Calculating Total Cycle Time of Supply Chain Based on Markov Chain

After time-based competition was put forward in 1988, total cycle time has long been recognized as an important metric for assessing the performance and competitiveness of a supply chain. Total cycle time management paradigm of supply chain is a managerial philosophy. Total cycle time management seeks to reduce total time required to perform all the activities that occur in the entire supply chain. Goods flow process in supply chain is analyzed, finding that it has the Markov property. In this paper, a Markov chain model is developed for calculating and managing the total cycle time of supply chain. It can identify the activities that represent the largest components of total cycle time. Those activities are then targeted for cycle time reduction. Furthermore, an example was given, and finally observations are made.