Table Of ContentSupply Chain Engineering and
Logistics Handbook
Supply Chain Engineering and
Logistics Handbook
Inventory and Production Control
Erick C. Jones
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Library of Congress Cataloging‑in‑Publication Data
Names: Jones, Erick C., author.
Title: Supply chain engineering and logistics handbook : inventory and
production control / authored by Erick C. Jones.
Description: Boca Raton : CRC Press, an imprint of Taylor & Francis Group,
2019. | Includes bibliographical references.
Identifiers: LCCN 2019015737| ISBN 9781138066519 (hardback : alk. paper) |
ISBN 9781315159096 (ebk.)
Subjects: LCSH: Business logistics—Handbooks, manuals, etc. | Inventory
control—Handbooks, manuals, etc.
Classification: LCC HD38.5 .J646 2019 | DDC 658.7—dc23
LC record available at https://lccn.loc.gov/2019015737
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Contents
Preface ....................................................................................................................................................xiii
Acknowledgments ....................................................................................................................................xv
Author ....................................................................................................................................................xvii
Part 1 Understanding Global Supply Chain Engineering
1 Introduction to the Fourth Industrial Revolution and the Supply Chain ..................................3
Erick C. Jones
1.1 Introduction .............................................................................................................................3
1.2 Other Industrial Revolutions ...................................................................................................3
1.3 Supply Chain Envisioned for the Fourth Industrial Revolution .............................................4
1.4 National Research Agenda on SC ...........................................................................................6
2 Global Supply Chain Engineering Definitions .............................................................................11
Erick C. Jones
2.1 History of Global Supply Chain Management ......................................................................11
Review Questions ..............................................................................................................................31
2.2 GSC Engineering Supply Chain Planning Levels ................................................................32
2.3 Global Supply Chain Engineering Planning Supports Operational Optimization ..............32
2.4 Cyber-Enabled Best Practices for Success ...........................................................................36
2.5 Information Use in the Supply Chain ...................................................................................37
2.6 Inventory in the Supply Chain ..............................................................................................42
2.7 Business Responsiveness ......................................................................................................43
2.8 S ummary ...............................................................................................................................45
End of Chapter Questions.................................................................................................................45
References ........................................................................................................................................46
3 Evaluating the Impact of Sustainability and Pipeline Quality on the Global Crude Oil
Supply Chain ..................................................................................................................................49
Erick C. Jones and Sunny Paraskumar Jain
3.1 Introduction ...........................................................................................................................49
3.2 R esearch Significance ...........................................................................................................50
3.3 Research Questions and Hypothesis ......................................................................................51
3.4 R esearch Purposes .................................................................................................................51
3.5 Background ...........................................................................................................................52
3.6 R esearch Methodology .........................................................................................................63
3.7 Results ...................................................................................................................................68
3.8 Conclusion .............................................................................................................................82
Appendix 3.A: U.S. Petroleum and Other Liquids Production, Estimated Consumption, and
Net Imports (1995–2013) (million barrels per day) ..............................................................87
Appendix 3.B: U.S. Net Imports of Crude Oil and Petroleum Products from Saudi Arabia,
Canada, Russia, and Colombia (2004–2014) (thousand barrels per day) .............................88
v
vi Contents
Appendix 3.C: Russia Crude Oil Production, Consumption, and Net Exports (1992–2013)
(thousand barrels per day) .....................................................................................................88
Appendix 3.D: Colombia Crude Oil Production, Consumption, and Net Exports (1990–
2013) (thousand barrels per day) ..........................................................................................89
References ........................................................................................................................................89
Part 2 Basic Knowledge for Global Supply Chain Engineering
4 Forecasting in Global Supply Chain Engineering ......................................................................95
4.1 F orecasting ............................................................................................................................95
4.2 Aggregate Planning .............................................................................................................114
4.3 Solving Aggregate Planning Problems by Linear Programming: An Example ................130
4.4 The Linear Decision Rule ....................................................................................................133
References ......................................................................................................................................139
5 Inventory Control ..........................................................................................................................141
Erick C. Jones
5.1 Inventory Carrying Costs ....................................................................................................141
5.2 Inventory Flows ...................................................................................................................145
5.3 Fixed-Order-Interval System ..............................................................................................146
5.4 Just-in-Time Inventory Systems ...........................................................................................147
5.5 RFID and Inventory Control ...............................................................................................147
5.6 Automatic Replenishment ....................................................................................................147
5.7 Safety-Stock Reduction ........................................................................................................148
5.8 Picking and Routing.............................................................................................................148
5.9 Order Batching of Waves .....................................................................................................148
5.10 S ummary ..............................................................................................................................149
References .......................................................................................................................................149
6 ERP Systems ..................................................................................................................................151
Erick C. Jones and Gowthaman Anantakrishnan
6.1 R esearch Summary ..............................................................................................................151
6.2 Background and Introduction ..............................................................................................152
6.3 Research Question, Hypothesis, and Objectives .................................................................168
6.4 Research Methodology and Data Collection .......................................................................169
6.5 Results ..................................................................................................................................171
6.6 Conclusion ...........................................................................................................................196
