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Coordinating Flows Across the Supply Chain

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Meeting Summary 

Research Colloquium Review

Agenda &  Presentations

Research Interest Summary & Synthesis

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Research Colloquium Review This event joined ISCM sponsors with Leaders For Manufacturing (LFM) partners for a focused discussion on supply chain research. The event entailed LFM intern research progress reports, an ISCM supply chain presentation and a discussion to develop a common research interests.

The morning of the colloquium consisted of research progress reports from 5 LFM interns working on supply chain research projects for LFM Partner companies. The projects each have an aspect of coordinating the various flows across the supply chain (hence, the title of the colloquium). See below for the list of LFM intern presentations, along with a brief descrition of the nature of the project.

After the presentations, Mary Murphy-Hoye of Intel shared an overview of Intel's supply chain along with suggestions for our research focus. Participants were separated into three groups of approximately 9-10 people to discuss and provide input to the following questions/topics:

• Question one: Supply Chain Challenges
• Question two: Identify common needs
• Question three: Identify potential actions and projects

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Research Interest Summary & Synthesis A group exercise (break out groups, see details after graphic) helped surface common research interests, which have been organized in a framework as pictured below. 

The five (5) sets of research questions each respectively seem to support the (draft) goal of "Supply Chain Coordination" (for which we added several elements of efficiency, effectiveness and flexibility). Several issues seemed to apply equally to each of these research questions, and they have been categorized as cross-cutting elements of this framework

• Models & Approaches
• Benchmarking Practices & Data
  

Break Out Group Work Participants were separated into three groups of approximately 9-10 people to discuss and provide input to the following questions/topics:

• Question one: Supply Chain Challenges
• Question two: Identify common needs
• Question three: Identify potential actions and projects

These are the summaries from each of the three groups.LFM-ISCM Sub-Group Summary (Graves)

• Challenges:
  • Understand best material control policies: pull, push, conwip, MRP
  • Understand conflicting metrics and different goals across supply chain, especially as they inhibit collaboration
  • Understand how to use IT to make information useful, consistent and accessible to all members of supply chain
    
• Needs

• Principles for supply chain design, including ownership, geography, channel, operational mechanisms
• Quicker, better ways to evaluate decision options on inventory, capacity, products, networks
• Ways to define customer value from a (coordinated) supply chain
• Better ways to transform or filter data (or information or knowledge) for business use
• Projects
  • How much and what type of information to share across members of a supply chain?
  • What's the role of collaboration in seeking supply chain coordination?
  • Understand relationship between product proliferation and supply chain costs
  • Understand how to apply supply chain research, e. g. inventory models, capacity models, and how to match supply chain models to various contexts, depending on degree of product proliferation, channel structure, process types, …
  • Determine if (or when) the Hub concept is value added· Develop criteria and models for supply chain design and evaluation

LFM-ISCM Sub-Group Summary (Hanson)
Our Breakout group recommended 5 areas for further Supply Chain research and/or areas whereby the collaboration of MIT and Industry partners can provide a significant benefit.

1. Development of robust Supply Chain models for the total enterprise.
2. Recommended package of proven supply chain tools and/or best practices. eg Decisions Support tools
3. How to determine the points of profitability in the enterprise wide supply chain and how to share that profitability across all the participants based on their contribution to that profitability. eg. in order to optimize profitability and business performance of the total supply chain, some partners may incur increased costs and/or higher levels of supporting assets (inventory and capital equipment) and therefore lower individual ROA performance.
4. Enterprise wide supply chain metrics. Measurements that allow a company to compare the performance of their total supply against the performance of another company's total supply chain. This is driven by the recognition that even though their company may be currently enjoying good individual financial and business results, that those results are at risk if the performance of the total supply chain is below the performance of competing supply chains.
5. Forecasting tools. Even with the ability to use truly integrated supply chains with instantaneous sharing of knowledge and information of orders to all members of the supply chain which will allow true total build to order for all participants, forecasting will still be necessary for future capacity and resource planning.

These research themes were driven by the need for improved performance by most of the members of the group in the following areas.

1. Improved Forecasts
2. Integration:
   • functions within companies
   • company to company
   • processes that can freely link across organizational and company boundaries
3. Metrics and performance benchmarks that optimize the total supply chain
   • Overall supply chain results and benefits vs individual companies
   • lead time vs volume
   • inventory vs reduce waste (time and assests)
4. Information systems that link across organizational and corporate boundaries
5. Determining the economic valued added in the supply chain and how to properly reward that value added.
6. Success in selling modelling and simulation. How to educate their organization and supply chain partners to use and trust simulation.

