Paper Info
Title
Cyclic Consumption and Replenishment Decisions for Vendor-Managed Inventory of Multisourced Parts in Dell's Supply Chain
Abstract
Multisourcing and vendor-managed inventory VMI programs with percentage supply allocations PSAs are two common practices in the electronics industry. A PSA is a prenegotiated percentage of a multisourced part's total demand, which should be provided by a supplier. For parts within Dell's supply chain for which these practices are applicable, we provide a framework to implement pull-based replenishments, verify its feasibility, and demonstrate the potential benefits via simulation. Specifically, we investigate two decisions to meet customer demand and PSAs with minimal inventory: 1 how to allocate actual customer demand among multiple suppliers, and 2 what guidelines Dell should specify to suppliers for VMI hub replenishments. For demand allocations, we propose a consumption cycle based on the PSAs. We consider a heuristic replenishment policy and develop an algorithm to compute the policy parameters, which can be used as supplier guidelines. The proposed approach presents a significant opportunity for cost savings. Dell used the results of this project 1 to address skepticism toward a pull-based approach in managing VMI replenishments, 2 to gain stakeholder support to implement a pull-based approach, and 3 to emphasize the need for a change in Dell's philosophy on managing demand allocations to suppliers and VMI hub replenishments.
Year
DOI
Venue
2014
10.1287/inte.2014.0745
Interfaces
Keywords
Field
DocType
demand allocation, inventory decisions, multisourcing, supply allocation, vendor-managed inventory
Heuristic,Vendor-managed inventory,Stakeholder,Electronics,Supply chain,Engineering,Operations management
Journal
Volume
Issue
ISSN
44
3
0092-2102
Citations 
PageRank 
References 
3
0.39
8
Authors
3
Name
Order
Citations
PageRank
Abhilasha Prakash Katariya130.39
Sila Çetinkaya214413.01
Eylem Tekin330.39