6.7 Limitations and Future Research ........................................................................................196
Appendix 6.A: Survey ....................................................................................................................196
References ......................................................................................................................................196
7 Logistics in Global Supply Chain Engineering .........................................................................201
Erick C. Jones
7.1 Logistics ..............................................................................................................................201
7.2 S ummary .............................................................................................................................209
End of Chapter Questions...............................................................................................................209
7.3 Facilities Layout ...................................................................................................................210
7.4 Modeling Procedure ............................................................................................................211
7.5 Layout Improvement Alternatives and Numerical Results ..................................................214
Contents vii
7.6 Computer-Aided Program Algorithm Approach (BLOCPLAN) ........................................214
7.7 Discussion and Conclusion ..................................................................................................214
References .......................................................................................................................................214
Part 3 Research Design in Global Supply Chain Engineering
8 Analyzing Variability ....................................................................................................................219
Erick C. Jones
8.1 Introduction to Lean Six Sigma Levels ...............................................................................219
8.2 Introduction ..........................................................................................................................219
8.3 E stablishing Baseline ...........................................................................................................219
8.4 Baseline Performance Metrics ............................................................................................220
8.5 Analysis Tools ......................................................................................................................231
8.6 A nalytical Tools ..................................................................................................................235
8.7 Review Questions ...............................................................................................................237
8.8 U nderstanding Hypotheses .................................................................................................237
Review Questions ...........................................................................................................................244
8.9 x-y Process Map ..................................................................................................................245
8.10 Failure Mode and Effect Analysis ......................................................................................245
8.11 Failure Mode and Effect Analysis Process Steps ...............................................................247
8.12 Risk Assessment and RPN ..................................................................................................248
8.13 Types of FMEA ..................................................................................................................248
Review Questions ...........................................................................................................................249
8.14 Multi-vari Studies, Process Capability, and Regression ......................................................251
8.15 Regression ...........................................................................................................................254
8.16 Fitted Line Plot ...................................................................................................................256
8.17 Residuals .............................................................................................................................257
8.18 Multiple Regression ............................................................................................................257
8.19 Simple Linear Regression Model ........................................................................................258
8.20 The Method of Least Squares .............................................................................................259
8.21 Logistics Regression ............................................................................................................261
8.22 Process Capability Analysis ...............................................................................................262
8.23 Process Capability for Normal Distribution .......................................................................263
8.24 Process Capability Indices ..................................................................................................264
8.25 P rocess Performance ..........................................................................................................265
8.26 Process Performance Metrics .............................................................................................266
8.27 Rolled Throughput Yield ....................................................................................................266
8.28 Chi-Squared Analysis of Contingency Tables ....................................................................266
Review Questions ...........................................................................................................................267
References ......................................................................................................................................271
9 How Total Quality Management and Lean Six Sigma Drove Need for Supply Chain
Integration ....................................................................................................................................273
Erick C. Jones
9.1 Introduction .........................................................................................................................273
9.2 Perspectives on Quality ......................................................................................................275
9.3 TQM and Quality Overview ...............................................................................................277
9.4 What If Quality Is Too Expensive to Justify? .....................................................................279
9.5 Integrating TQM with LSS Techniques..............................................................................283
9.6 Voice of the Customer.........................................................................................................285
viii Contents
9.7 P roject Tracking ..................................................................................................................305
9.8 Tools Used in Yellow Belt ...................................................................................................308
Review Questions ............................................................................................................................311
9.9 Tools Used in Green Belt .....................................................................................................314
Review Questions ............................................................................................................................319
9.10 Black Belt ............................................................................................................................322
Review Questions ...........................................................................................................................329
Appendix: A Relationship between Six Sigma and Malcolm Baldrige Quality Award ..................331
The Baldrige Model for Quality ......................................................................................................331
Six Sigma Methodology ..................................................................................................................331
The Baldrige Model and Six Sigma ................................................................................................332
Integrating Six Sigma with the Baldrige Model .............................................................................334
Conclusion ......................................................................................................................................336
References ......................................................................................................................................337
10 A Relationship between Six Sigma and Malcolm Baldrige Quality Award ...........................339
Mellat-Parast M. and Erick C. Jones
