Vendor Managed Inventory Integration on Pharmaceutical Third-party Logistics

Transcription

1 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o.6 206, pp Venor anage Inventory Integraton on Pharmaceutcal Thr-party Logstcs Bo Jang an Lan Teng School of anagement an Economcs, Bejng Jaotong Unversty, Bejng, Chna E-mal: Abstract VI can ntegrate logstcs resource more systematcally an more effcently, but pharmaceutcal logstcs companes rarely conser VI n nventory management as n the process of mplementaton, the egree of logstcs specalzaton, nformaton sharng, nformaton technology, an beneft strbuton have all become restrct factors of VI. mportant role Base on the pharmaceutcal logstcs theory an logstcs system ntegraton theory, the research analyses the pharmaceutcal logstcs system n Chna. Amng at the problem of hgh nventory, the stuy uses the metho of Venor anage Inventory to establsh nventory ntegraton moel, makes correspone case stuy an the senstvty analyss. The concluson turns out some mportant that VI s avantageous n pharmaceutcal nventory ntegraton. The stuy explores the actve role of VI n pharmaceutcal logstcs ntegraton theoretcally. Keywors: Venor anage Inventory, Logstcs ntegraton, Pharmaceutcal logstcs, Inventory ntegraton. Introucton Venor anage Inventory VI - a systematc metho of nventory management n supply chan, s a metho that the upstream enterprses manage an control the nventory of ownstream enterprses n supply stream. As the ntensfy market competton, for some rugs, more an more buyers requre Venor anage Inventory strategy. Usng VI to ntegrate nventory resources, thr-party logstcs enterprses brng ther avantages of specalzaton an scale, so that venors can use thr-party logstcs enterprses to ntegrate pharmaceutcal storage an strbuton from several ownstream eman enterprses. Thr-party logstcs enterprses can supply specalze facltes & equpment, avance logstcs nformaton platform etc. for supplers to make eman precton, transport, qualty control, elvery, an a full range of servces. As for Pharmaceutcal logstcs, VI can reuce logstcs buren an mprove operatonal effcency, aress technology shortages an strengthen nformaton sharng, rase the specalzaton of management an mprove customer satsfacton, an enhance rsk-sharng an enterprses contacts. Therefore, pharmaceutcal logstcs ntegraton nees to ntegratng relate upstream an ownstream enterprses. Lao [] came up wth ths ea n early tmes. As the mature an wely research of supply chan theory, pharmaceutcal logstcs jont the party of supply chan management to acheve the effcent operaton of pharmaceutcal logstcs. Rong [2] analyze pharmaceutcal market of Chna an brought up that JIT Just In Tme can be use to reuce logstcs cost. We [3] scusse the request of carryng out supply chan management n pharmaceutcal logstcs area through the stuy of moern pharmaceutcal logstcs concept efnton an supply management moe. Karm [3] researche nternatonal rug enterprses fnng that for these companes there are some ffcultes n realzng global supply chan management, an carre out ILP moel whch consers the factors of purchase, I: IJUE Copyrght c 206 SERSC

