Abstract:

The present paper focus on the significance and benefits for operating as an integral part of supply
chains for the modern manufacturing enterprises and also the importance of information availability/ sharing
for the effective functioning of supply chains. In order to provide the necessary information technology
support for the supply chains, the basic concepts and features of agent technology has been evaluated in order
to determine their suitability of an agent based approach for the management of supply chains.

Supply Chain:
A supply chain is a network of business units that enables the collection of raw
material, its transformation into products and the delivery of these products to consumers
through a distribution system. The supply chain of a manufacturing enterprise is a world­
wide network of suppliers, factories, warehouses, distribution centers and retailers through 
which raw materials are acquired, transformed and delivered to customers0 and also 
information flows, cash flows and product flows in an organization.

Information Technology:
Information Technology (IT) plays a major role in the formation of the supply chain.
The decision support provided by IT products (ERPs, Network construction tools, etc) may
help the decision-makers in the development of the supply chain process and in
implementation.

PARTICIPANTS IN THE SUPPLY CHAIN:

Producers: Producers or manufacturers are organizations that make a product.

Distributors: Distributors are companies that take inventory in bulk from producers and
deliver a bundle of related product lines to customers.
Retailers: Retailers stock inventory and sell in smaller quantities to the general public.
Customers: Customers or consumers are any organization that purchases and uses a
product.
Service Providers: These are organizations that provide services to producers, distributors,
retailers, and customers.

SUPPLY-CHAIN MANAGEMENT:

Supply-chain management is the strategic, tactical, and operational decision making

that optimizes supply-chain performance. The aim of supply chain management is to
manage these activities so that products go through the business net-work in the shortest
time and at the lowest costs possible Improving supply chain management is a key strategy 
for increasing the enterprise’s competitive position and profitability. Key elements for scm 
are Production, Inventory, Location, Transportation, and Information.

THE SIGNIFICANCE OF INFORMATION AVAILABILITY ON SUPPLY CHAIN

MANAGEMENT
 1. One way to improve information flow is by sharing information among the
business entities. The available literature reveals that information sharing can
enhance supply chain performance. Every organization participating in a given
supply chain should achieve enterprise integration as supply chain decisions are
improved with access to global information. Abundant, accurate information can
enable very efficient operating decisions and better forecasts and there is a need to
identify software development process which can support the management of
heterogeneous or diversified information used for modeling a manufacturing
enterprise.

AGENTS IN MANUFACTURING:

An agent is an autonomous, goal-oriented software that operates asynchronously,

communicating and coordinating with other agents as needed. Agents communicate and
negotiate with the other agents, perform the operations based on the local available
information and may pursue their local goals. Technically, agents possess sufficient
knowledge and inferential capability to behave in a manner that would be classified as
“intelligent” if performed by a person. Organizationally, agents are entrusted with sufficient
authority to make commitments for users.
Common characteristics possessed by an agent are: Autonomy, Intelligence, Interaction,
Reactivity, Pro-activity, Goal orientation, Learning, Mobility, Communication/cooperation,
Character.
Types of Agents Proposed for SCM are:
• Inventory level agent: performs the data for inventory levels
• Material agent: Keeps track of material resources
• Purchase Agent: helps in decision making for purchasing the resources.
• Transportation Agent: Keeps track of transportation requirements/changes etc.
• Vendor Rating List agent: for vendor rating/ supplier rating etc.
• MRP Agent: for Material Resource & it’s planning
• Scheduling Agent: regarding different scheduling of processes.
• Industrial Engg Agent: for data on time study/rating etc.
• Order Agent: acts as per orders received or orders to be given.
• HR Agent: deals with availability of human resources.
• Maintenance Agent: acts with maintenance data .
• Process Planning Agent:

WHAT IS SUPPLIER ASSESMENT?

Supplier assessment can be a complicated and time consuming task – in large

organizations the number and range of suppliers can be significant and developing a
standard method of appraisal can be difficult. Information regarding supplier activity may
be maintained in a variety of areas and interfaces with suppliers may be many.
Given the challenges, why should supply chain executives appraise suppliers in the first
place? At the heart of this is the need to provide buying teams with information about
sources of supply while facilitating continuous improvement and communication within the
supply chain.

Many organizations utilize vendor rating techniques in order to segment their supply often
resulting in two ratings schemes. Traditionally organizations will implement an approved
and unapproved supplier “list”. Being placed on the approved list will allow an
organization to procure from said supplier. The second form of rating is often an
alphabetical “score” classing suppliers into performance categories, for example A (top
performing suppliers) through to D (lowest performing suppliers). Different scores may
result in different follow on action from partnering to disengagement.

