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Supply Chain Design Eric Sucky Lehrstuhl für Allgemeine Betriebswirtschaftslehre, insb. Produktion und Logistik, Otto-Friedrich-Universität Bamberg, Feldkirchenstr. 21, 96052 Bamberg, firstname.lastname@example.org Abstract/Zusammenfassung 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. i,k 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 2,1 1,1 3,1 4,1 3,1 4,1 2,2 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 1 Vgl. Christopher (1998), S. 8. 2 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- ing. 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) 1 h 1 j 1 h 1 j 1 h 1 subject to H inv j inv j1 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 3 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 hH can be characterized by its supply capacity, an agreed on minimum supply quantity, the plant specific lead-times, and the relevant costs of pur- chasing. 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.
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