Designing Sustainable Supply Chain under Innovation Influence

Proceedigs of the 15th IFAC Symposium on Proceedigs of the IFAC on Proceedigs of the 15th 15th IFAC Symposium Symposium on Information Control Problems in Manufacturing Proceedigs of the 15th IFAC Symposium on Information Control Problems in Manufacturing Proceedigs of the 15th IFAC Symposium on Information Control Problems in Manufacturing May 11-13, 2015. Ottawa, Canada Available online at www.sciencedirect.com Proceedigs of the 15th IFAC Symposium on Information Control Problems in Manufacturing May 11-13, 11-13, 2015. 2015. Ottawa, Canada Information Control Problems in Manufacturing May Ottawa, Canada Information Control Problems in Manufacturing May 11-13, 2015. Ottawa, Canada May 11-13, 2015. Ottawa, Canada May 11-13, 2015. Ottawa, Canada

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IFAC-PapersOnLine 48-3 (2015) 1695–1699

Designing Sustainable Supply Chain under Innovation Influence Designing Sustainable Supply Chain under Innovation Influence Designing Sustainable Supply Chain under Innovation Influence Designing Sustainable Supply Chain under Innovation Influence Designing Sustainable Supply Chain under Innovation Designing Sustainable Supply Chain under Innovation Influence Influence

Y. Artsiomchyk*. H. Zhivitskaya**
 Y. Artsiomchyk*. H. Zhivitskaya**
 Y. Artsiomchyk*. H. Zhivitskaya**
 Y. Artsiomchyk*. H. Zhivitskaya**
 Y. Artsiomchyk*. H. Zhivitskaya**
 *Wuhan University of Technology, Wuhan, People’s Republic of China (e-mail: [email protected]).
 Y. Artsiomchyk*. H. Zhivitskaya**
 *Wuhan University of Technology, Wuhan, People’s Republic of China China (e-mail: (e-mail: [email protected]).
 [email protected]).
 *Wuhan University of Technology, Wuhan, People’s Republic of *Wuhan University of Technology, Wuhan, People’s Republic of China (e-mail: [email protected]).
 ** Belarusian State University of Informatics and Radioelectronics, Minsk, Republic of Belarus Belarus (e-mail:
 (e-mail:
 ** Belarusian Belarusian StateofUniversity University of Wuhan, Informatics and Radioelectronics, Radioelectronics, Minsk, Republic of *Wuhan University Technology, People’s Republic of China (e-mail: [email protected]).
 ** State of Informatics and Minsk, Republic of Belarus (e-mail:
 *Wuhan University ofUniversity Technology, Wuhan, People’s Republic of ChinaMinsk, (e-mail: [email protected]).
 ** Belarusian State of Informatics and Radioelectronics, Republic of Belarus (e-mail:
 [email protected]) [email protected]) ** Belarusian State University of Informatics and Radioelectronics, Minsk, Republic of Belarus [email protected]) ** Belarusian State University of Informatics and Radioelectronics, Minsk, Republic of Belarus (e-mail:
 (e-mail:
 [email protected]) [email protected]) [email protected]) Abstract: The supply chain is increasingly becoming a source of competitive advantage. Supply chain Abstract: The supply chain is increasingly becoming aa source of competitive advantage. Supply chain Abstract: The supply chain is increasingly becoming source of competitive advantage. Supply chain Abstract: The supply chain is increasingly becoming a source of competitive advantage. Supply chain innovations combine developments in information and related technologies with new logistic and marketinnovations combine developments in information and technologies with new logistic and marketAbstract: The supply chain is becoming aa source of advantage. Supply chain innovations combine developments in information and related related technologies with new logistic and marketAbstract: The supply chainoperational is increasingly increasingly becoming source of competitive competitive advantage. Supply chain innovations combine developments in information related technologies with new logistic and marketing procedures to improve efficiency and enhance service effectiveness. This paper aims at ing procedures to improve operational efficiency and enhance service effectiveness. This paper aims at innovations combine developments in information related technologies with new logistic and marketing procedures to improve operational efficiency and enhance service effectiveness. This paper aims at innovations combine developments in information related technologies with chain new logistic and marketing procedures to improve operational efficiency and enhance service effectiveness. This paper aims at assessing the sustainable supply chain and innovation management. The supply model presented as assessing the sustainable supply chain and innovation management. The supply chain model presented as ing procedures to improve operational efficiency and enhance service effectiveness. This paper aims at assessing the sustainable supply chain and innovation management. The supply chain model presented as procedures to and improve operational efficiency and management. enhance service effectiveness. This paper aims at assessing the sustainable supply chain and innovation The supply chain model presented as aaing complex system innovations of each components were considered. Mathematical model that allows complex system and innovations of each components were considered. Mathematical model that allows assessing the sustainable supply chain and innovation management. The supply chain model presented as aassessing complex system and innovations of each components were considered. Mathematical model that allows the sustainable supply chain andchain innovation