Design of Efficient Textile Supply Chain in Emerging Economies

Transcription

1 Desgn of Effcent extle uly Chan n Emergng Economes Arnab Ahar a, Arnab Bs b a Oeratons Management Grou, Inan Insttute of Management Calcutta, Calcutta, 70004, Ina b Decson cences & Informaton ystems, Johns Hons Carey Busness chool, Baltmore, MD 0-099, UA Abstract - nce 000s textle nustry has exerence many sgnfcant changes le abolshment of Mult Fbre Agreement (MFA), ncreasng nee of vertcal ntegraton n the textle nustry, oularty of manmae fbre, etc. It has been observe that research relate to the suly chan ersectve of textle nustry s lmte to eveloe natons an some secfc oman areas. Also, several scholars have avocate the requrement of roer coornaton mechansm among textle suly chan members. Base on the actvtes erforme n aarel value chan or textle suly chan, members of the textle suly chan can be classfe nto cotton roucer, yarn roucer, an aarel roucer. In ths aer, a three level suly chan structure s ncororate to reresent the textle suly chan of emergng economes n a realstc way. In aton, the nteracton among the members of omestc textle suly chan an every layer s nteracton wth the corresonng foregn maret are ecte an arorate contract to acheve the textle suly chan coornaton s eveloe. Keywors textle suly chan; emergng economes; contracts. Introucton Extensve analyss of fferent nustral suly chan le suly chan of automoble nustry, foo nustry, harmaceutcal nustry, etc. remans an area of nterest for research scholars over the years. But, research relate to the textle suly chan s lmte to some secfc fels (Raut an Baar, 0). After the abolshment of textle quota by WO n 005, the role of emergng economes le Ina, Chna, Brazl, etc. has become very mortant from global outloo. Our nvestgaton nto the textle suly chan n emergng economes reveals that oor coornaton among the members of the suly chan affects ts growth otental. In aton, the resent fragmente structure maes few members roftable at the cost of others. hus, mbalance s create n the textle suly chan. In ths aer, our obectve s to esgn an arorate coornaton mechansm for ths suly chan. o reresent the textle suly chan structure of emergng economes n a more realstc manner; we have ncororate a three level suly chan framewor an esgne the coornaton mechansm n a etermnstc eman settng. Base on the actvtes, we have foun that cotton roucer, yarn roucer, an aarel roucer lay most mortant role n the textle suly chan. For ths reason, cotton roucer, yarn roucer, an aarel roucer are reresente as three stages of the textle suly chan n our esgn roceure. Cotton roucer s the most ustream member whereas aarel roucer s the most ownstream member n ths suly chan. Exstng lterature relate to three level suly chan n a etermnstc eman settng reveals that Munson an Rosenblatt (00) evelo a coornaton mechansm among the suly chan members of three level suly chan usng quantty scount contract. Khoua (00) esgns a coornatng three level suly chan n the context of one suler-one manufacturer-one retaler settng usng equal cycle tme an nteger multler cycle tme mechansm. Carenas an Barron (007) emonstrate a generalze verson of Khoua s wor for mult-stage suly chan. Jaber an Goyal (008) extens Khoua s aroach to a multle suler-one manufacturer-multle retaler settng an evelo the arorate coornaton mechansm. aaeh et al. (0) evelos a ont otmal olcy for a multle suler-multle manufacturer-multle retaler suly chan. Exstng scholarly wors relate to three level suly chan n etermnstc settng scuss about one-to-one relatonsh,.e., at each level, every member s ecate to only one aacent ownstream member. In our wor, we have shown how coornaton can be ossble when each of the members n a three level textle suly chan rouces for two buyers. We have ale the two exstng contracts of equal cycle tme coornaton an nteger multler

