supply chain design and analysis in pakistan 2023

supply chain design and analysis in pakistan 2023

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  PRESENTEDBY: ShifaAsif, ShehrBano, SyedIrtazaZaidi, TalhaBinHafeez, HazzaJaved SUPPLYCHAINDESIGN&ANALYSIS; Models&Methods
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  BRIEFOVERVIEW  A supplychainisa networkthatincludes suppliers, manufacturers,distributors,andretailersto transformrawmaterialsinto final products.  Thesupply chainis traditionallyviewed asa singleentity, but there is a need for a moreintegrated approachto manufacturingsystem design.  The objectiveof thispaperis to reviewsupply chainmodeling literatureandidentifya researchagendafor future research.  Thepaperreviewsexistingsupply chainmodels andmethodsandsuggestsfuture researchin four areas: 1) evaluatinganddeveloping supply chainperformancemeasures, 2) relatingdecisionvariablesto performancemeasures, 3) consideringissues affectingsupply chainmodeling, 4) andclassifyingsupply chainsystemsfor designandanalysis.
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  INTRODUCTION  SupplyChain;an integratedprocessinvolvingvarious businessentities  Traditionalcharacteristicsof a supply chain;forward flow of materials and backwardflow of information  Increasingfocus on the performance, design, and analysis of the supply chain as a whole  Emergence of the supply chain concept due to changes in the manufacturingenvironment  Additionof "reverselogistics"to includeproduct recovery for recycling, re-manufacturing,and re-use  Supply chainconcept originating fromtwo-stagemulti-echeloninventory models  Notable progress in the design and analysis of two-echelon systems
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  THESUPPLYCHAINDEFINED  A supplychain is a manufacturingprocess that converts raw materialsinto finalproducts and deliversthem to customers.  The supply chain consistsof two integratedprocesses: Production Planningand Inventory Control, and Distributionand Logistics.  PRODUCTIONPLANNINGANDINVENTORYCONTROL  Focuses on managing the manufacturingprocess and storage of raw materialsand final products.  Inventory control isresponsible for managing storage policiesand procedures.  DISTRIBUTIONANDLOGISTICS  Thisprocess involvesretrieving and transporting products from warehouses to retailers.  It includesinventory retrieval,transportation, and finalproduct delivery.  The designand management of these processes determine how wellthe supplychain performs in meeting objectives.
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  FOURMODELS;ForDesigningSupplyChain  it comesto designingand analyzingsupply chains, there are four main categoriesbased on how they are modeled. Deterministic AnalyticalModels • All the variables are known and specified • Everything is predictable • There are no unknown factors StochasticAnalytical Models • At least one variableis unknown • It is assumed to follow a specific probability distribution • It's like making educated guesses based on probabilities. EconomicModels • Focuses on the financialaspects of the supply chain. • This includes factorslike costs, profits, and investments. SimulationModels • use computer simulations to mimicreal- world scenarios • understand how the supply chain would perform under different conditions.  So, these four categories help us understand and analyze supply chainsbased on differentapproaches and objectives.