management. The supply chain model presented as ato complex system and innovations of each components were considered. Mathematical model that allows to estimate the influence of each supply system component to the system sustainability, its funcestimate the influence of each supply chain system component to the system sustainability, its funcaa complex system and innovations of components were considered. Mathematical model allows to estimate the influence of each supply system component to the system sustainability, its funccomplex system and innovations of each eachchain components were considered. Mathematical model that that allows to estimate the influence of each supply chain system component to the system sustainability, its functioning and failure was presented. tioning and failure was presented. to estimate the influence of each supply chain system component to the system sustainability, its tioning and failure was presented. to estimate the influence of each supply chain system component to the system sustainability, its funcfunctioning and failure was presented. tioning and failure was presented. Keywords: Supply chain management, innovations, sustainability © 2015,and IFAC (International Federation of Automatic sustainability Control) Hosting by Elsevier Ltd. All rights reserved. Keywords: Supply chain management, innovations, tioning failure was presented. Keywords: Supply chain management, innovations, sustainability Keywords: Supply chain management, innovations, sustainability Keywords: Keywords: Supply Supply chain chain management, management, innovations, innovations, sustainability sustainability 1. INTRODUCTION mathematical model that allows to estimate the influence of 1. INTRODUCTION mathematical model that to the influence of 1. INTRODUCTION INTRODUCTION mathematical modelsystem that allows allows to estimate estimate the influence of 1. mathematical model that allows to estimate the influence of each supply chain component to the system sustaineach supply chain system component to the system sustain1. INTRODUCTION mathematical model that allows to estimate the influence of The supply chain is increasingly becoming a source of comeach supply chain system component to the system sustain1. INTRODUCTION mathematical model that allows to estimate the influence of The supply chain is increasingly becoming a source of comeach supply chain system component to the system sustainability, its functioning and failure. Section 6 concludes the The supply supply chain is isFirms increasingly becoming a source source ofperforcom- ability, its functioning and failure. Section 66system concludes the each supply chain system component to the sustainThe chain increasingly becoming a of competitive advantage. have created superior firm ability, its functioning and failure. Section concludes the each supply chain system component to the system sustainpetitive advantage. Firms have created superior firm perforThe supply chain is increasingly becoming a source of comability, its functioning and failure. Section 6 concludes the paper with limitations and future research opportunities. petitive advantage. Firms haverivals created superior firmofperforperforwith limitations and future research opportunities. The supply chain isFirms increasingly becoming a source com- paper ability, its functioning and failure. Section 66 concludes petitive advantage. have created superior firm mance at least in part through via unique supply chain paper with limitations and future research opportunities. ability,with its limitations functioningand andfuture failure. Section concludes the the mance at least in through rivals via unique supply chain petitive Firms have created superior firm perforpaper research opportunities. mance atadvantage. least in part part through rivals via unique the supply chain petitiveat advantage. Firms have created superior firmuse perforpaper with limitations and future research opportunities. mance least in part through rivals via unique supply chain capabilities. These firms’ successes highlight of a 2. LITERATURE REVIEW paper with limitations and future research opportunities. capabilities. These firms’ successes highlight the use of a 2. LITERATURE REVIEW mance at least in part through rivals via unique supply chain capabilities. These firms’ successes highlight the usesupply of aa 2. LITERATURE LITERATURE REVIEW REVIEW mance atintangible least in part through rivals via unique the supply chain capabilities. These firms’ successes highlight use of 2. critical resource, namely, innovations in critical intangible resource, namely, innovations in supply capabilities. These firms’ successes highlight the use of aa The prior literature 2. LITERATURE REVIEW discuses innovations in channel relationcritical intangible resource, namely, innovations in supply capabilities. These firms’ successes highlight the use of 2. LITERATURE REVIEW The prior literature discuses innovations in relationcritical intangible resource, namely, innovations in supply chain management. Supply chain innovations combine deThe prior literature discuses innovations in channel channel relationchain management. Supply chain innovations combine decritical intangible resource, namely, innovations in supply The prior literature discuses innovations in channel relationship that always focus on advance information systems or IT chain management. Supply chain innovations combine decritical intangible resource, namely, innovations