performance, a positive relationship between structural categories (firm size and production type) and supply chain vulnerability, and a positive relationship between supply chain vulnerability and managerial categories (logistics importance, supply chain risk planning, and supply chain risk management).

Toward creating competitive advantage with logistics information technology

PurposeSuccessfully implementing and exploiting the right information technologies is critical to maintaining competitiveness in today's supply chain. However, simply adopting off‐the‐shelf technologies may not necessarily induce this competitiveness unless the organization combines these technologies with additional complimentary resources. This study draws on the logistics innovation literature, resource‐advantage theory, and the resource‐based view of the firm with the purpose of investigating performance outcomes of logistics information technology (LIT) adoption and the proposed moderating effect of a complimentary resource. The paper posits that combining LIT with positive buyer‐supplier relationships may set the stage for organizations to achieve competitive advantage.Design/methodology/approachA meta‐analysis of 48 studies that report outcomes of EDI or RFID adoption was performed. Regression was used to investigate the moderating effect of the buyer‐supplier relationship on the relationship between LIT adoption and performance outcomes.FindingsThe findings suggest that adoption of LIT promotes enhanced levels of effectiveness, efficiency, and resiliency for the adopting firm and that the quality of the buyer‐supplier relationship moderates the degree of efficiency and resiliency realized via adoption.Research limitations/implicationsThe results of this study suggest that adoption of a logistics innovation by itself may not necessarily produce a sustained competitive advantage. Instead, when combined with complimentary firm resources, the innovation may yield a sustained competitive advantage for the adopting firm.Originality/valueLogistics innovation needs greater theoretical development in the literature. This research extends a foundational logistics innovation model by incorporating relevant theory to propose and test an additional dimension of the model.

The promise of RFID-based sensors in the perishables supply chain

Perishable goods present some of the biggest challenges for today's supply chain management due to the high number of product variations with different perishability characteristics, requirements to account for the flow of products, and large volumes of goods handled over long distances. The elimination of even a small percentage of spoilage can add up to a significant performance improvement for the business. The optimal management of the perishables sup ply chain depends on the level of granularity (and timeliness) of product visibility, which can be used to provide answers to questions such as "where is my product" and "what is the condition of my product." The foundation for such visibility is an effective and efficient information system enhanced with sensors and RFID technology. In this article, we provide a brief tutorial and applications survey of RFID-based environmental sensors in the perishables supply chain. We also report on the results and lessons learned of an exploratory study where we use RFID-based temperature sensors to examine the condition of perishable products in two long-distance product shipments.

Third-party logistics providers offering form postponement services: value propositions and organisational approaches

In today's global supply chains, third-party logistics providers (3PLs) can play an important role in implementing the principle of form postponement (FP). This proposes that activities creating product variety and the associated production mix decisions are deferred along a product family manufacturing and distribution process as long as possible. While both FP and third-party logistics have increasingly drawn the attention of the academic community over the last few years, less research has been carried out on FP supported by 3PLs. The present paper empirically investigates how 3PLs can deliver value to companies offering product variety by providing FP services, defined as the carrying out of variety-creating activities on behalf of these companies close to the target markets. Our findings indicate that, through an FP service, a 3PL can give its customers two different kinds of benefits: either improved performance in serving the customer's existing markets or entry into new geographical markets. Further, our results show that through the choice of the organisational solution for FP service provision, the 3PL can increase FP value by mitigating a number of disadvantages that the customer might incur in the case of in-house implementation of FP. Challenges that the 3PL needs to overcome to actually provide these potential benefits are also identified. The paper concludes by discussing the implications of our findings for both practice and research on FP.

Insights on natural gas purification: Simultaneous absorption of CO2 and H2S using membrane contactors

Natural gas plays a critical role in today's energy supply. However, before it can be utilized as a fuel for chemical processing or energy generation, it must undergo extensive treatment to remove all contaminants such as CO2 and H2S. This paper presents the simultaneous absorption of CO2 and H2S from natural gas using aqueous potassium carbonate solutions as the absorbent solvent while utilizing hollow fiber membrane contactors. The reaction mechanisms of CO2 and H2S absorption into aqueous carbonate solutions are considered complicated due to the several species involved in the reaction scheme that undergo reversible reactions. A comprehensive 2D mathematical model has been developed for the simultaneous absorption of CO2 and H2S while considering reversible and equilibrium reactions rates. The model results showed that lower concentrations of carbonate solutions resulted in higher absorption rates, while the presence of high bicarbonate concentrations in the solution was the main incentive for the enhanced reversible reactions and thus, lower absorption rates were achieved. A complete removal of CO2 and H2S in a gas mixture containing 5% CO2, 5% H2S, and 90% CH4 was possible by using two membrane modules in series while using fresh 1M carbonate solution in each module. The first module removes all H2S in the system and small amounts of CO2, while the second module removes the remaining CO2 coming out from the first module. This scheme is favorable than using only one membrane module, because the majority of bicarbonate ions that favors the reversible reaction, are generated from the consumption of H2S with carbonate solution. Therefore in the second module, CO2 can be consumed significantly due to the absence of bicarbonate ions.

OVERCOMING SPREADSHEET RISK IN SUPPLY CHAIN MODELING

Spreadsheet optimization modeling plays an important role in the management of today's sophisticated supply chains. However, despite the advantages of spreadsheets (or in some cases because of these advantages) there are significant risks associated with spreadsheet models. Spreadsheet risk is defined as the chance of adverse operational or financial consequences due to erroneous creation, maintenance, and/or use of spreadsheet models. Such errors arise because the intrinsic complexity of optimization models is beyond the expertise of many non‐technical managers. In this article we discuss procedures that we developed for managing the substantial risks associated with the use of spreadsheets for supply chain optimization. The issues we address go far beyond simple data entry mistakes, which are possible in virtually every aspect of business and can never be completely eliminated.

