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Tactical coordination in a multi-location and multi-stage operations structure: A model and a pharmaceutical company case

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  • Meijboom, Bert
  • Obel, Børge
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    Abstract

    In this paper, we look at the internal supply chain of an internationally operating firm characterized by a multi-location and multi-stage operations structure. We address problems at three levels, namely the strategic, tactical, and operational levels. Our approach goes beyond the operational literature, and focuses primarily on the tactical level. We specify a model and a case that capture strategic and tactical issues and relate the tactical issues to organizational issues. We simulate coordination in different organizational forms pertaining to the 'tactical control' of the firm. Our analysis suggests that a functionally organized multi-location and multi-stage operations structure using traditional planning will not work. The choice is between a strongly IT-based, centralized organization or a more decentralized organization using transfer prices as the coordination device.

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    Bibliographic Info

    Article provided by Elsevier in its journal Omega.

    Volume (Year): 35 (2007)
    Issue (Month): 3 (June)
    Pages: 258-273

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    Handle: RePEc:eee:jomega:v:35:y:2007:i:3:p:258-273

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    Related research

    Keywords: Supply chain coordination Transfer prices Targets Centralization Decentralization Simulation experiment;

    References

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    1. Gomez, T. & Gonzalez, M. & Luque, M. & Miguel, F. & Ruiz, F., 2001. "Multiple objectives decomposition-coordination methods for hierarchical organizations," European Journal of Operational Research, Elsevier, vol. 133(2), pages 323-341, January.
    2. Lootsma, F. A., 1994. "Alternative optimization strategies for large-scale production-allocation problems," European Journal of Operational Research, Elsevier, vol. 75(1), pages 13-40, May.
    3. A. M. Geoffrion & G. W. Graves, 1974. "Multicommodity Distribution System Design by Benders Decomposition," Management Science, INFORMS, vol. 20(5), pages 822-844, January.
    4. Thomas, Douglas J. & Griffin, Paul M., 1996. "Coordinated supply chain management," European Journal of Operational Research, Elsevier, vol. 94(1), pages 1-15, October.
    5. Vidal, Carlos J. & Goetschalckx, Marc, 1997. "Strategic production-distribution models: A critical review with emphasis on global supply chain models," European Journal of Operational Research, Elsevier, vol. 98(1), pages 1-18, April.
    6. Bruce Kogut & Nalin Kulatilaka, 1994. "Operating Flexibility, Global Manufacturing, and the Option Value of a Multinational Network," Management Science, INFORMS, vol. 40(1), pages 123-139, January.
    7. Jayaraman, Vaidyanathan & Pirkul, Hasan, 2001. "Planning and coordination of production and distribution facilities for multiple commodities," European Journal of Operational Research, Elsevier, vol. 133(2), pages 394-408, January.
    8. Goetschalckx, Marc & Vidal, Carlos J. & Dogan, Koray, 2002. "Modeling and design of global logistics systems: A review of integrated strategic and tactical models and design algorithms," European Journal of Operational Research, Elsevier, vol. 143(1), pages 1-18, November.
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    Cited by:
    1. Tang, Shao-Long & Yan, Hong, 2010. "Pre-distribution vs. post-distribution for cross-docking with transshipments," Omega, Elsevier, vol. 38(3-4), pages 192-202, June.
    2. Gunasekaran, Angappa & Lai, Kee-hung & Edwin Cheng, T.C., 2008. "Responsive supply chain: A competitive strategy in a networked economy," Omega, Elsevier, vol. 36(4), pages 549-564, August.

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