Contemporary Issues in Supply Chain Management and Logistics

Anthony M. Pagano, Mellissa Gyimah

• Publisher: Business Expert Press
• Year: 2017
• Print ISBN: 9781631573613
• eBook ISBN: 9781631573620
• Topic: Business
• Subtopic: Operations
• Index: Business

This book is a collection of chapters on issues we face today in the world of supply chain management. While there are a number of college textbooks related to specific areas within logistics and supply chain issues, there are very few general supply chain management "trends" books. Contemporary Issues in Supply Chain Management and Logistics consists of seven dynamic, current and informative chapters that cover a variety of cutting-edge supply chain topics of use to both graduate students, and professionals working in the field. The book contains new, original research papers written by academics from the fields of engineering, transportation, marketing, and supply chain management and logistics.

CHAPTER 1

Introduction—About This Book

This book, titled “Contemporary Issues in Supply Chain Management and Logistics,” is a collection of chapters on issues we face today in the world of supply chain management. It consists of seven dynamic, current, and informative chapters that cover a variety of cutting-edge supply chain topics. This interdisciplinary book is of use to both graduate students and professionals working in the field because of its cutting-edge approach to emerging global issues. The book contains new, original research papers written by academics from the fields of engineering, transportation, information and decision systems, marketing, and, of course, supply chain management and logistics.

While there are a number of college text books related to specific areas within logistics and supply chain issues, there are very few general supply chain management “trends” books. Of the books that exist, the majority has a European-centered international focus. There is an untapped market to create a supply chain and logistics book to be used in college classes that uses examples in the United States. Indeed, undergraduate and graduate business schools are increasing their course offerings in logistics and supply chain management, based on student demand. Supply chain managers’ salaries are increasing and c-level positions are being added to many companies. To meet this demand, these new courses will require updated and relevant books that provide timely perspectives and examples using “real-world” situations. Additionally, professionals working in the field need to stay current on the trends and issues facing supply chain managers. They will be leading their corporations’ strategies on supply chain management. This book, therefore, feeds their position as thought leaders looking to make their supply chain leaner, more visionary, and reflective of the trends in supply chain management.

Chapter 2 of this book discusses research undertaken at the University of Illinois at Chicago (UIC) Center for Supply Chain Management and Logistics by UIC Professors Matt Liotine, Anthony M. Pagano, and Sidd Varma Gadiraju from Capgemini. It involves a two-year study that analyzes recent technological trends in the Logistics and Supply Chain Management space in the United States. The research focuses first on the vendors/suppliers of the technologies, progressing then to the buyers/users of these technologies. From this research, the chapter identifies emerging technologies, their implications, and acceptance, and utilization levels across various industry sectors.

Chapter 3 by William Stillman of GainSystems details the effort in trying to minimize the negative financial impacts of “Murphy’s Law.” This issue has challenged the executive suite for years. Corporations have spent hundreds of millions of dollars on outside consulting firms and enterprise software trying to manage the impact of “Murphy” on their inventory investment and operating costs. It then discusses a method to consistently achieve the “Perfect Order.” To achieve this with the maximum contribution to margin, one needs to plan across the enterprise at the most granular level. Therefore, one needs to account in that plan for all variables and needed to monitor the enterprise to identify any changes in Stock Keeping Unit Location (SKUL) behavior patterns, customer behavior patterns, or other relevant elements of the enterprise supply chain.

Fazle Karim and Professor Houshang Darabi of UIC review, in Chapter 4, the methods for demand forecasting and provide a comprehensive framework for the prediction of the demand of location-dependent services such as healthcare facilities, retail stores, banks, restaurants, and so on. The chapter discusses how accurate forecasting is becoming vital for survival and success of business, and how demand forecasting is also becoming the foundation of location-dependent services as it helps with marketing and revenue.

Chapter 5, written by Mellissa Gyimah, explores and discusses how education and academic intersect within supply chain management, and what people in the workforce look for as an educational foundation for students they would potentially hire. Essentially, what coursework do companies appreciate and value most so that potential employees are effective in their company as workers? Using a survey method and analyzing individual’s responses, we see the skills and educational background companies prefer and how it would be beneficial for companies and universities to collaborate moving forward.

