Integrated production/distribution planning in supply chains: An invited review

1. IntroductionManaging operations in today’s competitive marketplace poses significant challenges. The traditionalthought was that there were so many conflicts in the multiple demands on the operations function thattrade-o•s were made in achieving excellence in one or more of these dimensions. Thus, for example, if afirm competed on the dimensions of flexibility and quality, cost was of secondary concern. This type ofthinking was motivated by the fact that customers requiring product variety and high quality were typicallywilling to pay a premium price. Similarly, if the competitive pressures required the supply of low costproducts (i.e., price was the major competitive force), then flexibility in terms of new product variety wasnot necessarily a major priority for the firm and hence, was sacrificed. This type of analysis forced thetraditional operations manager to visualize the trade-o•s between competitive priorities were a way of life.However, the quality revolution and increased e†ciency of foreign manufacturers in the late 1970s andearly 1980s changed our thinking. Thus, for example, regardless of the type of product, flawless quality wasrequired at extremely competitive prices. In fact, the competitive realities of the current marketplace andthe impact on the contemporary operations manager are aptly summarized below (Skinner, 1985):Make an increasing variety of products, on shorter lead times with smaller runs, and flawless quality.Improve the ROI by automating and introducing new technology in processes and materials so thatprices can be reduced to meet local and foreign competition. Mechanize – but keep the schedules flex-ible, inventories low, capital costs minimal, and the work force contented.From a strategic perspective, this indicates that the dimensions of cost, flexibility, quality and delivery arenot to be traded-o• against one another but need to be simultaneously prioritized. In response to this,operations managers have focused their attention on a multitude of approaches. In our opinion, the adventof Total Quality Management (TQM) to achieve flawless quality, Flexible Manufacturing Systems (FMS)