Chae An • Hansjorg Fromm (Eds.)
Supply Chain
Management on
Demand
Strategies, Technologies, Applications
With contributions by numerous experts
With 87 Figures
4y Springer
Technische Universitat Darmstadt
Fachbereich 1
Betriebswirtschaftliclie^ibliothek
"A MO.
Inveritar-Nr.: ..p?&i Abstell-Nr.: /.
Table of Contents
1 Beyond ROI 1
1.1 Where ROI Falls Short 1 1.2 ROI is dead. Long live ROI 2 1.2.1 Action 1: Analyze Supply Chain Value Drivers 3 1.2.2 Action 2: Quantify Value Driver Impact 5 1.2.3 Action 3: Use a Common Framework 6 1.2.4 Action 4: Link ROI to Business Strategy 8 1.2.5 Action 5: Consider the Risks 11 1.2.6 Action 6: Put ROI to Work 13 1.3 Making it Happen 14 1.4 Supply Chain Value Modeling at IBM 15 1.5 Understanding Value Driver Interactions 16 References 16
2 Supply Chain Simulation 17
2.1 Introduction 17 2.1.1 Comparison to Business Process Simulation 18 2.2 Simulation Modeling Requirements 18 2.2.1 Data 19 2.2.2 Processes 20 2.2.3 Entities 22 2.2.4 Resources 23 2.2.5 Supply Chain Process Example 23 2.3 Strategic Uses of Supply Chain Simulation 27
2.3.1 Case Study: Build-to-Plan
vs. Continuous Replenishment 28 2.4 Operational Uses of Supply Chain Simulation 32 References 34
3 Inventory Management in High Technology Value Chains 37
3.1 Introduction and Overview 37 3.2 High-Technology Value Chains 39 3.2.1 Complex Configured Hardware Value Chains 40 3.2.2 Configure-To-Order Value Chains 41
XIV Table of Contents
3.2.3 Semiconductor Value Chains 42 3.3 A Multi-Echelon Inventory Model
for Complex Configured Hardware 44 3.3.1 AMT: The Optimization Engine 44 3.3.2 Case Study:
IBM's Hard Disk Drive Value Chain 47 3.4 Configure-to-Order
for High-Volume High-Variety Products 50 3.4.1 The Optimization Model 50 3.4.2 Case Study:
IBM's Personal Computer Value Chain 52 3.5 Semiconductor Value Chains 55 3.5.1 The Optimization Model 56 3.5.2 Case Study:
Xilinx Semiconductor Value Chain 58 3.6 Summary 61 References 62
Product Pricing in the e-Business Era 65
4.1 Introduction 65 4.2 Pricing in the e-Business Environment 67 4.3 Current Pricing Practice 69 4.4 Research Literature 73 4.5 Commercial Systems 81 4.6 Benefits of Price Optimization 84 4.7 Case Studies 87 4.8 Concluding Remarks 92 References 93
Applications of Implosion in Manufacturing 97
5.1 Manufacturing Resource-Allocation Models:
A Small Example 99 5.2 An Implosion Heuristic 103 5.3 IBM usage of implosion 105 5.4 Mathematical Formulation of the Implosion LLP 110 References 114
Strategic Sourcing and Procurement 117
6.1 Background 117 6.2 Overview 118 6.3 Spend Analysis 119 6.3.1 Functional Requirements 121 6.3.2 Data Cleansing/Scrubbing Techniques 122
Table of Contents XV
6.3.3 Data Cleansing for Spend Analysis 125 6.4 Sourcing 129 6.4.1 Core Ingredients 129 6.4.2 Support Functions 137 6.4.3 Mapping Features to Functional Components 139 6.5 Tactical Procurement 139 6.6 Conclusions.. 141 References 141
Managing Risk with Structured Supply Agreements 143
7.1 Introduction 143 7.2 Current Practices 144 7.3 Current Research 146 7.4 Framework for Analyzing Structured Supply Agreements... 148 7.5 Technical Implementation 149 7.5.1 Range Forecasting 149 7.5.2 Computational Risk Analysis of Portfolios
and Options of Structured Agreements 150 7.5.3 Mathematical Formulation 152 7.6 Calculation Engine 154 7.7 Contract Design & Management Reporting 157 7.8 Industry Examples : 158
7.8.1 Tooling/Capacity Planning
