International Journal of Physical Distribution & Logistics Management

Jari Collin; Dennis Lorenzin

2006 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030610677375

Purpose – The purpose of this paper is to describe how demand planning can increase agility in supply chains. The paper builds on a case study from mobile infrastructure industry with explicit focus on project business environment. Design/methodology/approach – The paper contains a short theoretical review on supply chain agility, different planning and forecasting concepts and explores the linkages between them. Empiric evidence is collected from Nokia Networks as a case study. Main lessons are primarily taken from integrated project management program that is to implement a truly customer‐focused delivery process in the case company. Findings – Suppliers should pay more attention on effectively utilizing customer's project plans for aligning their supply chain. Supply chain agility does not just happen but requires continuous planning. Practical implications – Common project planning is the most natural way for customers to share future demand information between the supply chain players. Instead separate and often laborious demand forecasting process, suppliers should utilize customer's project plans in building agility in their supply chains. Originality/value – Focuses on the importance of the ability to adapt to rapid and unexpected changes and asserts that a continuous, customer driven planning process is a pre‐requirement for being agile in supply chains.

H.S. Ismail; H. Sharifi

2006 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030610677384

Purpose – Parallel developments in the areas of agile systems and manufacturing, and supply chain management led to the introduction of the agile supply chains (ASC) concept. How to achieve agility in supply chain is, however, a subject of question and research. This paper proposes a framework for the development of ASC that is based on the integration of existing supply chain analysis and development models and techniques with those of the supply chain design (SCD) and also the design for the supply chain (DfSC). Design/methodology/approach – The framework mainly relies on research previously carried out by the authors in the areas of developing agile manufacturing and systems and models for demand network alignment. An extensive literature survey is carried out to support the ideas and derive the constructs of the conceptual model as a basis for further empirical research. Findings – The model suggest that responding proactively to the market and business environment changes, agility, can be facilitated by simultaneous development of supply chain and the output/product of the chain. The concept of DfSC, built on the success of existing “design for X” techniques, would increase the reactive and proactive capabilities of organisations. Originality/value – The research provides a theoretical ground for achieving ASC which facilitates reconciliation between two usually separately approaches of SCD and DfSC, as well as suggesting practical solutions for developing agility in supply chains. This view can make the ASC concept understandable and practical, and open a new way of viewing the subject in research circles.

Alok K. Verma

2006 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030610677393

Purpose – The purpose of this paper is to deal with the application of the stochastic inventory model to the three‐tier supply chain and verify the values obtained by mathematical model in physical simulation. Design/methodology/approach – The paper investigates three‐stage serial supply chain with stochastic demand and fixed replenishment lead‐time. Inventory holding costs are charged at each stage, and each stage may incur a consumer backorder penalty cost charged by primary supplier to secondary supplier. The customer‐demand follows Poisson distribution. The base stock model is implemented for inventory control at both suppliers. Physical simulation is then designed in such a way that it satisfies all the assumptions for mathematical model. Simulation is run to verify the values obtained from mathematical model. Findings – Computer simulation is designed to include all the assumptions made by mathematical model. Hence, mathematical base stock model and computer simulation model are comparable. Demand follows Poisson distribution in both cases. The backorder cost and inventory holding cost are calculated in each phase of simulation and summarized. The paper infers that the total inventory cost is optimum in phase II, in which reorder point is same as that calculated by mathematical model. In phase I, total inventory cost is more than that of phase II because of backorders. In phase III, excess inventory increased the total cost. Thus, the values obtained from mathematical model produce optimal inventory cost. Base stock model is effective when the demand is not deterministic and service factor assumed in mathematical model is 0.9, which is quite acceptable. Base stock model assumes replenishment order quantity as 1 and the total inventory cost decreases with replenishment lead time. Base stock model is beneficial for supply chains having short replenishment lead time. Computer simulation results indicate that discrete event simulations can be used to model stochastic systems like organizational supply chains and to validate the results from mathematical models. Originality/value – The paper offers a review of simulation work aiming to support improvement of agility in the supply chain.

S.C. Lenny Koh; S. Saad; S. Arunachalam

2006 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030610677401

Purpose – To investigate the integration of supply chain management (SCM) and enterprise resource planning (ERP) systems for competing in the twenty‐first century supply chain. Design/methodology/approach – A case study with a paper manufacturing company in China is conducted. Primary data is collected through interviews with managers of the company. The reengineering activities and processes, and the soft issues of supplier relationship are examined. Findings – Breaking the traditional decentralised system and introducing the concept of a single, integrated plan, which a company could work together with their suppliers has led to cost reduction, lead‐time reduction, improved visibility, reduced time to market, and increased efficiency in the company. Research limitations/implications – This research is based on a single case study in process manufacturing industry in China, which perhaps limits its usefulness elsewhere. Practical implications – One should not rely solely on ERP systems for managing their supply chain. Individual company should look at an effective purchasing function as one of the competencies essential to supply chain success. Originality/value – ERP systems in the case company address only a subset of SCM needs. ERP's main added value is its combination of financial control with multi‐facility coordination, but ERP does not deliver supply planning and demand planning functionality for the company. The systems are not designed to support internal supply chains. However, integration of SCM and ERP gives the company the opportunity to build effective processes with suppliers they trust, so they can get the maximum return on relationship with all their suppliers on a continuous basis.

Lingyun Wang; Pekka Kess

2006 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030610677410

Purpose – To study the motives for partnership in marketing channels and provide an empirical study on mutual selection between manufacturers and distributors. Design/methodology/approach – The data were collected mainly from the interviews which present the perspectives of both the Finnish manufacturers and Chinese distributors and agents. Findings – Based on the empirical study, the new finding is that task‐related and partner‐related dimensions in partner selection of international joint ventures also apply to distributor relationship. We argue that a distributor relationship is a product‐tied relationship, and product innovation can be used as an approach for performance improvement in distributor relationship. Research limitations/implications – The study consists of four case companies so the result cannot be of general application. Nevertheless, it provides valuable information for further utilization. Practical implications – The study provides empirical evidence of the motives of partnership and mutual selection between manufacturers and distributors in China. The results of the study suggest that distributor relationship management could be improved through product innovation. Originality/value – The paper attempts to fill the gap in available research on the initiative stage of distributor relationship while also providing some perceptions from the distributor side of the process.