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Enhancing Supply Chain Efficiency: A Two-Stage Model for Evaluating Multiple Sourcing and Extra Procurement Strategy Optimization

Author

Listed:
  • Chong-Keun Kim

    (Global Technology Research, Samsung Electronics, Suwon-si 16677, Republic of Korea)

  • Chanho Lee

    (School of Industrial Management Engineering, Korea University, Seoul 02841, Republic of Korea)

  • DongKyun Kim

    (Department of Battery-Smart Factory, Korea University, Seoul 02841, Republic of Korea)

  • Hyungjoo Cha

    (School of Industrial Management Engineering, Korea University, Seoul 02841, Republic of Korea)

  • Taesu Cheong

    (School of Industrial Management Engineering, Korea University, Seoul 02841, Republic of Korea)

Abstract

This paper presents a two-stage mathematical model aimed at enhancing supply chain efficiency by evaluating multiple sourcing strategies and optimizing extra procurement. In the first stage, the model minimizes the gap between Sales and Operation Planning (SOP) and maximum product quantity achievable with current inventory levels, setting the foundation for understanding resource requirements. The second stage focuses on extra procurement strategy optimization, considering lead times, cost-effectiveness. We analyze the trade-offs between multiple sourcing and single vendor approaches, providing valuable insights for supply chain decision-makers. This research offers a practical framework to improve supply chain efficiency, reduce gaps, and enhance customer satisfaction while strengthening supply chain resilience in the face of unforeseen challenges, as demonstrated by the lessons from the COVID-19 pandemics.

Suggested Citation

  • Chong-Keun Kim & Chanho Lee & DongKyun Kim & Hyungjoo Cha & Taesu Cheong, 2023. "Enhancing Supply Chain Efficiency: A Two-Stage Model for Evaluating Multiple Sourcing and Extra Procurement Strategy Optimization," Sustainability, MDPI, vol. 15(22), pages 1-20, November.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:22:p:16122-:d:1283766
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    References listed on IDEAS

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