Faizul Huq

Supplier selection problem: a comparison of the total cost of ownership and analytic hierarchy process approaches

Supplier selection and evaluation are arguably one of the most critical functions for the success of an organization. Several approaches exist in the literature to objectively evaluate suppliers, including analytic hierarchy process and total cost of ownership. Analytic hierarchy process provides a framework to cope with multiple criteria situations involving supplier selection, while the total cost of ownership is a methodology and philosophy, which look beyond just the price of a purchase to better understand and manage costs in selecting and maintaining relationships with suppliers. This paper illustrates the two approaches and provides a comparison.

From arms‐length to collaborative relationships in the supply chain

Buyer‐supplier relationships play an important role in an organization’s ability to respond to dynamic and unpredictable change. If the relationship is too restrictive, flexibility will be difficult to achieve and, if it is too lenient the risk of opportunism will be present. This paper provides a framework for understanding how buyer‐supplier relationships have evolved over the past two decades from transaction processes based on arms‐length agreements to collaborative processes based on trust and information sharing. To achieve this objective, buyer‐supplier relationships are reviewed from the perspectives of transaction cost theory, strategy‐structure theory and resource‐based theory of the firm. Findings from early supply chain research are contrasted with the findings of more current research to provide a better understanding of how these relationships have changed. Current theory is extended by offering two proposals that test the influence of trust and information sharing and a third proposal that rejects the notion that supply chain alliances lead to monopolistic practices.

Benchmarking – best practices: an integrated approach

The essence of benchmarking is the process of identifying the highest standards of excellence for products, services, or processes, and then making the improvements necessary to reach those standards – commonly called “best practices”. Various companies have adopted benchmarking and customized the methodology to suit their needs. A five‐step benchmarking model is suggested in this paper as a model to be used when undertaking a benchmarking study. Two case studies are enumerated and a comparison presented.

An integrated location, production, distribution and investment model for a multinational corporation

Abstract We present a mixed integer linear formulation that extends published models on multinational corporation facility location decisions by including exogenous variables such as exchange rates and tariff rates and incorporating production, distribution, and investment decisions. The model provides insights on production levels; facility configurations, distribution strategies and levels of investment needed at these facilities and explores factors that influence the facilitys configuration decisions. Several scenarios are considered based on various facility configurations and levels of exchange and tariff rates. The results obtained from these show that the models performance and results are in complete agreement with accepted economic theories.

BPR through ERP: Avoiding change management pitfalls

Abstract ERP-led BPR implementation often leads to fundamental changes within an organizations structure, culture and management process. Literature cites that a fragmented approach to change management practices is the major reason for BPR failures. The purpose of this paper is to look at the change management process in companies where BPR was implemented through ERP, and thereby obtain some insight into the dynamics of this change process. Many ERP implementers are finding themselves in a position to re-engineer their existing processes to fit the software they are implementing. The paper uses a case study approach that investigates six change management issues at three diverse companies where ERP-led BPR was implemented. The paper shows that through close attention to the change management principles the ERP implementers must integrate the changes with company strategic objectives, and through detailed planning and workforce cultural changes navigate the new system.

The impact of machine flexibility on the performance of flexible manufacturing systems

The performance of flexible manufacturing systems, (FMS) has been one of the major topics that has attracted the attention of production and operations management (POM) researchers for the last two decades. In this paper we study the relationship between the degree of machine flexibility and the level of system performance. A machine loading and routing model is developed and used to investigate the effect of changing machine flexibility on the performance measures of an FMS. The measures used in this paper include makespan, routing flexibility, capacity flexibility, and inventory effects. The results indicate that changes in the machine flexibility affect some measures more than others. The results also show that, for a decrease of 24 per cent in the degree of machine flexibility, makespan increases by 17 per cent, routing flexibility decreases by as much as 13 per cent, and capacity flexibility decreases by as much as 38 per cent, and the inventory decreases by as much as 26 per cent. Furthermore, as the workload on the FMS increases, the differences in the performance between two FMSs (with different degrees of machine flexibility) increase.

Measuring organizational responsiveness: the development of a validated survey instrument

Purpose – The paper aims to develop the survey utilized in this research as a data collection tool for the study of organizational responsiveness.Design/methodology/approach – Drawing from the operations and strategic management literature, measurement scales were developed in order to empirically test five proposed enablers of organizational responsiveness: environmental scanning, strategic planning, flexible manufacturing infrastructures, supply chain governance mechanisms, and multi‐skilled workers.Findings – The survey produced a total of 66 responses from 59 companies in three industries: automotive suppliers, instrumentation equipment, and semiconductor components. Three of the five enablers were found to be bi‐dimensional, which produced a survey instrument with eight separate measurement scales. Coefficient alpha was observed to be within the acceptable range for all construct scales and factor analysis confirmed unidimensionality for each construct.Research limitations/implications – The survey i...

Simulation study of a two‐level warehouse inventory replenishment system

Purpose – This paper aims to discuss a simulation study for a multi‐product, two‐echelon inventory replenishment system. The paper compares a one‐warehouse N‐retailer replenishment system to a two‐warehouse, N‐retailer system with cost per unit of distribution and delivery lead‐times as the performance measures. The purpose is to demonstrate that under specific circumstances a two warehouse N‐retailer inventory replenishment system provides better customer service without significant changes in the cost.Design/methodology/approach – Mathematical modeling and simulation methodology is used to test the performance of the proposed two warehouse N‐retailer system and statistical analysis is used to compare the performance of several scenarios.Findings – The two warehouse replenishment system indeed reduces delivery lead‐times, used as a measure of customer service, under specific conditions such as controllable freight costs.Research limitations/implications – Caution should be exercised when interpreting the...

Embedding JIT in MRP: The case of job shops

Abstract The philosophy and principles needed to institute JIT in any system, including a job shop, are described. A simulation model is developed using a benchmark job shop to study using a pull system in a job shop having variations in processing times, load levels, and machine breakdowns. It is inferred from simulation that JIT can be implemented if certain conditions are met. Processing time variations did not pose a serious impediment, but load levels and machine breakdowns were critical factors. With uneven loading, the resulting capacity bottlenecks make the pull system look like a push system. This can be avoided by processing a uniform mix of jobs to not violate workstation capacity limitations. If machine breakdowns are unavoidable, maintenance of buffer capacity is essential.

A continuous approximation procedure for determining inventory distribution schemas within supply chains

This paper presents an integrated inventory distribution optimization model that simultaneously incorporates the issues of location, production, inventory, and transportation within a supply chain. The objective is to determine the optimal number and size of shipments under varying but commonly practiced production and shipping scenarios. A continuous approximation procedure is proposed to determine the optimal number and size of shipments. Three production and shipping scenarios are investigated and closed form expressions for the optimal number of shipments for each scenario are obtained. A numerical example is presented to demonstrate the usefulness of the model. 2007 Elsevier B.V. All rights reserved.