Learning Center
Plans & pricing Sign in
Sign Out
Get this document free

Formatvorlage (DOC)


									Supply Chain Design

Eric Sucky
Lehrstuhl für Allgemeine Betriebswirtschaftslehre, insb. Produktion und Logistik,
Otto-Friedrich-Universität Bamberg, Feldkirchenstr. 21, 96052 Bamberg,

Strategic supplier selection decisions have to be long-term orientated considering mutual commit-
ments between the partners involved, fixed costs upon selection of a new supplier in the form of in-
vestment in training, and technology, as well as significant costs of switching from one supplier to
another. By selecting strategic suppliers the network structure – the supply chain’s design – will be
influenced and determined over long periods of time. We propose a stochastic dynamic model for stra-
tegic supplier selection based on hierarchical planning approaches.
2      Kopfzeile 1 – wird später eingefügt

1   Introduction
From a physical perspective, a supply chain can be considered as a network of differ-
ent geographically dispersed production facilities, where raw materials, intermediate
and finished products are transformed, warehouses and distribution centers, where
products are stored, and transportation links which connect the production facilities,
distribution centers and warehouses. From an institutional perspective, following the
proposal of Christopher,1 a supply chain “is a network of organizations that are in-
volved, through upstream and downstream linkages in the different processes and ac-
tivities that produce value in form of products and services in the hand of the ultimate
consumer.” This contribution focuses on the design of the physical supply chain infra-
structure, which is also called “Network Design”, “Network Configuration”, “Supply
Chain Configuration”, or “Supply Chain Design”.2

2   The Supply Chain’s Structure
Corresponding to our definition, provided in section 1, we first introduce an adequate
formal characterization of the supply chain. Based on this characterization we are able
to emphasize the impact of supplier selection decisions on the supply chain’s structure.

                        2,1                                     2,1
            1,1                    3,1      4,1      1,1                   3,1        4,1
                        2,2                                     2,2
                                   3,2      4,2                            3,2        4,2
            1,2         2,3
                                            4,3                                       4,3
            a) initial situation                     b) eliminating a supplier
            1,1                    3,1       4,1                            3,1       4,1
                                   3,2       4,2                            3,2       4,2
            1,2         2,3                          1,2         2,3
                                             4,3                                      4,3

            1,3         2,4                          1,3         2,4

            c) activating a supplier                 d) substituting a supplier
         Fig./Abb. 1: Impact of supplier selection decisions on the supply chain’s structure

In general, supply chains are inter-organizational systems with a multiple number of
firms (e.g. manufacturers of finished goods, suppliers of intermediate products and

    Vgl. Christopher (1998), S. 8.
    Vgl. Bowersox/Closs (1996), S. 26; Chopra/Meindl (2004), S. 98.
                                                       Kopfzeile 2 – Titel – Wird später eingefügt     3

logistics service providers), each responsible for a specific set of nodes or links of the
supply chain.3

                                   Supplier A              Supplier B Manufacturer Supply Chain
         Production costs                  7.665               8.445       16.925        33.035
         Inventory costs                          60             120            0           180
         Distribution costs                4.500               2.250         1.125        7.875
         Costs                            12.225              10.815       18.050        41.090
                                          Tab. 1: Upstream Planning
Each potential supplier can be characterized by its supply capacity, an agreed on min-
imum supply quantity, the plant specific lead-times, and the relevant costs of purchas-

2.1 A Deterministic Supplier Selection Model
On the top-level of our hierarchical approach we model alternative dynamic supplier
selection strategies and the corresponding investment and switching costs. On the
base-level the impacts of the supplier selection strategies on mid-term performance
will be evaluated. In order to generate the base-level of our hierarchical approach for
strategic supplier selection, we first present a generic model for supplier selection.

                      H J               H               J               H
         TRCbase     cs hj  xhj   cf h  y h   ch j  inv j    ch  xh
                                                                        
                    1  h 1 j 1      h 1            j 1             h 1
subject to
                       inv j  inv j1   xhj  d j for all  and j                             (2)
                                                h 1

                                    J

                               x
                               1 j 1
                                          hj    x h  sup h for all h                              (3)

At the top-level of this hierarchical approach we model supplier selection alternatives
and the corresponding investment and switching costs. The model presented above
will be used as the base-level of the hierarchical approach to evaluate the impacts of
the supplier selection decisions on mid-term performance.

2.2 The Strategic Dynamic Supplier Selection Process
The complete planning period of the dynamic supplier selection problem comprises T
periods (t=1,...,T), e.g. five years. The state of the manufacturer’s supply side – the

    Vgl. Christopher (1998), S. 8.
4      Kopfzeile 1 – wird später eingefügt

manufacturer’s supply system – at period t is characterized by the set of potential sup-
pliers, the potential supply linkages, and the manufacturer’s plants.
Each potential supplier hH can be characterized by its supply capacity, an agreed on
minimum supply quantity, the plant specific lead-times, and the relevant costs of pur-

3   References/Literaturverzeichnis
Ballou, R. H. (2001): Unresolved issues in supply chain network design, in: Information Systems
     Frontiers 3(4), S. 417-426.
Basnet, C.; Leung, J. M. Y. (2005): Inventory lot-sizing with supplier selection, in: Computers & Op-
     erations Research 32, S. 1-14.
Chopra, S.; Meindl, P. (2004): Supply Chain Management, 2nd Ed., Upper Saddle River.
Christopher, M. (1998): Logistics and Supply Chain Management – Strategies for Reducing Cost and
     Improving Service, 2nd Ed., London.
Fleischmann, B.; Meyr, H. (2003): Planning Hierarchy, Modeling and Advanced Planning Systems,
     in: De Kok, A.; Graves, S. (Eds.): Supply Chain Management: Design, Coordination and Opera-
     tion, Amsterdam, S. 457-502.
Janker, C. G. (2004): Multivariate Lieferantenbewertung – Empirisch gestützte Konzeption eines
     anforderungsgerechten Bewertungssystems, Wiesbaden.
Schneeweiss, C. (2003): Distributed decision making, 2nd Ed., Heidelberg.
Schneeweiss, C. (1974): Dynamisches Programmieren, Würzburg.
Tempelmeier, H. (2002): A simple heuristic for dynamic order sizing and supplier selection with time-
     varying data, in: Production and Operations Management 11, S. 500-515.

To top