Supply chain design in the electronics industry incorporating JIT purchasing

The overriding objective of the present work is to design and analyse the supply chain of a section of an existing electronics industry which is involved in the manufacturing of instruments to be used in communication and is presently unable to compete in the open market. The suppliers, manufacturers, distributors and customers have been integrated with each other using Just-in-Time (JIT) purchasing. The models have been developed both at the strategic, as well as operational, levels for minimising the cost. The operational level models have been integrated with the strategic level model to achieve overall optimization, instead of individual echelon optimisation. Keeping in view the large number of variables, constraints and related industrial data, the model has been solved using 'Industrial LINGO 8.0' software. The model solution gives the optimum values of the various cost components and per product cost for the customers. The dominant costs have been targeted for reduction using JIT purchasing in the raw material procurement process. Finally, it is observed that the implementation of JIT purchasing considerably reduces per product costs. [Submitted 22 July 2007; Revised 17 December 2007; Accepted 08 February 2008]