2 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o prouct, strbute, an fferences n nternatonal tax, resultng n that nventory holng cost, rug lfe cycle, an other factors after-tax revenue can promote rug supply chan management. Yu et al [4] explore the performance an stortons of Chnese rug market base on the lterature revew an publc electronc atabases an research nformaton n the offcal webstes of the government, conclung that there are neffectve supervson an other problems n Chnese rug logstcs. arayana et al [5] supple some relate avces n pharmaceutcal proucton & sales envronment an health care. They consere that rug logstcs an supply chan shoul realze convenent mecal purchases. There are scholars manage pharmaceutcal logstcs. Guerrero [6] use a heurstc algorthm to fn out the near-optmal level of orers for each prouct n the central pharmacy polcy, ensurng all other parameters are of optmal polcy structure moel, whch mae the hosptal reuce about 45% nventory value. At the same tme, the servce level of the hosptal rase. Uthayakumar [7] consere that the shortage an abuse of pharmaceutcal mecne woul not only brng economc loss, but also prouce sgnfcant nfluence, so he carre out an nventory moel an ntegrate contnuous feeback supply chan conserng the prouce an sale of pharmaceutcal companes an hosptal supply chan, whch has mae sgnfcant nfluence n rug nventory management. Wth the ferce market competton, compare wth tratonal moes, VI can ntegrate logstcs resource more systematcally an more effcently. However, the realty s that pharmaceutcal logstcs companes rarely conser VI n nventory management as n the process of mplementaton, the egree of logstcs specalzaton, nformaton sharng, nformaton technology, an beneft strbuton have all become restrct factors of VI. For pharmaceutcal logstcs, there are strct requrement for nventory management, so companes shoul mprove ther compettveness but also control hgh nventory costs [8-0]. Base on the pharmaceutcal logstcs theory an logstcs system ntegraton theory, the research analyses the pharmaceutcal logstcs system n Chna. Amng at the problem of hgh nventory, the stuy uses the metho of Venor anage Inventory to establsh nventory ntegraton moel, makes correspone case stuy an the senstvty analyss. The stuy s organze as follows: n the followng secton, we analyze the pharmaceutcal thr-party logstcs, whch prove the necesstes to mplement VI nventory ntegraton. In Secton 3, we ntrouce the Inventory anagement oel, whch forms the theoretcal founaton of ths stuy. In Secton 4, we carry out the analyss of moel, as well as the results through whch we verfy the moel. Fnally we conclue the whole stuy. 语言 2 Analyss on Pharmaceutcal Thr-Party Logstcs VI Inventory Integraton Thr-party logstcs has the followng necesstes to mplement VI nventory ntegraton.. Professonal logstcs servces Ownng avance nformaton faclty an technology, thr-party logstcs companes focus on specalze logstcs servce. Facng the constantly changng market, thr-party logstcs enterprses have better unerstanngs on the features an rsk management, an can quckly respon to changes n eman. Usng thr-party logstcs can reuce costs, captal nvestment to enable enterprses to acheve sophstcate logstcs nformaton management servce n orer to rase customer servce level an reuce the uncertanty rsk of eman [-2].. Sophstcate nformaton management system Thr-party logstcs have sophstcate nformaton management system, nclung warehouse management system, customer relatonshp management system to acheve the 398 Copyrght c 206 SERSC

3 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o effectve connecton between upstream an ownstream customers to have nventory management. Thr-party logstcs companes nvolve market precton through nformaton system from ownstream, an they can combne the proucton capacty of supplers to ssue eman plan, make safe stock, an etermne the amount & tme of replenshment to ensure nformaton sharng whle accurately reflect market eman.. Avance nformaton technology support Thr-party logstcs companes can take avantage of ther avance nformaton technologes, nclung orgnal technology ata acquston, ata storage, ata transmsson technology, provng techncal support for VI mplementaton [3]. Fgure shows the nformaton technology support whch can realze long-stance ata exchange, real-tme ata processng an ata exchange between enterprses; realze the synchronze nventory nformaton of upstream an ownstream to procee effectve nventory management; supply orer processng, bllng, nventory nformaton query etc.. onlne busness to effectvely reuce resource uplcaton an waste. Raw ata acquston Bar coe RFID GPS Inventory management Data storage Database Data Processng Decson Support Deman Precton Clent... Data transmsson EDI Wreless ata transmsson Fgure. Informaton Technology Support of Thr-Party Logstcs v. Effectve ntegraton of resources Uner VI moel, thr-party logstcs serve for one suppler an several customers. In pharmaceutcal fel, there are always multple suppler serve for one customer [4]. In Fgure 2, thr-party logstcs can use the avantage of specalzaton an scale to serve multple supplers for transport, storage. It s conucve to realze the optmzaton of overall value. Copyrght c 206 SERSC 399

