Asoo J. Vakharia

Integrated production/distribution planning in supply chains: An invited review

1. IntroductionManaging operations in today’s competitive marketplace poses significant challenges. The traditionalthought was that there were so many conflicts in the multiple demands on the operations function thattrade-o•s were made in achieving excellence in one or more of these dimensions. Thus, for example, if afirm competed on the dimensions of flexibility and quality, cost was of secondary concern. This type ofthinking was motivated by the fact that customers requiring product variety and high quality were typicallywilling to pay a premium price. Similarly, if the competitive pressures required the supply of low costproducts (i.e., price was the major competitive force), then flexibility in terms of new product variety wasnot necessarily a major priority for the firm and hence, was sacrificed. This type of analysis forced thetraditional operations manager to visualize the trade-o•s between competitive priorities were a way of life.However, the quality revolution and increased e†ciency of foreign manufacturers in the late 1970s andearly 1980s changed our thinking. Thus, for example, regardless of the type of product, flawless quality wasrequired at extremely competitive prices. In fact, the competitive realities of the current marketplace andthe impact on the contemporary operations manager are aptly summarized below (Skinner, 1985):Make an increasing variety of products, on shorter lead times with smaller runs, and flawless quality.Improve the ROI by automating and introducing new technology in processes and materials so thatprices can be reduced to meet local and foreign competition. Mechanize – but keep the schedules flex-ible, inventories low, capital costs minimal, and the work force contented.From a strategic perspective, this indicates that the dimensions of cost, flexibility, quality and delivery arenot to be traded-o• against one another but need to be simultaneously prioritized. In response to this,operations managers have focused their attention on a multitude of approaches. In our opinion, the adventof Total Quality Management (TQM) to achieve flawless quality, Flexible Manufacturing Systems (FMS)

Cell formation in group technology: review, evaluation and directions for future research

Abstract This paper discusses and reviews a fundamental issue in cellular manufacturing—cell formation. This problem is of strategic and operational importance in that it affects the fundamental structure and the overall layout of a cellular manufacturing system. We first provide a comprehensive mathematical formulation of the cell formation problem and then propose a methodology-based classification of prior research. This classification is used in reviewing the most recent literature on the cell formation problem. Based on a comparison and critical evaluation, we highlight the shortcomings of current approaches and also outline directions for future research.

Single versus multiple supplier sourcing strategies

Successful supply chain management necessitates an effective sourcing strategy to combat uncertainties in both supply and demand. In particular, supply disruption results in excessive downtime of production resources, upstream and downstream supply chain repercussions, and eventually a loss in the market value of the firm. In this paper we analyze single period, single product sourcing decisions under demand uncertainty. Our approach integrates product prices, supplier costs, supplier capacities, historical supplier reliabilities and firm specific inventory costs. A unique feature of our approach is the integration of a firm specific supplier diversification function. We also extend our analysis to examine the impact of minimum supplier order quantities. Our results indicate that single sourcing is a dominant strategy only when supplier capacities are large relative to the product demand and when the firm does not obtain diversification benefits. In other cases, we find that multiple sourcing is an optimal sourcing strategy. We also characterize a non-intuitive trade-off between supplier minimum order quantities, costs, and supplier reliabilities. Finally, we examine the robustness of our results through an extensive numerical analysis of the key parameters of our model.

Designing a Cellular Manufacturing System: A Materials Flow Approach Based on Operation Sequences

Abstract This paper presents a cell formation method which integrates the issues of cell formation and with in-cell material flows. A coefficient which assesses the similarity of two parts in terms of their operation sequences is proposed and used to form part families and cells. Further, the within-cell machine sequence and machine loads are explicitly considered in the design process. The methodology has been operationalized through several computer programs )written in FORTRAN 77) and implemented on an IBM/PC, An application of the design methodology to a hypothetical cell formation problem is provided.

e-Business and Supply Chain Management

In recent years, the area of Supply Chain Management has generated a substantial amount of interest both by managers and researchers. This interest has also been fueled by the growth in the development and application of e-business technologies. These technologies enable the supply chain manager to make coordinated decisions by integrating the diverse and sometimes conflicting objectives of the various trading partners in a chain. The purpose of this paper is to: (a) highlight strategic and tactical issues for analyzing supply chains in an e-business setting based on papers published in this special issue; and (b) describe future research opportunities in this emerging interdisciplinary area.

