Hans-Henrik Hvolby

An outsourcing framework: action research in the heavy industry sector

Abstract Recent literature suggests that outsourcing, properly understood and managed as an integral part of strategy, can aid competitiveness. This paper examines the process of outsourcing manufacturing to understand its role in the new strategic agenda. A system model which indicates the critical workflow interfaces between the production system and internal support functions is proposed. The model helps determine the cross-functional interdependencies of the outsourcing process. A four-phase model of strategic outsourcing is then developed. The model serves both as an internal management tool and as an external marketing tool. This leads to synthesis of a practical framework that links six generic phases of outsourcing to strategic planning. The framework includes key activities with built-in performance measures and expected output for each of the phases. The research methodology combines theory study with case study and action research in Aalborg Industries, which operates in the heavy industry. Hence, the research pursues both academic and industrial application.

Technical and industrial issues of Advanced Planning and Scheduling (APS) systems

The basic functionality of planning and scheduling in Advanced Planning and Scheduling (APS) systems, especially constraint-based planning and optimization, is analyzed and discussed by use of theory and examples including how objectives, decision-variables and penalty factors are handled. The paper concludes that the planning functionality is radically improved compared to MRP and ERP, but stresses how essential it is for a good outcome that the user is familiar with the core APS functionality to enable a careful setup of the many (conflicting) planning parameters. The research presented in this paper is funded by the EU Union via the EmpoSME and ValuePole projects while the APS descriptions and tests are based on Oracles Advanced Planning and Scheduling software.

Challenges in business systems integration

Four main frameworks for intercompany relationships (SCOR, CPFR, ISA95 and OAG) are discussed and compared. The link between the frameworks and different supply chain integration applications such as ERP, CRM and VMI are pictured. Finally the state-of-the-art, future state and challenges of the supply chain integration applications are discussed. It is concluded that the main challenge with respect to frameworks supporting business systems integration is to extend them with implementation functionality to better support business system application development. An example of this is customer requirement fulfillment processes such as product development and order fulfillment. Not only do they cross the borders of the companys departments (sales, logistics, purchasing, etc) but also various companies in the supply chain. In spite of this development, business integration across systems and borders are still not matured and to a large extend based on human interaction.

Supply chain planning opportunities for small and medium sized companies

In this paper major opportunities for supply chain planning for small and medium sized companies are described. The role of information and communication technology (ICT) is investigated and a framework for supply chain planning solutions is designed.

Linking Modular Product Architecture to the Strategic Sourcing Process: Case Studies of Two Danish Industrial Enterprises

This research links the concepts of product modularisation and strategic sourcing, in order to understand their role in lean supply and the conditions under which they are appropriate. The framework for analysis is a combination of theoretical findings and two longitudinal case studies from Danish industry. Four interrelated models are presented: (1) a supply chain model; (2) a conceptual model for modular product architecture; (3) a strategic archetype model of contractual relationships; and (4) a decision-tree model for strategic sourcing. The models have academic and operational significance.

The implications of information sharing on bullwhip effects in a toy supply chain

This paper compares actual bullwhip effects provided by retailers who shared downstream demand information and retailers who did not share in a three-level (divergent) toy supply chain. The toy supply chain faces high forecast errors and bullwhip effects due to unpredictable and seasonal demand patterns. The results indicate a reduction of the bullwhip effect and an improvement of the fill rate due to the increase of retailers who shared downstream demand information. This paper also addresses two main causes of the bullwhip effect, which are the supply variability and limited use of the shared demand information. To reduce the bullwhip effect, two solutions using the shared information are tested. They are a proposed premature replenishment rule and a simple forecast updating mechanism. Both solutions are proven capable in reducing bullwhip effects of the toy supply chain even without coordination between the toy manufacturer and the retailers.

