Prioritizing edge over node: process control in supply chain networks and push-pull strategies

Abstract

We outline recent work identifying an equilibrium solution in a supply chain network. The solution overcomes some difficulties associated with the bullwhip effect through limited cooperation and coordination along edges (links) in the supply chain network. The links constitute the stochastic modelling entities rather than the nodes of the network. We outline a range of feedback mechanisms that monitor and restore equilibrium in a supply chain. One of these is prediction capability charts which monitor the process. These charts are used by the decision makers to profile the allocation of inventory in the supply chain and identify out of control conditions. They maintain quality within the network, as well as intelligently track the way the network evolves in conditions of changing variability. We illustrate with an example simulating a push strategy in the clothing industry.

Keywords:

• inventory
• supply chain
• process control
• push and pull strategies
• bullwhip effect

Acknowledgements

The material in this paper was presented at the IMSIO conference in Salford, UK in May 2005. I wish to thank Dr Jeff Dodgson for his assistance with Appendix and the Carnegie Trust of Scotland. I am grateful to my family for their support. Ad majorem Dei gloriam.