International Journal of Scientific Research in Knowledge, 2(1), pp. 38-47, 2014 Available online at http://www.ijsrpub.

com/ijsrk ISSN: 2322-4541; 2014 IJSRPUB http://dx.doi.org/10.12983/ijsrk-2014-p0038-0047

Full Length Research Paper Coordination of Product, Process and Supply Chain Design; Analysis of Recent Literature and Directions for Development
Maysam Shahbazi1*, Jahaniar Bamdad Soofi2, Ali Khatami Firouzabadi2, Abolfazl Kazazi2
1

PhD Candidate in production and operation management, Allameh Tabatabai University, Tehran, Iran 2 Department of industrial management, Allameh Tabatabai University, Tehran, Iran *Corresponding Author: Email: shahbazi_meisam@yahoo.com
Received 11 November 2013; Accepted 27 December 2013

Abstract. In recent years a growing body of research has focused on coordinating product, process and supply chain decisions in order to meet customers increasing demand for variety. Because of the importance of this approach, as well as its novelty, we aimed to conduct a comprehensive literature review of published papers and make some propositions for future research. The published material has been collected from credible and related journals and has been reviewed and analyzed from different aspects. Finally some suggestions are proposed to be considered in conducting future studies. Industry-specific and implementation-oriented studies, incorporating the real complexities and uncertainties of the business environment, and pay more attention to downstream supply chain management are the main propositions of this paper for future research. Keywords: Three dimensional concurrent engineering (3DCE), Supply chain coordination, Product architecture, Literature review

1. INTRODUCTION In the last decades, customers increasing demand for greater product variety has changed the competitive environment of businesses. Offering a wider variety of products, services and options are considered the main competitive advantage and many companies are forced to move from mass production to mass customization. This relatively new term that is introduced by Davis (1987) denotes producing customized goods at an economic cost. In other word, mass customization aims to achieve an optimal balance between the benefits of craft production and mass production. Providing wider variety of products often leads to higher complexity in the manufacturing and business system. Therefore achieving a good tradeoff between product variety and the efficiency of production system requires managing these complexities. Accordingly, finding appropriate methods to manage these difficulties is going to be an attractive topic for researchers in operations management. One of the main fields of research in this regard is the coordination of product, process and supply chain design; which is also called "three dimensional concurrent engineering (3DCE)". This paper aims to present a comprehensive literature review of published related material and

propose a framework for development of research body on the increasing importance of this issue in both practical and academic aspects. Thus the paper aims to provide a framework to understand the developments in the literature as well as highlight areas for future research. The objectives of this paper are to: (a) Report and review various perspectives on the three dimensional concurrent engineering; (b) Highlight the research methods and industry sectors that are prevalent or missing; (c) Identify the gaps existing in the literature and suggest a few research directions. The remainder of this paper is organized as follows. Section 2 is devoted to review the concept of three dimensional concurrent engineering. In section 3 we briefly describe the method of collecting relevant papers. In the next three sections we will organize the literature based on the objectives of our study. After that, in section 7 we will discuss the gaps identified in the literature and finally in the eighth section some propositions for future research will be presented. 2. BACKGROUND OF THE STUDY The concept of concurrent engineering as defined by O'Grady and Young (1991) is the consideration during the design phase, of the factors associated with the life

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cycle of the product. These include manufacturing, assembly, testing, maintenance, reliability, cost, and quality. In other words concurrent engineering means considering the requirements of the manufacturing process in the product design phase. As Wu and Ogrady (1999) point out concurrent engineering "complicates the design problem as it requires joint optimization of a more complex objective with a larger set of constraints". Most of the early papers on concurrent engineering consider it as a two dimensional method involving product design and manufacturing process. So this method is primarily focused on the inside of the system. We know that in today's business environment rapid changes are taking place. Boosting level of competition, continuously shortening products life cycle, globalization of markets and customers increasingly demanding greater product offerings (ElMaraghy and Mahmoudi, 2008) are some of these trends. It is clear that in such a competitive environment internal cooperation of the system is not sufficient for prosperity of a company. But it also depends on coordinating a set of decisions like supplier selection, providing raw material, logistics, positioning manufacturing facilities, outsourcing to external partners and so on, altogether called supply chain management. This fact led to the introduction of the concept of 3-dimensional concurrent engineering

