Development of an approach to coordinate the objectives for members of a supply chain

Abstract

Two important problems in a traditional supply chain are that the supply chain strategy is not fully
integrated with a company’s competitive strategy, and that supply chain members have their own
different objectives that may adversely affect the performance of the whole chain. A supply chain and
its members need to develop a supply chain strategy that fits well with the competitive strategies of
each member, as this will decrease conflict among them. In order to address these two issues, an
optimized approach is proposed in this research. This approach not only integrates the supply chain
and company strategies, but also coordinates the various objectives among members to maximize
supply chain performance. It provides a calculation of the objectives of the entire supply chain and
those of individual members, so that they can evaluate their objective setting and performance while
executing different value-added operations. The proposed approach is illustrated with a numeric
example of a typical supply chain and followed by a case study as evidence of its effectiveness.