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Supply chain design to guarantee quoted lead time and inventory replenishment: model and insights

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  • Ramzi Hammami
  • Yannick Frein
  • Bouchaib Bahli

Abstract

Do lead time constraints only lead to re-think and re-optimise the inventory positioning along the supply chain or can they impact on the design of the supply chain itself? To answer such a question, we integrate the lead time constraints in a multi-echelon supply chain design model and challenge the difficulty of combining in the same model the long-term decisions (facility location, supplier selection) with the midterm decisions (inventory placement and replenishment, delivery lead time). The model guarantees the respect of the quoted lead time associated with each customer order and the replenishment of the different stocks (raw materials, intermediate and final products) in the different stages of the supply chain between any pair of consecutive orders. We use the model to investigate the impact of the quoted lead time and customer’s order frequency on supply chain design decisions and costs. Some of our results indicate that the lead time constraints can lead to bringing the sites of manufacturing and distribution close to the demand zone and to select local suppliers in spite of their higher cost.

Suggested Citation

  • Ramzi Hammami & Yannick Frein & Bouchaib Bahli, 2017. "Supply chain design to guarantee quoted lead time and inventory replenishment: model and insights," International Journal of Production Research, Taylor & Francis Journals, vol. 55(12), pages 3431-3450, June.
    • Handle: RePEc:taf:tprsxx:v:55:y:2017:i:12:p:3431-3450
    DOI: 10.1080/00207543.2016.1242799
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    Cited by:

    1. Choi, Tsan-Ming & Shi, Xiutian, 2022. "Reducing supply risks by supply guarantee deposit payments in the fashion industry in the “new normal after COVID-19”," Omega, Elsevier, vol. 109(C).
    2. Ramzi Hammami & Yannick Frein & Abduh Albana, 2020. "Delivery time quotation and pricing in two-stage supply chains: Centralized decision-making with global and local managerial approaches," Post-Print hal-02898219, HAL.
    3. Petchprakai Sirilertsuwan & Sébastien Thomassey & Xianyi Zeng, 2020. "A Strategic Location Decision-Making Approach for Multi-Tier Supply Chain Sustainability," Sustainability, MDPI, vol. 12(20), pages 1-37, October.
    4. Sayid Albana, Abduh & Frein, Yannick & Hammami, Ramzi, 2018. "Effect of a lead time-dependent cost on lead time quotation, pricing, and capacity decisions in a stochastic make-to-order system with endogenous demand," International Journal of Production Economics, Elsevier, vol. 203(C), pages 83-95.
    5. Chávez, Marcela María Morales & Sarache, William & Costa, Yasel, 2018. "Towards a comprehensive model of a biofuel supply chain optimization from coffee crop residues," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 116(C), pages 136-162.
    6. Hammami, Ramzi & Frein, Yannick & Albana, Abduh S., 2020. "Delivery time quotation and pricing in two-stage supply chains: Centralized decision-making with global and local managerial approaches," European Journal of Operational Research, Elsevier, vol. 286(1), pages 164-177.

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