The team of Pourabdollahi, Karimi, Mohammadian, and Kawamura are the authors of Chapter 6. This chapter is based on the PhD thesis of Zahra Pourabdollahi, now at RS&H, Inc in Tampa. Behzad Karimi of the University of South Florida, Professors Kouros Mohammadian and Kazuya Kawamura of UIC round out the team. In Chapter 6, we are exposed to the remarkable increase in freight movements and their significant impacts on the transportation system, regional well-being, and economic growth. This provides sufficient motivation to develop reliable analysis tools to estimate commodity flows between zones and forecast the future demand and trends of goods movements among regions. The chapter illustrates the need to develop freight demand models to better facilitate infrastructure planning and policy development by outlining a behavioral agent-based supply chain and freight transportation model for the Chicago Metropolitan Area. This multimodal freight model addresses critical technical and conceptual hurdles that have challenged past efforts by applying an agent-based framework.

The initial part of Chapter 7, written by Professor Chis Westland of UIC, addresses the research question of how you create an accurate customer demand forecast for a single item inventory where demand is indirectly observed by tracking inventory levels. Inventory management and control are often myopic. The only information that management has available for the customer demand input to their policy model comes from the inventory levels over time, which is inherently right-censored by stock-outs (where demand exceeds supply). The remainder of the chapter delineates a methodology to address customer demand forecast errors that can contribute to suboptimization in supply-chain algorithms. It introduces a separable demand forecasting based on Kaplan–Meier estimators using data only from inventory levels, while providing examples of the application of such estimators to elicit demand forecast time-series. Finally, the chapter incorporates the forecasts generated from Kaplan–Meier estimators using data only from inventory levels into a basic inventory restocking algorithm.

Chapter 8, written by Anthony M. Pagano, discusses Public–Private Partnerships (PPP) that is in the forefront of approaches to funding transportation infrastructure improvements. Highlighted in the highway area by long-term leases of the Chicago Skyway and Indiana Toll Road, a variety of states are investigating the use of PPP either as “Brownfield” leases such as the Chicago and Indiana cases, or “Greenfield” Design, Build, Operate, Transfer arrangements. These and other PPP projects raise a variety of issues, including the length of the lease, toll escalation permitted, and use of funds. This paper develops a rationale for PPPs in transportation, evaluates several approaches to PPPs using this rationale, and analyzes some of the difficult issues that can surface.

CHAPTER 2

Technology Trends in Logistics and Supply Chain Management

Matthew Liotine, Anthony M. Pagano, and Siddhartha Varma Gadiraju

Overview of Research

This research, undertaken by the University of Illinois at Chicago’s Center for Supply Chain Management and Logistics, involves a two-year study, which works toward analyzing the recent technological trends in the Logistics and Supply Chain Management space in the United States, which are being followed by major corporations. The research focuses first on the vendors/suppliers of the technologies discovered, progressing then to the buyers/users of these technologies.

Objectives

• Identify the emerging technologies, either hardware or software, that companies are investing in, currently, and in the short term.
• Understand the implications of the technologies with respect to areas that include value creation, operational effectiveness, investment level, technical migration, and general industry acceptance.
• Identify short-term trends in the technology acceptance and utilization levels across various industry sectors.
• Characterize the supply chain and logistics applications in which the technologies are being utilized with regard to product planning, materials management and inventory, transportation, distribution, workflow, plant maintenance, quality assurance, environment, health, and safety.
• Identify favored suppliers for the technologies identified.

Study Approach

The team has interviewed a group of 10 companies that provide various innovative technological services for industry giants in North America and elsewhere. The choice of vendors was made based on the innovative quality of their product/service, its usability, and adaptability in regard to current supply chain practices and associated return on investment (ROI).

A list of companies has been included in the following table, along with their associated field of service in the supply chain space. While there is much diversity in the services and products provided by these companies, they all contribute to optimizing complex, global supply chains. A comprehensive view of how these different technologies interact with each other to have a positive impact on the supply chain operations is provided in this report.

To get a better idea of the desired functionality of new supply chain technologies in the industry, an interview with the Aberdeen Group was also conducted. Aberdeen, as a company with a supply chain research unit, has been able to shed some light on the recent trends in the supply chain industry.

