The impact of supply chain performance measurement systems on dynamic behaviour in supply chains

The amplification of demand variation up a supply chain widely termed ‘the Bullwhip Effect’ is disruptive, costly and something that supply chain management generally seeks to minimise. Originally attributed to poor system design; deficiencies in policies, organisation structure and delays in material and information flow all lead to sub-optimal reorder point calculation. It has since been attributed to exogenous random factors such as: uncertainties in demand, supply and distribution lead time but these causes are not exclusive as academic and operational studies since have shown that orders and/or inventories can exhibit significant variability even if customer demand and lead time are deterministic. This increase in the range of possible causes of dynamic behaviour indicates that our understanding of the phenomenon is far from complete. One possible, yet previously unexplored, factor that may influence dynamic behaviour in supply chains is the application and operation of supply chain performance measures. Organisations monitoring and responding to their adopted key performance metrics will make operational changes and this action may influence the level of dynamics within the supply chain, possibly degrading the performance of the very system they were intended to measure. In order to explore this a plausible abstraction of the operational responses to the Supply Chain Council’s SCOR® (Supply Chain Operations Reference) model was incorporated into a classic Beer Game distribution representation, using the dynamic discrete event simulation software Simul8. During the simulation the five SCOR Supply Chain Performance Attributes: Reliability, Responsiveness, Flexibility, Cost and Utilisation were continuously monitored and compared to established targets. Operational adjustments to the; reorder point, transportation modes and production capacity (where appropriate) for three independent supply chain roles were made and the degree of dynamic behaviour in the Supply Chain measured, using the ratio of the standard deviation of upstream demand relative to the standard deviation of the downstream demand. Factors employed to build the detailed model include: variable retail demand, order transmission, transportation delays, production delays, capacity constraints demand multipliers and demand averaging periods. Five dimensions of supply chain performance were monitored independently in three autonomous supply chain roles and operational settings adjusted accordingly. Uniqueness of this research stems from the application of the five SCOR performance attributes with modelled operational responses in a dynamic discrete event simulation model. This project makes its primary contribution to knowledge by measuring the impact, on supply chain dynamics, of applying a representative performance measurement system.

An empirical study of the imperatives for a supply chain implementation project in Seagate Technology International

Singapore's electronics manufacturers are facing many questions. In the computer hard-drive industry, where the problem of obsolescence is common and where a product's lifecycle may be only six months, manufacturers are anxious to know what the next order-winning criteria will be. Since low labour costs are no longer a key factor, many organisations are developing their competencies in research and development, sales and marketing, logistics and supply chain management in order to maintain competitiveness. This paper illustrates how Seagate has envisaged a climate of cooperation and collaboration to better serve its customers in the areas of technology, cost and delivery. The paper is based on observations and findings following a longitudinal case study approach at the Seagate Storage Product Group (SPG) in Singapore. The seven-stage implementation framework adopted by Seagate in their SCM project is discussed, together with the process of how Seagate has created a paradigm shift towards a new culture of teamwork-based collaboration.

IT support for managing aircraft spares in a closed-loop supply chain

This paper reports on the development of elements of an e-supply chain management system for managing maintenance, repair and overhaul (MRO) relationships in the aerospace industry. A standard systems development methodology has been followed to produce a process model (i.e. the AMSCR model); an information model (i.e. business rules) and a computerised information management capability (i.e. automated optimisation). The proof of concept for this web-based MRO supply chain system has been established through the collaboration with a sample of the different types of supply chain members. The proven benefit is a reduction in the stock-holding costs for the whole supply chain whilst also minimising non-flying time of the aircraft that the supply chain supports. This type of system is now vital in an industry that has continuously decreasing profit margins, which in turn means pressure to reduce servicing times and increase the interval between maintenance actions.

Relationship characteristics within the supply chain of small and medium-sized construction enterprises in Thailand

The Small and Medium-sized construction Enterprises (construction SMEs) in Thailand face challenges like high fragmented structure and low productivity. Many industries improved their business performance using the supply chain integration. This research was conducted by interviewing 14 small and medium Thai building contractors to understand the features and relationship characteristics of the supply chain of construction SMEs. The study reveals that the linkages between the small and medium general contractors and other supply chain members are based on personal trust rather than contract laws, there is no systematic procedure to manage the relationship with clients during the project execution, and social connections help to maintain long-term relationship with clients. Based on the working behaviour and commitment to long-term relationship, six forms of relationship with supply side members are proposed. Finally, improvement measures for the supply chain integration of the construction SMEs in Thailand are presented.

