Designing a supply chain Proposition for improving quality and overall productivity of enterprises using business model
DESIGNING A SUPPLY CHAIN: PROPOSITION FOR IMPROVING QUALITY AND OVERALL PRODUCTIVITY OF ENTERPRISES USING BUSINESS MODEL BY SWAPNIL S. ANDHARE B.E. (Mechanical), Nagpur University, India, 2006 THESIS Submitted in partial fulfillment of the requirements for the degree of Master of Science in Industrial and Systems Engineering in the Graduate School of Binghamton University State University of New York 2010 UMI Number: 1480386 All rights reserved INFORMATIO N TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI 1480386 Copyright 2 010 by ProQuest LLC. All rights reserved. This edition of the work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Bo x 1346 Ann Arbor, MI 48106-1346 © Copyright by Swapnil S. Andhare 2010 All Rights Reserved iii Accepted in partial fulfillment of the requirements for the degree of Master of Science in Industrial and Systems Engineering in the Graduate School of Binghamton University State University of New York 2010 May 06, 2010 Dr. Nagendra N. Nagarur, Chair and Faculty Advisor Department of Industrial and Systems Engineering, Binghamton University Dr. Susan Lu Department of Industrial and Systems Engineering, Binghamton University Dr. Eser Kirkizlar Department of School of Management, Binghamton University iv ABSTRACT Increasingly competitive and dynamic environment obligated top management to bring uniqueness in the value proposition. Highly volatile marketplace and innovation in products has put the business world on a fast track but also reduced the product development time and product life cycle. Globalization and current economy further increased the pressure forcing companies to build a sound business model to combat against the increasing competition. Thus, efficient and effective supply chain design can potentially be the remedy for the above concerns. One of the key issues in designing the supply chains is the identification of key performance metrics. This research attempts to identify the critical measures using a simplest, quantitative, consumer driven improvement technique called as Quality Function Deployment (QFD). A detailed case study explains the interactions between the business model elements and supply chains performance metrics using QFD to highlight the important measures, useful for deciding the supply chains structures. v To my father Mr. Satishkumar, mother Ms. Sonali, brother-in-law Mr. Amar and sister Ms. Sarika vi ACKNOWLEDGMENTS M.S. from Systems Science and Industrial Engineering, Binghamton University, NY was a wonderful experience and was a great journey that helped me in inculcating a sense of professionalism through academic knowledge, interactive activities, and practical industry exposure. Primarily, I would like to proffer my greatest gratitude to Almighty Lord and parents. I offer my sincerest thanks to my advisor, Dr. Nagendra Nagarur, Chair, Department of Systems Science and Industrial Engineering, for providing valuable advice, and guidance for my thesis, research and throughout my graduate studies at Binghamton University. As my advisor, his constant encouragement, patience, suggestions and reviews certainly made the completion of this thesis possible. I wholeheartedly thank my family, all my well-wishers and friends who supported me in many ways to do my Masters from this prestigious University vii TABLE OF CONTENTS LIST OF FIGURES xii LIST OF TABLES.xiv CHAPTER 1 INTRODUCTION TO RESEARCH 1 1.1 INTRODUCTION 1 1.2 NEED FOR THE CHANGE 1 1.3 INTRODUCTION TO THE BUSINESS WORLD 3 1.4 SUPPLY CHAINS AND BUSINESS MODELS 3 1.5 ROLE OF A BUSINESS MODEL 5 1.6 SCOPE OF THE SUPPLY CHAIN 7 1.7 PROBLEM STATEMENT 8 1.8 RESEARCH OBJECTIVE 9 CHAPTER 2 LITERATURE REVIEW 10 2.1 ORIGINATION OF BUSINESS MODEL 10 2.2 PROGRESSION OF THE BUSINESS MODEL CONCEPT 12 viii 2.2.1 First phase: Definitions and classifications 12 2.2.2 Second phase (2000-2002): Citation of business model elements/components 13 2.2.3 Third phase (2000-2003): Detailed explanation of each element/component 13 2.2.4 Fourth phase (2004): Model formulation 13 2.2.5 Fifth phase: Application and implementation 13 2.3 KEY INGREDIENTS OF A BUSINESS MODEL 13 2.4 BUSINESS MODEL FRAMEWORK 14 2.4.1 Product innovation 15 2.4.2 Customer Interface 16 2.4.3 Infrastructure management 17 2.4.4 Financial aspects 19 2.5 THE BUSINESS TRIANGLE 19 2.5.1 Business strategy and business model interaction 20 2.5.2 Business organization and business model interaction 21 2.5.3 Technology and business model interaction 21 2.5.4 Environment and business model interaction 21 2.6 ROLE OF THE SUPPLY CHAINS 22 2.7 SUPPLY CHAIN DRIVERS 24 ix 2.7.1 Logistical drivers 25 2.7.2 Cross-functional drivers 26 2.8 SUPPLY CHAIN PERFORMANCE MEASURES 27 2.8.1 Strategic 28 2.8.2 Tactical 28 2.8.3 Operational 29 2.9 SUPPLY CHAIN STRATEGIES AND FIT 31 2.9.1 Lean supply chains 32 2.9.2 Agile supply chains 32 2.9.3 Hybrid supply chains 32 2.10 QUALITY FUNCTION DEPLOYMENT 37 2.10.1 Introduction 37 2.10.2 QFDs existence 37 2.10.3 Chronological development and implementation of QFD 38 2.11 QFD FRAMEWORK 39 2.11.1 First stage: Voice of customer (VOC) 40 2.11.2 Second stage: Competitive analysis 42 2.11.3 Third stage: Voice of the organization 43 2.11.4 Fourth stage: Design target level 43 2.11.5 Fifth stage: Relationship matrix 43 [...]