(3D-CE) first discussed by Fine (1998) to understand and coordinate the interdependencies among product, process and supply chain decisions. This was while the traditional approach to these three dimensions in the industries and academic studies was the serial pattern. In a serial pattern a product is developed, and then the decisions regarding its production process and supply chain will be taken. A large body of papers offered in the last years still focuses on studying these three dimensions separately and consequently ignoring their interdependence. Fine (1998) argues that when firms do not explicitly acknowledge and manage supply chain design and engineering as a concurrent activity to product and process design and engineering, they often encounter problems late in product development, or with manufacturing launch, logistical support, quality control, and production costs... Blackhurst et al. (2005) refer to "reduced product development time, reduced product cost, increased quality, reduced product lead times, reduced supply chain problems, and a smoother product introduction" as some of the improvements that can result from three dimensional concurrent engineering. Figure 1 depicts two and three dimensional concurrent engineering and highlights the difference between them.

Fig. 1: Three dimensional concurrent engineering.

Source: Ellram et al., 2008; Modified from Fine, 1998 and Ellram et al., 2007

Despite the significant interest in academia and industry alike (Langenberg et al., 2012) there has been limited work in the field of supply chain management that explicitly links product-process-supply chain design, and most of the work studies two of the links, and mentions the importance of the third without any in-depth integration (Ellram et al., 2007). As a result, our knowledge, especially about the implementation of this approach is limited and there is a growing need to develop additional research in order to fill the

existing gap and explore different aspects of this subject matter. 3. METHODOLOGY The first step to review the literature is to select papers. The literature on coordinating product, process and supply chain was collected from journals in the areas of operations management, supply chain, operations research, production economics and etc. Candidates for inclusion consist of recently (After

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2000) published journal articles not limited to particular journals. Key word searches were made through several databases including internet searches,

Google Scholar, Scopus, Science Direct and Emerald. Once papers were identified, the references were reviewed to assist in locating additional papers.

Table 1: Some key words used in the literature search

Key words Concurrent engineering Three dimensional concurrent engineering Coordination / supply chain Product alignment / supply chain Matching supply chain, product and process Product standardization / supply chain Alignment / product / process / supply chain Coordination supply chain, product and process Product platform / supply chain Integrating product / process / supply chain

After the search, collected articles were studied and the relevance of each to the literature of three dimensional concurrent engineering was evaluated.

Finally, related articles were identified and the literature was analyzed. Table 2 shows the different journals used in this study.

Table 2: Different Journals used in this study

List of Journals Computers and Chemical Engineering Computers & Industrial Engineering Computers in Industry Concurrent Engineering Decision Support Systems Engineering Applications of Artificial Intelligence European Journal of Operational Research Harvard Business Review IEEE TRANSACTIONS ON AUTOMATION SCIENCE AND ENGINEERING IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT Industrial Management & Data Systems Information Control Problems in Manufacturing Integrated Manufacturing Systems International Journal of Computer Integrated Manufacturing (IJCIM) International Journal of Operations & Production Management International Journal of Physical Distribution & Logistics Management International Journal of Production Economics Journal of Cleaner Production Journal of Mechanical Design Journal of Operations Management Journal of Purchasing & Supply Management Manufacturing Technology PRODUCTION AND OPERATIONS MANAGEMENT R&D Management Supply Chain Management: An International Journal Systems Engineering THE JOURNAL OF PRODUCT INNOVATION MANAGEMENT

After identifying relevant papers, we organized them into different categories based on the objectives of our study, and then we started to analyze them. 4. DIFFERENT STREAMS OF RESEARCH LITERATURE A significant body of literature indicates inventory management in the supply chain as a topic of interest.

