A decision support system for integrating manufacturing and product design into the reconfiguration of the supply chain networks

Authors:
Yohanes Kristianto;Angappa Gunasekaran;Petri Helo;Maqsood Sandhu
Affiliations:
Department of Production, University of Vaasa, P.O. Box 700, FI-65101 Vaasa, Finland;Department of Decision and Information Sciences, Charlton College of Business, University of Massachusetts - Dartmouth, 285 Old Westport Road, North Dartmouth, MA 02747-2300, USA;Department of Production, University of Vaasa, P.O. Box 700, FI-65101 Vaasa, Finland;Faculty of Business and Economics, United Arab Emirates University, P.O. Box 17555, Al-Ain, United Arab Emirates
Venue:
Decision Support Systems
Year:
2012

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Abstract

A supply chain needs to meet its customers' requirements (CRs) in terms of delivery lead times, total costs and product quality. The objective of this article is to improve the level of integration in all aspects of supply chain reconfiguration, such as the inventory allocation and manufacturing process involved, by incorporating manufacturing and product design into logistic design. The effect of uncertain customer demand, production and supply lead times are studied. An optimum supply chain network is configured by combining optimization at the strategic and tactical level. A system dynamic based computer simulation model is used to validate the operations of the supply chain. The performance of the system is measured in terms of backorders and inventory level. The results and analysis indicate that fewer stockholding points and a shorter review period of demand can improve performance in this respect. In addition, a proposal for improving the performance of supply chain in terms of lower safety stocks is presented. Finally, management decision-making is discussed, among other concluding remarks.