Jan Holmström

Intelligent Products: A survey

This paper presents an overview of the field of Intelligent Products. As Intelligent Products have many facets, this paper is mainly focused on the concept behind Intelligent Products, the technical foundations, and the achievable practical goals of Intelligent Products. A novel classification of Intelligent Products is introduced, which distinguishes between three orthogonal dimensions. Furthermore, the technical foundations in the areas of automatic identification and embedded processing, distributed information storage and processing, and agent-based systems are discussed, as well as the achievable practical goals in the contexts of manufacturing, supply chains, asset management, and product life cycle management.

Bridging Practice and Theory: A Design Science Approach

Despite ambitious efforts in various fields of research over multiple decades, the goal of making academic research relevant to the practitioner remains elusive: theoretical and academic research interests do not seem to coincide with the interests of managerial practice. This challenge is more fundamental than knowledge transfer, it is one of diverging knowledge interests and means of knowledge production. In this paper, we look at this fundamental challenge through the lens of design science, which is an approach aimed primarily at discovery and problem-solving as opposed to accumulation of theoretical knowledge. We explore in particular the ways in which problem-solving research and theory-oriented academic research can complement one another. In operations management (OM) research, recognizing and building on this complementarity is especially crucial, because problem-solving-oriented research produces the very artifacts (e.g., technologies) that empirical OM research subsequently evaluates in an attempt to build explanatory theory. It is indeed the practitioner - not the academic scientist - who engages in basic research in OM. This idiosyncrasy prompts the question: how can we enhance the cross-fertilization between academic research and research practice to make novel theoretical insights and practical relevance complementary? This article proposes a design science approach to bridge practice to theory, not vice versa, theory to practice.

Intelligent products: a step towards a more effective project delivery chain

International projects present really difficult logistics challenges. In international investment projects, a vast number of individualised deliveries has to be managed through a large supply network in a tight timeframe. This article investigates how the logistic challenges of international projects can be solved by utilising advanced web technologies and product identification. The paper presents a control system being built at Helsinki University of Technology, which is based on distributed programming, and wireless identification technologies. The aim of the system is to change the controlling mechanisms of project deliveries by giving the deliveries themselves the means with which to control their route. This enables the material flows in the project delivery chains to be controlled from the inside of the material flow itself.

Additive manufacturing in the spare parts supply chain

As additive manufacturing (AM) evolves to become a common method of producing final parts, further study of this computer integrated technology is necessary. The purpose of this research is to evaluate the potential impact of additive manufacturing improvements on the configuration of spare parts supply chains. This goal has been accomplished through scenario modeling of a real-life spare parts supply chain in the aeronautics industry. The spare parts supply chain of the F-18 Super Hornet fighter jet was selected as the case study because the air-cooling ducts of the environmental control system are produced using AM technology. In total, four scenarios are investigated that vary the supply chain configurations and additive manufacturing machine specifications. The reference scenario is based on the spare parts suppliers current practice and the possible future decentralization of production and likely improvements in AM technology. Total operating cost, including downtime cost, is used to compare the scenarios. We found that using current AM technology, centralized production is clearly the preferable supply chain configuration in the case example. However, distributed spare parts production becomes practical as AM machines become less capital intensive, more autonomous and offer shorter production cycles. This investigation provides guidance for the development of additive manufacturing machines and their possible deployment in spare parts supply chains. This study contributes to the emerging literature on AM deployment in supply chains with a real-world case setting and scenario model illustrating the cost trade-offs and critical requirements for technology development.

Wireless product identification: enabler for handling efficiency, customisation and information sharing

More sophisticated customer demand chains and electronic business pose new challenges to supply chain management. Delivery sizes decrease as a result of more deliveries directly to the point of use. Customers are demanding products and deliveries customised to their specific needs. Also, the information concerning small, customised deliveries has to be shared in volatile supply networks. This article analyses the opportunities of wireless product identification technology in transforming supply chain management. A new concept of item level supply chain management and enabling steps to achieve the benefits are proposed. Innovative companies already use wireless product identification with great benefits in specific functional areas, e.g. manufacturing and warehousing. However, the biggest potential is in supply chain wide solutions, i.e. item level supply chain management.

