The beneficial effect of information sharing in the integrated production-distribution planning of textile and apparel supply chain

Abstract

The present paper proposes an integrated production-distribution planning approach for a textile and apparel supply chain. Tactical and operational decisions are considered in the proposed multi-product and multi-period planning problem. Using a rolling horizon, the approach aims at defining optimal quantities to produce, to store and to deliver. The integration consists in coordinating informational flows between producer and retailer. Information sharing will allow the producer to estimate more accurately the future replenishment orders that may happen at the operational level and adjust production capacity requirements accordingly. For this purpose, a two-stage planning approach is devised; the first stage deals with the tactical level while the second stage deals with the operational level. The monthly decisions taken at the tactical planning level are accounted for in the operational planning considering a variable rolling horizon. Moreover, accurate forecasts of future replenishment orders are established based on information sharing and introduced in the operational planning to determine the weekly decisions. Linear programming models are used to build production and distribution plans at the tactical and operational levels. Using real-life data from a textile and apparel Tunisian firm, we show that producer-retailer coordination based on the sharing of current sales information, yields significant cost savings reaching up to 20% of the supply chain cost. These findings can only motivate the partnership between producer and retailer through reliable information sharing in joint tactical-operational and production-distribution planning.