A strategic framework for integrating marketing and supply chain strategies

PurposeThe purpose of this paper is to review and structure the literature on the integration between marketing and supply chain management (SCM) and to contribute to the body of knowledge by developing a framework for integrating marketing and supply chain strategies.Design/methodology/approachThe paper draws its insights and conclusions from a review of the literature in both fields, marketing and SCM, followed by an interaction research approach which helped to refine and validate the theory‐derived framework from the perspective of practitioners.FindingsIn the existing body of literature on marketing and SCM integration, three perspectives can be differentiated: the interfunctional perspective, the process perspective and the perspective of integrated business concepts. The proposed framework builds on these perspectives and moves them onto a strategic level. Integrating marketing and supply chain strategies involves the management of four integration levels: corporate integration; strategic customer integration; strategic supplier integration and marketing and supply pipeline strategy integration.Practical implicationsThe proposed framework points managers at the managerial issues of marketing and supply chain strategy integration and illustrates the need for an interaction approach which challenges the traditional view of marketing in the demand creation and SCM in the demand fulfilment role.Originality/valueMarketing and SCM integration is a topic which has received considerable interest in both fields for the last 30 years. Despite the notion that a close integration can contribute to the company and even supply chain success, no contribution to date addresses the integration from a strategy perspective. This paper leverages existing knowledge and advances our understanding of the strategic integration issues companies are facing in today's supply chain network‐based competition.

Asymmetric Information and Enforcement in Supply Contract Design

This paper studies a supply contracting problem where a buyer sources a product from a supplier to satisfy uncertain market demand. With the increasing length and complexity of today's global supply chains, the buyer may face two issues when designing the supply contract: adverse selection (i.e., the supplier's cost structure is private information) and lack of enforcement (i.e., the supplier's capacity investment is not enforceable). We derive the buyer's optimal contracting strategies and analyze their properties. We find that although the buyer's optimal mechanism is generally complex, it may reduce to a two-part tariff under certain conditions (i.e., a single, linear contract could be optimal for the buyer). Even when the two-part tariff is suboptimal, it performs nearly as well as the optimal mechanism for a wide range of situations. These findings indicate that the value of achieving enforceability and the value of using complex menu are negligible in such a supply chain setting. Therefore, our research demonstrates that the two-part tariff is an attractive option for buyers whose goal is to ensure supply while facing both cost uncertainty and enforcement issues. It also provides a new explanation for the prevalence of such simple contracts in practice.

Trackview – Fleet Tracking Solution Using Global Positioning System

Real-time localization of moving assets gains increasing importance in today's transportation and supply chain systems. TrackView is a fleet tracking solution specialized in monitoring railway vehicles. The solution integrates GPS, GIS and GSM/GPRS communication technologies to offer an overview of the fleet of railway vehicles in real-time. This paper presents the structure and the functions of the system, insisting on software application layer capabilities. Special attention is paid to aspects related to scalability, interoperability and integration with existing logistics and enterprise management systems.

A-TEAM BASED SUPPLY CHAIN MANAGEMENT AGENT ARCHITECTURE

Today's supply chains increasingly involve complex sets of processes, objectives and constraints, and therefore agent-based architectures for supply chain management (SCM) become much more difficult to implement and maintain. The paper presents a multi-agent architecture for specifying, analyzing and developing SCM systems, in which asynchronous teams (A-Team) of problem solving agents exchange results within populations that provide effective management of information flows in supply chains, and cooperate to produce sets of non-dominated solutions that show the tradeoffs between objectives. Our approach distinguishes itself by improving problem-solving efficiency based on a diverse set of algorithms without complicated synthesis efforts, removing the focus from agent communication and coordination details, and improving reusability, flexibility and extensibility by supporting object-oriented and component-based programming style. We examine the effectiveness of the architecture through a real-world case study and experimental results.

An entropy-based approach for measuring complexity in supply chains

Today's supply chains are more complex than ever due to globalisation and its effects, especially on logistics activities. Therefore, understanding and managing complexity in supply chains are very popular topics nowadays. Measures for complexity in supply chains contribute to their manageability and controllability. This paper describes an approach to the measurement of complexity in supply chains based on Shannon's information entropy. The new proposed approach gives a formal approach that is able to measure and analyse the supply chain complexity. The main contribution of this study is to extend two formulas (structural and operational complexity) building on Shannon's entropy measure to evaluate the complexity of a supply chain. The aim is to measure complexity associated with information and material flows in the chain. A numerical example is presented to demonstrate the approach.

Supplier evaluation and selection: an augmented DEA approach

Evaluating and selecting suppliers is an essential part of effectively managing today's dynamic and global supply chains. In this paper, we propose a supplier evaluation and selection methodology based on an extension of data envelopment analysis (DEA) that can evaluate suppliers in an efficient manner. Through the incorporations of a range of virtual standards, the proposed methodology termed augmented DEA, has enhanced discriminatory power over basic DEA models to rank suppliers. In addition, weight constraints are introduced to reduce the possibility of having inappropriate input and output factor weights. We demonstrate the application of augmented DEA with comparison experiments and find that the augmented DEA model has advantages over the basic DEA model as well as the cross-efficiency and super-efficiency models. Finally, we present a case application with data obtained from a communication and aviation electronics company to demonstrate the applicability and use of augmented DEA.