INTRODUCTION:

The changing of business landscape have created the need for logistics as a competitive tool
to improve customer service and reduce the total cost of providing customer service. Owing
to the existence of many individual companies and many different processes and activities,
supply chain network can be large and sophisticated. Therefore, supply chain network
planning is also very sophisticated, since it needs to cooperate those different individual
companies and integrate many different processes and activities in the supply chain network
in order to improve the value of products or minimize the system-wide costs but still satisfy
the demand of customer with a good level (Che and Sha 2006). Companies are constantly
reviewing and redesigning their various logistics systems and tools to improve customer
service levels. Firms can realise significant benefits in the form of reduced inventories, lower
costs, enhanced responsiveness, and improved strategic focus in terms of design, execution
and capital investments by drawing on the capabilities offered by the supply chain and by
developing and fostering appropriate ties with both customers and suppliers.

STATEMENT OF THE PROBLEM

Network planning is an important aspect of supply chain management that goes beyond
issues of make/buy, buyer–supplier relationships, or vertical integration. Network design
decisions, being the most important strategic level decisions in supply chain management, are
concerned with complex interrelationships between various tiers, such as suppliers, plants,
distribution centers, and customer zones as well as determining the number, location, and
capacity of facilities to meet customer needs effectively. Yet, network planning and design
presents managers and researchers with its own set of issues, concerns and obstacles. There’s
no ‘one size’ that fits all when it comes to supply chain design. What works well in one
setting may not work well in another. For example, in supply-driven supply chains, such as
those in the energy/petroleum industries, require different practices and they may not work
well in demand-driven supply chains of Wal-Mart and Toyota. Similarly, configurations of
supply chain resources and investments are unique in disaster relief systems. All these have
been well documented.

RATIONALE OF THE STUDY (RESEARCH GAP)

While much supply chain research has delved into the relevance of design decisions mainly
for service industries such as healthcare and food products supply chain, there is a paucity of
analytical research that explores an optimal network design for high tech products such as
UPS where the dynamics are entirely different. Hence any formalism that seeks to model
supply chains relating to industrial products can provide valuable insights and measures for
improvement.

CHARACTERISITCS OF SUPPLY CHAIN AND NETWORKS TODAY

Large-scale nature and complexity of network topology

Congestion, which leads to nonlinearities;

Interactions among the underlying networks themselves, such as the Internet with electric
power networks, financial networks, and transportation and logistical networks;

Recognition of their fragility and vulnerability during crisis

Policies surrounding networks today may have major impacts not only economically, but also
socially, politically and security-wise

ARTICLE SUMMARIES (LITERATURE REVIEW)

i. An examination of multi-tier supply chain strategy alignment in the food industry Andrew
C. Lyons, Azanizawati Ma’aram

The Fisher (1997) framework advocates an efficient supply chain for functional products and
a responsive supply chain for innovative products. The authors empirically test this
framework in the context of the food industry using a survey of 170 food companies across
the UK and Malaysia. Respondents are sampled from multiple tiers in the food industry
supply chain, including retailers, distributors and manufacturers. Findings support that an
efficient supply chain is, as expected, typically aligned with functional food products across
all levels of the supply chain. Innovative food products, however, are aligned with responsive
supply chains predominantly with downstream partners while upstream partners such as
manufacturers continue to pursue an efficient supply chain, even with innovative food
products. These results bring up interesting questions regarding the concept of decoupling a
supply chain versus purposeful design from cradle to grave. Are there natural decoupling
points in supply chain designs? Can one part of the supply chain be designed to optimise cost
while other parts are designed to optimise innovation output, or should one purposefully
design an entire supply chain to focus on a single outcome? In terms of the proposed
framework, this article addresses design decisions (physical design) and building blocks
(physical design).
ii. Product complexity and supply chain design

Robert R. Inman, Dennis E. Blumenfeld

This paper uses analytical modelling to explore and quantify the impact of product
complexity on the likelihood of supply chain disruption. The authors identify four key design
factors that affect performance in the presence of product complexity: (1) the make/buy
decision; (2) supplier location; (3) shipping mode/route; and (4) consolidation and
deconsolidation centres. The design of supply chains across these four factors should
therefore consider the level of product complexity. The arguments presented by these authors
highlight the importance of considering product architecture when designing supply chain
architecture. In other words, there are some types of supply chain design that are appropriate
for a given level of product complexity, and when the level of product complexity changes,
so should the supply chain design. In terms of the proposed framework, this article addresses
influencers (desired outcome) and design decisions (inventory and transportation).

FOCUS OF THE STUDY

To view the existing network design of the company and the processes that exists in the
network.

In order to review the overall structure of the network design the physical network design
such as transportation network and geographical dispersion of sites will be studied.
Additionally the sourcing strategies and the social information flow and relationship flow can
be studied.

To analyze the full breadth and depth of supplier-to-customer network to identify areas of
strength and weakness

To determine an optimal design for the company’s supply chain network that minimizes costs
and maximizes profits.

This includes decisions on the number, locations and size of manufacturing plants and
warehouses, the assignment of retail outlets to warehouses, etc.

Identifying stocking points as well as selecting facilities

The objective is to design or reconfigure the logistics network in order to minimize annual system-
wide cost, including production and purchasing costs, inventory holding costs, facility costs (storage,
handling, and fixed costs), and transportation costs, subject to a variety of service level
requirements. In this setting, the trade-offs are clear.