Supply Chain, The Way to Flat Organisation Supply Chain, The Way to Flat Organisation Edited by Yanfang Huo and Fu Jia I-Tech IV Published by In-Teh In-Teh is Croatian branch of I-Tech Education and Publishing KG, Vienna, Austria. Abstracting and non-profit use of the material is permitted with credit to the source. Statements and opinions expressed in the chapters are these of the individual contributors and not necessarily those of the editors or publisher. No responsibility is accepted for the accuracy of information contained in the published articles. Publisher assumes no responsibility liability for any damage or injury to persons or property arising out of the use of any materials, instructions, methods or ideas contained inside. After this work has been published by the In-Teh, authors have the right to republish it, in whole or part, in any publication of which they are an author or editor, and the make other personal use of the work. © 2008 In-teh www.in-teh.org Additional copies can be obtained from: publication@ars-journal.com First published December 2008 Printed in Croatia p. cm. ISBN 978-953-7619-35-0 1. Supply Chain, The Way to Flat Organisation, Yanfang Huo and Fu Jia Preface With the ever-increasing levels of volatility in demand and more and more turbulent market competition, there is a growing recognition that individual business no longer compete as stand-alone entities but rather as supply chains. And supply chain management (SCM) has been both an emergent field of practice and an emerging academic domain to help to firms to satisfy the customer needs more responsively, with improved quality, reduction cost and higher flexibility. According to one American professional association, SCM can be defined as a field which encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, SCM integrates supply and demand management within and across companies. Facing this challenge, the companies should make some fundamental changes, which involves not only the total transparency through Information sharing, but also process integration, organizational structures reengineering, and performance measures change as well. Only the organizations will win who can better structure, co-ordinate and manage the relationships with their partners in a network committed to better, closer and more agile relationship with the final customers. Although lots of researches and practices have been devoted in this field, neither perspective is fully mature but each has considerable promise. Mainly concerned on the operation and control of supply, the book collected some latest development and findings. It consists of 20 chapters, each addressing a certain aspect of supply chain management, including the application and development ICT and the RFID technique in SCM, the new mathematical tools and techniques for SCM modeling and control, and some emerging issues in the academic research and practices of supply chain management. Each chapter gives the reader background information on a subject and proposes an original solution. This should serve as a valuable tool for professionals in this interdisciplinary field. Hopefully, readers will contribute their own discoveries and improvements, innovative ideas and concepts, as well as novel applications and business models related to the field of supply chain management. A brief introduction to each chapter is summarized in the following. Chapter 1 is about the optimal inventory control strategy of a serial supply chain. A two-level model was suggested, one level to determine the optimal control strategy using a nonlinear integer-programming model solved by intelligent algorithms of GA, random-PSO and PEA, and the other to obtain the performance measurements of the optimized supply chain by simulation of the general push/pull model. Chapter 2 explored a synergistic approach towards autonomic event management in supply chains aiming at improving the qualities of supply chain event management (SCEM), especially with regard to approaching self-X properties and automation. The VI holistic approach leveraged various computing paradigms of granular, semantic web, service-oriented, space-based, etc. Chapter 3 proposed the use of enterprise input-output (EIO) models to represent and analyze