Economical delivery strategies of products in a JIT system under a global supply chain

Abstract

This study supplies an optimal total cost model, including approach I and approach II, to manufacturers with several assemblers in the same area to decide the most economical product delivery strategy in the global just-in-time (JIT) system. In approach II, manufacturers deliver products to downstream assemblers via a JIT system with third party logistics (3PL) support. There is a distinction between approach I and approach II according to whether or not the delivery quantity is limited to economical delivery lot size. A case study analysis is used to illustrate the proposed models, in which the following conclusions can be obtained. Firstly, the JIT product delivery strategy according to economical delivery lot size can be obtained to achieve a cost-effective global supply chain. Second, upstream manufacturers can apply a JIT system under a global supply chain to downstream manufacturers with lower cost through support from 3PL with economical delivery lot size.

Logistics Strategies to Facilitate Long-Distance Just-in-Time Supply Chain System

“…Rather, they utilize the extended transport networks of global 3PL's in various regions. This partnering with 3PL's streamlines the JIT operations and contributes to lean and agile supply chain (Kreng & Wang, 2005).…”

“…In the era of global supply chain, companies buy parts and components from abroad. Then, those imported parts and components are oftentimes consolidated by 3PLs that are within the driving distance from a manufacturer (Kreng & Wang, 2005). In a foreign manufacturing environment, a cluster is often formed through physical proximity for JIT manufacturing (Wood and Murphy, 2004).…”

A methodology for the design and operation of pull‐based supply chains

“…References to JIT material flow in the SC context are scarce, but are increasing during last years. Among them, it is worth mentioning the works by Gargouri and Hammadi (2002), Olhager (2002), Vergara et al (2002), Chiu and Huang (2000), Kim and Ha (2003), Rubiano and Crespo Marquez (2003), Aigbedo (2004), Wang et al (2004), Kreng and Wang (2005), Liberopoulos and Koukoumialos (2005), Mistry (2005), Takahashi et al (2005), Wang and Sarker (2005), Wang and Sarker (2006), Wong and Johansen (2006), Zhao et al (2007) and Hopp (2008). Gargouri and Hammadi (2002) focus on an agro‐food environment where there is an unpredictable and seasonal demand.…”

“…The problem is modelled as a LP model in order to minimise the total costs. Kreng and Wang (2005) discuss two different JIT systems under a global SC according to whether the delivery of products is limited or not to their economic lot size. Liberopoulos and Koukoumialos (2005) state that advance demand information (ADI) systems may acquire a great importance in the SC context.…”

Integration of Delivery Policy and Application of Multiple Objective Decision Method－A Supply Chain Collaboration Approach

“…These models considered multiple deliveries of an order, but they did not emphasize the logistics center as a medium, in order to reach the purpose of both parties making large batches and transporting in turn. Kreng and Wang (2005) suggested that manufacturers can optimize their total cost by deciding whether or not to cooperate with third party logistics (3PL) and arrive at their optimal production lot size. 3PL will also occupy a much more important position in the JIT system under a global supply chain.…”