10.1 Introduction .........................................................................................................................339
10.2 The Baldrige Model for Quality .........................................................................................339
10.3 Six Sigma Methodology ......................................................................................................340
10.4 The Baldrige Model and Six Sigma ....................................................................................340
10.5 Implementing Six Sigma within the Baldrige Model ..........................................................341
10.6 Integrating Six Sigma with the Baldrige Model .................................................................342
10.7 The Case for Motorola ........................................................................................................342
10.8 Conclusion ...........................................................................................................................344
References ......................................................................................................................................344
11 Evaluating Increasing Hospital Closure Rates in U.S.: A Model Framework and Lean
Six Sigma Deployment Approach for Quality Improvement Initiatives to Prevent
Further Closures in Rural and Disadvantaged Locations .......................................................347
Soma Sekar Balasubramanian and Erick C. Jones
11.1 Introduction .........................................................................................................................347
11.2 Purpose of this Research ....................................................................................................348
11.3 R esearch Objectives ............................................................................................................348
11.4 Background .........................................................................................................................349
11.5 Methodology .......................................................................................................................358
11.6 Analysis/Results .................................................................................................................366
11.7 Contribution to the Body of Knowledge .............................................................................400
11.8 Conclusions and Discussions ..............................................................................................400
Appendix 11.A ..............................................................................................................................402
References ......................................................................................................................................405
12 TQM Case Study ..........................................................................................................................409
Erick C. Jones
12.1 Introduction .........................................................................................................................409
12.2 Background .........................................................................................................................409
12.3 Network Modeling Steps Incorporated into a Six Sigma Service Project ..........................411
12.4 C ase Description ..................................................................................................................412
12.5 Implications for the Technical Manager ..............................................................................415
12.6 Conclusions ..........................................................................................................................415
References .......................................................................................................................................416
Contents ix
Part 4 Technology in Global Supply Chain Engineering
13 The Internet of Things (IoT) Technologies and the Tracking of Supply Chain Assets .........419
Erick C. Jones
13.1 Introduction to AIT Technologies .......................................................................................419
13.2 Automatic Information Technologies ..................................................................................419
13.3 Radio Frequency Identification ............................................................................................421
13.4 Global Positioning System ...................................................................................................432
13.5 RTLS ...................................................................................................................................434
13.6 D ifferences in Using RFID, RTLS, and GPS ......................................................................435
13.7 Automation in Warehousing ...............................................................................................437
14 Evaluating the Impacts of the Internet of Things to Reduce Runway Incursions .................443
Samuel Innanore Okate and Erick C. Jones
14.1 Introduction .........................................................................................................................443
14.2 Purpose of This Research ...................................................................................................445
14.3 R esearch Objectives ............................................................................................................445
14.4 Organization of this Dissertation ........................................................................................447
14.5 Background .........................................................................................................................447
14.6 Methodology .......................................................................................................................454
14.7 Experimental Procedure .....................................................................................................459
14.8 Results and Conclusions .....................................................................................................460
Appendix 14.A: Human Causal Element Data Collection per Airport ...........................................478
References ......................................................................................................................................483
15 A Methodology to Evaluate Obsolete Inventory in Healthcare ...............................................485
Erick C. Jones and Rama K. Thummalapalli
15.1 Introduction .........................................................................................................................485
15.2 Background .........................................................................................................................487
15.3 R esearch Objective .............................................................................................................496
15.4 R esearch Methodology .......................................................................................................497
15.5 Model Validation ................................................................................................................503
15.6 Conclusion ...........................................................................................................................509
Appendix 15.A ................................................................................................................................510
Appendix 15.B.................................................................................................................................511
References .......................................................................................................................................512
16 Manufacturing Feasibility Evaluation of RFID Chips Embedded in Artificial Organs .......515
Maurice Cavitt, Erick C. Jones, and Deijing Kong
16.1 Introduction ..........................................................................................................................515
16.2 Methods ...............................................................................................................................516
16.3 Discussion and Conclusion ..................................................................................................517
Acknowledgment .............................................................................................................................517
References .......................................................................................................................................517
Part 5 New Trends in Global Supply Chain Engineering
17 Embedding Integrated RFID Sensors into Fiber Reinforced Plastics During the
Manufacturing Process ................................................................................................................521
Billy Joe Gray, Felicia Jefferson, and Erick C. Jones
17.1 Introduction ..........................................................................................................................521
17.2 Purpose for this Research ...................................................................................................522