There are a variety of vendor rating methods, these range from forms and feedback
processes, to full blown audits. Software suppliers too are getting in on the act with a
variety of electronic tools available. Most organizations utilize a vendor ratings scorecard
which groups up a series of metrics and questions that when completed allow a supplier to
be rated.

Measurement is subject to the gathering and analysis of information pertaining to a

suppliers performance and capabilities – these may take the form of either subjective
ratings or quantative ratings. Most supply chain professionals know the fine line of
subjective ratings – we can all make comments about our relationship with certain suppliers
(which often boils down to individual relationships between buyer and seller) – information
like this is importing but quantative analysis (in particular QCD measures) can provide a
much richer indication of performance. Indeed ratings systems may be extended to include
a wide variety of measures including:

1/ Price (to include price trends)

2/ Quality (product effectiveness, rejects)
3/ Value in Supply Chain
4/ Service Level (commonly includes delivery schedule adherence)
5/ Speed of response.

Vendor assessment is a vital piece of the supply chain executives toolkit but as with any
assessment program – the results should help target issues and act as a facilitator in
resolving them. Too many organizations fail to act on their supplier ratings – companies
should ensure that ratings promote improvement. As a minimum ratings should be
discussed at vendor reviews – ratings should also be renewed periodically to allow for
trend analysis

Improved Supplier Management through effetive supplier rationalization

Posted to Supply Chain Management

 Supplier rationalization is a method used within procurement to concentrate spend
with a smaller number of suppliers This allows the buying organization to leverage spend
in an attempt to negotiate lower purchase prices. As an initiative supplier rationalization
can help lower operational costs and is a common activity in many organizations.

An effective rationalization program can ensure can improve supplier managment ensuring
that procurement staff focus efforts on key suppliers and strategic activity rather than
supplier sourcing or negotiation - a by product of a rationalization program should deliver
suppliers with appropriate enabling contracts to improve future procurement effeciency.

Rationalization is not only used to reduce cost but also to improve the quality of the supply
chain with the suppliers that remain being of better quality (either through capabilities or
service levels).

Supplier rationalization can present a number of challenges to the business – these include:

• It is important that organizations use supplier performance as an indicator as to retention –

this data is not always available
• Ensuring compliance with the approved supplier list once rationalized is required in order
that the supplier base doesn’t grow back to previous levels
• Where sole suppliers exist (often in the shape of Original Equipment Manufacturers)
these be readily removed from the supplier base
• Understanding the full commodity capability of the supplier base can become time
consuming

In order to make supplier rationalization program a success – ensure that

• The project has effective ownership by senior management

• Ensure controls are in place to prevent the supplier base “flexing back” to it’s previous
size/shape
• Dedicate resource to the project
• Agree retention criteria and stick to it
• Set targets for the program and measure success

What is supplier rationalization

Posted to What is.....
Supplier rationalization is the concept of “concentrating purchases with a smaller
group of suppliers to provide leverage on prices and to reduce risk of supply”
Many buying organizations find themselves with a plethora of suppliers. This can be
caused by a variety of reasons for example
• Lack of control over supplier approval
• Diverse requirements
Supplier Rationalization programs attempt to deliver benefits by lowering the amount of
active suppliers that are transacted with. A common method is to group transactions based
on commodity type – eg. Stationery and then negotiating a central contract reducing the
supplier count to a minimum.
There are some significant cost saving benefits that can be realized from a supplier
rationalization program but there are a number of other associated benefits no least of all
standardization and closer relationships with more long term partners.
There are also issues related to such a program – these include
o Overdependence on suppliers
o Negative impact on relationships within the marketplace
o Reduced competitiveness within the supply chain
Programs also require administration – for example monitoring maverick spend to ensure
that supply chain does not grow after it has been rationalized.

Benefits of a supplier association

Posted to General

Supplier associations have been popular for many years having been a important part
of Japanese manufacturing over the last 60 years. In Japanese manufacturing they are
termed a Kyoryoku Kai. These supplier associations have helped large manufacturing
companies such as Toyota develop thier subcontractors.

Defined as a group of companies bought together on a regular basis whose purpose is the
co-ordination and co-operation within the suply chain. Supplier associations help
diseminate best practice throughout the supply chain. Supplier associations tend to target
the following objectives:

* Standard supply system using standard processes and techniques

* Facilitate communication and trust between all parties
* To help disseminate best practice and training (especially to smaller organizations)

There are a variety of benefits that associations bring, least of all the development of
relationships within the supply chain improving an understanding between suppliers and
helping to built trust. Improved communication can help in scheduling and problem
resolution.

However it’s important thats whthe association has targets and a plan on how to achieve
them or else risk becoming a talking shop where benefits are not realised and the pace of
developments slows.

