Abstract

Ming-Hon Hwang* and Yung-Fu Huang

Two important problems in a traditional supply chain are that the supply chain strategy is not fully integrated with a company’s competitive strategy, and that supply chain members have their own different objectives that may adversely affect the performance of the whole chain. A supply chain and its members need to develop a supply chain strategy that fits well with the competitive strategies of each member, as this will decrease conflict among them. In order to address these two issues, an optimized approach is proposed in this research. This approach not only integrates the supply chain and company strategies, but also coordinates the various objectives among members to maximize supply chain performance. It provides a calculation of the objectives of the entire supply chain and those of individual members, so that they can evaluate their objective setting and performance while executing different value-added operations. The proposed approach is illustrated with a numeric example of a typical supply chain and followed by a case study as evidence of its effectiveness.