Outsourcing inventory management decisions in healthcare: Models and application

Traditionally healthcare systems have paid little attention to the management of inventories. However, with the implementation of diagnostic related groups by the United States government (which resulted in a pre-fixed level of compensation for specific medical services), these systems have turned their attention to cost containment as a means of increased profitability. This research addresses the issue of managing inventory costs in a healthcare setting. The specific problem addressed in this paper is a comparison of inventory costs and service levels of an in-house three-echelon distribution network vs. an outsourced two-echelon distribution network. In comparing inventory policies in both networks, we focus on non-critical inventory items. Based on our analysis, we find that the recent trend of outsourcing to distribute non-critical medical supplies directly to the hospital departments using them (i.e., the twoechelon network) results not only in inventory cost savings but also does not compromise the quality of care as reflected in service levels. � 2003 Elsevier B.V. All rights reserved.

A Hamiltonian path approach to reordering the part-machine matrix for cellular manufacturing

The formation of machine and part groups is a central issue in the design of cellular manufacturing systems. The part-machine incidence matrix has formed the basis of several techniques for cell formation. In this paper, we propose formulating machine and part ordering as a Hamiltonian Path Problem. Similarity coefficients are used to form a distance measure for machines and parts. The resulting solutions are shown to be better than those obtained from binary clustering on a set of test problems.

SCHEDULING A FLOWLINE MANUFACTURING CELL WITH SEQUENCE DEPENDENT FAMILY SETUP TIMES

This paper considers the problem of scheduling part families and jobs within each part family in a flowline manufacturing cell where the setup times for each family are sequence dependent and it is desired to minimize the makespan while processing parts (jobs) in each family together. Lower bounds on the optimal makespan value and eAcient heuristic algorithms for finding permutation schedules are proposed and empirically evaluated as to their eAectiveness in finding optimal permutation schedules. ” 2000 Elsevier Science B.V. All rights reserved.

A methodology for designing flexible cellular manufacturing systems

Cell formation in cellular manufacturing deals with the identification of machines that can be grouped to create manufacturing cells and the identification of part families to be processed within each cell. Dynamic and random variations in part demands can negatively impact cell performance by creating unstable machine utilizations. The purpose of this paper is to introduce and illustrate an interactive cell formation method that can be used to design ‘flexible’ cells. Flexibility in this context refers to routing flexibility (i.e., the ability for the cellular system to process parts within multiple cells) and demand flexibility (i.e., the ability of the cell system to respond quickly to changes in part demand and part mix). Through an experimental analysis using multiple data sets, we also validate the procedure and provide guidelines for parameter settings depending upon the type of flexibility of interest to the user. Finally, trade-offs and interdependences between alternative types of flexibility in the context of cellular systems are illustrated.

Heuristics for sourcing from multiple suppliers with alternative quantity discounts

In this paper, we analyze the impact of supplier pricing schemes and supplier capacity limitations on the optimal sourcing policy for a single firm. We consider the situation where the total quantity to be procured for a single period is known by the firm and communicated to the supplier set. In response to this communication, each supplier quotes a price and a capacity limit in terms of a maximum quantity that can be supplied to the buyer. Based on this information, the buyer makes a quantity allocation decision among the suppliers and corresponding to this decision is the choice of a subset of suppliers who will receive an order. Based on industry observations, a variety of supplier pricing schemes from the constituent group of suppliers are analyzed, including linear discounts, incremental units discounts, and all units discounts. Given the complexity of the optimization problem for certain types of pricing schemes, heuristic solution methodologies are developed to identify a quantity allocation decision for the firm. Through an extensive computational comparison, we find that these heuristics generate near-optimal solutions very quickly. Data from a major office products retailer is used to illustrate the resulting sourcing strategies given different pricing schemes and capacity limitations of suppliers in this industry. We find for the case of capacity constrained suppliers, the optimal quantity allocations for two complex pricing schemes (linear discount, and incremental units discount) are such that at most one selected supplier will receive an order quantity that is less than its capacity.