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  A.ALGORITHMS;DeterministicAnalyticalModel No. INVENTED BYOBJECTIVE • VARIABLE 1 Williams (1981) Find the most cost-effective schedule that meets demand in the supply chain network. • Production and distribution scheduling, • cost considerations (inventory, ordering, delivery, set-up). 2 Williams (1983) Minimize average cost per period by determining batch sizes for production and distribution. • Batch sizes, • processing costs, • inventory holding costs 3 Ishii et al. (1988): Optimize stock levels and lead times in the supply chain. • Stock levels, • lead times, • linear demand, • inventory obsolescence. 4 Cohen and Lee (1989) Maximize total profit after taxes for manufacturing facilities and distribution centers. • Economic order quantity, • resource constraints, • demand limits, • product assignments 5 Cohen and Moon (1990) Determine the cost and operations of the supply chain, including facility openings. • Raw material suppliers, • manufacturing facilities, • distribution centers, • retailer
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  B.ALGORITHMS;StochasticAnalyticalModel No. ALGORITM INVENTEDBY HOW IT WORKS 1 Material Requirements Policy Model Cohen and Lee (1988) • Focuses on establishing material ordering quantities, reorder intervals, and estimated response times for all supply chain facilities • Utilizes four cost-based sub-models, each corresponding to a different production stage • Minimizes total costs for each sub-model 2 Multi-Echelon Distribution-Type Model Svoronos and Zipkin (1991) • Considers supply chain systems with at most one direct predecessor and any number of direct successors • Assumes a base stock, one-for-one replenishment policy for each facility • Provides steady-state approximations for average inventory level and average number of outstanding backorders • Determines minimum-cost base stock level using approximations 3 Heuristic Stochastic Model for Material Flows Lee and Billington (1993) • Models a pull-type, periodic, order-up-to inventory system • Determines review period and order-up-to quantity as model outputs • Calculates required stock levels to achieve target service level or determines service level given a material ordering policy
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  No. ALGORITM INVENTEDBY HOW IT WORKS 4 Stochastic Periodic- Review Inventory Model for Process Localization Lee, et. al. (1993) • Focuses on designing product and production processes suitable for different market segments • Considers differences in target market structures • Aims to minimize cost and maximize customer service levels 5 Mathematical Programming Model for Integrated Supply Chain Pyke and Cohen (1993) • Considers a three-level supply chain with one product, one manufacturing facility, one warehousing facility, and one retailer • Minimizes total cost subject to a service level constraint • Determines reorder interval, replenishment batch sizes, and order-up-to levels for the retailer 6 Application of filter theory and simulation to study supply chains Towill and Del Vecchio (1994) • compare filter characteristics of supply chains • Analyze supply chain responses to randomness in demand patterns • Use simulation to compare responses and determine minimum safety stock requirements for desired service level 7 Analytical model for product configuration and optimization Lee and Feitzinger (1995) • product differentiation through optimal production steps • Assume stochastic product demands and consider manufacturing process with multiple steps • Determine optimal step P for factory and distribution centers based on expected cost analysis
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  C.EconomicModel  ChristyandGrout(1994) developedaneconomic,game- theoreticframeworkfor modelingthe buyer-supplier relationshipin a supply chain.  They used a 2 x 2 supply chainrelationshipmatrixto identify conditionsfor each type of relationship.  Thematrixcapturesthe risksassumed by the buyer and supplier based on process andproductspecificity.  Theauthorsassignedappropriatetechniquesfor modeling the buyer-supplier relationshipfor each of the four riskcategories.
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  D.SimulationModels  Towill(1991)andTowill,et.al.(1992)  usedsimulationtechniquesto see how differentstrategiesaffectdemand patterns in a supply chain.  They looked at thingslike eliminatingdistributioncenters, improving information flow, using Just-In-Timeinventory, and changingorder quantity procedures.  The goal was to find the strategiesthat worked best in smoothing out variationsin demand.  Results:They found that the Just-In-Timestrategy and removing distribution centers were the most effective.  Wikner,et.al.(1991)  Explored differentstrategiesto improve the supply chain.  They looked at thingslike fine-tuningdecision rules, reducing time delays, and integratinginformation flow.  They testedthese strategieson a three-stage supply chain model  Results:The most effectiveimprovement strategy was improving the flow of information and separatingorders at all levelsof the chain.
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  SUPPLYCHAINPERFORMANCEMEASURES  Performancemeasuresareimportantin supplychaindesignandanalysis  They areused to determineefficiency andeffectiveness of existingandalternativesystems  They areusedto designproposed systems by determiningthe best values of decisionvariables  There arequalitativeandquantitativeperformancemeasuresused in evaluatingsupply chain effectivenessand efficiency.
