International Journal of Production Economics

Published by Elsevier
Print ISSN: 0925-5273
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The strategic importance of R&D will be emphasised even more in the future. Continuous improvement of the effectiveness of R&D requires an adequate and comprehensive assessment and measurement system. The present method, the quality and maturity method (QMM), for assessing the quality and maturity of R&D examines R&D from six viewpoints: R&D as part of business strategy; R&D as part of product and technology strategy; strategic implementation of R&D; R&D as a business section; R&D outputs; and implementation of R&D projects. Procedures in each of the six viewpoints are assessed and scored by 5 maturity levels. The QMM method has been lightly piloted in about 50 companies, which have had development projects in Finnish national technology programs. The verifying of the preliminary QMM method in four pilot-companies has shown that the viewpoints used in the assessment describe factors pertaining to the quality and maturity of R&D quite well, and they indicate central development needs. Development needs mainly concentrate on the development of procedure definitions and/or the development of practical implementation based on existing definitions. The deeper piloting of the method is under way or will begin in six companies and two research institutes. Future research will test the applicability of the method to different types of companies and analyse the background variables (such as the nature of R&D in organisation). The real challenge in improving the effectiveness of R&D is linking the project-level R&D objective to company-level business strategies. Effectively collected feedback information from R&D projects should be utilised in strategic planning, and the desired objectives for R&D should be defined clearly in the strategies
 
Theory construction and rigorous empirical testing is a relatively recent development in quality management. A key issue in theory development is the distinction between quality management practices and quality performance which to date has been blurred under the broad heading of quality. The emphasis in recent empirical studies has been on the relationship between quality practices and quality performance. However, the various dimensions of quality performance and the relationship between them have received less attention from the research community. More specifically, the role of design quality has not been fully addressed in empirical studies. To address this gap we developed a path model incorporating design quality, conformance quality, external quality-in-use, product cost, time-to-market and customer satisfaction. The model was tested with data collected from 351 manufacturing companies in the Republic of Ireland. Analysis of the data indicated considerable support for the conceptual model.
 
In this paper, we develop a model of relationship characteristics (duration, presence of supplier awards, degree of product standardisation/customisation, tier position), supply chain (SC) relationship quality and SC performance. We use data from the electronics sector in Ireland to test our model. Our results provide mixed support for the model, with the effects of both duration and supplier awards being supported but degree of product standardisation/customisation and SC tier position not supported. We reflect on these findings and suggest a research agenda based on our results.
 
Research design of empirical studies of production environment and MCS characteristics
A modern production environment reasonably requires a management control system that is tailored to fit the specific circumstances of this kind of organization. A modern environment relates to many elements: flexible machines, low inventories, production to order, etc. This paper reviews and discusses the literature that addresses the relationship between elements of the production environment and aspects of management control systems. This review of the relevant conceptual and empirical research in the field reveals limited and inconclusive evidence on the extent to which organizations have aligned management control systems with the production environment. The review indicates that new forms of production and inventory control (e.g., just in time) are not always easily captured by the conventional classifications of technology that are commonly used in the empirical literature. The paper also addresses problems and issues related to the existing literature, and makes suggestions for avenues of future research.
 
Inventory variance as a function of the inventory feedback gain, f Figure 2 shows the inventory variance as function of f. As expected the variance is minimal for f=1. For 0 1 f   the variance is a decreasing function of f and for 1 2 f   the variance is an increasing function of f. The variance of the ordering rule (8) becomesˆˆ becomesˆ becomesˆˆ ˆ , , , ,
The order and inventory variance trade-off in the ARMA(1,1) plane for 1  
Using state space techniques we study a “myopic” order-up-to policy. The policy is myopic because it is optimal at minimising local inventory holding and shortage costs. In particular we study the bullwhip effect produced by the replenishment policy reacting to a stochastic ARMA(1,1) demand processes. We reveal that bullwhip is fundamentally caused by the co-variance between the inventory level and the demand forecast. We go on to highlight the impact of a simple control engineering inspired bullwhip reduction technique, a proportional controller in the inventory feedback loop. Although it can be shown this approach is always able to remove bullwhip, we expose that it is not possible to arbitrarily “tune” the proportional controller, without knowing in advance the likely structure of the demand process. We conclude with an investigation of trade-offs and optimisations in the order and inventory variance (and their sum) produced by our policy.
 