Collaborative planning forecasting and replenishment: new solutions needed for mass collaboration

The challenge faced by supplier companies in the grocery supply chain for implementing collaborative planning, forecasting and replenishment (CPFR) is how to get the retailer to forecast, especially when it has not been necessary before. In this paper a solution that would allow collaboration on a wide scale is presented. The forecasting approach is called ``rank and share’’ and uses input from the retailer’s existing planning process ± the category management process. The benefit of using category management as the basis is that the retailer can scale up collaboration with a large number of suppliers without increasing planning resources. For the supplier the benefit is point of sales forecasts at the time of the assortment decision. To support this collaborative forecasting process there is a need for more robust replenishment solutions, new measures to illustrate benefits, and for a distributed planning architecture and software. Potential solutions for these are also discussed in the paper.

The impact of increasing demand visibility on production and inventory control efficiency

Information sharing practices such as vendor‐managed inventory (VMI) give manufacturers access to more accurate demand information, e.g. customer sales data, than before. The value of this type of information sharing has been established in many studies. However, most of the research has focused on the ideal situation of the manufacturer having access to information from all downstream parties. In practice, this is rarely the case. In this paper, discrete‐event simulation is used to examine how a manufacturer can combine traditional order data available from non‐VMI customers with sales data available from VMI customers in its production and inventory control and what impact this has on the manufacturers operational efficiency. The simulation model is based on a real‐life VMI implementation and uses actual demand and product data. The key finding is that even for products with stable demand a partial improvement of demand visibility can improve production and inventory control efficiency, but that the value of visibility greatly depends on the target products’ replenishment frequencies and the production planning cycle employed by the manufacturer.

Business process innovation in the supply chain – a case study of implementing vendor managed inventory

Abstract A growing number of international companies operate in a standard business systems environment. This suggests that standard business system solutions, e.g. from SAP R/3, might be adopted rather than introducing new problem specific systems solutions for new business requirements. This could be a cost efficient alternative in a situation when supply chain sophistication and integration demands from customers are increasing. In the Nordic countries vendor managed inventory (VMI) is an example of a new way of doing business that can give pioneers a competitive edge. The vendor in this case is the first supplier to go into a full-scale VMI relationship with the wholesaler – and has, through this, substantially reduced delivery costs to the retail trade. The case VMI implementation demonstrates that it is possible to arrive at a simple but efficient solution in a standard systems environment. The case shows how VMI can be implemented in a SAP R/3 environment based on the EDIFACT inventory report.

Rapid manufacturing in the spare parts supply chain: Alternative approaches to capacity deployment

Purpose – The purpose of this paper is to describe and evaluate the potential approaches to introduce rapid manufacturing (RM) in the spare parts supply chain.Design/methodology/approach – Alternative conceptual designs for deploying RM technology in the spare parts supply chain were proposed. The potential benefits are illustrated for the aircraft industry. The general feasibility was discussed based on literature.Findings – The potential supply chain benefits in terms of simultaneously improved service and reduced inventory makes the distributed deployment of RM very interesting for spare parts supply. However, considering the trade‐offs affecting deployment it is proposed that most feasible is centralized deployment by original equipment manufacturers (OEMs), or deployment close to the point of use by generalist service providers of RM.Research limitations/implications – The limited part range that is currently possible to produce using the technology means that a RM‐based service supply chain is feasi...

VMI: What are you losing if you let your customer place orders?

Managing the order-delivery processes between organizations is a key issue in supply chain management. Despite the increasing application of just-in-time (JIT), lean and agile practices and new information systems that increase the visibility in supply chains, a lot of problems still remain. Surveys among European companies indicate that no signifi cant improvements have taken place in delivery performance during last decade. Vendor managed inventory (VMI) is a recent alternative for the order-delivery process. The fundamental change is that the ordering phase of the process is abolished, and the supplier is given both authority and responsibility to take care of the entire replenishment process. Despite of its advantages VMI has not yet become a standard mode of operation in companies. In this paper the benefits of VMI are analyzed from the viewpoint of managing the replenishment process of the entire product range, not the viewpoint of a single stock keeping unit. A time-based analysis method is developed for measuring the benefits of VMI in different situations. The hypothesis explored that by taking the whole product range viewpoint the advantages of VMI are more readily identified. The hypothesis is tested by using real-life demand data from three different grocery supply chains.