Build-to-order supply chain management

Build-to-order supply chain management

Build-to-order supply chain management

The build-to-order (BTO) supply chain model has been actively pursued in several different industries. One of the first successful BTO companies was Dell Computers, which gained market share by building customized computers using the internet as an order fulfillment vehicle. The BTO supply chain can be defined as the configuration of firms and capabilities of the supply chain that support a higher level of flexibility and responsiveness to changing customer requirements in a cost effective manner. The aim of this feature issue is to help researchers and practitioners to understand the implications, development and management of BTO supply chains. With the help of articles appearing in this feature issue, one should be able to better understand the design and implementation of the BTO supply chain.

This special issue on BTO supply chains deals with the following:

1. 1.

   product design decisions in the BTO supply chain;

2. 2.

   supplier or partnership selection;

3. 3.

   information technology in the BTO supply chain; and

4. 4.

   performance management in the BTO supply chain.

The six articles appearing in this issue present researchers and practitioners with analytical and simulation models, and conceptual and empirical frameworks for developing and managing the BTO supply chain. They deal with a range of problems from product design to customer services in BTO supply chains. An overview of the papers is provided below to highlight the key contributions of each of them to the theory and applications of this topic.

The concept of supply chain responsiveness (SCR) has received considerable attention in the operations management literature, mostly under the auspices of concepts such as build-to-order, mass customization, lean and agility. However, there is a lack of a suitable framework that comprehensively portrays the cause-and-effect relationships involved in SCR. In the paper, “Creating the customer-responsive supply chain: a reconciliation of concepts” Reichhart and Holweg aim to address such a gap. The paper synthesizes the existing contributions to manufacturing and supply chain flexibility and responsiveness, and draws upon various related bodies of literature that affect a supply chain's responsiveness such as product architecture and modularization. They have identified four types of responsiveness: product, volume, mix and delivery, all of which can relate to different time horizons, and can be present as either potential or demonstrated responsiveness. Furthermore, they propose a holistic framework distinguishing between requiring and enabling factors for responsiveness, identifying the key relationships within and between these two categories. The framework developed in this paper is suited for both qualitative and holistic quantitative studies.

The second paper, “Mix flexibility and volume flexibility in a build-to-order environment: synergies and trade-offs” by Salvador, Rungtusanatham, Forza and Trentin investigates the factors enabling or hindering the simultaneous pursuit of volume flexibility and mix flexibility within a supply chain through the lens of a manufacturing plant seeking to implement a BTO strategy. To accomplish this empirical investigation, they designed an in-depth case study involving a manufacturing plant and its supply chain. Their empirical study suggests that, to some extent, volume flexibility and mix flexibility may be achieved synergistically, as initiatives such as component standardization or component-process interface standardization would improve both volume flexibility and mix flexibility.

Howard and Squire in their paper, “Modularization and the impact on supply relationships” examine the role of product architecture in supply chain design. Specifically, they seek to resolve confusion over the impact of modularization on supplier relationship management. The introduction of modularization suggests that buyer and supplier firms should move towards greater collaboration in order to co-develop products and reduce interface constraints. The paper supports the argument that modularized components require collaborative sourcing practices; this suggests that outsourcing requires a high level of integration, creating dependencies between firms, and representing considerable investment in equipment and sharing through proprietary information systems. As interest in build-to-order supply chains and flexible product architecture grows, this emphasizes the importance of specifying the exact nature of relationship processes without satisfying product innovation.

The paper, “A strategic model for agile virtual enterprise partner selection” by Sarkis, Talluri and Gunasekaran provides a multi-attribute model to help in the evaluation and selection of partners within virtual enterprise environments. After development of the many factors necessary for forming an agile virtual enterprise, the analytical network process (ANP) is used as the multi-attribute model to link these factors. The results show that the normative ANP model is an effective method to help in the integration of the complex set of organizational and intra-organizational factors for selecting partners for an agile virtual enterprise. This paper seeks to integrate tangible and intangible factors and multi-organizational selection for AVE formation.

The penultimate paper, “Information technology and performance management for build-to-order supply chains” by Sharif, Irani and Lloyd addresses the growth and importance of BTO supply chains, which allow consumers and supply chain participants to select, configure, purchase and view order delivery status. This paper uses an interpretivist case study research strategy that exploits multiple research methods. Also, it focuses on a case study in which an aerospace components company was attempting to become a BTO enterprise.

Finally, the paper, “Bi-negotiation integrated AHP in suppliers selection” by Chen and Huang proposes a new approach for tackling the uncertainty and imprecision of identifying suitable supplier offers, evaluating these offers and choosing the best alternatives in bi-negotiation. In a BTO supply chain, the handling of uncertainties is addressed by a real time information sharing system and appropriate supplier selection. A methodology integrated analytic hierarchy process (AHP) with bi-negotiation agents based on the multi-criteria decision-making approach and software agent technique is then developed to take into account both qualitative and quantitative factors in supplier selection. During the decision-making between buyer and suppliers, the AHP process matches product characteristics with supplier characteristics. Next, agents assist the user in the debate to negotiate a joint representation of the chosen supplier and automatically justify proposals with this joint representation. This study focused on a multi-attribute negotiation mechanism including qualitative conditions, which enables automated negotiation on multiple attributes. Finally, a fuzzy membership function represented the joint representation's cognition for each condition such as quantity, price, quality, and delivery for the outsourced component. A case study in a high-end computer manufacturing company is given to demonstrate the potential of the methodology.

In summary, this special issue of IJOPM on the BTO supply chain offers great scope both in terms of theory and applications. Considering the growing importance of outsourcing and information technology, the BTO supply chain is poised to become the twenty-first century operations paradigm incorporating the perspectives of virtual enterprise and internet-enabled supply chain management. I hope the readers will find this special issue interesting and useful not only from a research point of view, but also from applications in practice.

Finally, I would like to thank all the authors who have submitted papers for the special issue of the BTO supply chain and the reviewers who have reviewed manuscripts in a timely manner to realize the special issue on time. I am most grateful to the Editors of IJOPM for their constant support right from the beginning until the editorial had been approved. Without the help of the Editors, a quality special issue of this nature on the BTO supply chain can hardly be realized.

Angappa GunasekaranDepartment of Decision and Information Sciences, Charlton College of Business, University of Massachusetts-Dartmouth, North Dartmouth, Massachusetts, USAE-mail: agunasekaran@umassd.edu