Supply Chain, The Way to Flat Organisation Part 1 doc

A two-level model was suggested, one level to determine the optimal control strategy using a nonlinear integer-programming model solved by intelligent algorithms of GA, random-PSO and PE

Supply Chain,The Way to Flat Organisation

Supply Chain, The Way to Flat Organisation

Edited by Yanfang Huo

and

Fu Jia

I-Tech

IV

Published by In-Teh

In-Teh is Croatian branch of I-Tech Education and Publishing KG, Vienna, Austria

Abstracting and non-profit use of the material is permitted with credit to the source Statements and opinions expressed in the chapters are these of the individual contributors and not necessarily those of the editors or publisher No responsibility is accepted for the accuracy of information contained in the published articles Publisher assumes no responsibility liability for any damage or injury to persons or property arising out of the use of any materials, instructions, methods or ideas contained inside After this work has been published by the In-Teh, authors have the right to republish it, in whole or part, in any publication of which they are an author or editor, and the make other personal use of the work

Preface

With the ever-increasing levels of volatility in demand and more and more turbulent market competition, there is a growing recognition that individual business no longer compete as stand-alone entities but rather as supply chains And supply chain management (SCM) has been both an emergent field of practice and an emerging academic domain to help to firms to satisfy the customer needs more responsively, with improved quality, reduction cost and higher flexibility

According to one American professional association, SCM can be defined as a field which encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers In essence, SCM integrates supply and demand management within and across companies Facing this challenge, the companies should make some fundamental changes, which involves not only the total transparency through Information sharing, but also process integration, organizational structures reengineering, and performance measures change as well Only the organizations will win who can better structure, co-ordinate and manage the relationships with their partners in a network committed to better, closer and more agile relationship with the final customers

Although lots of researches and practices have been devoted in this field, neither perspective is fully mature but each has considerable promise Mainly concerned on the operation and control of supply, the book collected some latest development and findings It consists of 20 chapters, each addressing a certain aspect of supply chain management, including the application and development ICT and the RFID technique in SCM, the new mathematical tools and techniques for SCM modeling and control, and some emerging issues in the academic research and practices of supply chain management Each chapter gives the reader background information on a subject and proposes an original solution This should serve as a valuable tool for professionals in this interdisciplinary field Hopefully, readers will contribute their own discoveries and improvements, innovative ideas and concepts, as well as novel applications and business models related to the field of supply chain management A brief introduction to each chapter is summarized in the following

Chapter 1 is about the optimal inventory control strategy of a serial supply chain A two-level model was suggested, one level to determine the optimal control strategy using a nonlinear integer-programming model solved by intelligent algorithms of GA, random-PSO and PEA, and the other to obtain the performance measurements of the optimized supply chain by simulation of the general push/pull model

Chapter 2 explored a synergistic approach towards autonomic event management in supply chains aiming at improving the qualities of supply chain event management (SCEM), especially with regard to approaching self-X properties and automation The

Taking optimization based e-sourcing models as objective, Chapter 5 reviewed three popular e-sourcing techniques with their underlying mathematical programming models that are used to solve the winner determination problems, and presented two future directions also: global sourcing and robust sourcing

RFID has thought to be “the first important technology of the twenty-first century”, and lots of researches have been done in this field Chapter 6 suggested a Domain Engineering Process for RFID Systems Development in Supply Chain, which defines a systematic process

to perform domain engineering which includes the steps of domain analysis, domain design, and domain implementation

In Chapter 7, some issues of the return policies and collaboration in supply chain are reviewed, involving an overview of the benefits and costs of returns policies, the different kinds of returns policies that are required to coordinate the supply chain for the different types of products and the impact of demand uncertainty and retailing competition on returns policies

Chapter 8 focuses on the problem of managing at the operational level supply chains, and described it by a modular model based on the first order hybrid Petri net formalism, which can effectively describe the operational management policies and the inventory control rules, and enables the designer to impose an optimal SC dynamics according to given objective functions

