THESIS OF EXECUTIVE DOCTORATE IN BUSINESS ADMINISTRATION OF PARIS DAUPHINE UNIVERSITY – FRANCE AND SAINT JOSEPH UNIVERSITY IN BEIRUT – LEBANON Joseph Elias Al-Ammar Implementation of a Mix DDMRP-Kanban Supply Chain System within a multi-product industrial company: Case of Liban Cables SAL EDBA Thesis Director: Mr. Régis BOURBONNAIS Maître de Conférence HDR – Université de Paris-Dauphine Directeur du Master Supply Chain Internationale November 2018 Acknowledgment Acknowledgment I would like to dedicate this paper to my father. This achievement is as much your work as it is mine, without your constant reminders, encouragement and persistence to enroll in a doctoral program, I probably wouldn’t have followed this path in the first place. Thank you for believing in me and pushing me always to challenging paths. I would like to thank my family, my mother, my two sisters, and my brother, for their encouragements, and support. To my EDBA colleagues, who became very dear friends, this experience allowed us all to explore who we are, meet new friends, and broaden our horizons. Thank you for sharing all aspects of this experience, the anxieties, the difficulties, the fun and excitements, and mostly for your availability, advices, and care. A special thanks to my thesis director, your guidance and motivation throughout this paper, as well as your validation of the innovative aspect of this subject, offered me with the vital motivation and confidence to advance and finish this work. A final thanks to the professors and staff of Saint Joseph University and Paris Dauphine University, for the help and support, as well as encouragement and availability, offered throughout the time of this work. Page 2 of 282 Implementation of a Mix DDMRP-Kanban Supply Chain System Table of Content Table of Content Acknowledgment ............................................................................................................................ 2 Table of Content ............................................................................................................................. 3 List of Tables .................................................................................................................................. 8 List of Charts................................................................................................................................. 10 Abbreviations ................................................................................................................................ 11 Introduction ................................................................................................................................... 13 A – Empirical Question ................................................................................................................ 14 B – Literature review on Supply Chain, Kanban & DDMRP....................................................... 28 B.1) Evolution of Supply Chain Management .......................................................................... 32 B.1.a) Textile Industry quick response system ...................................................................... 32 B.1.b) Efficient Consumer Response in grocery business ..................................................... 33 B.1.c) Supply Chain initiatives at other Manufacturing companies ...................................... 34 B.2) Agility................................................................................................................................ 34 B.2.a) The route to agility ...................................................................................................... 36 B.2.b) Hybrid strategies mixing lean and agile ..................................................................... 37 B.2.c) The role of the “decoupling point” in an agile strategy .............................................. 38 B.2.d) Reducing complexity to enhance agility .................................................................... 40 B.3) The Bullwhip Effect .......................................................................................................... 41 B.3.a) The causes of the Bullwhip Effect .............................................................................. 43 B.4) Push Management Strategy ............................................................................................... 46 B.4.a) Evolution of Manufacturing Planning ........................................................................ 48 B.4.b) Brief history of MPC system evolution ...................................................................... 48 B.4.c) Manufacturing Execution systems .............................................................................. 49 B.4.d) Enterprise resource planning ...................................................................................... 50 Page 3 of 282 Implementation of a Mix DDMRP-Kanban Supply Chain System Table of Content B.5) Pull Management Strategy ................................................................................................ 52 B.5.a) Toyota Production System .......................................................................................... 53 B.5.a.1) Toyota Production System’s basic concept........................................................... 54 B.5.a.1.a) Reduction of cost by eliminating waste .......................................................... 54 B.5.a.1.b) Just in Time Production .................................................................................. 54 B.5.a.1.c) Jidoka .............................................................................................................. 56 B.5.a.1.d) Full utilization of workers’ capabilities .......................................................... 56 B.5.a.2) Toyota Kanban system .......................................................................................... 58 B.5.a.2.a) The aim of the Kanban system ........................................................................ 58 B.5.a.2.b) Description of the Toyota Kanban System ..................................................... 58 B.5.b) Review of the Kanban system .................................................................................... 60 B.5.b.1) Kanban Control systems ....................................................................................... 62 B.5.b.1.a) Single Kanban System (using production kanban) ......................................... 62 B.5.b.1.b) Dual Kanban system (using two kanbans simultaneously) ............................ 63 B.5.b.1.c) Semi-dual kanban system (changing production kanbans and withdrawal kanbans at intermediate stages) ....................................................................................... 63 B.6) Push and Pull ..................................................................................................................... 64 B.6.a) Hybrid Push-Pull systems ........................................................................................... 67 B.7) Demand-Driven MRP (DDMRP) ..................................................................................... 68 B.7.a) Description of DDMRP .............................................................................................. 68 B.7.b) Tompkins International: Demand-Driven Supply Chains .......................................... 75 B.7.c) KPMG: Demand-Driven Supply Chains .................................................................... 77 B.7.d) Supply Chain Magazine Article ................................................................................. 78 C – Research Question .................................................................................................................. 80 D – Research Methodology .......................................................................................................... 86 Page 4 of 282 Implementation of a Mix DDMRP-Kanban Supply Chain System Table of Content D.1) Epistemological positioning .............................................................................................. 86 D.2) Choice of research method: Qualitative research ............................................................. 90 D.3) Choice of Single case study .............................................................................................. 91 D.4) Data Gathering & Analysis Method.................................................................................. 93 E – Case Study: Liban Cables SAL .............................................................................................. 95 E.1) Brief description of the company ...................................................................................... 97 E.2) Supply Chain model used before changing ....................................................................... 98 E.2.a) Inventory situation (reference Nexans 2014 Internal Audit) .................................... 100 E.3) Structural changes – Creation of a Supply Chain Department ........................................ 104 E.3.a) Data Collection / Cleaning ........................................................................................ 105 E.3.b) Unification of language between departments .......................................................... 106 E.3.c) Creation of ABC Matrix ........................................................................................... 108 E.3.d) Creation Sales & Operation Planning (S&OP) file .................................................