Supply chain integration model: practices and customer values

Abstract

In order to increase partnership efficiency and truly meet the customers' demands, in today's business environment companies are operating in supply chains. Integration of supply chains facilitates minimizing diferent types of wastes and satisfying needs of the end customer. The first step toward supply chain integration is to understandand the customer values, and to reconfigure supply chain to support those values. The current research addresses supply chain integration through quantifying relations between supply chain practice and customer values. It employs Bayesian network and analytic network process as tools to quantify comparative relations among entities. The proposed approach starts with identifying trade-offs along customer values using Bayesian network. In parallel supply chain practices are comparatively analyzed through interviews with experts which is technically quantified using analytic network process. Thereafter, these two parallel phases join together to form a network of customer values and supply chain practices. The network is able to quantitatively identify relations among nodes; in addition, it can be used to plan scenarios and handle senstitivity analyses. This model is expected to be used by supply chain decision makers to have a quantitative measure for monitoring the influence of practices on preferences of the end customer. A survey and two case studies are discussed which go through aforementioned phases. The survey identifies and analyzes six customer values namely quality, cost, customization, time, know-how and respect for the environment. It makes input for the two cases which develop supply chain integration model for fashion and food industry. Supply chain practices are categorized into two groups of manufacturing and logistics practices. The two case studies include five manufacturing practices as cross functional operations, decrease work in process, implement standards, mixed production planning, and use recyclable materials as well as four logistics practices namely visibility to upstream /downstream inventories, information sharing with customer, implement logistics standards, and just in time.