LFM-ISCM Sub-Group Summary (Rosenfield)

Question one: Challenges
Producing to schedule given competing objectives Forecasting accurately Configuring to order	Collaboration with suppliers and customers Reducing lead times Sharing information vs. collusion Demand and capacity mgm
Question two: Common needs or agenda
Taxonomy or set of visualizations for types of supply chains Process to integrate information systems When, how and benefits from collaboration, including structures Collaboration that goes beyond sharing information Share design Help reduce lead times etc. How to share information given legacy systems Perfect information not always what we think	How to gather and use POS data How to share power Dealing with short prod. life cycles Right inv. at right place at right time Approaches to relate and match Capacity Inventory Lead times Demand by part across the entire supply chain (to the left)
Question 3: Actions and projects
Taxonomy & visualizations for SCs that break down approaches by problem type Inventory and capacity placement for different types of chains for entire chain Where to place inventory How long to respond to changes How to deal with perturbations How to allocate capacity	Benchmarking Collaboration needs Review of software packages for collaboration Incentive structures and contracts including examples Modeling different types of information sharing Improved forecasting models and best practices including which techniques work best for different situations

Summary

September 17, 1999 MIT Faculty Club, Cambridge Massachusetts  » LFM Intern Research Midstream Project Reviews Asea Brown Boveri - Supplier Coordination Miriam Park - MIT LFM Intern at ABB Miriam Park: This project is part of a larger effort in ABB's Gas Turbine Division to design and implement a Supply Chain and Logistics management system to synchronize demand driven market pull with supply chain constraints. This internship specifically analyzes the current supply chain, recommends improvements to coordinate the supply chain and joint systems, quantifies the impact of design changes on manufacturing and logistics, and develops tools and metrics to monitor the supply chain performance. Alcoa Distribution and Customer Coordination Brian Urkiel - MIT LFM Intern at Alcoa Brian Urkiel: A Belgium warehouse acts as a service center linking Alcoa's U.S. operations and its European customers. For sheet and plate products produced in Davenport, IA there is a wide gap between the customer's actual consumption rate and the manufacturing facility's minimum order quantity. To overcome this and to buffer against variability in production yields, customer demand, lead times, the Alcoa Mill Products (AMP) supply chain is forced to maintain large amounts of inventory. Currently there is no methodology in place to engineer inventory levels by product for each European customer which optimize the entire supply chain. This internship analyzes the entire AMP supply chain and identifies the primary reasons why inventory is being carried. This internship assesses existing stocks, mill production parameters, and end customer requirements to develop a methodology to optimize inventory levels for entire AMP supply chain while meeting desired customer service levels. Compaq - Component Supplier Coordination Mitch Malone - MIT LFM Intern at Compaq Mitch Malone:Compaq's Alpha Server supply chain will be used to identify the issues Compaq and MIT should assess to improve a supply chain through an ongoing project in this area. A Model of this supply chain for memory components will be built to assist in cost and quantity decisions. Kodak - Internal Coordination of a Vertically Integrated Supply Chain Scott Pagendarm & James Ryan Horn - MIT LFM Interns at Kodak James Horn and Scott Pagendarm: This project is undertaking initiatives in Kodak's film sensitizing operations to bring customer demand signals to directly to early steps in manufacturing, to reduce lead times by re-evaluating testing procedures, to optimize policies for batch size and inventory holding, and to model strategies for managing seasonality. Intel - Capacity & Throughput Management Tony Newlin - MIT LFM Intern at Intel Tony Newlin: Intel's assembly and test factories utilize the Theory of Constraints to manage output and through put times. The application of the theory involves a combination of WIP buffers and excess tool capacity. The factories face frequent changes in product mix and maturity which result in large swings in available capacity. This dynamic combined with increased cost reduction efforts has led to a need for more accurate capacity planning. This internship employs discrete event simulation of an entire manufacturing line to optimize excess tool capacity requirements and WIP policies.  » The Intel Supply Chain Mary Murphy-Hoye - Director - IT Strategy & Technology (prsenting for Gordon McMillan - Director of Supply Network Strategy) Intel Corporation  » Research Discussion - Common Issues & Themes Subgroups of Sponsors and MIT Faculty & Researchers  » Research Discussion - Collective Common Issues & Themes: Next Steps ISCM & LFM Sponsors, MIT Faculty & Researchers  »