in supply ship that always focus on advance information systems or The prior literature discuses innovations in channel relationchain management. Supply chain innovations combine developments in information and related technologies with new ship that always focus on advance information systems or IT IT velopments in information and related technologies with new The prior literature discuses innovations in channel relationchain management. Supply chain innovations combine deship that always focus on advance information systems or IT improvement. Recently, the researchers begin to concentrate velopments in information and related technologies with new chain management. Supply chain innovations combine de- improvement. Recently, the researchers begin to concentrate ship that always focus on advance information systems or IT velopments in information and related technologies with new logistic and marketing procedures to improve operational improvement. Recently, the researchers begin to concentrate logistic and marketing procedures to improve operational ship that always focus on advance information systems or IT velopments in information and related technologies with new improvement. Recently, the researchers begin to concentrate creating value-adding innovation and how to make full logistic andand marketing procedures totechnologies improve Innovations operational velopments inmarketing information and related with new on on creating value-adding innovation and how to make full improvement. Recently, the researchers begin to concentrate logistic and procedures to improve operational efficiency enhance service effectiveness. on creating value-adding innovation and how to make full efficiency and enhance service effectiveness. Innovations improvement. Recently, the researchers begin to concentrate logistic and marketing procedures to improve operational on creating value-adding innovation and how to make full use the resource, because of its relation to both the supply efficiency and enhance service effectiveness. Innovations logistic efficient andand marketing procedures to continuous improve Innovations operational use the resource, because of its to both the supply on value-adding innovation and how to make full efficiency enhance service effectiveness. include consumer response, replenishuse the resource, because of performance its relation relation to(Kim both the supply include efficient consumer response, continuous replenishon creating creating value-adding innovation and to how to make full efficiency and enhance service effectiveness. Innovations use the resource, because of its relation both the supply chain process and to business et al., 2006). include efficient consumer response, continuous replenishefficiency and enhance service effectiveness. Innovations chain process and to business performance (Kim et al., 2006). use the resource, because of its relation to both the supply include efficient consumer response, continuous replenishment, automated ordering utilizing scanner data, and many chain process and to business performance (Kim et al., 2006). ment, automated ordering utilizing scanner data, and many use the resource, because of its relation to both the supply include efficient consumer response, continuous replenishchain process and to business performance (Kim et al., 2006). Central to this theme is the need for firms to look outside of ment, automated ordering utilizing scanner data, and many includetechnology-enhanced efficient consumer response, continuous replenishCentral to theme is the for firms to outside of chain process to business performance (Kim et al., 2006). ment, automated ordering utilizing scanner data, and many other processes and procedures in the Central to this thisand theme isopportunities the need need for to firms to look look outside of other technology-enhanced processes and procedures in the chain process and to business performance (Kim et al., 2006). ment, automated ordering utilizing scanner data, and many Central to this theme is the need for firms to look outside of their organizations for collaborate and coorother technology-enhanced processes and procedures in the ment, technology-enhanced automated ordering utilizing scanner data, and in many their organizations for opportunities to collaborate and coorCentral to this theme is the need for firms to look outside of other processes and procedures the out-bound supply chain. Importantly, these innovations contheir organizations for opportunities to collaborate and coorout-bound supply chain. Importantly, these innovations conCentral to this theme is the need for firms to look outside of other technology-enhanced processes and procedures in the their organizations for opportunities to collaborate and coorwith partners to ensure that their supply chain is both out-bound supplynew chain. Importantly, these innovations conotherof technology-enhanced processes and procedures inconthe dinate dinate with partners to ensure that their supply chain is both their organizations for opportunities to collaborate and coorout-bound supply chain. Importantly, these innovations sist allocating investments and activity sets to channel dinate with partners to ensure that their supply chain is both sist of allocating new investments and activity sets to channel their organizations for opportunities to collaborate and coorout-bound supply chain. Importantly, these innovations condinate with partners to ensure that