Chapter 9 described a statistical physics approach to understanding the supply chain oscillations, models of both normal modes and External interventions are demonstrate by inventory oscillations model and a fluid-flow model separately It is the first time that the general approach together with its applications has been assembled in one place, along with

a number of possible extensions

Information Technique is one of the most enablers of SCM development In Chapter 10,

a framework that enhances the agility of SCM with IT is presented

A simulation known as The Trading Agent Competition: Supply Chain Management Game (TAC SCM) was sponsored by a group of universities and research centers to compete against each other to prove mechanisms for supply chain situations since 2003 Chapter 11 presented the deepest analysis about the construction of the Tiancalli agents since 2005, intending to describe the effort and experience during the three years participating on TAC SCM

Chapter 12, investigating the methods of supply chain integration for manufacturing industry in the background of China, proposed a three-echelon theoretical framework for

Chapter 14 described the design and implementation of the MIDAS supply chain system by Using Web Services and the Service Oriented Architecture

In Chapter 15, a distributed supply chain planning system for multiple companies with Limited Local Information using an augmented Lagrangian relaxation method has been proposed

While by introducing Fuzzy mixed integer Linear Programming to tactical Supply Chain Planning, a multi-echelon, multi-product, multi-level and multi-period SC planning model was established in Chapter 16, given lack of knowledge (demand, process and supply uncertainties)

Chapter 17 explored the research issues on collaborative product design and development based on CM principles, which then be introduced in four areas separately- configuration identification, configuration change control, configuration status accounting, and configuration audits

Chapter 18 illustrated the RFID and EPC potential for business processes and presented RFID@B2B, a new method to improve the supply chain performances using RFID technology Chapter 19, focusing on the issues and potential solutions for a range of security vulnerabilities of RFID systems, analyzed the underlying vulnerabilities that exist in RFID systems, illustrated the threats of possible attacks, and provided corresponding countermeasures

In Chapter 20, aiming at the problems in traditional knowledge retrieval, an approach is put forward to supply chain knowledge management construction by introducing ontology, which consists of construction of domain ontology, formalization of ontology model, and development of supply chain knowledge management system based on ontology

We would like to thank all the authors for their excellent contributions in the different areas of supply chain management It is their knowledge and enthusiastic collaboration that lead to the creation of this book, which we are sure that will be very valuable to the readers

