Dynamic Performance and Stability Research of VMI-APIOBPCS in Apparel Industry Based on Control Theory

Dynamic Performance and Stability Research of VMI-APIOBPCS in Apparel Industry Based on Control Theory

Xueli Zhan (College of Economic and Management, Tianjin University, Tianjin, China & School of Economics, Beijing Wuzi University, Beijing, China), Qin Zhang (College of Economic and Management, Tianjin University, Tianjin, China) and Wenfeng Xie (College of Economic and Management, Tianjin University, Tianjin, China)
Copyright: © 2018 |Pages: 21
DOI: 10.4018/IJEIS.2018040104
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In this article, the authors mainly investigate the dynamic performance of VMI-APIOBPCS (Vendor Manage Inventory-Automatic Pipeline Inventory and Order Based Production Control System) in the apparel industry. With the increasing importance of supply chain system integration, VMI-APIOBPCS can integrate various kinds of elements in the real operation, which is proved to be very effective in solving complex problems. Apparel supply chains have relatively more complicated dynamic behaviors because of the factors like volatile demand, the strong seasonality of sales and the large number of items with short life cycle or lacking historical data. In order to clear these behaviors, and come up with new ideas to solve present difficulties, the authors apply classic control theory to build up the model of VMI-APIOBPCS in apparel supply chain. They then analyze the dynamic performance of apparel supply chain and use Routh-Hurwitz Stability Criterion to analyze the stability on the expectation that the outcomes of our research can be useful in the practical occasions.
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1. Introduction

One successful commercial supply chain model generally includes supplier, manufacturer, distributor and retailer, which has been proved to be able to solve various problems in management and operation, including cost reducing, efficiency promoting and so on. A kind of model is widely used in various industries and was improved into a so-called supply chain family, mainly including OBPCS (Order Based Production Control System), VIBPCS (Variable Inventory and Based Production Control System), IOBPCS (Inventory and Order Based Production Control System), APIOBPCS (Automatic Pipeline Inventory and Order Based Production Control System), APVIOBPCS (Automatic Pipeline, Variable Inventory and Order Based Production Control System) and so on. The above models are employed in various business circumstances. For instance, APIOBPCS is welcomed in auto manufacturing world, combined with Kanban policy in remanufacturing system (Liu Chang, Yacine Ouzrout, et al., 2014).

Furthermore, to meet the requirement for integration of information and resources in the whole supply chain, VMI-APIOBPCS was developed. VMI, a scenario where vendor totally coordinates the inventory in supply chain, enables the operators not only to coordinate the finished goods but also the raw material and work-in-progress as a whole.

Recently, this high-efficient model has been applied in apparel industry management. CHIU.SHUI, a famous Chinese apparel brand, targeting at city female customers, has achieved excellent operation performance by adopting VMI policy.

However, we all know that it is an unprecedented challenge to manage such a complex system. Parameter adjustment can easily lead to changes in system stability and complexity. On one hand, the management of supply chain is involved with so many factors that it is tough for managers to obtain best performance. Therefore, some problems are inevitable, such as bullwhip effect, inventory backlog, system evolution process (Lou, Ma et al., 2017; Costantino, Gravio et al., 2014).

On the other hand, the apparel industry is more complicated in reality, which is shown in Figure 2. The production of garments includes some procedures such as weaving and dying that are correlated and supposed to share information in all aspects in order to offer qualified products. Besides, as is shown in Figure 3, the garments always have various categories with different sizes, colors and departments for the sake of excellent consumer service level. Therefore, the integration of materials requires comprehensive coordination of all the related supply chain units (Luo, Fan et al., 2012; Choi, Lo et al., 2012).

What’s more, these problems appear to be much tougher when the demand is not practically predictable. In the apparel supply chain, factors like the volatile demand, the strong seasonality of sales, the wide number of items with short life cycle or lacking historical data malfunction the traditional forecasting techniques. In addition, the development of e-commerce greatly changes the running surroundings of the fashion apparel industry. Consumers are more sensitive to the information of fashion trend and prices of different brands. The great pressure from both inside and outside really challenge the apparel supply chain (Ma, Ma et al., 2016; Lim, Heng et al., 2016).

In conclusion, the unnecessary waste of material due to the incapability of integration and the backlogged inventory that generates inventory holding cost and reduction of expected profit burdens the supply chain operation. The decrease in profit is definitely because the price discount that intends to attract the customers who are ignorant of outdated fashion styles.

The complexity of the supply chain itself and the special features of apparel industry supply chain pose obstacles to managing supply chain successfully (see Figure 1).

Figure 1.

Causal loop diagram of VMI-APIOBPCS


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