Supply Chains and Production Networks

Following the rationale of Shi and Gregory (1998, p. 199) that a company should first optimize the elements of a supply chain under its own control, issues related to the inter-organizational integration and coordination of supply chains will generally not be covered in this work. For an overview of specific inter-organizational supply chain management tasks 

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Global supply chain and production network management... 

Putting Global Supply Chain and Production Network Management in Place... 

The specific value chain network is characterized in the following based on a value chain typology. Several authors developed typologies and characteristics to classify industrial value chains with focus on supply chain and production (Loos 1997 Delfmann/Albers 2000 Zeier 2002 Schaub/Zeier 2003, Meyr/Stadtler 2004). 

Within these value chains, change happens frequently. Relationships come and go. The value chain is characterized by the number of nodes in the network, the number and type of constraints, the variability of demand and supply, the rhythms and cycles of decisions, the products and shipments, and the latency of information. Five years ago, the design of supply chains and value networks was an ad hoc process. Today, over 35 percent of companies have planning teams to rationalize the design and refine the network for current conditions. In our interviews, we learned that these teams are growing in both size and importance. 

Porter s value chain is one basis for the development of the supply chain. The term supply chain was created by consultant Keith Oliver in 1982 according to Heckmann et al. (2003). Compared to the company-internal focus of Porter s value chain, the supply chain extends the scope towards intra-company material and information flows from raw materials to the end-consumer reflected in the definition of Christopher (1992) a supply chain is a network of organizations that are involved through upstream and downstream linkages in different processes and activities that product value in the form of products and services in the hand of the ultimate consumer . Core ideas of the supply chain concept are ... 

Supply Chain Management and Production Network Design... 

Given the supply-chain context of this book, we will consider only the management of independent-demand items—i.e., those items that move between firms in the supply chain. Throughout this book, we focus on issues related to node-to-node relationships in the supply chain, consistent with the framework developed in Chapter 1 that defines a supply chain as a network of nodes. Dependent demand involves "within-node" effects and is outside the scope of this book, but is discussed extensively in books on production/operations planning and control systems (e.g., Vollmann et al., 2005 or Chapman, 2006, which also contains an excellent discussion on hybrid systems that combine appropriate elements of MRP and kanban control). Note, however, that the classification of an item as an independent-demand item or a dependent-demand item is not an absolute characterization. Rather, it only makes sense in context. For example, to the company that assembles the cell phones, the keypad is clearly a dependent-demand item, provided that its only demand is derived from the production schedule for cell phones (i.e., not from sales of keypads as stand-alone items). To the firm that produces the keypads and sells them to various cell phone manufacturers, however, the keypad is an... 

In this section, trends in research and practice for the (near) future are identified. This analysis is motivated by the existing awareness that CE is stiU very much alive. Much effort is required to achieve a concurrent way of working in current complex projects, supply chains, and networks that focus on development of new products and processes. 

Simchi-Levi et al. [9] described supply chain as logistics network in which dilFerent facilities frequently have different, conflicting, objectives. Ma et al. [10] considered supply chain as a utilized structured network that is built around core products and controls information, material, and capital flow to maintain a smooth process of production from raw-material suppliers to end consumers (see Fig. 2.1). 

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