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  A.QualitativePerformance Measures CustomerSatisfaction Flexibility Information andmaterial flowintegration SupplierPerformance EffectiveRisk Management
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  B.QuantitativePerformance Measures MeasuresbasedonCost Profitmaximization Salesmaximization ReturnonInvestmentmaximization Costminimization Inventoryinvestmentminimization MeasuresbasedonCustomerSatisfaction Fillratemaximization Productlatenessminimization Customerresponsetimeminimization Responsetimeminimization Functionduplicationminimization
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  PerformanceMeasuresUsedInSupplyChain Performance Measures ForCost Maximize Profit Minimize Cost Minimize Average Inventory level Minimize amount of obsolete inventory Performance Measures For Customer Responsiveness Achieve target service level (Fill Rate) Minimize stockout probability Performance Measures For Cost & Customer Responsiveness Minimize product demand variance or demand amplification Maximize buyer-supplier benefit Performance Measures For Cost and Activity TIme Minimizethe number of activitydays and total cost Performance Measures For Flexiblity Maximize available system capacity
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  DecisionVariablesInSupplyChainModeling  In supplychain modeling, performance measures help understand how well things are going.  These measures are liketools that are used to evaluatedifferentaspectsof the supply chain.  These measures are representedas functions (mathematically), and take into account various decisionvariables.  The goal is to select the best combination of decisionvariablesthat willoptimize the performance measures.  By doing this, we can improve the overall performance of the supply chain.  Decisionvariablesincludedinthearticle: Production/DistributionScheduling Decidingwhen and where to manufacture and distributeproducts. InventoryLevels Determiningthe quantity and location of raw materials, sub-assemblies,and finalproducts. NumberofStages(Echelons) Decidinghow many stages or levelsthe supply chain willhave. DistributionCenter(DC) Customer Assignment:Figuringout whichdistributioncenters willserve which customers Plant-ProductAssignment Determiningwhichplants willproduce which products. Buyer-SupplierRelationships Managing and developing the relationshipbetweenbuyers and suppliers. ProductDifferentiation StepSpecification Decidingat which point in the manufacturing process a product should be differentiatedor specialized. NumberofProductTypesHeldin Inventory Determiningthe variety of product types to be stored in finishedgood
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  GapsInResearchOnPerformanceMeasures  Areasforfutureresearch 1) Evaluatinganddevelopingperformance measures for supply chains. 2) Developingmodels and procedures to connect decisionvariablesto performance measures. 3) Considering issuesthat impact supply chainmodeling. 4) Classifyingsupply chainsystems to create rules or techniquesfor designingand analyzingmanufacturing supply chains.  Existingresearch has not examined whether the measures currentlyused are suitablefor supply chainsas a whole.  It's unlikelythat a singlemeasure willbe enough, so a combination of measures may be neededfor accurate and comprehensive analysis.  Theresearchquestions thatcanbeexploredare: 1) 1Are the current performance measures appropriate for supplychains? 2) What types of performance measures or measurement systems are suitablefor analyzingsupply chain performance, and why?
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  GapsInResearch(Cont.)  SupplyChainoptimization  Researchonsupply chain optimizationfocuses on aligningindividualmanagers' performance goals with the entire supply chain to minimizeconflicts.  Some studiesexplore the relationshipbetween inventory costs and optimal decisionrules.  More research is needed to connect performance measurement systems with key supply chaindecision variables.
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  SUPPLYCHAINMODELEINGISSUES  ProductPostponement  Involvesdelayingoperationsinthesupplychainto delayproductdifferentiation  Leadingto benefitssuchasreducedinventoryandholdingcosts.  GlobalvsSingleNationSupplyChainModeling  Global supply chain modeling involvesconsidering additionalfactors when operating in multiple nations.  For example export regulations,duty rates, and exchange rates.  DemandDistortionandVarianceAmplification  Also known as the bullwhipeffect  It can occur when orders to suppliershave larger variancesthan sales to buyers  Thiscan lead to excess inventory costs.
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  CONCLUSION  Supply chainsystemsarecomplexand requirecomplex models andmethods to study and understandthem.  Supply chainsystemscan be classifiedbasedon characteristicssuch asuncertainty,volume of demand,number of echelons, ornumber of itemsproduced.  Developing a meaningfulclassificationscheme forsupply chainsystems canlead to rule-of-thumb techniquesthat suggestoperationalcharacteristicsto achievespecificobjectives.  Researchisneeded to develop a classificationscheme andestablishassociationsbetween decision variablesandperformanceobjectives insupply chain systems.