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Proposal for research into supply chain management and integration

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Abstract The supply chain is a major issue in a global market. The efficient relationship between supplier-producer-retailer conforms the perfect combination to achieve a high level of competitiveness according to the needs of increasingly demanding and changing markets.

The difficulty of synchronizing the members within the SC is related to the inherent uncertain factors. This paper proposes a methodology for integrating the supply chain that can be applied in any type of business. To demonstrate its relevance, a case study is performed at a handmade shoe company. An improved demand forecasting, an optimal balanced production line, a proper inventory management of raw materials, and an efficient calculation of the delivery time to the customer represent some of the main results.

Introduction Proper integration of supply chain SC is a major issue because in a global world the company competitiveness is the key to stay in the market.

Nevertheless, in the competition for its permanence, companies must sail endless problems. The synchronization of the supply chain is a topic that has been widely discussed in different approaches. A healthy relationship between the three main members supplier-producer-retailer leads companies to get a high level of competitiveness. The complexity of harmonizing these three elements lies in the various viewpoints and approaches that each member may have in order to generate an adequate coordination.

For the manufacturer it is important to have a system that supports an efficient planning, scheduling, and production control, a proper selection of their suppliers and to define efficient distribution protocols in order to be able to integrate, synchronize, and optimize the performance of the entire chain.

The competitiveness of markets has forced manufacturers to select the most appropriate supply chain network to reduce total costs and loss of time. In the literature there are examples of various methodologies to achieve the supply chain integration, for example, Ghasimi et al. The model permits to determine the amount of economic production, the length of each cycle, and the number of defective products, waste products, and retail scarcity using just-in-time technique.

The methodology presented provides this integration by finding the requested supplier capacities using the demand and order lead time information across the whole SC in an uncertain environment.

The sensitivity analysis is made by comparing the obtained results with the traditional statistical techniques. Finally Hon and Ng [ 3 ] propose a Process Integration PI approach to supply chains, especially developing further the analogy proposal for research into supply chain management and integration Pinch Analysis and the field of operational research.

Their work provides clear insight into how the PI concept brings a significant contribution to the development of supply chain design.

Most companies have seen a decline of their profits due to poor internal organization and administration. In addition, many of the products or goods are unattractive to customers. There is a fierce competition both national and international to find a distinctive feature that makes a product or service unique. One of the industries where the difficulties are more visible is the shoe industry. In this article the case of a shoe maker company is presented to demonstrate the performance of the methodology proposed.

We present a state of art in the following section, the problem to address will be exposed in the third section, in the fourth section the proposed methodology for the integration of supply chains is presented. In the fifth section the methodology is applied in a case study and finally the conclusions about the work are presented.

State of the Art At the present, the highly competitive and changing markets have caused that companies demand quick responses that represent an advantage to face its competitors [ 5 ]. Besides the rapid evolution of technological innovation, the stiff competition and the fluctuating consumer demands have forced to establish a closer cooperation between suppliers, producers, and distributors, as well as the study of the relationships between the members within the chain supply in order to improve their performance [ 6 ].

Global competition is imposing to current industry to make high quality products in a faster and cheaper way. The demand for a quick exchange of information has increased, especially among remote sites, for creating a better cooperation and coordination.

Methodology for Supply Chain Integration: A Case Study in the Artisan Industry of Footwear

Several papers seek the effective coordination between the entities that make up the supply chain network. Traditionally, the strategic management of human resource had been focused as an isolated entity. The framework also generates a better human resource strategic management, a better relationships both internal and external at the organization, and understanding of the links among the human resource systems, the orientation of the supply chain, and proposal for research into supply chain management and integration strategic results.

Several tools and techniques had been used to achieve the supply chain integration depending on the current needs. Eliman and Dodin [ 9 ] propose a supply chain integration as a network of projects that covers certain activities: This network is modeled by mixed integer programming that captures various advantages and disadvantages as the stationary and transient inventory costs, processing activity costs, the shipping cost, and the penalty for delay in delivery of customer orders.

The optimal solution found provides cycle times, modes of transport, processing times, and due dates at minimal cost. From another perspective Jafar [ 10 ] studied the supply chain in two stages in order to reduce the delivery time. He involved the distributors to participate in the coordination plan making emphasize in the importance of more reliable shipping equipments.

Mehdi [ 11 ] presents a programming model for multiple objectives with the purpose to adopt an integrated approach that support the decision making on the optimal allocation of the limited resources in the supply chain, the suppliers selection, the production, distribution, and schedule of supplies, and the lower cost and the higher income, thus, maximizing the benefit of the chain. The model considers the integration level of suppliers, producers, and distributors, as well as the free relationships among the producers to manage the product supply through the process or even the products of each other, and finally consider the effect of the economic factors in decisions such as inflation.

It is imperative for contemporary companies proactively seek to improve continuously the performance of their supply chain. The coordination and the integration of the decision making across the supply chain between the various partners that conform it are often used for this purpose.

Such coordination strategies of the supply chain include the use of a common cycle time, fix quantity discounts, the use of an optimal batch sizing, the quality improvements and inspections, to mention a few. An important issue in the supply chain refers to the incorporation of human factors presented thought the supply chain task such as the failed quality inspections and production improvements due to learning. The objective is to minimize the annual cost incurred in the supply chain.

To ensure the effective supply of biomass to produce biofuels on a large scale, Tao et al. The mixed integer linear programming model optimizes the activities like biomass collection, packaging, transportation, internal transport, preprocessing, storage, production, and distribution of ethanol.

The locations, capacities and quantity of facilities and distribution patterns of biomass and ethanol are considered as key strategic decisions, while biomass production, delivery and operation schedules and inventory monitoring are key tactical decisions.