4 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Suppler Suppler 2 Suppler 3 Replensh Inventory Informaton Thr-party Logstcs Inventory Integraton Transport Integraton Resource Integraton... Wholesaler Wholesalerr 2 Logstcs Informaton Flow Fgure 2. Resource Integraton of Thr-Party Logstcs 3. Inventory anagement oel Base on VI 3. oel Assumpton an Symptoms oel assumpton. The moel consers the structure of one suppler an multple wholesalers.. Before an after ntegraton are both VI nventory management metho. Before s supplers establsh VI n wholesalers; after s VI base on thr-party logstcs. Ranom arket eman v. There are multple eman crcle n wholesalers v. Conserng stock-out cost v. Conserng safety nventory v. Wholesalers requre to satsfy certan servce level v. Temperature cost are consere v. Supplers an thr-party logstcs company use s, strategy to have nventory checke constantly, when nventory level s below orer pont t s tme to orer, orer quantty s, whch s EO Parameter Deman crcle umber of wholesalers Deman quantty of wholesaler Amount of replenshment of wholesaler F Inventory cost of goos n unt tme per unt of wholesaler F Inventory cost of goos n unt tme per unt of wholesaler after ntegraton Shortage cost of wholesaler Shortage cost of wholesaler I after ntegraton Safety nventory of wholesaler Safety nventory of wholesaler after ntegraton 400 Copyrght c 206 SERSC

5 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Requre servce level of wholesaler C C Replenshment cost of wholesaler Replenshment cost of wholesaler after ntegraton T Temperature control cost R Transportaton cost Total logstcs cost of supply chan before ntegraton Total logstcs cost of supply chan after ntegraton 3.2. Inventory Integraton oel Base on VI Conserng ranom eman, n orer to control shortage cost, nventory cost an servce level shoul be taken nto account, an also esgn proper safety stock. Servce level s an mportant factor nfluencng safety stock, especally for the rug nustry. So when conserng safety stock level, requre servce level of wholesalers shoul be taken nto account serously. Obvously, when servce level s hgh, safety stock s hgh; servce level s low, safety stock s low. Known that rug wholesaler eman obeys the probablty strbuton wth mean value of an a stanar evaton of, the requre servce level of wholesaler s., s the percentle pont on the probablty strbuton. If the probablty strbuton s known, can be ensure, so that safety stock level Assume that the eman obeys normal strbuton, an servce level, so 2 From normal strbuton chat, Z =.65 So, Wthout conserng the nvolvement of thr-party logstcs, total nventory cost conssts of replenshment cost, nventory holng cost, shortage cost an temperature control cost, whch are respectvely C 5 2 F 2 3 B x f x So the total cost of nventory s 6 x 7 4 T 8 Copyrght c 206 SERSC 40

6 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Copyrght c 206 SERSC T x x f x B F C ] 2 [ 9 s eman ensty functon of wholesaler. After the nvolvement of thr-party logstcs, total nventory cost conssts of replenshment cost of thr-party logstcs, nventory holng cost, storage cost of thr-party logstcs, an shortage cost of thr-party logstcs companes. As the nvolvement of thr-party logstcs, the transport cost of suppler to thr-party logstcs s ae, so transport cost of thr-party logstcs s ae. Inventory cost of wholesaler s F 2 0 Inventory cost of thr-party logstcs s 2 2 F Replenshment cost of thr-party logstcs s 3 C 2 Shortage cost s 4 y y f x B 3 Temperature control cost s 5 T 4 Transport cost s 6 R 5 So, R T y y f x B C F F 6 s eman ensty functon of thr-party logstcs company. As 9 an 6 shown, the change of total cost before an after thr-party logstcs company nvolves n venor manage nventory 加上 Equaton C