... conceptual tool that contains a set of elements and their relationships and allows expressing a company's logic of earning money It is a description of the value a company offers to one or several segments of 11 customers and the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue... competitive strategies against the competitors Variability and uncertainty in demands or supplies are the major cause of worries for the supply chains (Hwarng and Xie, 2008) Therefore, having a balanced supply chain is a key to company’s success A successful supply chain should be (Cohen and Roussel, 2005): • Supportive to the business strategy; 7 • Targeted i.e customer focused; and • Flexible and adaptive... with business model (Gunasekaran and Chung, 2004) 1.5 ROLE OF A BUSINESS MODEL Business model is the simplified representation of company’s business logic” However, this logic can sometimes be abstract concepts too, leading to confusion To avoid such scenarios a general value chain framework can be very effective for model formulation This can as well help managers to gauge, understand, analyze and manage... strategies based on efficiency and responsiveness are often decided primarily on the products being offered: Functional or Innovative (Stavrulaki and Davis, 2010), where former requires efficient supply chains strategy and later requires responsive supply chains Another important aspect of the supply chains is the performance measures: Qualitative and Quantitative (Beamon, 1998) which are useful in assessing... drivers, (Chopra and Meindl, 2006) 25 Figure 2-7 Fisher’s product supply chain matrix, (Stavrulaki and Davis, 2010) 31 Figure 2-8 Leanness and agile supply chain matrix for demands, (Naylor et al., 1999) 33 Figure 2-9 Market qualifiers and winners for lean and agile supply chains, (Jones et al., 2000) 33 Figure 2-10 Supply chain strategies, (Naylor et al., 1999) ... model could have a huge and noteworthy impact on deciding appropriate supply chain and reducing total working cost for the business The second major hindrance is clarifying the myths and clearing the ambiguity regarding the business model among masses Some of the other reasons that contribute towards the selection of a business model for designing a supply chain include: • A business model is the most... Proposed supply chain strategy 87 xiii LIST OF TABLES Table 2-1 Supply chains performance measures, (Gunasekaran et al., 2001) 30 Table 2-2 Comparisons of supply chain characteristics, (Stavrulaki and Davis, 2010) 36 Table 3-1 Relationship table (Cohen, 1995) 59 Table 4-1 Competitive assessment and QFD calculation 74 Table 4-2 Service performance assessment 78 Table... external forces plays a crucial role during designing of business model Each of the above three worlds has a unique interaction with the business model Figure 2-3 Business triangle: Business model and interactions (Osterwalder, 2004) 2.5.1 Business strategy and business model interaction This type of interaction normally discusses company’s vision, its goals and analyzes means to achieve it 20 2.5.2 Business. .. representation of how an interrelated set of decision variables in the areas of venture strategy, architecture, and economics are addressed to create sustainable competitive advantage in defined markets.’’(Morris et al 2005) Amongst all, Osterwalder is the most prolific researcher on business model and his definition of business model is widely accepted, which states that: A business model is a conceptual... adaptive to the market changes 1.7 PROBLEM STATEMENT One of the biggest and the greatest concerns in today’s business world is that of the market sustainability and stability For any business or organization to be successful, it has to generate profits Sustainability and stability brings profitability in the business In order to sustain and stabilize the business in the dynamic market, a company has to meet . DESIGNING A SUPPLY CHAIN: PROPOSITION FOR IMPROVING QUALITY AND OVERALL PRODUCTIVITY OF ENTERPRISES USING BUSINESS MODEL BY SWAPNIL S. ANDHARE B.E. (Mechanical), Nagpur University,. Figure 2-8 Leanness and agile supply chain matrix for demands, (Naylor et al., 1999) 33 Figure 2-9 Market qualifiers and winners for lean and agile supply chains, (Jones et al., 2000) 33 . coordinated supply chains, and collaborated business decisions and strategies (Walters, 2004). During last few decades supply chains have gained tremendous importance, people became aware of the