Developing Supply Chain Process Management and Measurement in Global Manufacturing Company

The objective of this research is to create a current state analysis of pulp supply chain processes from production planning to deliveries to customers. A cross-functional flowchart is being used to model these processes. These models help finding key performance indicators (KPIs) which enable examinations of the supply chain efficiency. Supply chain measures in different processes reveal the changes need processes that affect the whole supply chain and its efficiency and competitiveness. Structure of pulp supply chain differs from most of the other supply chains. The fact that there are big volumes of bulk products, small product variations and supply forecasts are made for the year ahead make the difference. This factor brings different benefits but also challenges when developing supply chain. This thesis divides pulp supply chain in three different main categories: production planning, warehousing and transportation. It provides tools for estimating the functionality of supply chain as well as developing the efficiency for different functions of supply chain. By having a better understanding of supply chain processes and measurement the whole supply chain structure can be developed significantly.

Offshoring and outsourcing under demand uncertainty -a supply chain management analysis

Outsourcing and offshoring or any combinations of these have not just become a popular phenomenon, but are viewed as one of the most important management strategies due to the new possibilities from globalization. They have been seen as a possibility to save costs and improve customer service. Executing offshoring and offshore outsourcing successfully can be more complex than initially expected. Potential cost savings resulting from of offshoring and offshore outsourcing are often based on lower manufacturing costs. However, these benefits might be conflicted by a more complex supply chain with service level challenges that can respectively increase costs. Therefore analyzing the total cost effects of offshoring and outsourcing is necessary. The aim of this Master´s Thesis was to to construct a total cost model using academic literature to calculate the total costs and analyze the reasonability of offshoring and offshore outsourcing production of a case company compared to insourcing production. The research data was mainly quantitative and collected mainly from the case company past sales and production records. In addition management level interviews from the case company were conducted. The information from these interviews was used for the qualification of the necessary quantitative data and adding supportive information that could not be gathered from the quantitative data. Both data collection and analysis were guided by a theoretical frame of reference that was based on academic literature concerning offshoring and outsourcing, statistical calculation of demand and total costs. The results confirm the theories that offshoring and offshore outsourcing would reduce total costs as both offshoring and offshore outsourcing options result in lower total annual costs than insourcing mainly due to lower manufacturing costs. However, increased demand uncertainty would make the alternative of offshore outsourcing more risky and difficult to manage. Therefore when assessing the overall impact of the alternatives, offshoring is the most preferable option. As the main cost savings in offshore outsourcing came from lower manufacturing costs, more specifically labour costs, the logistics costs in this case company did not have an essential effect in total costs. The management should therefore pay attention initially to manufacturing costs and then logistics costs when choosing the best production sourcing option for the company.

Untangling the Organizational Ambiguities in Supply Chain Risk Recognition, Assessment, and Response: The Role of Network Embeddedness

In this thesis, I focus on supply chain risk related ambiguity, which represents the ambiguities firms exhibit in recognizing, assessing, and responding to supply chain disruptions. I, primarily, argue that ambiguities associated with recognizing and responding to supply chain risk are information gathering and processing problems. Guided by the theoretical perspective of bounded rationality, I propose a typology of supply chain risk related ambiguity with four distinct dimensions. I, also, argue that the major contributor to risk related ambiguity is often the environment, specifically the web of suppliers. Hence, I focus on the characteristics of these supplier networks to examine the sources of ambiguity. I define three distinct elements of network embeddedness – relational, structural, and positional embeddedness – and argue that the ambiguity faced by a firm in appropriately identifying the nature or impacts of major disruptions is a function of these network properties. Based on a survey of large North American manufacturing firms, I found that the extent of the relational ties a firm has and its position in the network are significantly related to supply chain risk related ambiguity. However, this study did not provide any significant support for the hypothesized relationship between structural embeddedness and ambiguity. My research contributes towards the study of supply chain disruptions by using the idea of bounded rationality to understand supply chain risk related ambiguity and by providing evidence that the structure of supply chain networks influences the organizational understanding of and responses to supply chain disruptions.

SUPPLY CHAIN MANAGEMENT IN INDIAN PETROLEUM REFINING INDUSTRY

Model development for selection of location for refinery in India and identification of characteristics to be looked into when configuring it and to develop models for integrated supply chain planning for a refinery. Locating and removing inbound, internal and outbound logistic problems in an existing refinery and overall design of a logistic information system for a refinery are the main objectives of the study. A brief description of supply chain management (SCM), elements of SCM and their significance, logistics cost in petroleum industry and its impacts, and dynamics of petroleum its logistic practices are also to be presented. Scope of application of SCM in petroleum refinery will also be discussed. A review of the investigations carried out by earlier researches in the area of supply chain management in general and with specific reference to petroleum refining.

Performance of Supply Chain when using selected Coordination Mechanisms

Coordination among supply chain members is essential for better supply chain performance. An effective method to improve supply chain coordination is to implement proper coordination mechanisms. The primary objective of this research is to study the performance of a multi-level supply chain while using selected coordination mechanisms separately, and in combination, under lost sale and back order cases. The coordination mechanisms used in this study are price discount, delay in payment and different types of information sharing. Mathematical modelling and simulation modelling are used in this study to analyse the performance of the supply chain using these mechanisms. Initially, a three level supply chain consisting of a supplier, a manufacturer and a retailer has been used to study the combined effect of price discount and delay in payment on the performance (profit) of supply chain using mathematical modelling. This study showed that implementation of individual mechanisms improves the performance of the supply chain compared to ‘no coordination’. When more than one mechanism is used in combination, performance in most cases further improved. The three level supply chain considered in mathematical modelling was then extended to a three level network supply chain consisting of a four retailers, two wholesalers, and a manufacturer with an infinite part supplier. The performance of this network supply chain was analysed under both lost sale and backorder cases using simulation modelling with the same mechanisms: ‘price discount and delay in payment’ used in mathematical modelling. This study also showed that the performance of the supply chain is significantly improved while using combination of mechanisms as obtained earlier. In this study, it is found that the effect (increase in profit) of ‘delay in payment’ and combination of ‘price discount’ & ‘delay in payment’ on SC profit is relatively high in the case of lost sale. Sensitivity analysis showed that order cost of the retailer plays a major role in the performance of the supply chain as it decides the order quantity of the other players in the supply chain in this study. Sensitivity analysis also showed that there is a proportional change in supply chain profit with change in rate of return of any player. In the case of price discount, elasticity of demand is an important factor to improve the performance of the supply chain. It is also found that the change in permissible delay in payment given by the seller to the buyer affects the SC profit more than the delay in payment availed by the buyer from the seller. In continuation of the above, a study on the performance of a four level supply chain consisting of a manufacturer, a wholesaler, a distributor and a retailer with ‘information sharing’ as coordination mechanism, under lost sale and backorder cases, using a simulation game with live players has been conducted. In this study, best performance is obtained in the case of sharing ‘demand and supply chain performance’ compared to other seven types of information sharing including traditional method. This study also revealed that effect of information sharing on supply chain performance is relatively high in the case of lost sale than backorder. The in depth analysis in this part of the study showed that lack of information sharing need not always be resulting in bullwhip effect. Instead of bullwhip effect, lack of information sharing produced a huge hike in lost sales cost or backorder cost in this study which is also not favorable for the supply chain. Overall analysis provided the extent of improvement in supply chain performance under different cases. Sensitivity analysis revealed useful insights about the decision variables of supply chain and it will be useful for the supply chain management practitioners to take appropriate decisions.