Supply Chain Management is
a field of growing interest for both companies and researchers. It consists of
the management of material, information, and financial flows in a logistics
distribution network composed of parties like vendors, manufacturers,
distributors, and customers. The environment in which companies nowadays manage
their supply chain is highly dynamic. This thesis is devoted to the development
of optimization tools that enable companies to detect, and subsequently take
advantage of, opportunities that may exist for improving the efficiency of
their logistics distribution networks in such a dynamic environment.
Within the field of
distribution logistics a number of developments have occurred over the past
years. We have seen a globalization of supply chains in which national
boundaries are becoming less important. Within Europe we can observe an
increase in the attention that is being paid by West-European companies to
markets in Eastern Europe and the former Soviet Union. The fact that European
borders are disappearing within the European Union results in questions about
the reallocation, often concentration, of production. Moreover, the relevance
of European and regional distribution centers instead of national ones is
reconsidered. According to Kotabe [80], the national boundaries are losing
their significance as a psychological and physical barrier to international
business. Therefore, companies are stimulated to expand their supply chains across
different countries. Global supply chains try to take advantage of the
differences in characteristics of various countries when designing their
manufacturing and sourcing strategies. For example, the labor and raw materials
costs are lower in developing countries while the latest advances in technology
are present only in developed countries. As pointed out by Vidal and
Goetschalckx [135], global supply chains are more complex than domestic ones
because, in an international setting, the flows in the supply chain are more
difficult to coordinate. Issues that are exclusive to a global supply chain are
different taxes, trade barriers, and transfer prices.
(Image courtesy: AIMS institute of supply
chain management image taken from supply
chain management certification and masters in supply chain management courses)
There are dynamics
inherent to the flows in the supply chain. Fisher [46] introduces the concepts functional
and innovative to classify products. Functional products are the
physical products without any added value in the form of, for instance, special
packaging, fashionable design, service, etc. He argues that functional products
have a relatively long life cycle, and thus a stable and steady demand, but
often also low profit margins. Therefore, companies introduce innovations in
fashion or technology with the objective of creating a competitive advantage
over other suppliers of physically similar products, thereby increasing their
margins. As a consequence, this leads to a shortening of the life cycle of
innovative products since companies are forced to introduce new innovations to
stay competitive. Another development that can be observed is the customer orientation.
Supply chains have to satisfy the requirements of the customers with respect to
the customized products as well as the corresponding services. The first step
when designing and controlling an effective supply chain is to investigate the
nature of the demand of the products.
The tendency towards a
shorter life cycle for innovative products leads to highly dynamic demand
patterns and companies need to regularly reconsider the design of their supply
chains to effectively utilize all the opportunities for profit. One way of
creating a competitive advantage is by maintaining a highly effective logistics
distribution network. Thus, logistics becomes an integral part of the product
that is being delivered to the customer. Competitiveness encourages a continuous
improvement of the customer service level, see Ballou [6]. For example, one of
the most influencing elements in the quality of the customer service is the
lead time.
Technological advances can
be utilized to reduce these lead times, see Slats et al. [125]. For example,
Electronic Data Interchange with or without internet leads to improved
information flows, which yield a better knowledge of the customers’ needs at
each stage of the supply chain.
“found that article in my previous study notes of supply chain training
and I remembered that after a week there will be a test day for my students of logistics
courses in my supply chain academy where I am teaching the classes of supply chain management diplomat and also giving tips to supply chain
management courses students and taking care of supply chain management programs
department so I thought to help out students for coming test that’s why I am
sharing this article.”
