Integration of manufacturing and distribution networks in a global car company – network models and numerical simulation

Global supply chain practices and their effects have received considerable attention over the last two decades. In the recent past, the need for integration across supply chains has been identified as a key for effective and efficient operations of supply chains. This is observed with the increasing trend of collaborative partnerships among supply chain partners. This paper presents an integrated approach for manufacturing and distribution networks within the supply chain system of a global car company. The paper shows that the integration of manufacturing and distribution networks creates the environment for effective planning of many components and execution/follow-up of those plans. These components include materials, resources, operations/activities, suppliers and customers. The main features of the integration include component integration at individual networks via use of a central warehouse. This integration reduces various interfacing steps between partners and enables representations of relationships (component precedence, parent-component and component-component). The proposed integrated model is numerically tested using past data from one of Japan's auto-makers, based in the emerging economy of Thailand. The paper concludes that the integrated supply network eliminates the need for interfacing of individual networks and enables simultaneous planning of many components as well as forward planning of supply components in global supply chain operations. It also shows that the integrated approach is capable of providing visibility, flexibility, and maintainability for further improvement in the supply network environment.