Some research papers are primarily focused on the inventory allocation problem. A study conducted by Kristianto et al. (2012) aims at improving the level of integration in all aspects of supply chain reconfiguration by incorporating manufacturing and product design into logistic design. They presented a proposal for improving the performance of supply chain in terms of lower safety stocks. Huang et al. (2005), Huang et al. (2007), Langenberg et al. (2012),

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chiu and Okudan (2011), Lamothe et al. (2006), Blackhurst et al. (2005) and Thonemann and Bradley (2002) also consider the issue of inventory in coordinating product, manufacturing process and supply chain design, although it was not the only concern of their work. Jiao et al. (2009) formulate product, process and supply chain coordination as a factory loading allocation problem from a constraint satisfaction perspective. Some other research papers are mainly focused on the concept of product architecture included decisions like modularity/integrality, commonality and standardization of products and components and product platform design. This group of researchers believes in the central role of product architecture in coordinating product, process and supply chain design decisions. Some of the main results of this group are as follow. Statistically significant relationships linking supply chain structure with product architecture in luxury and high-performance vehicles (Novak and Eppinger, 2001), preference of modularmodular and integral integral solutions (for the product design and supply chain design, respectively) to integralmodular or modularintegral solutions (Fine et al., 2005), more benefits of standardization when the demand is variable (Baud-Lavigne et al., 2012), the positive effect of product modularity on flexibility and customer service and in turn product performance

(Lau et al., 2007), significant impact of product platform commonality on both the performance and the configuration decisions of the respective supply chains, and also on the agility of the manufacturers supply chain (Huang et al., 2005), shared benefits of platforming for manufacturers and suppliers, and the gradually decreasing trend of inventory cost under the impact of platforming (Huang et al., 2007), reduction of the fixed costs and also the number of modules used in a bill of material which reduces the total number of modules needed and consequently the variable costs, as a result of standardization (El Hadj Khalaf et al., 2009), and the significant achievable cost savings in the supply chain by optimizing the composition of modules (Cunha et al., 2007). Some studies in this group have addressed the coordination of product and supply chain structure. Fisher (1997), as one of the first authors presents a model specifically about the relationship between product and supply chain, distinguishes between physically efficient supply chain and responsive supply chains; and also functional products and innovative products. He suggests that functional and innovative products require efficient and responsive supply chains, respectively. However Lo and Power (2010) tests Fisher's model using a survey in Australian manufacturing industry and concluded that a hybrid strategy is employed by most organizations irrespective of the nature of the product they supply.

Fig. 2: Matching supply chain with products

Source: Fisher (1997)

The studies of Gadde and Jellbo (2002), Doran (2003), Ro et al. (2007), Doran et al. (2007), Ulku and Schmidt (2011) and Nepal et al. (2012) Caridi et al. (2012) can be considered in this category. Some of these research papers generalized the concepts of modularity and integrality to describe the structure of supply chain. Modular supply chain is characterized by lower level of collaboration required between the

members of the supply chain. Doran et al. (2007) believe that "there will be shifts in the location of suppliers as well as clustering and merging of suppliers that possess module complementarities". Another stream of the literature focuses on considerations like legal, environmental and macroeconomic aspects, product safety and social responsibility. Ellram et al. (2008) explore three

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dimensional concurrent engineering with emphasis on the environmental aspects of new product development. They study the yields of employing three dimensional concurrent engineering to integrate new product development and environmentally responsible manufacturing (ERM). Another study in this category is the work of Dowlatshahi (2001) who has investigated the role of product safety and related responsibilities in the early stages of product design. This group of studies is expected to have an increasing trend in the future. ElMaraghy and Mahmoudi (2009) noted the currency exchange rate as a macroeconomic variable in coordinating product structure and supply chain design. The key role of supplier integration in the new product development is the main focus of another literature stream. Petersen et al. (2005) emphasize the criticality of the supplier selection decision in the effectiveness of new product development. Considering not only the capabilities of the supplier, but also the culture of the supplier is found necessary by them. Lau et al. (2007) also relying on the concept of co-development provide evidence that managers should involve their suppliers, internal functional units and customers early in their design stages, especially in the decisions relating to product modularity. The last body of literature consists of the studies which develop methodologies for the modeling and implementation of 3DCE. Mansoornejad et al. (2010) propose a hierarchical methodology to integrate these
Mathematical modeling (Goal programming, Mixed integer linear programming, etc.) Case study Survey and expert judgments