Hierarchical structure of decision problem.
Computations of d à i , d À i and CC i
This paper is aimed to present a fuzzy decision-making approach to deal with the supplier selection problem in supply chain system. During recent years, how to determine suitable suppliers in the supply chain has become a key strategic consideration. However, the nature of these decisions usually is complex and unstructured. In general, many quantitative and qualitative factors such as quality, price, and flexibility and delivery performance must be considered to determine suitable suppliers. In this paper, linguistic values are used to assess the ratings and weights for these factors. These linguistic ratings can be expressed in trapezoidal or triangular fuzzy numbers. Then, a hierarchy multiple criteria decision-making (MCDM) model based on fuzzy-sets theory is proposed to deal with the supplier selection problems in the supply chain system. According to the concept of the TOPSIS, a closeness coefficient is defined to determine the ranking order of all suppliers by calculating the distances to the both fuzzy positive-ideal solution (FPIS) and fuzzy negative-ideal solution (FNIS) simultaneously. Finally, an example is shown to highlight the procedure of the proposed method at the end of this paper. This paper shows that the proposed model is very well suited as a decision-making tool for supplier selection decisions.
 
Most of the current attempts for business process optimisation are manual without involving any formal automated methodology. This paper proposes a framework for multi-objective optimisation of business process designs. The framework uses a generic business process model that is formally defined and specifies process cost and duration as objective functions. The business process model is programmed and incorporated into a software platform where a selection of multi-objective optimisation algorithms is applied to a range of test designs including a real example. The test business process designs are of varying complexity and are optimised with three popular optimisation techniques (Non-Dominated Sorting Genetic Algorithm II (NSGA2), Strength Pareto Evolutionary Algorithm II (SPEA2) and Multi-Objective Particle Swarm Optimisation (MOPSO) algorithms). The results indicate that although business process optimisation is a highly constrained problem with fragmented search space; multi-objective optimisation algorithms such as NSGA2 and SPEA2 produce a satisfactory number of alternative optimised business process designs. However, the performance of the optimisation algorithms drops sharply as the complexity of the process designs increases. This paper also discusses the directions for future research in this particular area.
 
Decision-making is one of the most critical issues in current engineering design models, including Concurrent Engineering. Design for Manufacturing is a powerful tool to provide manufacturing information to the designing process. Axiomatic design (AD) is an engineering design theory that provides a framework to decision-making in the designing process. This paper shows how AD allows for perceiving the relationships between each product and the related manufacturing processes. An example is used to describe how ADs information axiom could be applied to select the most appropriate manufacturing process in order to allow for the subsequent detail design of a mechanical component.
 
Simultaneously reducing inventory levels of raw materials, work-in-process, and finished items has become a major focus for supply chain management. In order to achieve a higher degree of coordination and automation among the supply chain parties, the supply chain sometimes invests in reducing the ordering cost to streamline and speed up transactions via the application of information technology. In this paper, an integrated vendor-managed inventory (VMI) model is presented for a single vendor and multiple buyers, where the vendor purchases, and processes raw materials and then delivers finished items to multiple buyers. A joint relevant cost model is developed with constant production and demand rates under the assumption that the buyers’ ordering cycles may be different and that each buyer can replenish more than once in one production cycle, in which the investment decision is also considered. A solution procedure of the optimal investment amount and replenishment decision for all the buyers and the vendor is proposed. Three numerical examples with an exponential ordering cost function are presented to provide insight.
 
Pokharel [2008. A two objective model for decision making in a supply chain. International Journal of Production Economics 111, 378-388] proposed a two-objective decision-making model for the choice of suppliers and warehouses for a SCN design. This is one of the first works in using multiple objectives in the design of supply chain networks. In this work, comments and suggestions are given to the recently published work (Pokharel, 2008).
 