their supply chain is both efficient and responsive to dynamic market needs. Kim et al. sist of allocating allocating new investments and activity sets to to channel channel out-bound supply chain. Importantly, these innovations con- efficient and responsive to market needs. Kim et al. dinate to that supply chain sist of new investments and activity sets participants to maximize joint profit by reducing costs efficient andpartners responsive toofdynamic dynamic market needs. Kimis etboth al. participants to maximize joint profit by costs dinate with with partners to ensure ensure that their their supply chain is et both sist new activity sets efficient and responsive to dynamic market needs. Kim al. (2006) confines the scope inter-firm systems integration to participants to operational maximize joint and profit byby reducing reducing costs sist of of allocating allocating new investments investments and activity sets to to channel channel (2006) confines the scope of inter-firm systems integration to efficient and responsive to dynamic market needs. Kim et al. participants to maximize joint profit by reducing costs through greater efficiency and increasing rev(2006) confines the scope of inter-firm systems integration to through greater operational efficiency and by increasing revefficient and responsive to dynamic market needs. Kim et al. participants to maximize joint profit by reducing costs (2006) confines the scope of inter-firm systems integration to important collaborative channel activities, such as planning through greater operational efficiency and by increasing revparticipants to maximize joint profit byby reducing costs important collaborative channel activities, such as planning (2006) confines the scope of inter-firm systems integration to through greater operational efficiency and increasing revenue through greater service effectiveness. important collaborative channel activities, such as planning enue through greater service effectiveness. (2006) confines the scope of inter-firm systems integration to through greater operational efficiency and by increasing revimportant collaborative channel activities, such as planning forecasting with other channel members. The essential enue through greater serviceefficiency effectiveness. through greater operational and by increasing rev- and and forecasting with other channel members. The essential important collaborative channel activities, such as planning enue through greater service effectiveness. and forecasting with other channel members. The essential important collaborative channel activities, such as planning enue through greater service effectiveness. and forecasting with other channel members. The essential Innovation is a complex process as it normally involves many parts of collaborative planning, forecasting, and replenishenue through service effectiveness. Innovation is aa complex process as involves many of planning, forecasting, and replenishand with other channel members. The essential Innovation is greater complex process as it it normally normally involves many parts parts of collaborative collaborative planning, forecasting, and replenishand forecasting forecasting withbeen other channel members.inand The essential Innovation is aa complex process as it normally involves many parts of collaborative planning, forecasting, replenishdifferent functions, actors and variables. It comprises aa whole ment activities have discussed recently supply chain different functions, actors and variables. It comprises whole ment activities have been discussed recently in supply chain Innovation is complex process as it normally involves many parts of collaborative planning, forecasting, and replenishdifferent functions, actors and variables. variables. Itand comprises a whole whole ment activities have been discussed recently inand supply chain Innovation isevents a complex process as ittime normally involves many literature. parts activities of collaborative planning, forecasting, replenishdifferent functions, actors and It comprises a ment have been discussed recently in supply chain sequence of that occur over which involves In a study by Anantaram and Joseph (2004), for sequence of events that occur over time and which involves literature. In a study by Anantaram and Joseph (2004), for different functions, actors and variables. It comprises a whole ment activities have been discussed recently in supply chain sequence of events that occur over time and which involves literature. In a study by Anantaram and Joseph (2004), for different functions, actors and variables. It comprises a whole ment activities have been discussed recently in supply chain sequence of events that occur over time and which involves literature. In a study by Anantaram and Joseph (2004), for all the activities of developing a new product/service or instance, they propose that such collaboration and coordinaall the activities of developing aa time new product/service or instance, they propose that such collaboration and coordinasequence of events that occur over and which involves literature. In a study by Anantaram and Joseph (2004), for all the activities of developing new product/service or instance, they propose that such collaboration and coordinasequence of events that occur over time and which time involves literature. In apropose study by Anantaram and Joseph (2004), for all the activities of developing a new product/service or instance, they that such collaboration