7 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o [ C F 2 B x f x x] T B C T [ F x R ] 2 F 2 f y y oel Soluton Accorng to the assumpton, eman obeys normal strbuton, so assume that requre servce level of wholesaler s 95%, 5%. Frst, shoul be smplfe., an probablty of stock-out s Known for probablty strbuton chart, when, t can be etermne not to be out of stock. x Z 99.86% 8 So, Z When servce level s etermne as 95%, the maxmum amount of stock-out s Expect of stock-out s.34 5% In the course of moel soluton, EO moel s selecte. The prncpal of EO s keepng the certan amount of storage uner the crcumstances of several kns of relate cost. In the case of fxe total eman, the smaller the orer quantty s, the lower the nventory an storage cost are. 4. oel Analyss 4.. etho Deman cycle, number of wholesalers, transport unt cost an temperature control cost unt are gven, the relate parameter of supply chan members before an after thr-party logstcs ntegraton are ranom, nclung eman cycle, wholesalers eman, stanar evaton of wholesalers eman, wholesaler nventory storage cost per unt, wholesaler shortage cost per unt, replenshment from supplers to wholesalers cost, storage cost of thr-party logstcs per unt, thr-party logstcs transport cost, thr-party logstcs replenshment cost, an shortage cost of thr-party logstcs. 2 Calculate the total cost fference before an after thr-party logstcs nvolve n VI nventory ntegraton. 3 Observe the cost varaton of one of the parameter ncrease a fxe amount unt. Copyrght c 206 SERSC 403

8 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o The process of soluton s as follows. Intal number Fxe numbers are gven to gve the soluton. =0, =20, T=0, R=0 Wholesalers eman, eman varance, replenshment cost, storage cost, shortage cost are all ranom numbers. 2 Programng Through atlab programng, Table an Table 2 are the results Table. Parameters Before the Involvement of Thr-Party Logstcs Seral Deman Stanar Replenshment Storage Shortage evaton cost cost cost Table 2. Parameters After the Involvement of Thr-Party Logstcs Stanar Replenshment Storage Shortage Seral Deman evaton cost cost cost C From the ata above, total logstcs cost of supply chan before the nvolvement of thr-party logstcs s 0457, after the nvolvement of thr-party logstcs the total cost s So t s conclue that the nvolvement of thr-party logstcs n supply chan management nventory ntegraton can lower the total logstcs cost Senstvty Analyss As shown n expresson of 7, cost varaton before an after ntegraton s affecte by many factors. Ths part wll analyss the senstvty of parameters to fn out the nfluence factors of nventory ntegraton n orer to supply theory support for thr-party logstcs ntegraton Wholesalers Inventory Storage Cost Keepng other parameters stll, change wholesaler s nventory storage cost per unt by two unts, an observe the cost varaton before an after the nvolvement thr-party logstcs. Data change an results are shown n Table 3. Fgure 4 s base on the smulaton ata of a lne chart, where y s cost varance, abscssa s nventory storage cost per ncreases of wholesalers. 404 Copyrght c 206 SERSC

9 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Table 3. Varaton of Inventory Storage Cost of Wholesalers Ae unt of wholesalers storage cost C Fgure 4. Inventory Storage Cost Varaton Tenency of Wholesalers It can be conclue that as the storage unt cost of wholesaler s rases, total fference becomes bgger an rases stealy Inventory Storage Cost of Thr-Party Logstcs Keepng other parameters stll, change thr-party logstcs nventory storage cost per unt by two unts, an observe the cost varaton before an after the nvolvement thr-party logstcs. Data change an results are shown n Table 4. Fgure 4 s base on the smulaton ata of a lne chart, where y s cost varance, abscssa s nventory storage cost per ncreases of thr-party logstcs. Table 4. Inventory Storage Cost Varaton of Thr-Party Logstcs Ae unt of thr-party logstcs storage cost C Copyrght c 206 SERSC 405

10 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Fgure 6. Inventory Storage Cost Varaton Tenency of Thr-Party Logstcs Known for Fgure 6, as the ncrease of unt cost of nventory storage cost of thr-party logstcs, total cost becomes smaller. When there s no storage avantages, the total cost after ntegraton s bgger than that of before. So t s essental for thr-party logstcs to rase the ablty of storage, an t s mportant for supplers to nvestgate the storage ablty of thr-party logstcs enterprses Wholesaler s Deman Varance Keepng other parameters stll, change wholesaler s eman varance per unt by two unts, observe the cost varaton before an after the nvolvement thr-party logstcs. Data change an results are shown n Table 5. Fgure 7 s base on the smulaton ata of a lne chart, where y s cost varance, abscssa s eman varance ncreases of thr-party logstcs. Table 5. Wholesaler s Deman Varance Ae unt of Wholesaler s eman varance C Copyrght c 206 SERSC