physical and monetary flows between production processes, including logistics ones. Based on the use of EIO models, a set of complete and complementary tools able to analyze the problem according to different perspectives and point of views are presented. Chapter 4 focused on the operational activities of the supply chain dynamics, and proposed dynamic models for multipurpose systems considering production ratios. By introducing new parameters, the models go from a simple linear supply chain based on material flows to a nonlinear one considering orders handling and based on traffic flow theory, both are applied to two simulation case studies. Taking optimization based e-sourcing models as objective, Chapter 5 reviewed three popular e-sourcing techniques with their underlying mathematical programming models that are used to solve the winner determination problems, and presented two future directions also: global sourcing and robust sourcing. RFID has thought to be “the first important technology of the twenty-first century”, and lots of researches have been done in this field. Chapter 6 suggested a Domain Engineering Process for RFID Systems Development in Supply Chain, which defines a systematic process to perform domain engineering which includes the steps of domain analysis, domain design, and domain implementation. In Chapter 7, some issues of the return policies and collaboration in supply chain are reviewed, involving an overview of the benefits and costs of returns policies, the different kinds of returns policies that are required to coordinate the supply chain for the different types of products and the impact of demand uncertainty and retailing competition on returns policies. Chapter 8 focuses on the problem of managing at the operational level supply chains, and described it by a modular model based on the first order hybrid Petri net formalism, which can effectively describe the operational management policies and the inventory control rules, and enables the designer to impose an optimal SC dynamics according to given objective functions. Chapter 9 described a statistical physics approach to understanding the supply chain oscillations, models of both normal modes and External interventions are demonstrate by inventory oscillations model and a fluid-flow model separately. It is the first time that the general approach together with its applications has been assembled in one place, along with a number of possible extensions. Information Technique is one of the most enablers of SCM development. In Chapter 10, a framework that enhances the agility of SCM with IT is presented. A simulation known as The Trading Agent Competition: Supply Chain Management Game (TAC SCM) was sponsored by a group of universities and research centers to compete against each other to prove mechanisms for supply chain situations since 2003. Chapter 11 presented the deepest analysis about the construction of the Tiancalli agents since 2005, intending to describe the effort and experience during the three years participating on TAC SCM. Chapter 12, investigating the methods of supply chain integration for manufacturing industry in the background of China, proposed a three-echelon theoretical framework for VII supply chain integration based on Thorn’s model and presented the relative key techniques of each level. Referring to develop integrated supply chains significantly more flexible, responsive and agile than traditional supply chains, Chapter 13 discussed two new approaches- Dynamic Agility Index and Fuzzy Association Rule Mining - for modeling and evaluating agility in dynamic integrated supply chains. Chapter 14 described the design and implementation of the MIDAS supply chain system by Using Web Services and the Service Oriented Architecture. In Chapter 15, a distributed supply chain planning system for multiple companies with Limited Local Information using an augmented Lagrangian relaxation method has been proposed. While by introducing Fuzzy mixed integer Linear Programming to tactical Supply Chain Planning, a multi-echelon, multi-product, multi-level and multi-period SC planning model was established in Chapter 16, given lack of knowledge (demand, process and supply uncertainties). Chapter 17 explored the research issues on