Applying Capability Index to the Supply Network Analysis

Abstract

Supply Chain Management (SCM) adopts a systematic and integrative approach to managing the operations and relationships of various parties in a supply chain. The objective of the SCM is to reduce inventory costs and increase customer satisfaction levels. Supply chains span from raw materials to manufacturing, distribution, transportation, warehousing, and retailers for product sales. The ultimate goal of supply chain coordination is to maximize the benefits of the whole supply chain. One way of doing that is to synchronize delivery performance. To evaluate the delivery performance of a supply chain network, the supply chain process can be decomposed into detailed business processes. This paper investigates supply chain performance based on the capability index, S_pk, which establishes the relationship between customer specification and actual process performance, providing an exact measure of process yield. A case from the thin-film transistor liquid crystal display (TFT-LCD) industry is used to demonstrate the proposed methodology.

Keywords:

• Supply chain management
• delivery performance
• capability index

Acknowledgement

The first author is grateful for partial support from the Taiwanese National Science Council under the grant NSC-93-2213-E011-091.