The design and configuration of manufacturing equipment require crucial decision considering optimum capacity and functionality. The equipment selection problem might be involved with choosing between large-capacity machines versus a greater number of machines with smaller capacities, and/or dedicated facilities versus multi-product facilities. This paper investigates reconfigurable machining system characteristics in order to identify the crucial factors influencing the machine selection and the machine (re)configuration. Furthermore, changeover cost and changeover time while switching from one product to the other are taken into account. In particular, a fuzzy analytical hierarchical process (FAHP) model is proposed to integrate the decisive factors for the equipment selection process under uncertainty. The expected values of the normalised fuzzy sets are determined to identify the preference values of the alternative machines. The fuzzy multi-criteria model is analysed within the fuzzy domains of the operational characteristics along with economic, quality and performance criteria. The proposed model is examined using monitoring sensitivity analysis through a case study. As a result, the alternative machines are prioritised with consideration of the inconsistency ratios. The relative performances of the alternative equipment in view of interactions of process reconfigurability and cost, and capacity and functionality are graphically illustrated.
 
In today's competitive environment, business organizations are forced to maintain their competitive advantage by their ability to cut costs, increase revenue and uncover hidden issues. In order to enhance the visibility and transparency of value added information in a supply chain network, a process mining system is proposed for discovering a set of fuzzy association rules based on the daily captured logistics operation data, within the network. The proposed methodology provides all levels of employees with the ability to enhance their knowledge and understanding of the current business environment. Once interesting association rules have been extracted, organizations can identify the root-causes of quality problems in a supply chain and improve performance by fine-tuning the configuration of process parameters in specified processes. The application of the proposed methodology in a case company has also been studied. The prototype system has been developed and evaluated after performing a spatial analysis. The results obtained indicate that the system is capable of extracting high-quality and actionable information in the case company.
 
Product proliferation as a result of meeting ever increasing customer demand preferences is well documented. In addition, customisation has been promoted as a source of competitive advantage. Despite these factors, most of the published research in operations and supply chain management has neglected the needs of the 'engineer-to-order' (ETO) sector and there is no major systematic literature review for the ETO supply chain. This paper presents a comprehensive literature review of published material relating to ETO supply chains. It contributes to the development of a more robust definition of the ETO supply chain, helps to identify strategies that are suitable and investigates the relationship of the ETO sector with lean and agile approaches. The review also presents an analysis of research methods and industry sectors that emerge from the literature search. By analysing different streams of literature this paper helps to provide a foundation for thinking about engineer-to-order supply chain definitions and strategies and provides a research agenda to guide further study.
 
Supplier selection is one of the most important activities of purchasing departments. This importance is increased even more by new strategies in a supply chain. Supplier selection is a multi-criteria decision making problem in which criteria have different relative importance. In practice, for supplier selection problems, many input information are not known precisely. The fuzzy set theories can be employed due to the presence of vagueness and imprecision of information. A weighted max-min fuzzy model is developed to handle effectively the vagueness of input data and different weights of criteria in this problem. Due to this model, the achievement level of objective functions matches the relative importance of the objective functions. In this paper, an analytic hierarchy process (AHP) is used to determine the weights of criteria. The proposed model can help the decision maker (DM) to find out the appropriate order to each supplier, and allows the purchasing manager(s) to manage supply chain performance on cost, quality and service. The model is explained by an illustrative example.
 
A comparison of ISO 9000, ISO 14000 and ISO 26000 
Coding system for the study.  
Following a growing interest in corporate social responsibility, the International Organization for Standardization (ISO) announced plans for development of the ISO 26000—guidance standard for social responsibility. Despite initial signals that ISO 26000 will be built on the intellectual and practical infrastructure of ISO 9000 and ISO 14000, the Advisory Group on Social Responsibility set a different direction: a guidance standard and not a specification standard against which conformity can be assessed. This paper aims to investigate what views ISO member body delegations and invited participants in international standardisation of social responsibility had about the divergence from the meta-standard approach towards a guidance standard. To answer the research question, the discussions at the ISO International Conference on Social Responsibility, where ISO member body delegations and approximately 40 invited organisations commented on this matter, have been analysed. As a result of this understanding, not only will insight into the first steps of standardisation of social responsibility be provided, but it will also shed light on the perception of ISO 9000 and ISO 14000 that are held by standard developers.
 