in Automobile Industry 158 7.8.2 Capacity and Launch Planning
in the CPG Industry 159 7.8.3 Supply chain coordination
in the High-Tech Industry 161 7.9 Summary 164 References 164
Reverse Logistics
-Capturing Value in the Extended Supply Chain 167
8.1 Introduction 167 8.2 The Supply Side - Reverse Product Flows 170 8.3 The Demand Side - Remarketing 172 8.4 Designing the Reverse Logistics Process 174 8.4.1 Take-Back Strategies 176 8.4.2 Grading and Disposition 178 8.4.3 Location and Network Design 179 8.5 Inventory Management and Value of Information 180 8.6 Conclusions 184 References 185
XVI Table of Contents
9 Service Parts Logistics Management 187
9.1 Introduction to Service Parts Logistics 187 9.1.1 Overview of this chapter 187 9.1.2 Service Parts Logistics 188 9.1.3 Probabilistic Demand 188 9.1.4 Lifetime 189 9.2 The Service Logistics Management Process 190 9.2.1 Service Planning 192 9.2.2 Service Network Design 193 9.2.3 Policy Planning 198 9.2.4 Source Selection and Contract Management 201 9.2.5 Policy Fulfillment 202 9.2.6 Order Management 204 9.2.7 Source Management and Engineering 204 9.2.8 Service Delivery 204 9.2.9 Management Information System 205 9.3 System Solution Developments 206 9.4 The Next Step:
Managing the Service Logistics Supply Chain 208 References .' 209
10 Business Process Integration 211
10.1 Introduction 211 10.1.1 The Vision 211 10.1.2 The Challenge 212 10.1.3 Bridging the Gap 212 10.2 A Multi-Layer Modeling Framework for BPIM 214 10.3 Supply Chain Scenario 216 10.4 Framework Details 218 10.4.1 Strategy Layer 218 10.4.2 Operation Layer 218 10.4.3 Operation Model for the JIT Example 220 10.4.4 Execution Layer 224 10.5 Sense and Respond Supply Chains through BPIM 229 References 231
11 Collaboration in e-Supply Networks 233
11.1 Introduction 233 11.2 From Supply Chains to e-Supply Networks 235
11.2.1 Some Theory - Towards Event-based,
Collaborative Business Networks 237 11.2.2 The New Competitive Landscape
Table of Contents XVII 11.3 Intercompany Relationships in e-Supply Networks 246 11.3.1 Relationships through e-Markets 247 11.4 Collaborative Processes in e-Markets 254 11.4.1 Collaborative Planning in e-Markets 260 11.4.2 Manufacturer-Customer
Collaborative Planning Processes 261 11.4.3 Manufacturer-Supplier
Collaborative Planning Processes 266 11.4.4 Manufacturer-3PL
Collaborative Planning Processes 269 11.5 Benefits of Collaboration in e-Supply Networks 275 11.6 Implementing Collaborative Planning 276 11.6.1 Organizational Implementation Considerations 277 11.6.2 Technological Implementation Considerations 278 11.7 Some Implementation Considerations 280 11.7.1 Who should you collaborate with? 280 11.7.2 How should you go about collaboration? 282 11.7.3 What are the requirements for
and implications of implementation? 282 11.8 Epilogue 283 References 284
12 Sense and Respond Business Performance Management 287
12.1 Introduction 287 12.2 Related Work 289 12.3 Sense and Respond Business
Performance Management Roadmap 290 12.3.1 Automation 291 12.3.2 Visibility 292 12.3.3 Control 293 12.3.4 Adaptiveness : 293 12.4 Sense and Respond Business
Performance Management Framework 294 12.4.1 Model-Driven Architecture 294 12.4.2 Monitoring Framework 296 12.5 Sense and Respond
Business Performance Management Applications 298 12.5.1 Demand Conditioning for PC Manufacturing 298 12.5.2 Inventory Management
in a Technology Supply Chain 304 12.6 Summary and Future Study 310 References 311
