Supply Chain Design and Analysys: Models and Methods

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Supply Chain Design and Analysis:
Models and Methods

Abstract
For years, researchers and practitioners have primarily investigated the various processes within manufacturing supply chains individually. Recently, however, there has been increasing attention placed on the performance, design, and analysis of the supply chain as a whole. This attention is largely a result of the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies. The objectives of this paper are to: (1) provide a focused review of literature in multi-stage supply chain modeling and (2) define a research agenda for future research in this area.

Keywords
supply chain, production, distribution, logistics
2
1 Introduction
A supply chain may be defined as an integrated process wherein a number of various business entities (i.e., suppliers, manufacturers, distributors, and retailers) work together in an effort to: (1) acquire raw materials, (2) convert these raw materials into specified final products, and (3) deliver these final products to retailers. This chain is traditionally characterized by a forward flow of materials and a backward flow of information. For years, researchers and practitioners have primarily investigated the various processes of the supply chain individually. Recently, however, there has been increasing attention placed on the performance, design, and analysis of the supply chain as a whole. From a practical standpoint, the supply chain concept arose from a number of changes in the manufacturing environment, including the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies. The current interest has sought to extend the traditional supply chain to include .reverse logistics., to include product recovery for the purposes of recycling, re-manufacturing, and re-use. Within manufacturing research, the supply chain concept grew largely out of two-stage multi-echelon inventory models, and it is important to note that considerable progress has been made in the design and analysis of two-echelon systems. Most of the research in this area is based on the classic work of Clark and Scarf (1960) and Clark and Scarf (1962). The interested reader is referred to Federgruen (1993) and Bhatnagar, et. al. (1993) for comprehensive reviews of models of this type. More recent discussions of two-echelon models may be found in Diks, et. al. (1996) and van Houtum, et. al. (1996). The objectives of this paper are to: (1) provide a focused review of literature in the area of multi-stage supply chain design and analysis, and (2) develop a research agenda that may serve as a basis for future supply chain research. 2 The Supply Chain Defined

As mentioned above, a supply chain is an integrated manufacturing process wherein raw materials are converted into final products, then delivered to customers. At its highest level, a supply chain is comprised of two basic, integrated processes: (1) the Production Planning and Inventory Control Process, and (2) the Distribution and Logistics Process. These Processes, illustrated below in Figure 1, provide the basic framework for the conversion and movement of raw materials into final products. 3

Manufacturing
Facility
Storage
Facility
Transport
Vehicle
Distribution Center
Retailer
Production Planning
and Inventory Control
Distribution and Logistics
Suppliers
Figure 1. The Supply Chain Process
The Production Planning and Inventory Control Process encompasses the manufacturing and storage sub-processes, and their interface(s). More specifically, production planning describes the design and management of the entire manufacturing process (including raw material scheduling and acquisition, manufacturing...
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