This paper explores the linkages between the practices and behaviour developed in the operations function of a company and the implementation of the ISO 14001 standard by that company. Specifically, it is argued that (1) those companies with a more proactive operations function are also the companies more inclined to develop capabilities that facilitate the development of an environmental management system in compliance with the standard and (2) the adoption of such a system is associated with the generalized implementation and development of diverse environmental management practices in the operations function. The analysis of empirical data provided by 184 Spanish manufacturers gives support to these propositions.
 
The objective of this research is to propose a decision support framework for developing Ecodesign at the conceptual design phase based upon ISO/TR 14062 (2002). The contribution of this research lies in the decision support model for integrating analytic network process (ANP) and the distance-to-target (DT) method in order to calculate a single score Ecodesign concept indicator that makes the new product more eco-effective than the baseline product. The highlight of this framework is that the model can reduce bias and ease the decision-making process as well as enhance presentation of the new idea to stakeholders. A case study, recommendations, limitation, and further research are also presented.
 
Selected papers from the 18th International Conference on Production Research were presented, which shows developments in operations strategy, supply chain design, and production systems are presented. The digital revolution in product and process design is well advanced and digital technologies are commonplace in design, manufacture and new product development. The issue comprises four sections, namely operations strategy and performance, supply chain design and management, management and control of production systems, and methods and models for industrial sectors. The study demonstrates the potential impact of adopting Information and Communication Technology (ICT) tools to compress lead times in supplier/buyer relationships.
 
The report analyzes the dynamics of the material inventories in the Bulgarian economy applying the following approach: the value volume of the inventories is represented in the form of a variable dependent on the changes in the volume of the produced product and the inventory capacity. The total coefficient of the inventory capacity is taken as a generalizing average quantity indicator which is determined by its individual level in the separate sectors of the national economy as well as on the degree of their participation in the formation of this indicator. That is why the aggregate volume of inventories in the national economy is considered as a resultant indicator which is formed under the influence of the following factor indicators: total volume of the produced product, level of the sector coefficient of inventory capacity, structure of the national production.Under this assumption the aim which the author sets himself is to define to what degree the rate of growth of the inventories in the national economy is due to the increased volume of the product produced or to the changes in the coefficient of the inventories' capacity (taking into consideration the influence of the structural factor). This is a necessary condition for revealing the reserves and for evaluating the main trends of their reduction in perspective. With the help of a modern additive method the contribution of each factor growth in the general augmentation of the inventories is evaluated. The research on these factor influences in dynamic aspect helps to reveal tendencies in their development, the degree of the usage of the inventories as well as to evaluate the trends of their behaviour in perspective.
 
McConnell and Perez–Quiros have recently provided evidence that the growth rate of GDP has stabilized since 1984. They conclude that the enhanced stability can be attributed to improvements in inventory management in the durables sector. This study examines the behavior of output in two-digit SIC manufacturing industries in an effort to determine whether this increase in stability is evident in less aggregated data. After accounting for changes in demand volatility, output stabilized in four of the six 2-digit durables industries modeled here. Total durables output stabilized by 9%. These improvements appear to be the result of milder short-run output responses to demand shocks. This suggests that output has become less responsive to demand shocks and casts doubt on enhanced flexibility of production that should be characteristic of improved production management.
 
Customer service plays an important role in companies acting in new market economies of Central Europe. Assessment of customer service is possible while adopting different standards reflecting various aspects of that service. This paper presents results of surveys of Polish companies in the period 1993–2001. Those surveys show that Polish manufacturers changed their attitudes towards customer service and its competitive advantage aspects. They are aware of growing customer requirements and adopt sets of standards to evaluate that service. However, several drawbacks can be indicated in the field of practical use of those standards such as low quality or sporadic reports and accidental use.
 
