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- Title
- ACHIEVING COST-EFFECTIVE SUPPLY CHAIN AGILITY FOR THE SEMICONDUCTOR INDUSTRY.
- Creator
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Jeffery, Mariah, Butler, Renee, University of Central Florida
- Abstract / Description
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Supply chain agility has been receiving a lot of attention in recent literature as a way for organizations to become more responsive to change and improve customer service levels. However, agility is typically dealt with qualitatively, and organizations are usually unsure of the steps to take to improve their agility and the customer service level to target. This research studies supply chain agility based on a case study of Intel Corporation, a large semiconductor manufacturer. Here, agility...
Show moreSupply chain agility has been receiving a lot of attention in recent literature as a way for organizations to become more responsive to change and improve customer service levels. However, agility is typically dealt with qualitatively, and organizations are usually unsure of the steps to take to improve their agility and the customer service level to target. This research studies supply chain agility based on a case study of Intel Corporation, a large semiconductor manufacturer. Here, agility is defined as the ability to satisfy customer demands by reacting effectively to changes in market stimuli. Reacting effectively does not mean reacting to every change in supply or demand. Doing so means increasing supply chain variability unnecessarily, which is amplified by the bullwhip effect. The essence of supply chain agility is determining the degree to which variability should be managed through artificial means such as safety stock, and appropriate triggers for changing production levels and inventory targets. The purpose of this research is to examine factors that influence supply chain agility and identify a cost-effective plan for achieving it. The first phase addresses the problem of identifying target inventory and customer service levels based on regression analysis of historical data and financial analysis of inventory holding costs and stock-out costs. The impact of three factors (forecast error, order lead-time, and demand variability) on the relationship between inventory and customer service level is also examined. The second phase of the research evaluates strategies for production and inventory control with the goal of finding the appropriate trade-off between minimizing cost (of holding inventory and stock-outs) and minimizing variability. Control policies based on the Exponentially Weighted Moving Average (EWMA) control chart with control limits on demand forecasts are proposed to detect when tighter control of processes is necessary. A Monte Carlo supply chain simulation is used to evaluate the performance of these policies under various levels of forecast error and demand variability. Results indicate that several control chart-based policies outperform Intel's current planning policy in terms of cost without significantly increasing variability. The selection of the appropriate policy must be based on the decision-makers' desire to minimize cost compared to the desire to minimize variability, as each policy results in a trade-off between these two objectives.
Show less - Date Issued
- 2005
- Identifier
- CFE0000853, ucf:46670
- Format
- Document (PDF)
- PURL
- http://purl.flvc.org/ucf/fd/CFE0000853
- Title
- MEASURING THE EFFECT OF ERRATIC DEMANDON SIMULATED MULTI-CHANNEL MANUFACTURINGSYSTEM PERFORMANCE.
- Creator
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Kohan, Nancy, Kulonda, Dennis, University of Central Florida
- Abstract / Description
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ABSTRACT To handle uncertainties and variabilities in production demands, many manufacturing companies have adopted different strategies, such as varying quoted lead time, rejecting orders, increasing stock or inventory levels, and implementing volume flexibility. Make-to-stock (MTS) systems are designed to offer zero lead time by providing an inventory buffer for the organizations, but they are costly and involve risks such as obsolescence and wasted expenditures. The main concern of make-to...
Show moreABSTRACT To handle uncertainties and variabilities in production demands, many manufacturing companies have adopted different strategies, such as varying quoted lead time, rejecting orders, increasing stock or inventory levels, and implementing volume flexibility. Make-to-stock (MTS) systems are designed to offer zero lead time by providing an inventory buffer for the organizations, but they are costly and involve risks such as obsolescence and wasted expenditures. The main concern of make-to-order (MTO) systems is eliminating inventories and reducing the non-value-added processes and wastes; however, these systems are based on the assumption that the manufacturing environments and customers' demand are deterministic. Research shows that in MTO systems variability and uncertainty in the demand levels causes instability in the production flow, resulting in congestion in the production flow, long lead times, and low throughput. Neither strategy is wholly satisfactory. A new alternative approach, multi-channel manufacturing (MCM) systems are designed to manage uncertainties and variabilities in demands by first focusing on customers' response time. The products are divided into different product families, each with its own manufacturing stream or sub-factory. MCM also allocates the production capacity needed in each sub-factory to produce each product family. In this research, the performance of an MCM system is studied by implementing MCM in a real case scenario from textile industry modeled via discrete event simulation. MTS and MTO systems are implemented for the same case scenario and the results are studied and compared. The variables of interest for this research are the throughput of products, the level of on-time deliveries, and the inventory level. The results conducted from the simulation experiments favor the simulated MCM system for all mentioned criteria. Further research activities, such as applying MCM to different manufacturing contexts, is highly recommended.
Show less - Date Issued
- 2004
- Identifier
- CFE0000240, ucf:46275
- Format
- Document (PDF)
- PURL
- http://purl.flvc.org/ucf/fd/CFE0000240