2 cycle tme coornaton mechansm n the context of etermnstc eman. In aton, we have shown the mact of allocaton of raw materal nventory between two buyers. he rest of the artcle s organze as follows. ecton resents the overall rocess escrton an the notatons use n the aer. ecton emonstrates the moel an results n etal. ecton 4 scuss the mlcatons of the results. he aer s conclue by scussng contrbuton an future research avenues n ecton 5.. Moel Descrton an Notatons. Process Descrton Internatonal cotton maret Internatonal yarn maret Internatonal aarel maret Cotton Proucer Yarn Proucer Aarel roucer Domestc aarel maret Fgure. extle suly chan n emergng economes We have esgne the omestc textle suly chan of the emergng economes ecte n Fgure by ncororatng a three level suly chan structure. here are three members n the aforementone suly chan, namely, aarel roucer, yarn roucer, an cotton roucer. Aarel roucer an yarn roucer rocure ther all raw materals from the omestc yarn roucer an omestc cotton roucer, resectvely. Cotton roucer uses ts own raw materal for hs roucton rocess. As er our moel, all members of the omestc textle suly chan sell ther rouct n the corresonng foregn maret aart from sulyng ther rouce quantty to the omestc buyers. Every member n the suly chan uses two roucton lnes: one roucton lne s solely ecate to omestc buyer an other roucton lne s for satsfyng the eman receve from foregn maret. As the eman of foregn maret s much hgher comare to that of the omestc maret, they use technologcally mrove equment an rocess for the roucton lne use for foregn maret to meet the eman on tme. It leas to the hgher setu cost an hgher roucton rate for the roucton lne ecate to foregn maret comare to that of the roucton lne for the omestc maret. In case of raw materal nventory, they have reetermne allocaton rule to satsfy the eman of the omestc buyer an the foregn maret. Every member of the suly chan s able to match the total eman of the omestc buyer an the foregn maret.. Notatons In our moel, we have assgne the seral number to the most ownstream layer, the aarel roucer, seral number to mle level member yarn roucer, an seral number to the cotton roucer base on ustream actvtes. It s emonstrate n etals n able. he notatons relate to the fferent cost arameters, annual eman rate, annual roucton rate, an raw materal nventory of any suly chan member s reresente n able. able. eral number assgnment to the members of textle suly chan an the symbols of buyers at any level of suly chan Member Cotton roucer Yarn roucer Aarel roucer eral Number () Buyers for any of the suly chan member () Domestc maret (DM) Foregn maret (FM)

3 able. ymbols relate to the cost, annual eman rate, annual roucton rate, an raw materal nventory for the textle suly chan members ymbol Exlanaton et u cost er orer for the roucton lne allocate to buyer by suly chan member. Annual eman rate of buyer that laces to suly chan member. Annual roucton rate of roucton lne allocate for buyer by suly chan member. h Holng cost of suly chan member. α Porton of raw materal nventory reserve for omestc maret by suly chan member. As for examles, D enotes the set u cost er orer for the roucton lne allocate to omestc maret by the aarel roucer, an F reresents the annual eman rate of foregn maret lace on omestc yarn roucer.. Assumtons o avo trval result an esgn the moel n a more realstc manner, we mae followng assumtons:. he Moel an Results > FM DM > FM DM > FM DM In ths secton, we scuss our moel an results n etal. For coornatng the overall suly chan, we have emloye two conventonal coornaton mechansms, namely, the equal cycle tme coornaton an the nteger multler cycle tme coornaton. Accorng to exstng lterature (Khoua, 00), equal cycle tme coornaton sgnfes the tme requre for roucton shoul be same for each stage of the roucton rocess to coornate the suly chan. In our moel, the otmal cycle tme s same for all members of the suly chan. In aton, the cycle tme remans the same for both roucton lnes of all members n the suly chan. It s ossble ue to the use of technologcally mofe rocess an equment for roucton lne ecate to the foregn maret. In case of the nteger multler cycle tme coornaton mechansm, the cycle tme at any stage s an nteger multler of the cycle tme of the aacent ownstream stage. he coornaton across the suly chan s assure wth the hel of ths. As an examle, f cycle tme of stage member n the suly chan s, then cycle tme of the stage member s an cycle tme of the stage member s, where an are the nteger multlers of stage an, resectvely. In our moel, nteger multler remans the same across roucton lnes of any member of the textle suly chan, aart from the conventonal nteger multler coornaton across stages. hese coornaton mechansms have been ale uner the cost mnmzaton obectve of the overall suly chan n a etermnstc eman settng. At frst, total cost of all members n the suly chan s comute. hen, the total cost of the overall suly chan s etermne. Uner the equal cycle tme coornaton mechansm, otmal cycle tme that mnmzes the total cost of the suly chan as well as ts members s etermne. In a smlar fashon, nteger multlers for cotton roucer an yarn roucer aart from the cycle tme of aarel roucer are also etermne for the nteger multler cycle tme coornaton.. he Equal Cycle me Coornaton For aarel roucer, the total cost comrses setu cost, holng cost of the fnshe goos nventory an raw materal nventory. he total setu cost of the aarel roucer can be exresse as: { DM, FM }