Academic research into radio frequency identification (RFID) has proliferated significantly over the last few years, to the point where journals (Production and Operations Management, International Journal of Production Economics, IEEE Systems Journal, and IEEE Transactions on Automation Science and Engineering) are producing special issues on the topic. In this paper, we present a literature review of 85 academic journal papers that were published on the subject between 1995 and 2005. We organize these studies into four main categories: technological issues, applications areas, policy and security issues, and other issues. All of the papers in the review are allocated to the main and sub-categories based on their main focus. Our analysis of these papers provides useful insights on the anatomy of the RFID literature, and should aid the creation and accumulation of knowledge in this domain. A comprehensive list of references is also presented. It is hoped that the review will be a good resource for anyone who is interested in RFID research, and will help to stimulate further interest in this area. The implications for RFID researchers and practitioners and suggestions for future research areas are discussed.
 
The objectives of this research are to identify the research trends in and publication outlets for the applications of the fuzzy set theory technique in production and operations management (POM). The major findings indicate that (1) the most popular applications are capacity planning, scheduling, inventory control, and product design, (2) some application areas make more use of particular types of fuzzy techniques, (3) the percentage of applications that address semi/unstructured types of POM problems is increasing, (4) the most common technologies integrated with the fuzzy set theory technique are genetic/evolutionary algorithms and neural networks, and (5) the most popular development tool is C Language and its extension. Our survey confirms several research trends, some of which are unexpected and some of which contradict previous findings.
 
A number of papers have recently appeared that investigate the "bullwhip effect" (the variance amplification of ordering decisions in the supply chain) produced by the order-up-to replenishment policy. An adapted policy, with a proportional inventory position feedback controller, has shown improved "bullwhip" behaviour. The dynamic behaviour of this so-called "proportional order-up-to" policy has been investigated for arbitrary lead-times and several demand models such as i.i.d. demand and autoregressive moving average AR(1) and ARMA(1,1) models. It has been shown that, for a correct choice of the feedback parameter, the bullwhip effect can always be avoided. However, less attractive properties of this policy have also become clear. Herein, we investigate the behaviour of the proportional order up to policy for ARMA(2,2) demand with arbitrary lead-times. In order to compensate for possible weaknesses of the proportional OUT policy we propose another replenishment rule that accounts for the characteristics of the demand in a superior manner. The characteristics of both policies are compared for several parameter settings of the ARMA(2,2) model. Finally, the consequences of our full-state-feedback order-up-to policy are discussed.
 
This errata points out several errors in various optimization models and an inconsistent numerical result in Chian-Son Yu, Han-Lin Li [International Journal of Production Economics 64 (2000) 385–397].
 
In this study we investigate the determinants of inventory turnover. The study is based on an econometric analysis of inventory behaviour using an inventory turnover model. The empirical implementation of the model was conducted on a sample of financial data for 566 Greek retail firms for the period 2000-2005. By employing panel data techniques it was found that inventory turnover ratio is negatively correlated with gross margin and positively correlated with capital intensity and a measure of sales surprise. Decomposing the variance into its components associated with year, firm and retail segment effects, we found that a substantial amount of inventory turns variability is due to segment-wise effects. Moreover, the inventory turnover reaction to different sales changes was also studied. It was estimated that changes in sales bring on bigger changes when firms operate in sales-declined region. These results are useful in identifying methods and applications to improve inventory performance among firms and over time.
 
Agrell and West [2001. A caveat on the measurement of productive efficiency. International Journal of Production Economics 69, 1–14] examined OCRA along with seven other productivity/performance measurement tools and stated, on the basis of a counter-example, that none satisfied one of the five behavioral properties they considered, the profitability property, to be “fair in an economic sense.” This paper demonstrates that OCRA indeed satisfies the profitability property.
 
Top-cited authors
Angappa Gunasekaran
  • Pennsylvania State University Harrisburg
Joseph Sarkis
  • Worcester Polytechnic Institute
T. C. E. Cheng
  • The Hong Kong Polytechnic University
Kee-hung Lai
  • The Hong Kong Polytechnic University
Qinghua Zhu
  • Shanghai Jiao Tong University