Value Chain Re-Engineering by the Application of Advanced Planning and Scheduling

The general purpose of the chapter is to present a novel approach to value chain re-engineering by utilizing the new concept of Advanced Planning and Scheduling (APS). The methodology applies collaboration among suppliers, buyers, and the customers to fulfill orders. The models show that it is possible to re-engineer the value chain by incorporating the supply side (suppliers) and demand side (customers) within the new concept of APS. A problem example is given to show how to implement this concept by emphasizing important aspects of supplier and customer relationship. This concept, however, does not take into account the importance of service and customer interface and transport optimization; hence the customer requirement effect cannot be measured. In terms of managerial implication, this chapter maintains that the value chain should incorporate procurement and product development into the main value chain activities since both the activities are more actively in communication with customers. The innovation of this chapter is in including product commonality and response analysis in the simulation model.