Coordinated responsiveness for volatile toy supply chains

Demands for innovative products in short selling windows are highly unpredictable. This volatility creates demands with dramatic peaks and troughs due to risk-avoidance behaviours among manufacturers and retailers. The consequences are high obsolete inventory, lost sales, and markdowns. Theoretically, the concepts of quick response and postponement are among the potential solutions for such as a volatile and seasonal toy supply chain. This study explores the role of responsiveness and coordination in improving supply chain performance. It is based on an in-depth case study in a European toy supply chain. Consumer and retailer demand patterns and their implications to the manufacturer's supply chains are analysed. Opportunities for relocating order penetration points (OPP) and quick response are simulated, and appropriate relocation rules are established. It is concluded that OPP relocation and responsiveness are beneficial but inadequate in improving the supply chain. Coordination of ordering behaviours is necessary. Coordination processes to achieve greater performance between the toy manufacturer and two of its retailers are presented. Furthermore, the concept of ‘coordinated responsiveness’ is proposed, which combines the concepts of quick response, accurate response and coordination.     

Models for supply chain reengineering

The goal of this paper is to provide a first step in the development of a coherent set of modelling methods for supply chain reengineering. This paper shows that different fields of attention in supply chain management should be approached with different modelling methods. Three modelling methods are presented: the event process chain (EPC) method; the activity chain model (ACM) method; and the GRAI grid method (adjusted for supply chains). EPC modelling focuses on time relationships between primary processes/functions, and is customer oriented. ACM modelling focuses on functions/processes and information flows. GRAI focuses on decision structures and information flows. The three methods are described, and an application of the methods to a case study company is presented. This paper concludes with a comparison of the methods and a discussion of their applicability.     

The Effects of Strategic and Structural Supply Chain Orientation on Operational and Customer‐Focused Performance

Supply chain orientation (SCO), or the implementation of a supply chain management philosophy, consists of two distinct, yet interdependent elements, namely strategic SCO and structural SCO. Strategic SCO involves integrating an SCM philosophy into the firm's strategy development, while structural SCO encompasses operational‐level behaviors and actions that reflect such a philosophy. This study extends the research on SCO by developing hypotheses on the contingent effects of strategic SCO and structural SCO on a firm's operational and customer‐focused performance. Drawing on the strategy‐structure‐performance framework, the study proposes that strategic SCO and structural SCO positively affect different dimensions of performance and that structural SCO plays a mediating role in the relationship between strategic SCO and performance. These relationships are tested using primary survey data and archival data from 183 manufacturers in the Midwestern US. Results confirm that strategic SCO is associated with both operational performance and customer‐focused performance, but structural SCO is only related to operational performance. Structural SCO acts as a mediator in linking strategic SCO with operational performance and customer‐focused performance and mediation effects are strengthened at higher levels of environmental dynamism.     

Bundling of Vertically Differentiated Products in a Supply Chain*

We consider a supply chain consisting of a single manufacturer and a single retailer. The manufacturer produces a basic and a premium product. If desired, a bundle of the two products might also be produced at a unit bundling cost. We allow either the manufacturer or the retailer to produce the bundle from the component products. All products, however, must be sold exclusively through the retailer. Using game theoretic models, we compare and contrast the equilibrium outcomes under retailer bundling and manufacturer bundling scenarios. We show that under manufacturer bundling, the manufacturer never offers the full product line composed of the basic product, the premium product, and the bundle, at equilibrium; while the same does not hold under retailer bundling. We show that total supply chain profit under retailer bundling weakly dominates that under manufacturer bundling and characterize the region in the parameter space where this domination is strict. We explore an extension where there is a capacity constraint in producing one or both of the component products and characterize the equilibrium outcomes. We show that unlike the infinite capacity case, offering the full product line is an equilibrium outcome under manufacturer bundling when the capacity of the premium good is limited.     

