Universität zu Köln

Olbert, Henning, Protopappa-Sieke, Margarita and Thonemann, Ulrich ORCID: 0000-0002-3507-9498 (2016). Analyzing the Effect of Express Orders on Supply Chain Costs and Delivery Times. Prod. Oper. Manag., 25 (12). S. 2035 - 2051. HOBOKEN: WILEY-BLACKWELL. ISSN 1937-5956

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Abstract

Delivery time differentiation is a supply chain concept that has been implemented in various industries, but not yet in the automotive industry. One reason is that the effects of delivery time differentiation on the supply chain are not well understood. The BMW Group, for instance, has considered offering an express order option, where express orders bypass standard orders in the supply chain processes to achieve short delivery times. Express orders distort planning processes, increase operations cost, and increase the delivery times of standard orders, however the effects have not been quantified yet. This study analyzes the impact of express orders on the supply chain, when express orders are built-to-order. To understand the supply chain consequences of express orders better, we analyzed the relevant supply chain processes at BMW Group. We determine the effect that built-to-order express orders have on delivery times and on component demand. To analyze the effect of introducing express orders on expected delivery times and expected cost, we use queuing theory and derive expressions for the transient behavior of a discrete time batch queue. Our analyses indicate that many supply chain processes are only marginally affected. However, the orders to the suppliers become considerably more uncertain, which must be compensated by additional safety stock. Our results indicate that express orders can be an attractive option for BMW and other automotive companies. If the fraction of express orders stays at a reasonable level, express orders can be delivered within about two weeks.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Olbert, Henning UNSPECIFIED UNSPECIFIED UNSPECIFIED Protopappa-Sieke, Margarita UNSPECIFIED UNSPECIFIED UNSPECIFIED Thonemann, Ulrich UNSPECIFIED orcid.org/0000-0002-3507-9498 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-254208
DOI:	10.1111/poms.12588
Journal or Publication Title:	Prod. Oper. Manag.
Volume:	25
Number:	12
Page Range:	S. 2035 - 2051
Date:	2016
Publisher:	WILEY-BLACKWELL
Place of Publication:	HOBOKEN
ISSN:	1937-5956
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language ADVANCE DEMAND INFORMATION; LIMITED PRODUCTION CAPACITY; INVENTORY MODEL; UNCERTAIN DEMANDS; SYSTEMS; SERVICE; POLICY; MANAGEMENT; CONSTRAINTS; PERFORMANCE Multiple languages Engineering, Manufacturing; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/25420