Optimization of facility location-allocation problem in customer-driven supply chain

This paper develops and applies an integrated multiple criteria decision making approach to optimize the facility location-allocation problem in the contemporary customer-driven supply chain. Unlike the traditional optimization techniques, the proposed approach, combining the analytic hierarchy process (AHP) and the goal programming (GP) model, considers both quantitative and qualitative factors, and also aims at maximizing the benefits of deliverer and customers. In the integrated approach, the AHP is used first to determine the relative importance weightings or priorities of alternative locations with respect to both deliverer oriented and customer oriented criteria. Then, the GP model, incorporating the constraints of system, resource, and AHP priority is formulated to select the best locations for setting up the warehouses without exceeding the limited available resources. In this paper, a real case study is used to demonstrate how the integrated approach can be applied to deal with the facility location-allocation problem, and it is proved that the integrated approach outperforms the traditional costbased approach.

Green as the new Lean:how to use Lean practices as a catalyst to greening your supply chain

The aim of this research paper is to explore and evaluate previous work focussing on the relationship and links between Lean and Green supply chain management practices. Several explanatory frameworks are explored and discussed. It is intended that evidence and insights can be developed and used: (a) to assist our understanding of where Lean practices are synergistic for Green; (b) to clarify if Green practices are synergistic for Lean; and (c) to identify opportunities for companies to use their Lean framework as a catalyst to making their processes Green. The paper provides evidence suggesting that Lean is beneficial for Green practices and the implementation of Green practices in turn also has a positive influence on existing Lean business practices. © 2010 Elsevier Ltd. All rights reserved.

Supply chain performance measurement framework:case studies on the Thai manufacturers

One of the most significant paradigm shifts of modern business management is that individual businesses no longer compete as solely autonomous entities, but rather as supply chains. Firms worldwide have embraced the concept of supply chain management as important and sometimes critical to their business. The idea of a collaborative supply chain is to gain a competitive advantage by improving overall performance through measuring a holistic perspective of the supply chain. However, contemporary performance measurement theory is somewhat fragmented and fails to support this idea. Therefore, this research develops and applies an integrated supply chain performance measurement framework that provides a more holistic approach to the study of supply chain performance measurement by combining both supply chain macro processes and decision making levels. Therefore, the proposed framework can provide a balanced horizontal (cross-process) and vertical (hierarchical decision) view and measure the performance of the entire supply chain system. Firstly, literature on performance measurement frameworks and performance measurement factors of supply chain management will help to develop a conceptual framework. Next the proposed framework will be presented. The framework will be validated through in-depth interviews with three Thai manufacturing companies. The fieldwork combined varied sources in order to understand the views of manufacturers on supply chain performance in the three case study companies. The collected data were analyzed, interpreted, and reported using thematic analysis and analysis hierarchy process (AHP), which was influenced by the study’s conceptual framework. This research contributes a new theory of supply chain performance measurement and knowledge on supply chain characteristics of a developing country, Thailand. The research also affects organisations by preparing decision makers to make strategic, tactical and operational level decisions with respect to supply chain macro processes. The results from the case studies also indicate the similarities and differences in their supply chain performance. Furthermore, the implications of the study are offered for both academic and practical use.

Managing the impact on biodiversity of supply chain companies

Industrial development has had a major role in creating the situation where bio-diverse materials and services essential for sustaining business are under threat. A key contributory factor to biodiversity decline comes from the cumulative impacts of extended supply chain business operations. In order to contribute to stopping this decline, the industrial world needs to form a better understanding of the way it utilizes the business and biodiversity agenda in its wider operations. This thesis investigates the perceptions and attitudes to biodiversity from government, society and a wide cross-section of industry. The research includes the extent of corporate attention to and use of environmental business tools and guidelines in reporting on biodiversity issues. A case study of three companies from different industrial sectors is undertaken to observe procurement and related environmental management of their supply chains. The use of accredited and non-accredited environmental management systems (EMS) are analysed as frameworks for introducing biodiversity aspects into supply chain management. The outcome is a methodology, which can be used either as a bespoke in-house biodiversity management system or within an accredited ISO 14001 EMS, for incorporating the assessment and management of the potential risks and opportunities involving environmental impacts on biodiversity of supply chain companies.

A process framework for selecting supply system architecture in manufacturing supply chains and networks

The process framework comprises three phases, as follows: scope the supply chain/network; identify the options for supply system architecture and select supply system architecture. It facilitates a structured approach that analyses the supply chain/network contextual characteristics, in order to ensure alignment with the appropriate supply system architecture. The process framework was derived from comprehensive literature review and archival case study analysis. The review led to the classification of supply system architectures according to their orientation, whether integrated; partially integrated; co-ordinated or independent. The classification was combined with the characteristics that influence the selection of supply system architecture to encapsulate the conceptual framework. It builds upon existing frameworks and methodologies by focusing on structured procedure; supporting project management; facilitating participation and clarifying point of entry. The process framework was initially tested in three case study applications from the food, automobile and hand tool industries. A variety of industrial settings was chosen to illustrate transferability. The case study applications indicate that the process framework is a valid approach to the problem; however, further testing is required. In particular, the use of group support system technologies to support the process and the steps involving the participation of software vendors need further testing. However, the process framework can be followed due to the clarity of its presentation. It considers the issue of timing by including alternative decision-making techniques, dependent on the constraints. It is useful for ensuring a sound business case is developed, with supporting documentation and analysis that identifies the strategic and functional requirements of supply system architecture.

