Managing product availability in an assemble-to-order supply chain with multiple customer segments

Thomas R. Ervolina (), Markus Ettl (), Young M. Lee () and Daniel J. Peters ()
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Thomas R. Ervolina: IBM T.J. Watson Research Center
Markus Ettl: IBM T.J. Watson Research Center
Young M. Lee: IBM T.J. Watson Research Center
Daniel J. Peters: Real Estate Operations

A chapter in Supply Chain Planning, 2009, pp 145-168 from Springer

Abstract: Abstract In this article, we propose a novel availability management process called Available-to-Sell (ATS) that incorporates demand shaping and profitable demand response to drive better supply chain efficiency. The proposed process aims at finding marketable product alternatives in a quest to maintain a financially viable and profitable product portfolio, and to avoid costly inventory overages and shortages. The process is directly supported by a mathematical optimization model that enables on demand up-selling, alternative-selling and down-selling to better integrate the supply chain horizontally, connecting the interaction of customers, business partners and sales teams to procurement and manufacturing capabilities of a firm. We outline the business requirements for incorporating such a process into supply chain operations, and highlight the advantages of ATS through simulations with realistic production data in a computer manufacturing environment. The models featured in this paper have contributed to substantial business improvements in industry-size supply chains, including over $100M of inventory reduction in IBM's server computer supply chain.

Keywords: Availability management; Assemble-to-order; Demand shaping; Configure-to-order (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-93775-3_6

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DOI: 10.1007/978-3-540-93775-3_6

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