Generation of integrated manufacturing distribution plan for a multi product manufacturing industry considering quality cost

Abstract

The Supply Chain Management (SCM) encompasses a network of entities through which material and information flows, along with money. In order to withstand the competition and succeed in their business, organizations have to produce and supply products to customers with minimum product cost without compromising the quality. The economy of any supply chain network is determined by the effective management of customer demand through appropriate manufacturing-distribution decisions by supply chain managers. Researchers have focused their extensive attention towards six key essentials of the SCM, namely, service level management, order and demand management, manufacturing management, supply management, distribution management and integrated SCM planning and execution. Involving all these crucial parameters, integrated manufacturingdistribution planning has become the focus of the current research work. Main benefits of integrated manufacturing-distribution planning are: swift response to customer requirements and improved performance of the supply chain. Business organizations, operating from various geographical areas, face significant challenges in efficiently designing and managing the supply chain for making quality products at a low cost with a short lead time. Integrated manufacturing-distribution planning is one of the most significant ways to optimize SCM in order to achieve the required performance (Sawik 2016). Lack of integrated technique in SCM will increase costs and reduce the performance of the Supply Chain (SC). Therefore, integration techniques are vital for the efficient functioning of supply chains and have motivated many practitioners and researchers to focus much more in this field than ever before. The first part of this research focuses on the development of MixedInteger Linear Programming (MILP) model considering normal timemanufacturing cost, overtime manufacturing cost, contract cost, backlog cost, quality cost, conveyance cost and recruiting/sacking cost, along with inventory cost.