The Importance of Managing Events in a Build-to-Order Supply Chain: A Case Study at a Manufacturer of Agricultural Machinery

Abstract

This application-oriented research focuses on customer-orientation in the context of build-to-order supply chain management (BOSC) and supply chain event management (SCEM). The last decade was characterized by increasing volatility and complexity in the supply network. As a consequence, companies with traditional supply chain management were confronted with more exogenous and endogenous disturbances. As a result, customer-oriented supply chains show poor performances in regard to the service rate, delivery time, inventory level and capacity utilization. Finally a “Lose-Lose-Situation” occurs, because customers do not get what they want and enterprises lose profit. This paper presents a case study of a manufacturer of agricultural machinery whose production system is following a BOSC strategy. Recently two supply chain disturbances, a strike in the production and a supplier shortage of a just-in-sequence part, significantly affected the service rate. The performance-related effects of these two disturbances are demonstrated in an elaborated system dynamics model, policies for their mitigation (e.g. capacity flexibility) proposed and their effectiveness evaluated.