Achieving reliable delivery in supply chains: the control of uncertainties

Time-based competition and market globalization make it imperative for supply chains to have reliable product deliveries within customer required lead times. This may not be easy to achieve in view that manufacturing activities are subject to various uncertainties. Furthermore, a delay of one manufacturer may propagate to others through precedence relationship. To improve delivery performance, it is critical to reduce the variance of product lead times. Motivated by the six sigma quality movement, a variance control technique is developed where lead time variances are accurately calculated and significantly reduced through effective scheduling individual manufacturers as well as coordinating across a chain with limited communication requirements. Numerical testing results demonstrate that the new approach is effective to schedule manufacturers on a supply chain 1:0 achieve on-time and reliable deliveries.