Allocating Capacity with Demand Competition: Fixed Factor Allocation*

We consider a supply chain consisting of a supplier and two retailers. The supplier sells a single product to the retailers, who, in turn, retail the product to customers. The supplier has limited production capacity, and the retailers compete for the supplier's capacity and are duopolists engaged in Cournot competition for their customers. When the sum of the retailers' orders exceeds the supplier's capacity, the supplier allocates his capacity according to a preannounced allocation rule. We propose a new capacity allocation rule, fixed factor allocation, which incorporates the ideas of proportional and lexicographic allocations: it prioritizes retailers as in lexicographic allocation, but guarantees only a fixed proportion of the total available capacity to the prioritized retailer. We show that (1) the fixed factor allocation rule incorporates lexicographic and proportional allocations from the perspectives of the supplier and the supply chain; (2) under fixed factor allocation, the supply chain profit is not affected by the allocation factor when it is greater than a threshold; (3) the retailers share the supply chain profit with the supplier depending on the value of the allocation factor; and (4) the fixed factor allocation coordinates the supply chain when the market size is sufficiently large. We also compare fixed factor with proportional and lexicographic allocations, respectively. Furthermore, we demonstrate how the supplier can optimize his capacity level and wholesale price under fixed factor allocation.     

Sustainable supply chain network design: A case of the wine industry in Australia

This paper comes at a time when many companies and people are increasingly facing various global problems linked to sustainability challenges, and when the literature is still scarce on research incorporating all three dimensions of sustainability in supply chain analytical models. The paper conducts a case-based modeling study to address this gap in the area of supply chain network design. We investigate the wine supply chain and propose a generic model for sustainable wine supply chain network design encompassing economic, environmental and social objectives. The case company is a real large-sized wine company located in Australia, for which a customized model is provided. Both models are formulated as a multi-objective mixed-integer program and solved using the augmented ϵ-constraint method by CPLEX. Social implications of the feasible scenarios are examined through introducing social impact coefficients. Non-dominated solutions are obtained and some balanced scenarios are proposed. The results show trade-offs between the objectives, yet more interestingly demonstrate how large is the gap between the existing supply chain configuration and the proposed scenarios in terms of supply chain cost and emissions.     

Advance selling with freebies and limited production capacity

We consider a two-period pricing model in which a seller offers freebies along with the product when making advance sales, and production is constrained by capacity. The seller can offer freebies to increase both market base and customer׳s valuation toward the product in advance. The customers strategically determine whether to purchase the product in advance and gain freebies when their valuation on the product is uncertain, or delay their purchase decision until the regular selling period. We characterize the optimal pricing, quality level of the freebie and production quantity decisions that maximize the expected profits of the seller over the two periods.     

Inventory control for the supply chain: An adaptive control approach based on the identification of the lead-time

In this paper, an Internal Model Control (IMC) scheme is incorporated in production inventory control systems in a complete supply chain. This control scheme presents a good target inventory tracking under the perfect knowledge of the system. Furthermore, the inventory tracking and load disturbance rejection control problems can be tackled separately. However, the closed-loop performance of the IMC scheme may be degraded due to a mismatch between the modelled and actual delay or to the fact that delays may be time-varying. Thus, the IMC control scheme is enhanced in this work with a novel method for the online identification of lead times based on a multimodel scheme. In this way, all benefits of the IMC scheme can be exploited. A detailed discussion of the proposed production inventory system is provided including a stability and performance analysis as well as the identification capabilities of the algorithm. Several simulation examples illustrate the efficiency of the approach.     

Supply chain optimisation and protocol environment (SCOPE) for rapid prototyping and analysis of complex supply chains

There is a strong need for modelling tools that allow decision makers to rapidly develop aggregate models of supply chains, including both material and information flow, that they can use to gain insights and assess alternative configurations. We present a prototype implementation of such a system and apply it to a simple supply chain for validation purposes, and to a real world case study from the consumer packaged goods industry.     

Performance measurement of supply chain management using the analytical hierarchy process

Performance measurement of supply chain management (SCM) is a rapidly growing multi-criteria decision-making problem owing to the large number of factors affecting decision-making. The right choice of performance metrics and measures is critical to the success and competitiveness of the firms in the era of globalisation. Recognising the multiple objective nature of the problem, this paper proposes the use of the analytical hierarchy process (AHP) methodology as aid in making SCM evaluation decisions. For pair-wise comparison in AHP, a survey methodology is used. The methodology presented can help firms to prioritise and formulate viable performance measurement strategies in the volatile and complex global decision environment from different balanced scorecard (BSC) perspectives. A demonstration of the application of this methodology in a real life problem is presented.