and coordinaprocess. The development of innovation requires for tion opportunities introduce new challenges and complexities process. The development of innovation requires time for tion opportunities introduce new challenges and complexities all the activities of developing a new product/service or instance, they propose that such collaboration and coordinaprocess. The development of innovation requires time for tion opportunities introduce new challenges and complexities all the activities of developing a new product/service or as instance, they propose that such collaboration and coordinaprocess. The development of innovation requires time for tion opportunities introduce new challenges and complexities organisations and individuals to gain capability, experience, a result of the potentially conflicting incentives among organisations and individuals to gain capability, experience, as a result of potentially conflicting incentives among process. development of innovation requires time tion introduce new challenges and complexities organisations and individuals to gain capability, experience, as result of the the potentially conflicting incentives among process. The The development of innovation requires time for for different tionaa opportunities opportunities introduce newMotivated challenges and complexities organisations and individuals to capability, experience, as result of the potentially conflicting incentives among knowledge and information. It is aagain cumulative and evolutionsupply chain players. by these new chalknowledge and information. It is cumulative and evolutiondifferent supply chain players. Motivated by these new chalorganisations and individuals to gain capability, experience, as a result of the potentially conflicting incentives among knowledge and information. It is a cumulative and evolutiondifferent supply chain players. Motivated by these new chalorganisations and individuals to gain capability, experience, as a result of the potentially conflicting incentives among knowledge and information. It is a cumulative and evolutiondifferent supply chain players. Motivated by these new chalary process (Clarke and Juma, 1987). lenges, our study explores a range of coordination and colary process (Clarke and Juma, 1987). lenges, our study explores aa range of coordination and colknowledge and information. It is a cumulative and evolutiondifferent supply chain players. Motivated by these new chalary process (Clarke and Juma, 1987). lenges, our study explores range of coordination and colknowledge and information. It 1987). is a cumulative and evolution- laboration differentour supply chain players. Motivated byinformation these new chalary process (Clarke and Juma, lenges, study explores a range of coordination and colproblems, stressing the role of and laboration problems, stressing the role of information and ary process (Clarke and Juma, 1987). lenges, our study explores a range of coordination and colInnovation is increasingly defined as the interaction of the laboration problems, stressing the role of information and ary process (Clarke and Juma, 1987). lenges, our study explores a range of coordination and colInnovation is increasingly defined as the interaction of the laboration problems, stressing the role of information and associated technologies in facilitating and enabling supply Innovation is increasingly defined as the interaction of the associated technologies in facilitating and enabling supply laboration problems, stressing the role of information and Innovation is increasingly defined as the interaction of the dynamics of the process, the firm and the environment in associated technologies in facilitating and enabling supply laboration problems, stressing the role of information and dynamics of the process, the firm and the environment in Innovation is increasingly defined of the associated technologies in facilitating and enabling supply integration. It emphasizes the importance of the innodynamics of the process, Its the firm as andthe theinteraction environment in chain chain integration. It emphasizes the importance of the innoInnovation is the increasingly defined as thethe interaction offeedthe associated technologies in facilitating and enabling supply dynamics of process, the firm and environment in which the firm operates. development depends on chain integration. It emphasizes the importance of the innoassociated technologies in facilitating and enabling supply which the firm operates. Its development depends on feeddynamics of the process, the firm and the environment in chain integration. It emphasizes the importance of the innoin channel integration between supply chain partners which the of firm operates. Its development depends ontechnifeedvation in channel integration between supply partners dynamics theoperates. process, the firm environments and thedepends environment in vation chain integration. It emphasizes the importance of innowhich the firm Its development on feedback mechanisms between external and vation in channel integration between supply chain chain partners chain integration. It emphasizes the importance of the the innoback mechanisms between external environments and techniwhich the firm operates. Its development depends on feedvation in channel integration between supply chain partners as they work together to co-create new customer value. back mechanisms between external environments and technias they work together to