collaborative product design and development based on CM principles, which then be introduced in four areas separately- configuration identification, configuration change control, configuration status accounting, and configuration audits. Chapter 18 illustrated the RFID and EPC potential for business processes and presented RFID@B2B, a new method to improve the supply chain performances using RFID technology. Chapter 19, focusing on the issues and potential solutions for a range of security vulnerabilities of RFID systems, analyzed the underlying vulnerabilities that exist in RFID systems, illustrated the threats of possible attacks, and provided corresponding countermeasures. In Chapter 20, aiming at the problems in traditional knowledge retrieval, an approach is put forward to supply chain knowledge management construction by introducing ontology, which consists of construction of domain ontology, formalization of ontology model, and development of supply chain knowledge management system based on ontology. We would like to thank all the authors for their excellent contributions in the different areas of supply chain management. It is their knowledge and enthusiastic collaboration that lead to the creation of this book, which we are sure that will be very valuable to the readers. December 2008 Editors Yanfang Huo School of Management, Tianjin University P.R. China Fu Jia Cranfield School of Management, Cranfield University UK Contents Preface V 1. Optimal Control Strategy for Serial Supply Chain 001 Min Huang, W.H.IP, Xingwei Wang and Jianqing Ding 2. A Synergistic Approach towards Autonomic Event Management in Supply Chains 021 Roy Oberhauser 3. Managing Logistics Flows Through Enterprise Input-Output Models 033 V. Albino, A. Messeni Petruzzelli and O. G. Okogbaa 4. Dynamic Analysis and Control of Supply Chain Systems 053 Alejandro Rodríguez-Angeles, América Morales Díaz and Arturo Sánchez 5. Optimization Based e-Sourcing 073 Kameshwaran Sampath and Lyès Benyoucef 6. A Domain Engineering Process for RFID Systems Development in Supply Chain 103 Leonardo Barreto Campos, Eduardo Santana de Almeida, Sérgio Donizetti Zorzo and Silvio Romero de Lemos Meira 7. Return Policies and Coordination of Supply Chain 127 Mabel C. Chou 8. Operational Management of Supply Chains: A Hybrid Petri Net Approach 137 Mariagrazia Dotoli, Maria Pia Fanti and Agostino Marcello Mangini 9. A Physics Approach to Supply Chain Oscillations and Their Control 163 Ken Dozier and David Chang 10. Utilizing IT as an Enabler for Leveraging the Agility of SCM 183 Mehdi Fasanghari and S. K. Chaharsooghi X 11. Development and Evolution of the Tiancalli Project 193 Macías Galindo Daniel, Vilariño Ayala Darnes and López y López Fabiola 12. A Framework and Key Techniques for Supply Chain Integration 215 Yanfang Huo, Xinyue Jiang, Fu Jia and Bingguang Li 13. New Approaches for Modeling and Evaluating Agility in Integrated Supply Chains 237 Vipul Jain and Lyes Benyoucef 14. Managing and Integrating Demand and Supply Using Web Services and the Service Oriented Architecture 259 Firat Kart, Louise E. Moser and P. M. Melliar-Smith 15. Distributed Supply Chain Planning for Multiple Companies with Limited Local Information 283 Tatsushi Nishi 16. Applying Fuzzy Linear Programming to Supply Chain Planning with Demand, Process and Supply Uncertainty 299 David Peidro, Josefa Mula and Raúl Poler 17. Research Issues on Collaborative Product Design and Development 323 Jiun-Yan Shiau 18. Improvement of Supply Chain Performances Using RFID Technology 339 Cornel Turcu, Cristina Turcu and Adrian Graur 19. RFID Technology, Security Vulnerabilities, and Countermeasures 357 Qinghan Xiao, Thomas Gibbons and Hervé Lebrun 20. Ontology and Its Application in Supply Chain Information Management 383 Zetian Fu, Jun Yue and Zhenbo Li [...]