Contents

1 Optimal Control Strategy for Serial Supply Chain 001

Min Huang, W.H.IP, Xingwei Wang and Jianqing Ding

2 A Synergistic Approach towards Autonomic Event Management

Roy Oberhauser

3 Managing Logistics Flows Through Enterprise Input-Output Models 033

V Albino, A Messeni Petruzzelli and O G Okogbaa

4 Dynamic Analysis and Control of Supply Chain Systems 053

Alejandro Rodríguez-Angeles, América Morales Díaz and Arturo Sánchez

Kameshwaran Sampath and Lyès Benyoucef

6 A Domain Engineering Process for RFID Systems Development

Leonardo Barreto Campos, Eduardo Santana de Almeida,

Sérgio Donizetti Zorzo and Silvio Romero de Lemos Meira

7 Return Policies and Coordination of Supply Chain 127

Mabel C Chou

8 Operational Management of Supply Chains:

Mariagrazia Dotoli, Maria Pia Fanti and Agostino Marcello Mangini

9 A Physics Approach to Supply Chain Oscillations and Their Control 163

Ken Dozier and David Chang

10 Utilizing IT as an Enabler for Leveraging the Agility of SCM 183

Mehdi Fasanghari and S K Chaharsooghi

X

11 Development and Evolution of the Tiancalli Project 193

Macías Galindo Daniel, Vilariño Ayala Darnes and López y López Fabiola

12 A Framework and Key Techniques for Supply Chain Integration 215

Yanfang Huo, Xinyue Jiang, Fu Jia and Bingguang Li

13 New Approaches for Modeling and Evaluating Agility

Vipul Jain and Lyes Benyoucef

14 Managing and Integrating Demand and Supply Using Web Services

Firat Kart, Louise E Moser and P M Melliar-Smith

15 Distributed Supply Chain Planning for Multiple Companies

Tatsushi Nishi

16 Applying Fuzzy Linear Programming to Supply Chain Planning

David Peidro, Josefa Mula and Raúl Poler

17 Research Issues on Collaborative Product Design and Development 323

Jiun-Yan Shiau

18 Improvement of Supply Chain Performances Using RFID Technology 339

Cornel Turcu, Cristina Turcu and Adrian Graur

19 RFID Technology, Security Vulnerabilities, and Countermeasures 357

Qinghan Xiao, Thomas Gibbons and Hervé Lebrun

20 Ontology and Its Application in Supply Chain Information Management 383

Zetian Fu, Jun Yue and Zhenbo Li

1

Optimal Control Strategy for Serial Supply Chain

1 College of Information Science and Engineering, Northeastern University, Shenyang, Liaoning

2Key Laboratory of Integrated Automation of Process Industry,

Northeastern University, Shenyang, Liaoning,

3Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hung Hom, Kowloon,

In this chapter, the research focuses on inventory control strategy optimization related to activities, such as the purchase, production, storage and transportation of material, work in process and finished goods inventory within up-stream and down-stream enterprises along the serial supply chain The main research aspects are as follows:

1 To review the state of art of inventory control strategies of supply chain

2 Supply chain inventory control strategy optimization is based on the simulation of supply chain inventory system So, in this chapter, the general model of serial supply chain inventory control strategy is addressed

3 Model for single objective control strategy optimization is established, which describes the optimization problem of serial supply chain inventory control strategy with the objective of minimum cost and the constraint of the customer service level and average input standard deviation

4 The algorithm of GA (Genetic Algorithm), Random-PSO (Particle Swarm Optimization) and PEA (Pheromone Evolutionary Algorithm) are designed for the model Simulation studies suggested that each of the algorithms can solve this problem efficient, and Random –PSO algorithm is most efficient one

Supply Chain, The Way to Flat Organisation

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2 The general control model for serial supply chain

2.1 The different control strategies for serial supply chain

Under globalization and the rapid development of computers and information technology, all enterprises face new chances as well as more challenges This breeds the concept of a serial supply chain, a value-added chain that is composed of a series of enterprises: raw material suppliers, parts suppliers, producers, distributors, retailers, and transportation enterprisers Clients finally get their products, which are manufactured and handled systematically by the enterprises of the chain, started from either the raw material suppliers

or the parts suppliers This series of activities are the total activities of a complete serial supply chain, that is, from the supplier’s suppliers to the clients’ clients [1, 2]

SCM aims at decreasing the system cost, increasing the product quality, and improving service level by collaborating and controlling the conduct of each entities of the supply chain The goal is to upgrade the overall competitive ability of the whole system Hence, the inventory management of the serial supply chain is important The inventory control strategy of an enterprise affects the cost and the revenue indirectly Therefore, the target of

an optimal inventory is both to maximize the degree of clients’ satisfaction and to minimize the overall cost [3]

Inventory decouples the supplying, producing, and selling processes of an enterprise Each process operates independently This helps to reduce the effect that comes from the variation of demand forecast, and makes good use of resources when variation happened due to demand changes and market changes On the other hand, capital is needed for setting up an inventory The cost includes the capital used for inventory and products in process, the space used for inventory, the expenses on management, maintenance, and discarding of defected products Inappropriate inventory management even affects the operation efficacy of the enterprise

The characteristic of uncertainty of a supply chain increases the overall inventory of the whole chain system It also brings unnecessary cost to the node enterprises of the supply chain In order to avoid the “bullwhip effect” caused by the uncertainty of demand and supply, the traditional inventory strategy has to be revised Inventory control of a supply chain can be improved by strategies like shared technology, contract system, and integrated enterprises Thus, the competitive ability of a supply chain is enhanced

Generally speaking, there are two kinds of production inventory systems: the push and the pull system The current worldly popular production inventory control systems of Manufacturing Resource Planning (MRPII) and Just-in-time (JIT) belong to the system, respectively The push production control system adopts a central control method and organizes production by forecasting the future demand Therefore, production lead time is estimated in advance The pull production control system adopts a distributed control method and production is organized according to the real demand [4] Each method has its own advantages [5, 6] Peoples try to combine the two methods to attain better performances

example of combined push/pull control method [10] In 2001, Gaury et al proposed a methodology to customize pull control systems[11] In 2003, Ovalle and Marquez suggested the model of CONWIP control system for a serial supply chain and also shows the corresponding simulation analysis [12] But, up till this moment, all researches on control system of supply chain only deal with single specific control strategy like the push system, the pull system, the classic combined push/pull CONWIP control system[10,13-14], or the

Optimal Control Strategy for Serial Supply Chain 3 simple combination of push and pull system A generally used model of push/pull control strategy and its research is still absent The aim of the research is to establish a generally used method of the inventory system of a serial supply chain to replace those traditional classic control systems

