A Web-based system for proactive management of supply exceptions

To avoid or mitigate the ripple effect of a supply exception (defined here as a partial and/or late delivery) in the supply chain, it is imperative to identify the exceptional event early and handle it effectively and efficiently between the affected parties. This paper proposes a Web-based system which enables the early identification of supply exceptions and provides structured business processes for handling them. Particularly, through the dynamic mapping of a specific customer order with finished goods inventory and the progress of internal work orders against a pre-defined milestone model for each product, the status of the customer's order is determined. In case of an exception (i.e. a customer order cannot be fulfilled as promised in the order schedule), a standard process is triggered to handle it collaboratively by business partners through fast, effective negotiations. To achieve these objectives, a top-down system design approach was employed, which covers conceptualization of the key co-ordination processes, methodology development, design of system architecture and the integrative processes and subsequent system implementation. To demonstrate the effectiveness of the Web-based system, an example is used to compare the current process with the one proposed. The system was evaluated in the context of the IST project Co-OPERATE. Finally, the presented work is concluded and future research directions are indicated. (c) 2010 The Society of Manufacturing Engineers. Published by Elsevier Ltd. All rights reserved.