Enterprise architectural framework for supply-chain integration

The concept of supply chain is about managing coordinated information and material flows, plant operations, and logistics. It provides flexibility and agility in responding to consumer demand shifts without cost overlays in resource utilization. The fundamental premise of this philosophy is; synchronization among multiple autonomous business entities represented in it. That is, improved coordination within and between various supply-chain members. Increased coordination can lead to reduction in lead times and costs, alignment of interdependent decision-making processes, and improvement in the overall performance of each member as well as the supply chain. Describes architecture to create the appropriate structure, install proper controls, and implement principles of optimization to synchronize the supply chain. A supply-chain model based on a collaborative system approach is illustrated utilizing the example of the textile industry. process flexibility and coordination of processes across many sites. More and more organizations are promoting employee empowerment and the need for rules-based, real-time decision support systems to attain organizational and process flexibility, as well as to respond to competitive pressure to introduce new products more quickly, cheaply and of improved quality. The underlying philosophy of managing supply chains has evolved to respond to these changing business trends. Supply-chain management phenomenon has received the attention of researchers and practitioners in various topics. In the earlier years, the emphasis was on materials planning utilizing materials requirements planning techniques, inventory logistics management with one warehouse multi-retailer distribution system, and push and pull operation techniques for production systems. In the last few years, however, there has been a renewed interest in designing and implementing integrated systems, such as enterprise resource planning, multi-echelon inventory, and synchronous-flow manufacturing, respectively. A number of factors have contributed to this shift. First, there has been a realization that better planning and management of complex interrelated systems, such as materials planning, inventory management, capacity planning, logistics, and production systems will lead to overall improvement in enterprise productivity. Second, advances in information and communication technologies complemented by sophisticated decision support systems enable the designing, implementing and controlling of the strategic and tactical strategies essential to delivery of integrated systems. In the next section, a framework that offers an unified approach to dealing with enterprise related problems is presented. A framework for analysis of enterprise integration issues As mentioned in the preceding section, the availability of advanced production and logistics management systems has the potential of fundamentally influencing enterprise integration issues. The motivation in pursuing research issues described in this paper is to propose a framework that enables dealing with these effectively. The approach suggested in this paper utilizing supply-chain philosophy for enterprise integration proposes domain independent problem solving and modeling, and domain dependent analysis and implementation. The purpose of the approach is to ascertain characteristics of the problem independent of the specific problem environment. Consequently, the approach delivers solution(s) or the solution method that are intrinsic to the problem and not its environment. Analysis methods help to understand characteristics of the solution methodology, as well as providing specific guarantees of effectiveness. Invariably, insights gained from these analyses can be used to develop effective problem solving tools and techniques for complex enterprise integration problems. The discussion of the framework is organized as follows. First, the key guiding principles of the proposed framework on which a supply chain ought to be built are outlined. Then, a cooperative supply-chain (CSC) system is described as a special class of a supply-chain network implementation. Next, discussion on a distributed problemsolving strategy that could be employed in integrating this type of system is presented. Following this, key components of a CSC system are described. Finally, insights on modeling a CSC system are offered. Key modeling principles are elaborated through two distinct modeling approaches in the management science discipline. Supply chain guiding principles Firms have increasingly been adopting enterprise/supply-chain management techniques in order to deal with integration issues. To focus on these integration efforts, the following guiding principles for the supply-chain framework are proposed. These principles encapsulate trends in production and logistics management that a supplychain arrangement may be designed to capture. . Supply chain is a cooperative system. The supply-chain arrangement exists on cooperation among its members. Cooperation occurs in many forms, such as sharing common objectives and goals for the group entity; utilizing joint policies, for instance in marketing and production; setting up common budgets, cost and price structures; and identifying commitments on capacity, production plans, etc. . Supply chain exists on the group dynamics of its members. The existence of a supply chain is dependent on the interaction among its members. This interaction occurs in the form of exchange of information with regard to input, output, functions and controls, such as objectives and goals, and policies. By analyzing this [ 291 ] Charu Chandra and Sameer Kumar Enterprise architectural framework for supply-chain integration Industrial Management & Data Systems 101/6 [2001] 290±303 information, members of a supply chain may choose to modify their behavior attuned with group expectations. . Negotiation and compromise are norms of operation in a supply chain. In order to realize goals and objectives of the group, members negotiate on commitments made to one another for price, capacity, production plans, etc. These negotiations often lead to compromises by one or many members on these issues, leading up to realization of sub-optimal goals and objectives by members. . Supply-chain system solutions are Paretooptimal (satisficing), not optimizing. Supply-chain problems similar to many real world applications involve several objective functions of its members simultaneously. In all such applications, it is extremely rare to have one feasible solution that simultaneously optimizes all of the objective functions. Typically, optimizing one of the objective functions has the effect of moving another objective function away from its most desirable value. These are the usual conflicts among the objective functions in the multiobjective models. As a multi-objective problem, the supply-chain model produces non-dominated or Pareto-optimal solutions. That is, solutions for a supplychain problem do not leave any member worse-off at the expense of another. . Integration in supply chain is achieved through synchronization. Integration across the supply chain is achieved through synchronization of activities at the member entity and aggregating its impact through process, function, business, and on to enterprise levels, either at the member entity or the group entity. Thus, by synchronization of supply-chain components, existing bottlenecks in the system are eliminated, while future ones are prevented from occurring. A cooperative supply-chain A supply-chain network depicted in Figure 1 can be a complex web of systems, sub-systems, operations, activities, and their relationships to one another, belonging to its various members namely, suppliers, carriers, manufacturing plants, distribution centers, retailers, and consumers. The design, modeling and implementation of such a system, therefore, can be difficult, unless various parts of it are cohesively tied to the whole. The concept of a supply-chain is about managing coordinated information and material flows, plant operations, and logistics through a common set of principles, strategies, policies, and performance metrics throughout its developmental life cycle (Lee and Billington, 1993). It provides flexibility and agility in responding to consumer demand shifts with minimum cost overlays in resource utilization. The fundamental premise of this philosophy is synchronization among multiple autonomous entities represented in it. That is, improved coordination within and between various supply-chain members. Coordination is achieved within the framework of commitments made by members to each other. Members negotiate and compromise in a spirit of cooperation in order to meet these commitments. Hence, the label(CSC). Increased coordination can lead to reduction in lead times and costs, alignment of interdependent decisionmaking processes, and improvement in the overall performance of each member, as well as the supply-chain (group) (Chandra, 1997; Poirier, 1999; Tzafastas and Kapsiotis, 1994). A generic textile supply chain has for its primary raw material vendors, cotton growers and/or chemical suppliers, depending upon whether the end product is cotton, polyester or some combination of cotton and polyester garment. Secondary raw material vendors are suppliers of accessories such as, zippers, buttons, thread, garment tags, etc. Other tier suppliers in the complete pipeline are: fiber manufacturers for producing the polyester or cotton fiber yarn; textile manufacturers for weaving and dying yarn into colored textile fabric; an apparel maker for cutting, sewing and packing the garment; a distribution center for merchandising the garment; and a retailer selling the brand name garment to consumers at a shopping mall or center. Synchronization of the textile supply chain is achieved through coordination primarily of: . replenishment schedules that have be