Data Warehousing and Mining in Supply Chains

Data Warehousing and Mining in Supply Chains

Richard Mathieu (Saint Louis University, USA)
Copyright: © 2009 |Pages: 6
DOI: 10.4018/978-1-60566-010-3.ch092
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Abstract

Every finished product has gone through a series of transformations. The process begins when manufacturers purchase the raw materials that will be transformed into the components of the product. The parts are then supplied to a manufacturer, who assembles them into the finished product and ships the completed item to the consumer. The transformation process includes numerous activities (Levary, 2000). Among them are • Designing the product • Designing the manufacturing process • Determining which component parts should be produced in house and which should be purchased from suppliers • Forecasting customer demand • Contracting with external suppliers for raw materials or component parts • Purchasing raw materials or component parts from suppliers • Establishing distribution channels for raw materials and component parts from suppliers to manufacturer • Establishing of distribution channels to the suppliers of raw materials and component parts • Establishing distribution channels from the manufacturer to the wholesalers and from wholesalers to the final customers • Manufacturing the component parts • Transporting the component parts to the manufacturer of the final product • Manufacturing and assembling the final product • Transporting the final product to the wholesalers, retailers, and final customer Each individual activity generates various data items that must be stored, analyzed, protected, and transmitted to various units along a supply chain. A supply chain can be defined as a series of activities that are involved in the transformation of raw materials into a final product, which a customer then purchases (Levary, 2000). The flow of materials, component parts, and products is moving downstream (i.e., from the initial supply sources to the end customers). The flow of information regarding the demand for the product and orders to suppliers is moving upstream, while the flow of information regarding product availability, shipment schedules, and invoices is moving downstream. For each organization in the supply chain, its customer is the subsequent organization in the supply chain, and its subcontractor is the prior organization in the chain.
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Introduction

Every finished product has gone through a series of transformations. The process begins when manufacturers purchase the raw materials that will be transformed into the components of the product. The parts are then supplied to a manufacturer, who assembles them into the finished product and ships the completed item to the consumer. The transformation process includes numerous activities (Levary, 2000). Among them are

  • Designing the product

  • Designing the manufacturing process

  • Determining which component parts should be produced in house and which should be purchased from suppliers

  • Forecasting customer demand

  • Contracting with external suppliers for raw materials or component parts

  • Purchasing raw materials or component parts from suppliers

  • Establishing distribution channels for raw materials and component parts from suppliers to manufacturer

  • Establishing of distribution channels to the suppliers of raw materials and component parts

  • Establishing distribution channels from the manufacturer to the wholesalers and from wholesalers to the final customers

  • Manufacturing the component parts

  • Transporting the component parts to the manufacturer of the final product

  • Manufacturing and assembling the final product

  • Transporting the final product to the wholesalers, retailers, and final customer

Each individual activity generates various data items that must be stored, analyzed, protected, and transmitted to various units along a supply chain.

A supply chain can be defined as a series of activities that are involved in the transformation of raw materials into a final product, which a customer then purchases (Levary, 2000). The flow of materials, component parts, and products is moving downstream (i.e., from the initial supply sources to the end customers). The flow of information regarding the demand for the product and orders to suppliers is moving upstream, while the flow of information regarding product availability, shipment schedules, and invoices is moving downstream. For each organization in the supply chain, its customer is the subsequent organization in the supply chain, and its subcontractor is the prior organization in the chain.

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Background

Supply chain data can be characterized as either transactional or analytical (Shapiro, 2001). All new data that are acquired, processed, and compiled into reports that are transmitted to various organizations along a supply chain are deemed transactional data (Davis & Spekman, 2004). Increasingly, transactional supply chain data is processed and stored in enterprise resource planning systems, and complementary data warehouses are developed to support decision-making processes (Chen R., Chen, C., & Chang, 2003; Zeng, Chiang, & Yen, 2003). Organizations such as Home Depot, Lowe’s, and Volkswagen have developed data warehouses and integrated data-mining methods that complement their supply chain management operations (Dignan, 2003a; Dignan, 2003b; Hofmann, 2004). Data that are used in descriptive and optimization models are considered analytical data (Shapiro, 2001). Descriptive models include various forecasting models, which are used to forecast demands along supply chains, and managerial accounting models, which are used to manage activities and costs. Optimization models are used to plan resources, capacities, inventories, and product flows along supply chains.

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