Integrated decision modelling of supply chain efficiency

As the industrial environment becomes more competitive, supply chain management has become a topic of interest to many authors. In some of the literature, models have been established for optimising supply chain (SC) costs. This paper is focused on improving SC efficiency and effectiveness under four criteria, profit, leadtime performance, delivery promptness and waste elimination, instead of the cost alone. The model established in the paper analyses the SC performance at two levels, the chain level and the operations level. At the chain level, objectives associated with the criteria are set for each SC stage so that the SC performance can meet the customer service target and the best SCM strategy is selected. At the operations level, manufacturing and logistics activities are optimised under the given targets. This paper analyses the SC performance in a hierarchical way so that benefits of the whole SC and its individual companies can be balanced. (C) 1999 Elsevier Science B.V. All rights reserved.