4 mlarly, the total holng cost of the aarel roucer for the fnshe goos nventory s h. J { DM, FM } In case of raw materal of the aarel roucer,.e., yarn, the holng cost wll be calculate for two ortons of cycle,.e., the roucton orton an the non-roucton orton. DM Here, the number of roucton cycles n a year for the omestc maret. DM Durng the roucton orton, raw materal nventory for omestc quota αd Durng the non- roucton orton, raw materal nventory for omestc quota 0. hen, the total holng cost of raw materal for omestc quota s DM α DM h. DM mlarly, total holng cost of raw materal for foregn quota s ( α ) FM FM DM hen, the total cost of an aarel roucer can be exresse as DM α DM FM ( α) DM h h h. { DM, FM } { DM, FM } DM FM mlarly, total cost of a yarn roucer s DM α DM FM ( α) DM h h h. { DM, FM } { DM, FM } DM FM As er assumton, cotton roucer uses ts own raw materal. o, we can gnore the holng cost of raw materal nventory for hm. Now, the total cost of the cotton roucer s h. h. { DM, FM } { DM, FM } Prooston : Uner the equal cycle tme coornaton, the total cost of the three level textle suly chan can be exresse as C C where, {DM, FM}. α ( h ) ( ) DM ( ) FM ( α ( ) ) ( ) DM ( ) FM DM h 4

5 he cycle tme that wll coornate the three level textle suly chan can be obtane as * α( ) ( ) DM ( ) FM h ( α( ) ) DM h ( ) DM ( ) FM where, {DM, FM}.. he Integer Multler Cycle me Coornaton he total cost of an aarel roucer remans the same as the total cost uner the equal cycle tme coornaton an t can be exresse as { DM, FM } J { DM, FM } h DM DM α DM h FM FM ( α ) Followng the nteger multler cycle tme coornaton mechansm, the cycle tme of the yarn roucer s. Now the setu cost for the yarn roucer s gven by. { DM, FM } Annual raw materal nventory holng cost of a yarn roucer α DM ( α ) FM DM h DM FM mlarly, the annual holng cost of the yarn roucer for fnshe goos nventory n case of roucton orton of the cycles s { DM, FM }, Now, the holng cost er cycle of the yarn roucer for fnshe goos nventory n case of non-roucton orton can be exresse as {( ) ( )... } ] [ DM DM DM h ( ) DM h. he number of cycles for yarn roucton s. hen, the annual holng cost of the yarn roucer for fnshe goos nventory n case of non- roucton orton of the cycles s ( DM h ) h DM h. 5

6 otal annual cost of yarn roucer uner the nteger multler cycle tme coornaton s α DM ( α ) FM DM h h { DM, FM } DM FM DM, { FM } In a smlar fashon, the cycle tme of cotton roucer s. Now the setu cost for the yarn roucer s. { DM, FM } he annual holng cost of cotton roucer for fnshe goos nventory n case of the roucton orton of the cycle s DM FM h DM FM h { DM, FM }, Now, the holng cost er cycle of cotton roucer for fnshe goos nventory n case of non-roucton orton of the cycle can be exresse as {( ) ( )... } ] [ DM DM DM h ) ( DM h he number of cycles n case of cotton roucton s. hen, the annual holng cost of cotton roucer for fnshe goos nventory n case of non- roucton orton of the cycles s ( DM h ) herefore, the total annual cost of the yarn roucer uner the nteger multler cycle tme coornaton s h { DM, FM } DM, { FM } Prooston : he total cost of the three level textle suly chan uner nteger multler cycle tme coornaton mechansm s gven by C C h { DM, FM } α ( ) ( ) ( ) ( ) h( ) DM ( α ) FM ( ) DM DM FM where, an {DM, FM}. 6