Strategic level decisions concern the amounts of goods flowing in chains downstream and upstream, while tactical level decisions concern the balancing of removing lines of inverse chain. The objective is to minimize transportation, purchases, renovation, and operation costs of disassembly workstations.

Finally, the authors formulated and described a nonlinear mixed integer programming model for this situation. Sarkar and Majumder [ 17 ] propose an integrated SC supplier-seller model. Two models constructed on the basis of the probability distribution of the time were presented. The waiting time is normally distributed in the first model, while in the second model a free distribution for the delivery time is considered.

For this second model, only the mean and standard deviation are known. The objective of the model is to reduce the total cost of the system taking into account the reduction of installation costs for the supplier.

A manufacturing SC with multiple suppliers in the presence of multiple uncertainties as uncertain supplies of materials, stochastic times of production and randomly costumer demand is a scenario that Song et al. They formulated an inventory management policy, a raw materials acquisition policy, and a production control policy using the stochastic dynamic programming approach.

Then they investigated other strategies as the reduction of suppliers and the differentiation of suppliers under the integrated inventory management policy, establishing qualitative relationships between the amount of suppliers, the supplier capabilities, and the total expected cost. The model allows achieving quantitatively the best trade-off between reducing suppliers and improving the supplier capability, in addition to quantifying the supplier differentiation in purchase decisions.

The multiskill environment is a problem for staff allocation, so Telhada [ 19 ] formulates a mixed integer programming model whose application supports the assignment of shifts and tasks on the same problem. Finally Zhang [ 20 ] formulated a model and a method for the coordination of production proposal for research into supply chain management and integration inventory cycles throughout the manufacturing SC involving reverse logistics for items with multiperiod finite horizon inventory.

An entire manufacturing SC involving reverse logistics includes category 2 Suppliers, category 1 suppliers, manufacturers, distributors, consumers, and Recycling. The authors propose a mathematical model to represent the behavior of this system; the solution methods proposed are based on a decentralized decision-making process and a combination of decentralized and centralized decision, known as the semicentralized decision making process.

The centralized decision-making process is achieved by a mixed integer linear programming. This brief literature review allows seeing the different angles from which the SC has recently been addressed.

In general it can be concluded that the above efforts are looking to integrate the various links in the chain, in order to reduce costs and increase yields.

But in particular, this study has dealt with the management and inventory control, the distribution of finished products, the identification of multiple suppliers in the presence of uncertainties, and the inclusion of human errors and their impacts to the chain, with this last point being the most important.

Mathematical Problems in Engineering

The ability, performance, and proceess that the human resource had, can move the chain differently. The above represents individual efforts to demonstrate how particular issues affect the operation of the SC. Also various techniques, algorithms or tools were used to potentially improve the SC and support the decision making process.

All these contributions were tested into SC that does not include artisanal production processes, which opens the possibility to question the validity of these applications in such processes.

This article proposes a methodology for ensuring the SC integration regardless of the type of business, using traditional engineering techniques and artificial intelligence techniques. This integration does not detract from the traditional methods of problem solving but they complement each other.

Problem Statement The SC synchronization is a topic that has been widely discussed in recent years as it could be shown in the previous section. Due to various factors, companies not only search the efficient coordination of their activities internally, but also maintain a harmonious relationship with its suppliers and dealers within this chain.

Globalization and new technologies are commonly terms used to reflect the current reality and are associated with ideas of change, speed, real-time communications, and electronic commerce, among others. However in this changing world still prevail situations such as the development proposal for research into supply chain management and integration customized products for specific needs, the correct allocation of task in a process, and the reduction of delivery time to name a few.

At the present, company competitiveness is the key to staying in the market, but the fact is that in the competition for their permanence businesses must deal with endless problems. In addition some businessmen persist to see their companies as a standalone system and not as a member of a bigger system that influences the future behavior of the market. They do not consider that the competition between networks and the integration of key processes with trading partners allow them to form a much larger system, where suppliers and customers are no longer part of its environment, but part of his whole system known as SC.

It is necessary for companies to have support tools that allow them to guide their efforts to identify their place within an efficient SC, establishing harmonious relations with suppliers and distributors, in order to establish itself in a competitive market. That why this paper presents a methodology to integrate the SC that aims to be a tool to optimize the resources and the flow of certain products thoughout the SC and even more to demonstrate the use of the proposed methodology a case study in the artesian company of footwear is presented.

In general, the integration is made in two levels: This methodology is a flexible tool that enables each of its steps apply both traditional engineering tools and sophisticated or specific tools. Finally, it is appropriate for any type of business, including those whose production process is artisanal. Methodology for Supply Chain Integration As we already mention all companies that conform the SC must interact in order to achieve competitive advantage, which represent the reason why a methodology to guide the integration of each of the links in the SC was formulated.

Each step of the proposed methodology is described below and schematized in Figure 1. A good demand forecast achieves synchronization of all the companies that conform the chain. This information is provided by historical records of the main selling points. Methodology for the integration of the supply chain. The four steps of the methodology together enable the company improve its internal performance and to establish a harmonious and synchronized relationship these changes will place the company in its respective SC and their respective partners within the same chain.

The Case of Study: Application of the Methodology for the Integration of the Supply Chain The footwear industry in Mexico is considered one of the most important in the artisanal field, with products whose quality is widely recognized. But unfortunately this industry like many others is submerged in a chronic crisis since several years. According to the National Chamber of the Footwear Industry in Mexico [ 21 ] the cost of production ranges between 18 and 20 dollars, while in Asian countries varies between 6 or 8 dollars.

Although, some Mexican companies have made the effort to get new technology and maintain high levels of international competitiveness, it is virtually impossible to compete against countries like China proposal for research into supply chain management and integration to their business strategies and their labor cost.