Advanced planning and scheduling technology

This article presents research on the core technology in advanced planning and scheduling (APS) systems that are currently the state-of-art in supply chain planning and optimisation. Further research is needed to enable the opportunities given, especially the area of combined planning and scheduling. Mixed integer linear programming (MILP) methods have been successfully applied to solve diverse problems, such as planning and capital budgeting. Constraint programming (CP) methods have proved to be successful in solving highly constrained discrete optimisation and feasibility problems for scheduling and resource allocation and have been combined with MILP and titled Mixed linear logic programming (MLLP). In this article an integrated approach is presented that uses the complementary strengths of MILP and CP for solving problems that are otherwise intractable using either of these two methods alone. The presented optimisation approach can effectively handle the combined planning and scheduling problem within an APS system as part of the core optimisation engine.

Models for supply chain reengineering

The goal of this paper is to provide a first step in the development of a coherent set of modelling methods for supply chain reengineering. This paper shows that different fields of attention in supply chain management should be approached with different modelling methods. Three modelling methods are presented: the event process chain (EPC) method; the activity chain model (ACM) method; and the GRAI grid method (adjusted for supply chains). EPC modelling focuses on time relationships between primary processes/functions, and is customer oriented. ACM modelling focuses on functions/processes and information flows. GRAI focuses on decision structures and information flows. The three methods are described, and an application of the methods to a case study company is presented. This paper concludes with a comparison of the methods and a discussion of their applicability.

Coordinated responsiveness for volatile toy supply chains

Demands for innovative products in short selling windows are highly unpredictable. This volatility creates demands with dramatic peaks and troughs due to risk-avoidance behaviours among manufacturers and retailers. The consequences are high obsolete inventory, lost sales, and markdowns. Theoretically, the concepts of quick response and postponement are among the potential solutions for such as a volatile and seasonal toy supply chain. This study explores the role of responsiveness and coordination in improving supply chain performance. It is based on an in-depth case study in a European toy supply chain. Consumer and retailer demand patterns and their implications to the manufacturers supply chains are analysed. Opportunities for relocating order penetration points (OPP) and quick response are simulated, and appropriate relocation rules are established. It is concluded that OPP relocation and responsiveness are beneficial but inadequate in improving the supply chain. Coordination of ordering behaviours is necessary. Coordination processes to achieve greater performance between the toy manufacturer and two of its retailers are presented. Furthermore, the concept of ‘coordinated responsiveness’ is proposed, which combines the concepts of quick response, accurate response and coordination.

Effective teamworking: can functional flexibility act as an enhancing factor?: An Australian case study

– Two of the most sought after properties in todays dynamic and competitive manufacturing environment are labour flexibility and effective teamworking. This is due in no small part to the growth of modern manufacturing philosophies which strongly advocate the need for both teamwork and flexibility. This paper aims to explore the impact of two labour flexibility strategies (functional flexibility and intra‐cell flexibility) on teamwork in a cellular manufacturing environment., – Using a revised input/process/output (IPO) team effectiveness model a questionnaire was designed and a case study undertaken at a large Australian manufacturer. The knowledge, skills, and ability (KSAs) gained from job rotation (flexibility) was quantitatively tested against team processes and team performance., – It was found that functional flexibility had an overall stronger, significant effect on the five team processes tested (communication, conflict resolution, problem solving, goals and performance, tasks and planning) than did intra‐cell flexibility. In regards to output (team performance) functional flexibility performed better in areas such as customer delivery, inventory holdings and quality, while intra‐cell flexibility performed better in the area of absenteeism. An inconclusive result was obtained for the fifth output measure, efficiency rate., – The study was conducted at a single organisation, which limits the generalisation of the outcomes, therefore broader research on the area is recommended., – The study provides evidence that the individual benefits of both functional flexibility and teamworking may be enhanced while being practised concurrently. With labour flexibility and teamwork being key factors in most modern organisations, the practical implications are much wider than the field of manufacturing., – Individually, the literature offers much on teamworking and flexibility but studies exploring the combined effects of these two important elements are rare, especially in the field of manufacturing. The present paper fills some of the gaps