... Exported quantity of product O i 0 Imported quantity of raw material I i 0 The real usable quantity of raw material X i 12 12 12 12 12 12 4 4 4 4 4 4 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 3 3 3 3 3 3 1 1 1 1 1 1 2 2 2 2 2 2 30 30 30 30 30 30 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 1 1 1 1 1 1 0 0 Quantity of processed orders OPi 0 Period of manufacturing i products L Period of transporting i products Ls Product-load... upper bound 1 2 3 4 1~ 41 1~ 71 1 ~10 6 1~ 1 41 Table 2 The lower and upper bound of card for 4 nodes problem To analyze the performance of the algorithm, the algorithm is run for 10 0 times The best solution is the best one within 10 0 runs The best rate is the rate to reach the best value within 10 0 runs Taking reasonable parameter of GA, the best solution K=[∞, ∞, ∞, ∞, 16 , 29, 43, 14 , 31, 16 ] for 4 nodes... designed for the model (8)- (11 ) The performance of them and the comparison among them are given 8 Supply Chain, The Way to Flat Organisation 3.2 .1 Genetic algorithm This section give the design and analysis of GA for the above model (8)- (11 ) [15 ,16 ] 3.2 .1. 1 Coding Integer coding is adopted considering the characteristic of the problem Each bite represents the element of the upper triangular part of matrix... period t i K ij APC t1 MLP 1 Dti APC ti OPt1 Pt1 Ot1 1 MLP TY t Yt1 S t1 i +1 OPt i +1 TY t i +1 i Pt i Oti Yt i S ti I ti +1 X ti +1 I ti X ti OPt cust APC ti +1 Dtn DS ti OPt i MLP i TY t X t1 D ti 1 MLP n DS tn n OPt B TY t n Pt i +1 Oti +1 Yt i +1 S ti +1 X tn Pt n n t S tn Yt n Fig 2 Illustration of the relationship among the variables In order to analysis the supply chain, the following performance... in [0, 1] used to adjust the relative importance of Pid and Pgd, so that could obtain the next movement position of the particle: X id = X id + Vid (15 ) The first part of the equation (14 ) is the former speed of the particle; the second part is “cognition”, express the think of the particle; the third part is “social”, express the information share and the cooperation between the particle [ 21] “Cognition”... process i Pwip0 Table 1 The initial value of parameters for each node enterprise in 4 nodes problem According to the parameter set in table 1, the upper-lower bound of card numbers for different control segments are shown in table 2 So the size of this problem is 414 * 713 * 10 62 *14 1= 1. 602 10 18 , while the constraint is not considered 10 Supply Chain, The Way to Flat Organisation The number of nodes... is not less than 90% and the input standard deviation is less than 2.5 Node enterprise Quantity of products in process P0i Product inventory Y i 0 Transportation quantity S i 0 Exported quantity of product O i 0 Imported quantity of raw material I i 1 2 3 4 8 8 8 8 12 12 12 12 4 4 4 4 8 8 8 8 8 8 8 8 9 9 9 9 3 3 3 3 1 1 1 1 2 2 2 2 30 30 30 30 1 1 1 1 1 1 1 1 2 2 2 2 1 1 1 1 0 The real usable quantity... i process Pwip0 t Table 3 The initial value of parameters for each node enterprise in 6 nodes problem 11 Optimal Control Strategy for Serial Supply Chain The number of nodes Lower and upper bound 1 2 3 4 5 6 1~ 41 1~ 71 1 ~10 6 1~ 1 41 1 ~17 5 1~ 210 Table 4 The lower and upper bound of card for 6 nodes problem The custom demand is a normal distribution with mean of 4.0, variance of 1. 0, upper-lower bound of... defined according to the above relationship among the variables: 1 Service level (%): (the customer satisfy percentage of the supply chain) The satisfy percentage of the last node of the supply chain is considered ⎛ T ⎞ 10 0* ⎜ ∑ Dtn − BTn ⎟ ⎝ t =1 ⎠ Sl = T n ∑ Dt (5) t =1 2 Standard deviation of inputs: SDO = 3 1 T ⎛ 1 T ∑ ⎜ OPt − ∑ OPt1 / T ⎞ ⎟ t =1 T − 1 t =1 ⎝ ⎠ 2 (6) Overall cost of the supply chain:... 0 ,1) is inertia factor, used to adjust the speed, r , r ∈ ( 0 ,1) are random numbers, used to adjust the extreme of particle 1 2 and the global extreme.; numid j note the times of card number which is j at the dth unit of the ith particle, P is the frequency of card number which is j at the dth unit of the ith id j particle, the probability is bigger as this value for the card number being j 3.2 .1. 4 The . 2. So the size of this problem is 4 41 * 3 71 * 2 10 6 *14 1= 18 1. 602 10 × , while the constraint is not considered. Supply Chain, The Way to Flat Organisation 10 The number of nodes 1 2 3. upper bound 1~ 41 1~ 71 1 ~10 6 1~ 1 41 Table 2. The lower and upper bound of card for 4 nodes problem To analyze the performance of the algorithm, the algorithm is run for 10 0 times. The best solution. 1 1 1 1 1 1 Period of transporting products i Ls 2 2 2 2 2 2 Product-load ability i M L P 30 30 30 30 30 30 Container capacity i UC 1 1 1 1 1 1 Margin benefits i t mr 1 1 1 1