Enhancing efficacy of supplier consolidation through integrating dedicated manufacturing lines

Abstract

In these days, many companies are outsourcing to satisfy various customer needs and to survive in rapidly changing market environment. For this reason, compa- nies are focusing supply based competitive strategies. They have to manage supply chain efficiently for reducing complexity. Supplier consolidation is one of worthwhile supply chain management strategies. Consolidating supplier has simultaneously enhanced the purchasing power and improved the product’s quality. In order to consolidate suppliers, the supplier should produce a variety of products that the buyer requires. If they produce them in dedicated lines for each product, no additional efficiency is expected for consolidation. In this regard, this study presents the framework for a supplier to construct an integrated manufacturing line that produces multiple products. The effectiveness of the integrated manufacturing line is demonstrated by comparison with dedicated lines. A vehicle component manufacturer’s welding process line is depicted as a case example. © 2018 ICIC International.