dimensions in the pulp and paper industry. Market analysis, SC optimization and techno-economic study are employed as tools and scenario generation is used to address the product price and demand volatility. Wu and Ogrady (1999) developed a methodology that models different considerations as an abstracted network, called CE-Nets. A graph theory based optimization methodology is proposed by Chiu and Okudan (2011) to incorporate supply chain decisions during product design. Some authors have also focused on developing tools, techniques and mechanisms to coordinate product, process and supply chain design. Singhal and Singhal (2002) link product design to process and supply chain through a component compatibility matrix, focusing on technological and marketing incompatibility. They developed the concepts and taxonomy of technological and marketing compatibilities in the context of the product-design function. Also a product-relationship-matrix is used by Seuring (2009) as a framework for strategic supply chain design. 5. LITERATURE REVIEW RESEARCH METHODS BASED ON

In this section we present the main recent contributions based on the research methods used. Table 3 classifies the literature based on this criterion. As the table shows mathematical modeling is the most commonly used method in the literature.

Table 3: Different categories of literature based on research method

Thonemann and Bradley (2002), Fine et al., (2005), Huang et al. (2005), Lamothe et al. (2006), Jiao et al. (2009), ElMaraghy and Mahmoudi (2009), El Hadj Khalaf et al. (2009), Chiu and Okudan (2011), Ulku and Schmidt (2011), Langenberg et al. (2012), Baud-Lavigne et al. (2012) Doran (2003), Cunha et al. (2007), Doran et al. (2007), seuring (2009), Mansoornejad et al. (2010) Novak and Eppinger, (2001), Singhal and Singhal (2002), Petersen et al. (2005), Doran et al. (2007), Lau et al. (2007), Ro et al. (2007), Lo and Power (2010), Caridi et al. (2012), Nepal et al. (2012) Fisher (1997), Dowlatshahi (2001), Ellram and Stanley (2008) Network based modeling (Blackhurst et al., 2005), Genetic algorithm (Huang et al., 2005; Nepal et al., 2012), Game theoretic approach (Huang et al., 2007), Simulated annealing (Cunha et al., 2007), Queuing theory (Kristianto et al., 2012), Dynamic simulation method (Kristianto et al., 2012), Fuzzy logic (Nepal et al., 2012)

Analytical, descriptive and qualitative analysis of literature Other methods

6. LITERATURE REVIEW INDUSTRY STUDIED

BASED

ON

In this section we organize the research papers based on the empirical aspect. As can be seen in table 4 the

majority of recently published studies in 3DCE have no empirical study. In the rest of the papers, most attention has been attracted to the auto industry. Other businesses including electronics and computer, and the furniture industry follow.

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Shahbazi et al. Coordination of Product, Process and Supply Chain Design; Analysis of Recent Literature and Directions for Development Table 4: Different categories of literature based on industry studied
No empirical study Fisher (1997), Thonemann and Bradley (2002), Fine et al., (2005), Huang et al. (2007), Ellram and Stanley (2008), El Hadj Khalaf et al. (2009), Ulku and Schmidt (2011), Langenberg et al. (2012), Baud-Lavigne et al. (2012) Dowlatshahi (2001), Novak and Eppinger, (2001), Doran (2003), Lamothe et al. (2006), Cunha et al. (2007), Ro et al. (2007), Doran et al. (2007), ElMaraghy and Mahmoudi (2009), Nepal et al. (2012) Caridi et al. (2012), Kristianto et al. (2012) Blackhurst et al. (2005), Jiao et al. (2009), Lau et al. (2007), Huang et al. (2005) Singhal and Singhal (2002) bicycle industry (Chiu and Okudan, 2011), Pulp and paper industry (Mansoornejad et al., 2010), plastics and toy (Lau et al., 2007) Petersen et al. (2005), Seuring, (2009), Lo and Power, (2010)