11 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Fgure 7. Cost Varaton Tenency of Wholesaler when Deman Varance Changes Deman varaton reflects the stablty of market eman. Shown n Fgure 7, as the ncrease of wholesalers eman varance, the cost ncreases faster before ntegraton, the cost ncrease stealy after ntegraton, so that the cost varaton s becomng bgger. In orer to meet the changng market emans, t s necessary for thr-party logstcs to use the avantage of specalzaton an stanarzaton to response to nstablty of the eman. When market eman s uncertan, t s more avantageous to use thr-party logstcs to control cost Deman Cycle Keep other parameters stll, change the eman cycle per unt by thrty unts for the sake of stuy the overall tren, an observe the cost varaton before an after the nvolvement of thr-party logstcs. Data change an results are shown n Table 6. Fgure 8 s base on the smulaton ata of a lne chart, where y s cost varance, abscssa s eman cycle. Table 6. Data When Deman Cycle Changes Deman cycle C Copyrght c 206 SERSC 407

12 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Fgure 8. Senstvty of Deman Cycle Shown n Fgure 8, as the ncrease of eman cycle, cost varaton before an after the nvolvement of thr-party logstcs frst ncreases an then mnshes. Obvously, there s optmal eman cycle. When eman cycle s small, cost varance ncreases; when eman cycle s bgger, cost ncrease of thr-party logstcs excees that before ntegraton, so that the cost varaton before an after ntegraton becomes smaller Transport Cost of Thr-Party Logstcs Keep other parameters stll, change transport cost of thr-party logstcs per unt by two unts, an observe the cost varaton before an after the nvolvement of thr-party logstcs. Data change an results are shown n Table 7. Fgure 9 s base on the smulaton ata of a lne chart, where y s cost varaton, abscssa s the ncrease of eman varance. Table 7. Transport Cost Varaton of Thr-Party Logstcs Ae unt of wholesalers eman varance C Copyrght c 206 SERSC

13 Internatonal Journal of ultmea an Ubqutous Engneerng Vol., o Fgure 9. Transport Cost of Thr Party Logstcs Senstvty Analyss From Fgure 9, as the transport cost ncreases, cost varance becomes smaller an smaller. Therefore, n orer to make total cost after ntegraton becomes smaller, t s necessary to control transport cost of thr-party logstcs. eanwhle, transport capacty s an mportant factor when venors selectng thr-party logstcs servce prover. 5. Concluson Frst the factors that nfluence nventory ntegraton wth the nvolvement of thr-party logstcs are quanttatvely analyze, then for multple wholesalers an sngle suppler supply chan structure, conserng stochastc eman, shortage, an meet certan servce stanars, an establsh a more realstc nventory consolaton moel. Then the senstvty of the moel are respectvely analyze. The results are as follows.. The ntegraton of thr-party logstcs an VI can effectvely reuce total cost of nventory.. The factors that nfluence ntegraton effect are comprehensvely analyze from the vew of venor. It can be conclue that once venor nventory cost are hgh, eman s unstable, an a hgher servce level wholesalers, t s necessary for venors to outsource VI to thr-party logstcs, at the same tme storage capacty, transport capacty shoul be focuse on ntensvely.. As thr-party logstcs servceprovers, thr partes shoul strengthen the calculaton of core compettveness of logstcs, especally n warehousng an transport, etc.. In concluson, VI has some avantages n rug logstcs, but as the qualfcaton requrement of rug regulatory authortes, the feasblty of VI nees further exploraton an research. Acknowlegements Ths paper s base on major project Cty Logstcs of atonal atural Scence Founaton Project umber: , an Laboratory of Logstcs anagement an Technology. Copyrght c 206 SERSC 409

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