Abstract
Supply Chain problem caused by the variability in demand is referred to as Bullwhip or Forrester effect. It attributes to increased inventory, poor customer service level and increase in overall supply chain cost. These adversities have been handled reasonably well by Information Technology enabled collaborative supply chains. Two prominent collaborative techniques, namely, Vendor Managed Inventory (VMI) and Collaborative Planning, Forecasting and Replenishment (CPFR) are considered effective in this regard. Despite perceived effectiveness of CPFR, the expected widespread adoption is still missing. An experimental research using beer game has been conducted to study the difference in the performance of traditional supply chain, VMI based Supply Chain and CPFR based Supply Chain in an industrial setting. Results affirms the ability of collaborative supply chain to reduce inventory and total cost of supply chain and achieve high service levels with almost nil backorders One more interesting observation about the human tendency of ignoring scientific tools for averting risks has been noticed. Authors observe that the emphasis on the use of business intelligence for forecasting will facilitate widespread adoption of CPFR.
Similar content being viewed by others
References
Attaran M, Attaran S (2007) Collaborative supply chain management the most promising practice for building efficient and sustainable supply chains. Bus Process Manag J 13(3):390–404, 1463–7154. doi:10.1108/14637150710752308
Caridi M, Cigonili R, De Marco D (2005) Improving supply-chain collaboration by linking intelligent agents to CPFR. Int J Prod Res 43(20):4101–4218
Fisher ML (1997) What is the right supply chain for your product? Harv Bus Rev 75(2):105–116
Forrester JW (1957) Industrial dynamics. A major breakthrough for decision makers. Harv Bus Rev 36(4):37–66
Hand DJ, Taylor JCC (1987) Multivariate analysis of variance and repeated measures. Taylor and Francis, Boca Raton
Holmstrom J, Framling K, Kaipia R, Saranen J (2002) Collaborative planning forecasting and replenishment: new solutions needed for mass collaboration. Supply Chain Manag Int J 7(3):136–145
Holmstrom J, Småros J, Disney SM, Towill DR (2003) Collaborative supply chain configurations: the implications for supplier performance in production and inventory control. 8th International symposium on logistics, Seville, Spain
Jin Y, Hong P (2007) Coordinating global inter-firm product development. J Enterprise Inf Manag 1741–0398. doi:10.1108/17410390710823699
Kamath RR, Liker JK (1994) Second look at Japanese product development. Harv Bus Rev (November–December) reprint 94605
Kampstra RP et al. (2006) Realities of supply chain collaboration. Int J Logist Manag 17(3):0957–4093. doi:10.1108/09574090610717509
Kőszegi B, Rabin M (2009) Reference-dependent consumption plans. Am Econ Rev 99(3):909–936. doi:10.1257/aer.99.3.909
Kurt Salmon Associates (2002) Survey of supply chain effectiveness. Food Distributors International, Food Marketing Institute and Grocery Manufacturers of America. www.gmabrands.com/publications/docs/SupplyChain.pdf
Lambert DM, Pohlen TL (2001) Supply chain metrics. Int J Logist Manag 12(1):1–19
Lee HL (2004) The triple-A supply chain. Harv Bus Rev 102–112
Lee HL, Padmanabhan V, Whang S (1997) The bullwhip effect in supply chains. Sloan Manag Rev 38(3):93–102
Lee H, So KC, Tang CS (2000) The value of information sharing in a two-level supply chain. Manag Sci 46(5):626–643
Pramatari K (2007) Collaborative supply chain practices and evolving technological approaches. Supply Chain Manag Int J 12(3):210–220. Doi:10.1108/13598540710742527
Riemer K (2008) The Beer game in business-to-business ecommerce courses—a teaching report. 21th Bled e-Conference e-Collaboration overcoming boundaries through multi-channel interaction
Shapiro RD, Caldwell P (2008) Supply Chain Management simulation: Root Beer Game. Harvard Business Review HBP No. 3101
Simatupang TM, Sridharan R (2008) Design for supply chain collaboration. Bus Process Manag J 14(3):401–418, 1463–7154. doi:10.1108/14637150810876698
Simatupang TM, Wright AC, Sridharan R (2002) The knowledge of coordination for supply chain integration. Bus Process Manag J 8(3):289–308. doi:10.1108/14637150210428989
Simatupang TM, Wright AC, Sridharan R (2004) Applying theory of constraints to supply chain collaboration. Supply Chain Manag Int J 9:57–70. doi:10.1108/13598540410517584
Vereecke A, Muylle S (2006) Performance improvement through supply chain collaboration in Europe. Int J Oper Prod Manag 26(11):1176–1198. doi:10.1108/01443570610705818
White Paper (2004) Collaborative planning, forecasting, and replenishment VICS Subcommittee web: http://www.vics.org/committees/cpfr/cpfr_white_papers
Yao Y et al. (2007) Supply chain integration in vendor-managed inventory. Decis Support Syst 43(2007) 663–674. doi:10.1016/j.dss.2005.05.021
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Hudnurkar, M., Rathod, U. Collaborative supply chain: insights from simulation. Int J Syst Assur Eng Manag 3, 122–144 (2012). https://doi.org/10.1007/s13198-012-0114-9
Received:
Revised:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13198-012-0114-9