In the systems of Kanban and CONWIP, system performances rely on the card quantities Similarly, in the serial push/pull system, distribution of circulating cards (the number of circulating cards at different stages) determines the control model, guides the production time and production quantity of the generally used system In the push system, the card numbers between each pair of nodes on the SC is infinite Therefore, determination of circulating cards becomes a key factor affecting the operating efficacy of a generally used inventory system of a serial supply chain

This chapter proposes an optimal control model that tackles a series of multi-stages of inventory control system of a supply chain The model is based on the combination of nonlinear integer programming and the generally used push/pull system of the inventory

of a serial supply chain It determines the distribution of circulating cards by integrating the intelligent algorithms and simulation analysis Both the case studies have proved that the results from intelligent algorithms are reasonable and effective

2.2 The general control model for serial supply chain

Figure 1 shows that there are n nodes on the whole serial supply chains Each node

represents upstream/downstream node enterprises like raw material suppliers, manufacturers, distributors, retailers, and clients Since the final target of a supply chain is

to satisfy the clients’ demands, each enterprise operates its production and sales under the generally used push/pull inventory system control That is, production of each node enterprise is affected by the raw material supply of the upstream enterprise and the demand

of the downstream enterprise One important goal of the supply chain is to reach a win-win status, to maximize the profits of the whole chain instead of any individual enterprise In order to control the quantity of products in process of the chain, there is a fixed product

standard on the feedback for the demand on upstream enterprise i from downstream enterprise j and marks it as card number K ij u Only when the real quantity of products in

Fig 1 The general control model for serial supply chain

process of node enterprise i is less than the forecast product quantity of each downstream

enterprise, then it is allowed to proceed with the manufacture Once the product of a unit is

allowed to be manufactured by node enterprise i, the node’s free card is attached to its

manufactured container, then the product has finished processing it is sent to the next node

enterprise i+1 The attached circulating card is detached and returns to node enterprise i as a

Supply Chain, The Way to Flat Organisation

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free card and authorizes further manufactures of other products When the value of K ij u is

∞, it means that there is no feedback control on upstream node i from downstream node j If

there is no feedback control on node i from all downstream nodes, then node i is under the

push control

The commonly used push/pull system has the following properties and assumptions:

1 Clients’ demands satisfy the normal distribution with upper and lower bound

2 The supply chain produces only one kind of product

3 All upstream enterprises can obtain the return cards from any downstream

manufacturing enterprise node without delay (no return delay)

4 There are sufficient materials for the initial node enterprise of the supply chain

Description of the Control Strategy

In order to describe the control strategy, two definitions are needed

The element K ij u of matrix K represents the card number in the control cycle sent by

downstream node j to upstream node i K ij u = ∞ implies that there is no pull control from

node j to node i Since all nodes are under the control of their downstream nodes, so the

lower triangular matrix of K is meaningless Thus, values of these elements are fixed as –1

So, we have equation (2):

Matrix M in (3) shows what kind of control strategy each node of the supply chain has If the

element M ij of matrix M equals to 1, it means there is pull control on upstream node i from

downstream node j If the element M ij of matrix M equals to 0, it means that there is no pull

control on upstream i from downstream node j So we have equation (4):

Optimal Control Strategy for Serial Supply Chain 5

ij ij

Property 1: When the sum of all elements of row i of matrix M equals to 0, there is no pull

control on node i from all its downstream nodes, which means that node i is under the push

control from its upstream node

2.3 The method for determine the optimal control strategy

The main problem of determining the optimal control strategy is how to choose an

appropriate control strategy so that some goals of the supply chain are reached while some

constraints are satisfied A two-level model are presented to cope with this problem The

first-level model is a mathematic programming model, which optimizes the distribution of

circulating cards by guaranteeing the goals of the supply chain and satisfying the certain

constraints

The second-level model is the general control model for serial supply chain which is used

for the analysis of the inventory system of the whole serial supply chain Definitions of the

variables for analysis is given here and the relationship among the variables is illustrated in

X the real usable quantity of raw material of node i of period t

(2) Technology flow variables

UC vessel capacity of node i

K matrix of circulating cards, element K ij represents the number of cards in the control

cycle of node i sent by node j

M the control matrix mark i, it is the last node which exerts the pull control on node i