7 Prooston : he otmal value of an can be etermne by * h, * αdm FM h h DM ( α) h DM FM where, {DM, FM}. Prooston 4: Uner the nteger multler cycle tme coornaton, the otmal cycle tme of the aarel roucer wll be * αdm FM h h DM ( α) h DM FM where, {DM, FM}. Prooston 5: he cycle tme uner nteger multler cycle tme coornaton mechansm wll be less comare to that uner equal cycle tme coornaton f t satsfes the followng conton: α DM FM ( ) h h h DM α DM FM αdm FM h h h DM ( α) DM FM where, {DM, FM}. 4. Dscusson > Uner equal cycle tme coornaton, otmal cycle tme eens on the setu cost, eman rate, roucton rate, holng cost, raw materal nventory of all suly chan members, whereas otmal cycle tme uner nteger multler coornaton eens only on the arameters of aarel roucer an yarn roucer. Determnaton of nteger multler for yarn roucer an cotton roucer nvolves arameters of all three members of the suly chan. Integer multler cycle tme coornaton mechansm can brng more effcency to the suly chan eenng uon the setu cost, roucton caacty allocaton, annual eman rate an roucton rate of materals. In aton, f aarel roucer s allocaton of raw materal,.e., yarn, for the roucton lne ecate to the foregn maret s hgh, then t wll ncrease the cycle tme. If raw materal allocaton s hgh for the roucton lne ecate to omestc maret, then the cycle tme wll be reuce an eventually the entre textle suly chan wll be beneftte. It avocates the more allocaton of raw materal for omestc maret that brngs more effcency n the textle suly chan. Followng the conventonal wsom, hgh setu cost causes hgher cycle tme for any of the coornaton mechansms. Followng Fgure escrbes the mact of raw materal nventory allocaton for omestc maret on cycle tme uner equal cycle tme coornaton an nteger multler cycle tme coornaton. 7

8 5. Concluson Fgure.Cycle tme vs. raw materal nventory allocaton for omestc maret In ths aer, we have shown the way to coornate the three level textle suly chan usng contracts n etermnstc eman settng where every member at each level has two buyers, vz., the omestc buyer an the foregn buyer. Also, we have analyze how nventory allocaton between the omestc maret an the foregn maret nfluences the cycle tme an coornaton. We have also esgne the conton for choosng arorate coornaton mechansm that can brng more effcency to the textle suly chan. From future research ont of vew, ths wor can be extene to the stochastc eman settngs. Also, esgnng arorate coornaton mechansm n a context where a member rocures raw materal from two sulers can be another area of research nterest. References Munson, Charles L., an Mer J. Rosenblatt. "Coornatng a three-level suly chan wth quantty scounts." IIE ransactons, no. 5 (00): Khoua, Moutaz. "Otmzng nventory ecsons n a mult-stage mult-customer suly chan." ransortaton Research Part E: Logstcs an ransortaton Revew 9, no. (00): Cárenas-Barrón, Leoolo Euaro. "Otmzng nventory ecsons n a mult-stage mult-customer suly chan: a note." ransortaton Research Part E: Logstcs an ransortaton Revew 4, no. 5 (007): Jaber, M. Y., an. K. Goyal. "Coornatng a three-level suly chan wth multle sulers, a venor an multle buyers." Internatonal Journal of Proucton Economcs 6, no. (008): Raut, Amr, an Abul Ham Abu Baer. "A rerse of suly chan management n consangunty to the nustry of textle." Management & Maretng-Craova (0): 5-6. aaeh, Mohsen., Mohamma aber Fallahnezha, an Maryam Khosrav. "A ont otmal olcy for a multlesulers multle-manufacturers multle-retalers system." Internatonal Journal of Proucton Economcs 46, no. (0):