Auto industry Furniture Electronic, computer and printer Manufacturing machines Other industries Survey of managers in different industries

7. RESULTS AND DISCUSSIONS Some observations were made from the analysis of the literature based on the three viewpoints mentioned; and some propositions are concluded. Analyzing the different research streams discussed in section 4 shows some missing links in the literature body; which are proposed to be compensated for in the future. Developing some optimization models is one of the main focuses in the current literature. Moreover several papers tried to test some propositions implying causal relationships in the supply chain. These made valuable contributions on the 3DCE body of knowledge, but the question of how to implement three dimensional concurrent engineering in different industries is the most important question that cannot be answered by the current literature. There are many practical contingencies in the real production environment that may act as a barrier or driving force to implementing 3DCE, and these are different depending on the industry studied. The question of how to find and manage these barriers and drivers in different industries is a serious question that should be answered by future research. Analyzing the empirical or theoretical aspects of the studies (as is shown in table 4) gives the same result. As can be seen, the absence of an empirical aspect in a large part of literature is remarkable. Many of the research papers have taken a purely theoretical approach and this is perhaps the reason for the industries poor benefit from the academic literature of three dimensional concurrent engineering. From the view point of research methods it can be seen that mathematical programming is the most common technique used by researchers to coordinate the three dimensions. Because of the conflicting nature of different objectives, goal programming is a commonly used technique to model these problems. Simplifying assumptions that are prerequisites of such

research make them less useful for real production environments. As can be seen in table 4 almost 30 percent of recent papers have no empirical work and are discussed in a purely theoretical framework. This is while in most of the other papers, considering different products is limited to exemplifying their theoretical models. That is, a theoretical model is presented and then it is described using an example of a specific product. Therefore specific considerations of those products or industries are not considered in this type of study. Only a few papers have taken a practical approach and have made contributions practicable in the industries. Although all these papers are effective in developing the body of knowledge, filling the gap between academic papers and industry operations is required and must be done by paying more attention to empirical studies. Another remarkable point is the limited number of industries studied by the rest of the literature. As can be seen in table 4 the auto industry is the most interesting sector to researchers, and the electronic and computer, and furniture industries respectively are favored less. Therefore a limited variety of industries and products are studied in this field. Having a clear physical structure and containing physical separable components and parts is the common feature of the products studied in the literature. This is while there are many other industries that producing a wide variety of products is their inevitable feature, and a little or even no studies are conducted on them. For example apparel, jewelry, accessories and the fashion industry are highly relevant businesses to research on the opportunities of 3DCE. However such studies were not found in recent literature. Considering the 3DCE a high complexity problem is another proposition of this paper from the standpoint of research methods. The deterministic quantitative methods used in the current literature are ill-suited for considering the real complexities of the 3DCE problems. Using simplified assumptions and

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severely restricting the scope of the problem are prerequisites for using these methods. Considering more realistic complexities of the 3DCE problems is feasible using new approaches like heuristic and metaheuristic methods. Also approaches like system dynamics and considering supply chains as complex adaptive systems are recommended for use in future research. Moreover incorporating the uncertainty of the internal and external business environment using probabilistic models and fuzzy logic are strongly recommended. These methods help researchers define more practical and realistic problems and make more applicable conclusions. The other observation is that most of the papers focused on the upstream of the supply chain; meaning that, supply side and related problems have attracted more attention in comparison than the downstream of the supply chain. Sourcing and supplier selection, collaboration between suppliers, supplier involvement in product design etc. are some examples of these research papers. 8. CONCLUSION According to the increasing importance of coordinating product, manufacturing process and supply chain decisions, and also the novelty of this subject, we tried to review and analyze its current body of literature. We aimed to present a comprehensive literature review and propose some suggestions for further development. In this regard we identified and collected the most recent contributions and reviewed the literature. Subsequently we classified them into different groups based on different research streams, research methods and the empirical aspect of the studies and analyzed them accordingly. Our analysis shows that more implementationoriented research should be conducted in the future. Specifically future research should answer some questions the current literature is incapable of answering. The most important are the questions of how to implement three dimensional concurrent engineering in different industries, of what the barriers and drivers of implementing 3DCE in different industries are, and also of how these barriers and drivers can be found and managed. The majority of the current literature does not make a distinction between various industries and products. Different industries have different natures, requirements and considerations and a general prescription is not applicable to all of them. The purely theoretical research approach in a large part of the literature results in an absence of a deliberation of the real considerations of businesses. Future papers should focus on industry-specific research and developing