Putting e-commerce adoption in a supply chain context

Purpose – The objective of this paper is to gain a better understanding of the impact of context on the adoption of e-commerce in supply chains. Design/methodology/approach – A literature review, 45 semi-structured interviews in four different supply chains in the UK healthcare sector, involving 16 different organisations, and additional documentation is used in this study. Findings – The adoption of e-commerce in supply chains is simultaneously affected by two contextual meta-variables: external pressure, which is influenced by supply chain structure, demand and industry characteristics; and internal readiness, which is influenced by IT, organisational and buying need characteristics. Different combinations of these two main variables lead to four different trade-off situations affecting adoption or non-adoption. Research limitations/implications – The empirical research has been undertaken in the specific context of the UK healthcare supply chains. It would be useful to test our findings in other sectors and countries. Practical implications – The paper helps to understand the contextual factors that affect e-commerce adoption and concludes with a framework that differentiates four situations that can improve managers' and researchers' understanding of e-commerce adoption in the future. Originality/value – The contribution of this paper is the recognition that the adoption of e-commerce is affected by factors in both an organisational and a supply chain context, which simultaneously lead to trade-off decisions. Also, unlike most other studies which refer to supply chains and are limited to an organisational perspective or at most a dyadic perspective, this paper builds up a supply chain picture of context by including perspectives from multiple actors in a chain.

Improving supply chain performance through improved visibility

Purpose – This paper seeks to investigate the links between different types of visibility, joint initiatives and business performance using the concepts of transparency as a measure of visibility in supply chains. The prognosis that increased supply chain visibility can be achieved through suppliers and customers working on joint initiative(s), the deployment of which leads to collaborative successes, is tested. Design/methodology/approach – Lamming et al.'s transparency concept was used as a basis for the development of a framework for assessing the visibility gaps between the focal company – Rolls-Royce (RR) – and their suppliers. The framework was applied to a particular supplier to identify visibility gaps; subsequently a joint initiative was launched across the supply chain and the benefits measured and assessed. A case study approach was followed due to the contemporary nature of the work undertaken. Findings – The supply chain's performance vis-à-vis schedule adherence was significantly improved as a result of the initiative launched. Additionally, there were improvements in visibility across capacity planning, material ordering and inventory management. Practical implications – The study demonstrated the value of using the developed transparency framework in a structured manner to generate improvements in the supply chain. RR will look to extend its use across other supply chains; the approach could also be extended out to other sectors. Originality/value – The development and application of the transparency frameworks in the aerospace sector are unique and have shown the value of the approach. The work has demonstrated tangibly that the exchange of high-quality information as part of an improvement initiative does lead to significant improvements in the overall performance of the supply chain.

Integrated strategic supply chain positioning for SME's:an empirical study

Purpose – The purpose of this paper is to report on an investigation into the selection and evaluation of a suitable strategic positioning methodology for SMEs in Singapore. Design/methodology/approach – The research methodology is based on critical review of the literature to identify the potentially most suitable strategic positioning methodology, evaluation and testing of the methodology within the context of SME's in Singapore, and analysis to determine the strengths and weaknesses of the methodology and opportunities for further research. Findings – This paper illustrates a leading integrated strategic positioning decision making process, which has been found to be potentially suitable for SMEs in Singapore, and the process is then applied and evaluated in two industrial case studies. Results in the form of strengths, weaknesses and opportunities are evaluated and discussed in detail, and further research to improve the process has been identified. Practical implications – A practical and integrated strategic supply chain positioning methodology for SMEs to define their own competitive space, among other companies in the manufacturing supply chain, so as to maximize business competitiveness. Originality/value – This paper contributes to the knowledge of the strategic positioning decision process as well as identifies further research to adapt the process for SMEs in Singapore.

Supply chain strategies for competitive manufacture

Few people would argue that there is one single solution to the design of a manufacturing supply chain. Relatively recent concepts such as strategic outsourcing and partnership sourcing are extremely valuable to some manufacturing organisations. This paper presents the findings of a comprehensive survey of manufacturing sourcing practices in the UK. This study has set out to understand current and intended practices that manufacturing companies have with their key suppliers, and also the decision processes and circumstances that have caused these relationships to occur.