First, we overviews the main research of supplier selection and divide evaluation
methods into 3 categories: conceptual approaches, empirical research and analytical
models for vendor selection which including weighted linear model
approaches(Timmerman, 1986), linear programming models (Pan,1989), mixed integer
programming (Weberand Current,1993), analytical hierarchy process (Barbarosoglu
and Yazgac, 1997;Naras imhan, 1983), matrix method (Gregory, 1986), multi- objective
programming (Weber and Ellram, 1993),total cost of ownership (Ellram, 1995), human
judgment models (Patton, 1996), principal component analysis (Petroni and Braglia,
2000), interpretive structural modeling (Mandal andDeshmukh, 1994), statistical
analysis (Mummalaneniet al., 1996), discreet choice analysis experiments(Verma and
Pullman, 1998), neural networks (Siying et al., 1997) ( Srinivas Talluri, 2002), selection
and negotiation model of purchasing bids
(Srinivas Talluri, 2002) , decision-making models for supplier selection (L. de Boer,
2003) and max-min approach (Srinivas Talluri, Ram Narasimhan, 2003). Next, we
present the framework for supplier selection process in supply chain management and
set up an index system of supplier selection in terms of cost, quality, service,
manufacture and technological capability, reputation and information system. Finally,
this model application is demonstrated through the evaluation system of Haier
company and draw general conclusions for further research.

Supplier select-cost, quality, service , manufacture/technological capability ,reputation ,information ,system

,price ,price flexibility, responsibility, delivery on time, defective ratio, after-sales support ,response to
customer, training and teaching, history record, status in the same area, long-term relationship, product
reliability, information devices, technological personnel, standard level, manufacture technology, financial
status, technical support, geographical location.

Dickson (1966)

Quality, delivery, performance history, warranties and claim policies, production

facilities, price, technical capability, financial capability, bidding procedural
compliance,
communication system, industry reputation and position, desire for business,
management and organization, operating controls, repair service, altitude, impression,
packaging ability, labor relations record, geographical location, amount of past
business,

training aids, reciprocal arrangement.

Wind, Green
&Robinson(1968)
Quality/price ratio, Delivery, Technical ability, Information and market services,
Reputation, Location, Technical innovativeness, Previous contact with buyer,

Reciprocity, Personal benefits received by buyer.

Lehmann &O’shaughnessy
(1974)
Delivery, Price, Flexibility, Reputation, Technical specifications, Past experience,
Sales service, Maintenance, Financing, Ease of use, Reliability, Technical service,
Preference of user, Confidence in salesmen, convenience in ordering, Training

offered ,Training required.

Perreault & Russ (1976) Product quality, distribution service, price, supplier
management, Distance to supplier,

Required order size, Minority/small business, reciprocity.

Abratt (1986) Technical service, product reliability, after-sales support, reputation, ease
of

maintenance, ease of operation, price, confidence in salesperson, product flexibility.

Billesbach, Harrison,
Croom-Morgan (1991)

Delivery, quality, price, response flexibility, technical support, JIT capability.

Thomas Y. Choi, Janet L.

Hartley (1996)
Financial conditions, profitability of supplier, financial records disclosure, performance
awards, conformance awards, conformance quality, consistent delivery, quality
philosophy, prompt response, long-term relationship, relationship closeness,
communication openness, reputation for integrity, product volume changes, short set-
up
time, short delivery lead time, conflict resolution, design capability, after-sales support,

sales rep’s competence, incremental improvement, product reliability, low initial price.

Rohit Verma& Madeleine

E. Puliman (1998)
Unit cost of components/raw, materials, quality of components/raw, delivery lead-time,

flexibility in changing the order.

S Yahya & B Kingsman

(1999)
Delivery, quality, facility, technical capability, management, financial position, past

performance, altitude, communication system, responsiveness, desire for business.

Luitzen de Boer &L.L. M

van der Wegen (2003)

Complexity-fit, cost/benefit.

Six attributes and levels of supplier selection

Cost/price -1.5% above target price, 2.approximatedtely at target price, 3. 5% below
target price
Quality - 1.poor (more than 5% defective), 2.good (2%-5% defective), 3.excellent (less
than 2% defective)
Service - 1.poor (more than 40% customer unsatisfied), 2.good (more than 90%
customer satisfied), 3.excellent (less than 2% customer unsatisfied)
Manufacture and technological - 1.low level, 2.moderate level capability/information
system, 3.high level
Reputation - 1.poor 2.good,3.excellent

CONCLUSIONS:

The benefits of adopting agent technology in supply chain management are several,
specially it is possible to satisfy all the issues identified in the proposed work regarding
efficient flow of information in a supply chain. Therefore, the authors have identified the
application of agent based approach for effective management of supply chains as the area
for their long term research activity which has the major objective of providing significant
contribution to modern manufacturing enterprises to face global competitiveness.