some applicable methodologies to take advantage of 3DCE. The need to spread the domain of industry sectors studied by researchers is another result of our analysis. Now, this domain is mainly restricted to the auto, electronic, computer and furniture industries. Studying the 3DCE in businesses like apparel, jewelry, accessories, kitchenware, carpet, etc. and even in the construction industry is proposed for future research. Another proposition for future research is incorporating the real complexities and uncertainties of the business environment into research. This requires considering the 3DCE a high complexity problem. Using fuzzy logic, heuristics and metaheuristic models would help define more realistic problems. Also using some approaches like system dynamics and considering the problem complex adaptive systems makes it easier to recognize the complexity of the problem and to develop some applicable solutions. The downstream supply chain management and issues related to final product distribution, accepted variety by the customer, developing opportunities for customization of the final product, improving product availability, developing more interactive communication channels with customers and involving them in product design make up a small portion in the research body and are proposed to be followed in the future. REFERENCES Antonio KWL, Richard CMY, Esther PYT (2007). Supply chain product co-development, product modularity and product performance: Empirical evidence from Hong Kong manufacturers. Industrial Management & Data Systems, 107: 1036 1065. Baud-Lavigne B (2012). Mutual impacts of product standardization and supply chain design. Int. J. Production Economics, 135: 5060. Blackhurst J, Wu T, OGrady P (2005). PCDM: a decision support modeling methodology for supply chain, product and process design decisions. Journal of Operations Management, 23: 325-343. Caridi, M, Pero M, Sianesi A (2012). Linking product modularity and innovativeness to supply chain management in the Italian furniture industry. Int. J. Production Economics, 136: 207217. Chiu MC, Okudan G (2011). An integrative methodology for product and supply chain design decisions at the product design stage. Journal of ASME Mechanical Design, 133: 0211008-1-15

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Maysam Shahbazi is a PhD candidate in production and operations management, Allameh Tabataba'i University, Tehran, Iran. He obtained his bachelor and master degrees in industrial management in 2006 and 2008, respectively. His current research interests include production economics, product variety management and multi-dimensional concurrent engineering.

Dr. Jahaniar Bamdad Soofi is an Assistant Professor in the Department of Industrial Management, Allameh Tabataba'i University, Tehran, Iran. He received his PhD in Small and Medium Size enterprises Management from the Lille University of Science and Technology, France. Dr. Soofis research areas include human resource management, industrial psychology, production management and factory management. He has published many research papers in national and international journals.

Dr. S.M. Ali Khatami Firouzabadi is an Associate Professor in Allameh Tabataba'i University Business School (ATUBS), Tehran, Iran. He received BSc and MSc degrees in Industrial Engineering from Iran University of Science and Technology. He received his PhD in Mechanical Engineering from the University of Leeds, UK. Dr. Khatami Firouzabadis research area includes linear programming, large -scale systems, model evaluation, multi-objective decision analysis, multi-attribute decision making, design for X, life cycle costs analysis, forecasting, reliability engineering in manufacturing systems and the application of operations research methodologies.

Dr. Abolfazl Kazazi is an Associate Professor in the Department of Industrial Management, Allameh Tabataba'i University, Tehran, Iran. He received his PhD in Industrial Management from the University of Bradford, UK. Dr. Kazazis research interests are in the areas of operations management, statistic al quality control, total quality management, strategic planning and feasibility studies for industrial projects.

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