Study Findings

Overview

Overall, companies have been integrating new technologies in their supply chain and logistics operations for numerous reasons. Among these are:

• To improve ROI by using technologies that better leverage utilization of capital expenditures in people and equipment.
• To create operational efficiencies in order to reduce inventory and improve cycle times.
• To improve customer responsiveness by reducing lead times, improving product availability, and offering flexibility to changing customer demands.

All of these ultimately result in creating greater value for the customer base, and consequently improved profitability. To this end, companies are seeking ways to establish greater end-to-end visibility across the complexity of supply chain and logistics operations, processes, and systems. Visibility provides “controlled access and transparency to accurate, timely and complete events and data (transactions, content and relevant supply chain information) within and across organizations and to support effective planning and execution of supply chain operations” [1].

Table 2.1 illustrates these relationships as they existed at the outset of this study. Until recently, technology has been considered as an enabler for improvements in underlying supply chain and logistics operations. However, recent trends in society and business such as mobile computing, social media, and online retailing have significantly changed almost every aspect of the supply chain and logistics landscape. In this study, the following technologies were found to have a pervasive role in altering this landscape (Figure 2.1):

Table 2.1 List of Companies

Company name	Services	Website
SAP	Enterprise Resource Planning	www.sap.com/index.html
Vuzix	Hardware—for Optimized Warehouse Operations	www.vuzix.com/
ORTEC	Software Solutions—Advanced Planning and Optimization	http://ortec.com/
Aberdeen Group	Industry Research	www.aberdeen.com/
Accenture	Management Consulting and Technology Services	www.accenture.com/
Mecalux	Industrial, Racking, and Storage Solutions	www.interlakemecalux.com/
GT Nexus	Cloud-based Supply Chain Services	www.gtnexus.com/
Bastian Solutions	Material Handling Systems Integrator	www.bastiansolutions.com/
AGV Solutions	Automated Guided Vehicle Systems Provider	http://agvsolutions.com/
Zebra Technologies	Tracking Technology and Solutions	www.zebra.com

Figure 2.1 Supply chain and logistics relationships

• Maturing technologies
  Based on industry study, the following technologies are considered maturing technologies, whose aim is to improve service and efficiency.
  • Optimization software
  • Sensors/telematics
  • Cloud computing
  • Data warehouse and integration
  • Automated storage and retrieval
  Current adoption levels for these technologies are at 35 percent and are projected to reach 80–90 percent by 2019 [2].
• Growth technologies
  The following technologies are considered growth technologies, whose adoption rates are currently about 20 percent, but are expected to grow steadily in the next three to five years [2].
  • Mobility
  • Wearability
  • Data analytics
  • Social media
• Emerging technologies
  The following technologies are considered emerging technologies, with current adoption rates of 10 percent [2]. These technologies are viewed as disruptive in nature, and thus have the potential to significantly alter supply chain and logistics operations in unforeseen ways:
  • 3D printing
  • Drones
  • Autonomous vehicles

Specific Findings

It is important to note that the impacts of these technologies in many cases are collective rather than individual, the result of integrating a technology with one or more of the others. The following briefly describe their impacts as identified in this study:

Cloud Computing

Cloud computing technology has enabled companies to migrate platforms and applications that were once predominantly on-premises or within public/private cloud environments. Cloud computing is a technology that provides user applications that are delivered from a collected group of distributed computing resources (e.g., servers, databases, applications, networks, etc.). Cloud computer offerings have been classified into Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). SaaS consumers use a provider’s applications running on a cloud infrastructure, accessing them using various client devices through a thin client interface such as a Web browser. The underly...

Table of contents

• Cover
• Title
• Copyright
• Acknowledgments
• Chapter 1. Introduction—About This Book
• Chapter 2. Technology Trends in Logistics and Supply Chain Management
• Chapter 3. The Science of Inventory Optimization: Profit Optimally Managing Change and Variability in the Supply Chain
• Chapter 4. The Demand Prediction of Location-Dependent Services
• Chapter 5. Supply Chain Education: Are University Courses Providing the Background That Companies Want for New Employees?
• Chapter 6. An Agent-Based Supply Chain and Freight Transportation Model: Case Study for Chicago Metropolitan Area
• Chapter 7. Kaplan–Meier Estimators for Single Product Demand Using Inventory Level Time-Series
• Chapter 8. Public–Private Partnerships (PPP) in Transportation: An Analysis of Alternatives
• About the Authors
• Index
• Adpage