1.1 Research Background
Modern enterprises face almost unpredictable impacts from globalization, technology innovation, short product lifecycle, high operational cost and market demand diversity. Such impacts force enterprises to involve in a highly competitive environment. Product supply speed and product quality have become the critical competences in the need of global operations. The operational targets of enterprises commonly refer to right product in the right time and right place delivered to right customer. That means a successful modern business model must depend on the cooperation and coordination in different regional markets, and even vertical and horizontal integration in relative industries. Enterprises need to establish a flexible, speed-oriented and competitive operational model for the purposes of reducing the operational risk and cost through the whole supply chain. The abilities in logistics management and supply chain management have become critical in global competiveness.
The notebook-computer industry is one of the high-tech industries in Taiwan.
Innovative global supply chain management operations are critical for Taiwanese manufacturers aspiring to work in multinational business activities. However, the multinational brand companies play the leading roles in the global market of notebook-computer. Taiwanese contract manufacturers are extremely advantageous on OEM and ODM business model in supporting brands’ global operations. The proportion of made-in-Taiwan notebook-computers keeps increasing in global market share. Taiwanese contract manufacturers have been the brands’ most important partners in global supply chain operations. In addition, the contract manufacturers’ process model also changes from Build-to-Forecast, Build-to-Order and Configuration-to-order following the brand’s global operational strategies. With this tendency, contract manufacturers need to alter and establish a competitive global supply chain structure for the purpose of responding clients’ needs/requirements quickly and achieving superior global supply chain management performance.
OEM/ODM contract manufacturing is the major business model in Taiwanese notebook-computer industry. The functionalities of contract manufacturers are not only in constructing supply-production system, but also extending to production-distribution and inventory-distribution systems. The role of Taiwanese manufacturers in global supply chain changes from contract manufacturing to total
solution provider because that the multinational brands pay much more attentions on marketing and customer-relationship management. The logistics activities in procurement, production and distribution have to rely on the efficient and flexible supply chain structure established by Taiwanese leading contract manufacturers.
Different business model combined with various process models form different operational models. It is very important for decision makers to clearly identify the supply chain structure and operational performance in satisfying and supporting multinational brands’ global operations. In the face of globalization, decision makers of contract manufacturers need to understand the key characteristics within the existing operational models. Such understanding will equip them to make effective managerial decisions regarding global operations and accommodate themselves to the dynamically changing business environment. On the other hand, any decision in strategic level will have direct impacts in operational level from the views of practical operations. Therefore, there exists the trade-off relationship between supply chain structure and supply chain performance.
In the future, global notebook-computer market will be dominated by multinational brands as usual. OEM/ODM contract manufacturing is still the major business model. However, following the tendency of brands much focusing on the aspects of potential market exploitation, brand marketing and customer-relationship management, the contract manufacturers must have the ability to dominate the whole supply chain. The relationship between Taiwanese contract manufacturers and multinational brands must be more closely. The design of better supply chain configuration consider the operational performance simultaneously would be beneficial to the development of Taiwanese notebook-computer contract manufacturers for keep receiving multinational brands’ contract manufacturing orders.
1.2 Motivation and Objectives
Global competition, short product life cycle, assets concentration and demand diversification are major challenges to notebook-computer industry. Multinational Brands keep playing the leading roles in global market. Supply chain configurations also keep changing in last decades for the purpose of quick response to customers’
needs and cost reduction. Such tendency makes contract manufacturers in Taiwan to pay more contribution in global supply chain operations. To build competitive advantages in supply chain process control and efficient logistics infrastructure
configuration, contract manufacturers can keep gaining the Brands’ orders.
In the past, “Build To Forecast (BTF)” model make these contract manufacturers have excellent OEM/ODM abilities and win the growing global market share. Now, most of leading Taiwanese notebook-computer manufacturers has been developing
“Build To Order (BTO)” model and actively extend it into “Configure To Order (CTO)” model. There exists intensively cooperation and coordination in supporting multinational Brands’ global operations. The nature of supply chain management (SCM) is pursuing the cooperative efficiency and effectiveness. In recent years, Brand Companies focus on the achievements of “zero touch” and “one-stop shopping” for lead-time shortening and cost reduction. That means contract manufacturers are authorized to products final configuration and distribution instead of original contract manufacturing. They will predominate over the process and activities of procurement, production and distribution under the cooperation with multinational Brands.
In order to meet the dynamic changing business environment, decision makers of contract manufacturers are required to understand what are the key factors and characteristics within existing operation models of supply chain management. It is often not easy to obtain complete business data to explore the different operation models and the factors that affecting the choice of these models. This study will conduct survey and to identify the reference model in which a set of factors and their effects could be obtained from the respondents in Taiwanese leading contract manufacturers. The reference model could provide valuable information to decision makers to make quick and wise decision in the changeable business environment.
