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Reconciling sales and operations management with distant suppliers in the automotive industry: A simulation approach

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  • Laurent Lim, Lâm
  • Alpan, Gülgün
  • Penz, Bernard

Abstract

A challenge for car manufacturers is to adjust rapidly and efficiently the production capacities with a volatile market demand and despite distant suppliers. In this paper, we consider a sales and operations planning problem based on the actual situation of Renault, a French global automobile manufacturer. The issue is to find the best trade-off between sales requirements and industrial constraints while limiting inventories, emergency supplies and keeping delivery lead times reasonable for customers. A new planning method based on flexibility rates is presented. The flexibility rates are defined to limit orders of a given type of vehicles, during a certain period. A simulation model is introduced and captures the dynamics of the sales and operations management. A numerical study has been performed by using industrial data. Results highlight factors that improve system performances and several policies are compared. This research also has relevance for other industries that face long procurement lead times in an uncertain environment.

Suggested Citation

  • Laurent Lim, Lâm & Alpan, Gülgün & Penz, Bernard, 2014. "Reconciling sales and operations management with distant suppliers in the automotive industry: A simulation approach," International Journal of Production Economics, Elsevier, vol. 151(C), pages 20-36.
    • Handle: RePEc:eee:proeco:v:151:y:2014:i:c:p:20-36
    DOI: 10.1016/j.ijpe.2014.01.011
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    3. MacCarthy, Bart L. & Ovutmen, Tamer, 2015. "Using a central Vehicle Holding Compound (VHC) in an open pipeline automotive order fulfilment system: A simulation study," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 590-601.
    4. Noroozi, Sayeh & Wikner, Joakim, 2017. "Sales and operations planning in the process industry: A literature review," International Journal of Production Economics, Elsevier, vol. 188(C), pages 139-155.
    5. Giacosa, Elisa & Culasso, Francesca & Crocco, Edoardo, 2022. "Customer agility in the modern automotive sector: how lead management shapes agile digital companies," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    6. Chuang, Chia-Hung & Chiang, Chung-Yean, 2016. "Dynamic and stochastic behavior of coefficient of demand uncertainty incorporated with EOQ variables: An application in finished-goods inventory from General Motors׳ dealerships," International Journal of Production Economics, Elsevier, vol. 172(C), pages 95-109.
    7. Ortega Jimenez, Cesar H. & Machuca, Jose A.D. & Garrido-Vega, Pedro & Filippini, Roberto, 2015. "The pursuit of responsiveness in production environments: From flexibility to reconfigurability," International Journal of Production Economics, Elsevier, vol. 163(C), pages 157-172.
    8. Sali, Mustapha & Ghrab, Yahya & Chatras, Clément, 2023. "Optimal product aggregation for sales and operations planning in mass customisation context," International Journal of Production Economics, Elsevier, vol. 263(C).
    9. Tobias Kreuter & Luiz Felipe Scavarda & Antonio Márcio Tavares Thomé & Bernd Hellingrath & Marcelo Xavier Seeling, 2022. "Empirical and theoretical perspectives in sales and operations planning," Review of Managerial Science, Springer, vol. 16(2), pages 319-354, February.
    10. Ben Ali, M. & D’Amours, S. & Gaudreault, J. & Carle, M-A., 2018. "Configuration and evaluation of an integrated demand management process using a space-filling design and Kriging metamodeling," Operations Research Perspectives, Elsevier, vol. 5(C), pages 45-58.
    11. Chuang, Chia-Hung & Zhao, Yabing, 2019. "Demand stimulation in finished-goods inventory management: Empirical evidence from General Motors dealerships," International Journal of Production Economics, Elsevier, vol. 208(C), pages 208-220.
    12. Tuomikangas, Nina & Kaipia, Riikka, 2014. "A coordination framework for sales and operations planning (S&OP): Synthesis from the literature," International Journal of Production Economics, Elsevier, vol. 154(C), pages 243-262.
    13. Thomé, Antonio Márcio T. & Scavarda, Luiz Felipe & Pires, Sílvio R.I. & Ceryno, Paula & Klingebiel, Katja, 2014. "A multi-tier study on supply chain flexibility in the automotive industry," International Journal of Production Economics, Elsevier, vol. 158(C), pages 91-105.
    14. Hidekazu Itoh & David Guerrero, 2020. "Investigating variations in the deep-sea sourcing strategies of car manufacturers: Two case studies of parts consolidation centers in Japan," Post-Print hal-02549412, HAL.
    15. Wochner, Sina & Grunow, Martin & Staeblein, Thomas & Stolletz, Raik, 2016. "Planning for ramp-ups and new product introductions in the automotive industry: Extending sales and operations planning," International Journal of Production Economics, Elsevier, vol. 182(C), pages 372-383.

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