International Journal of Information Systems and Supply Chain Management (IJISSCM) Volume 7, Issue 3 by Wang John

Author:Wang, John
Language: eng
Format: epub
Published: 2015-09-11T16:01:46.737000+00:00

The value creation from supply chain collaboration could be cost savings through the transfer of best practices, enhanced capacity and flexibility for collective actions, better decision making and increased revenue through resource synergy (Cao, & Zhang, 2011). These collaborative advantages of SC members are due to a committed relationship with mutual benefits among collaborative partners (Sheu et al., 2006).

4.1. Development of a Lateral Collaboration Scheme

As discussed earlier, demand uncertainty and short product life cycles of semiconductor industry products are two key factors that influence capacity expansion models. These manufacturers avoid carrying inventory due to high obsolescence rates of these perishable goods. Inventory models developed in this context typically use news vendor models or settings with single period demand (McCarthy-Byrne, & Menzer, 2011). So, the profit of the supply chain and its members can be modeled as a function of capacity and the forecasted aggregate demand. In a newsvendor setting, the buyers might benefit from cooperation through coordinated ordering and inventory pooling. The basic processes consist of placing coordinated orders by the buyers and use these quantities to satisfy the total demand. In this way, they can benefit from order coordination and perfect allocation of the ordered quantity to suppliers to realize demands.

It is interesting to note that that the decoupling point determines the push-pull boundary in the semiconductor industry supply chain. To implement the pull process, the buyer must establish an efficient supplier management system (SMS), and the collaboration between buyers and suppliers must justify SMS relationship. Typically, the suppliers invest for buyers to have a stable relationship. In the present analysis, the PC manufacturer is the buyer and the semiconductor manufacturing industry is the supplier. Since the supply chain is a part of the complex semiconductor industry supply network operating in the e-market (private exchanges), the supplier has a number of buyers. To satisfy the demand of the buyer, the supplier share the resources of other suppliers (collaborates) to build up the extra resource (capacity) requirement. So, various collaboration scenarios may be analyzed in a newsvendor setting to establish an appropriate scheme for collaboration among buyer cluster and supplier cluster.

In a newsvendor environment, the buyers can increase their total profit if they cooperate. The basic collaborative procurement process appears as follows: The buyers give coordinated orders at the start of the period, and after these orders arrive at the suppliers and the demands are realized, they allocate these orders accordingly. In this way, they can benefit from perfect allocation of the ordered quantity to the demands realized and the coordination of the orders. Instead of working alone and solving a newsvendor problem, the supply chain members can collaborate. For example, the collaborative procurement process proposes a coordinated ordering quantity for the semiconductor manufactures (suppliers) and then the suppliers allocate the demand allocations among themselves to maximize the total expected profit. Specifically, it can be assumed that each supplier possesses a maximum quantity (depending on its commitment to other buyers) that can be delivered or supplied to the buyer. In

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