Uncertainty is one of the most challenging but important problems in SCM. It is a primary difficulty in the practical analysis of supply chain performance. Supply chain flexibility, reflecting the ability to absorb uncertainty from randomness in material/product supply and market demand should be taken into consideration in supply chain planning. In this study, the concepts of an integrated multi-objective supply chain model are further developed based on the analysis of previous reference models. Then a supply chain design model that facilitates simultaneous strategic and operational planning is proposed. This model incorporates production, delivery, and demand uncertainty, and provides a suitable performance measure by using a multi-objective analysis for the entire SC network. The proposed model will be valuable for designing efficient, effective, and flexible supply chains and for assessing competing SC networks.
1.3 Problem Analysis and Research Issues
Excellent process control and products quality make Taiwanese contract manufacturers enable continuing growth in global notebook-computer market share via cooperation with multinational brands. More integrated and coordinated operations are required in shortening lead-time and responding quickly to customers’
needs. These challenges motivate Taiwanese manufacturers to make efforts to redesign the supply chain in order to gain successive advantages in global operations and satisfy the multinational brands needs.
Supply-production, production-distribution, and inventory-distribution systems have been examined for many years with most studies focusing only on a single component of the overall supply-production-distribution system, such as procurement, production, transportation, or scheduling. Limited progress has been made towards integrating these components in a single supply chain. Supply chain management (SCM) can be divided into strategic and operational levels. Models have been presented for optimizing supply chain operations at each of these levels.
Strategic optimization models determine the most cost-effective location of facilities, flow of goods throughout the supply chain, and assignment of customers to distribution centers. Operational optimization models focus on determining the safety stock for every product at each location, the size and frequency of the product batches that are replenished or assembled, the replenishment transport and production lead times, and the customer service levels. However, these strategic optimization models do not attempt to identify the impacts in operational parameters such as required inventory levels, and customer service levels. Based on the purpose of exploring the influential factors in supply chain design and developing a integrated model for Taiwanese notebook-computer contract manufacturers, the research issues are included in the following:
Issue 1: To explorer and analyze the key factors emphasized by different operation model. The operation models of supply chain mainly include the business model (OEM/ODM) and the process model (BTF/BTO/CTO). The reference model of different operation model is developed to represent the critical factors’ structure in each aspect of supply chain activities.
Issue 2: To develop a conceptual framework in supply chain design, based on the tradeoffs identification between the decisions in strategic-level planning and operational-level planning. Such concepts are established in the views of notebook-computer contract manufacturers.
Issue 3: To propose an integrated multi-objective supply chain design
model. Multi-objective decision analysis is performed so that a performance measurement system based on cost, customer service level (fill rate), and flexibility (volume or delivery) can be adopted.
1.4 Dissertation Framework
This dissertation is organized as follows. Chapter 1 is the introduction, which gives an overview of this research in terms of background, motivation and objectives, problem analysis and research issues, and the framework of this dissertation. Chapter 2 contains a briefly review of past researches for grey relational analysis method, supply chain flexibility, and supply chain models.
Chapter 3 explores the operational characteristics of Taiwanese notebook-computer industry, the developments in supply chain model, and supply chain configuration in different operational model. Chapter 4 analyzes key factors used by notebook-computer contract manufacturers with reference to different operational model. In Chapter 5, a conceptual framework in supply chain design is developed to represent how the decision in strategic-level gives direct impacts in operational-level.
Chapter 6 focuses on supply chain modeling and application. An integrated multi-objective supply chain design model is proposed to clearly define the impacts in operational performance from reconfiguration in the supply chain. The final chapter concludes the research and provides suggestions for future empirical studies.
The flow chart of this dissertation is shown in Figure 1.1.
Figure 1.1 Flow-chart of Dissertation Chapter 1
Research background
Problem analysis and research issues
Chapter 2
Literature review
Chapter 3
Operational Characteristics of Taiwanese notebook-computer industry
Chapter 4
Key factors used by notebook-computer contract manufacturers
Chapter 5 Conceptual framework
in supply chain design
Chapter 6 Supply chain modeling and application
Chapter 7
Conclusions and suggestions Chapter 1
Research background
Problem analysis and research issues
Chapter 2
Literature review
Chapter 3
Operational Characteristics of Taiwanese notebook-computer industry
Chapter 4
Key factors used by notebook-computer contract manufacturers
Chapter 5 Conceptual framework
in supply chain design
Chapter 6 Supply chain modeling and application
Chapter 7
Conclusions and suggestions