Supply chain decision making

Consider the supply chain example discussed earlier, but for this decentralized supply chain decision-making environment. Using the numerical example from the earlier section, the manufacturers optimal service level is - = 0.643. Using the probabilities in Table 5.1, this... 

C Capacity, Commonality, and Consumption. The originators refer to 3C as a "theory. The theory uses these aspects to simplify supply chain decision making. 

Values in the column of Table 7.12 can be used in supply chain decision making. For example, a buyer may consider minimizing the total transition time of his supply chain as a supplier selection criterion. Taking the analysis one step further, one of the functions /i(A) or /2(A) introduced earlier in the section can be used to characterize losses to the supply chain due to disruption delays. The last column in Table 7.12 shows the magnitude of losses the buyer would suffer from supplier disruptions under the / (A) function, where /i(A) = ln(A). As previously noted, buyers can use the/j(A) values (or/2(A) values given that they estimate the required parameters) to select among different suppliers. 

The cross-enterprise processes involve multiple companies in the executirui of supply chain processes. The important feature of these collaborative processes is that the companies involved are mainly concerned with their inter-conununications rather than with internal operations of each supply chain imit. That simplifies development and execution of complex supply chain processes. The cross-sectional processes involve multiple supply chain problem areas such as sales, purchasing, and logistics. This characteristic implies that supply chain decision-making and process execution cannot be done in isolation and mutual interactions and dependencies among different problem areas should be taken into account... 

As for any other system, the key properties of the supply chain system are decomposition, modularity, coupling and cohesion. The supply chain can be decomposed starting with the top level network. As stated above, the top level network consists of units having distinct legal or spatial characteristics. The units are further decomposed to represent their internal structure. For instance, a warehouse consists of multiple docking places and subdivisions. The decomposition is related to different levels of supply chain decision making. There are decisions (1) associated with the entire supply chain (2) made at the unit level and (3) made... 

The data structure generation is emphasized in the chapter because it is believed that a practical supply chain configuration model at the case level should not include graphical representation of all supply chain entities. The most efficient way is to show graphically only the most important supply chain entities and other supply chain entities can be represented using a text based format. Nevertheless, the textual representation should be easily perceivable and modifiable by experts involved in the supply chain decision-making. Spreadsheets are an attractive option. 

Fig. 9.6 Hybrid models and the supply chain decision-making framework...

Haraguchi, Masahiko, and Upmanu Lall. Flood Risks and Impacts A Case Study of Thailand s Floods in 2011 and Research Questions for Supply Chain Decision Making. International Journal of Disaster Risk Reduction 14, part 3 (2014) 256-272. Hohenstein, Nils-Ole, Edda Feisel, Evi Hartmann, and Larry Giunipero. Research on the Phenomenon of Supply Chain Resilience A Systematic Review and Paths for Further investigation. International Journal of Physical Distribution Logistics Management 45, no. 1/2 (2015) 90-117. 

Supply chain management deeisions are made under the conflicting criteria of maximizing profit and eustomer responsiveness while minimizing supply ehain risk. Multiple Criteria Deeision Making in Supply Chain Management provides a comprehensive overview of multi-criteria optimization models and methods that can be used in supply chain decision making. 

FIGURE 3-1 Supply Chain Decision-Making Framework... 

If it exists, is the business unit strategy relevant to manufacturing, much less supply chain, decisions Are patterns of decision making within manufacturing and other supply chain functions consistent Would the best decision for manufacturing be the best for the supply chain ... 

ET is a dominant unit of its supply chain and makes supply chain configuration decisions independently. The supply chain has a small number of fixed units since customers and suppliers are selected dynamically. Nevertheless, there is a portfolio of established customers and a pool of certified suppliers. There is a limited information sharing (the company gives suppliers in advance its own demand... 

Huang Y, Huang GQ (2012) Integrated supplier selection, pricing and inventray decisions in a multi-level supply chain. Decis Making Supply Chain Integr Decis Eng 1 47-62... 

In a typical supply chain, decisions at each stage are based on information received from its immediate suppliers and customers (decentralized information). Thus, each stage makes locally optimal decisions. In such a system, customer order information can become distorted, becoming lumpy as it moves upstream. This is also known as the BuUwhip effect. As mentioned earlier, Lee et al. (1997) mathematically established the bullwhip effect in a decentralized supply chain with no information sharing. 

The NPV of different options should be compared when making supply chain decisions. A negative NPV for an option indicates that the option will lose money for the supply chain. The decision with the highest NPV will provide a supply chain with the highest financial return. 

Every forecast supports decisions that are based on it, so an important first step is to identify these decisions clearly. Examples of such decisions include how much of a particular product to make, how much to inventory, and how much to order. All parties affected by a supply chain decision should be aware of the link between the decision and the forecast. For example, Walmart s plans to discount detergent during the month of July must be shared with the manufacturer, the transporter, and others involved in filhng demand, as they all must make decisions that are affected by the forecast of demand. All parties should come up with a common forecast for the promotion and a shared plan of action based on the forecast. Failure to make these decisions jointly may result in either too much or too httle product in various stages of the supply chain. 

---