co-create new customer value. which the firm operates. Its development depends on feedvation in channel integration between supply chain partners back mechanisms between external environments and technical developments (Freeman, 1987). Innovation is increasingly as they work together to co-create new customer value. vation in channel integration between supply chain partners cal developments (Freeman, 1987). Innovation is increasingly back mechanisms between external environments and technias they work together to co-create new customer value. cal developments (Freeman, 1987). Innovation Innovation is increasingly increasingly backdevelopments mechanisms between external environments and technias work to co-create new customer value. cal (Freeman, 1987). is generated by networks of relationships between firms, subThe significance and influence interactions feedback as they they work together together to co-createof customerand value. generated by networks of between firms, subsignificance and influence of interactions and feedback cal (Freeman, 1987). is generated by networks of relationships relationships between firms, sub- The The significance anddevelopment influence ofnew interactions and feedback cal developments developments (Freeman, 1987). Innovation Innovation is increasingly increasingly generated by networks of relationships between firms, subThe significance and influence of interactions and feedback contractors and government institutions rather than just withmechanisms on the of innovation are largely contractors and government institutions rather than just withmechanisms on the development of innovation are largely generated by networks of relationships between firms, subThe significance and influence of interactions and feedback contractors and government institutions rather than just withmechanisms on the development of innovation are largely generated by networks of al., relationships between firms, sub- explored The significance anddevelopment influence ofhas interactions and feedback contractors and government institutions rather than just withmechanisms on the of innovation are largely in organisations (Cooke et 2000). in the literature, which shifted the debate from in organisations (Cooke et al., 2000). explored in the literature, which has shifted the debate from contractors and government institutions rather than just withmechanisms on the development of innovation are largely in organisations (Cooke et al., 2000). explored in the literature, which has shifted the debate from contractors and government institutions rather than just withmechanisms on the development of innovation are largely in organisations (Cooke et al., 2000). explored in the literature, which has shifted the debate from an emphasis on internal structure to external linkages and an emphasis on internal structure to external linkages and in organisations (Cooke et al., 2000). explored in the literature, which has shifted the debate from The paper is organized as follows. Section 2 discusses what an emphasis on internal structure to external linkages and in organisations (Cooke et al., 2000). explored in the literature, which has shifted the debate from The paper is organized as follows. Section 2 discusses what an emphasis on internal structure to external linkages and processes (Tidd et al., 1997; Harland et al., 1999). These exThe paper is organized as follows. Section 2 discusses what processes (Tidd et al., 1997; Harland et al., 1999). These exan emphasis on internal structure to external linkages and The paper is organized as follows. Section 2 discusses what supply chain innovation is in the state of the art. Section 3 processes (Tidd et al., 1997; Harland et al., 1999). These exan emphasis on internal structure to external linkages and supply chain innovation is in the state of the art. Section 3 The paper is organized as follows. Section 2 discusses what processes (Tidd et al., 1997; Harland et al., 1999). These external linkages are increasingly being used as a rapid resupply chain innovation is in the state of the art. Section 3 ternal linkages are increasingly being used as a rapid reThe paper is organized as follows. Section 2 discusses what processes (Tidd et al., 1997; Harland et al., 1999). These exsupply chain innovation is in the state of the art. Section 3 presents the supply chain model formulation as a complex ternal linkages are increasingly being used as a rapid reprocesses (Tidd et al., 1997; Harland et al., 1999). These expresents the supply chain model formulation as a complex supply chain innovation is in the state of the art. Section 3 ternal linkages are increasingly being used as a rapid sponse to fast changing needs through the pooling of represents the supply chain model formulation as a complex sponse to fast changing needs through the pooling of resupply chain innovation is in the state of the art. Section 3 ternal linkages are increasingly being used as a rapid presents the supply chain model formulation as a complex system, and here we focus on the following components: sponse to fast changing needs through the pooling of reternal linkages are increasingly being used as a rapid resystem, and here focus on following components: presents the model formulation as aa complex sponse to fast changing needs through the pooling of sources and the sharing of risk. This type of innovation can system, and here we wechain focus on the the following components: sources and the sharing of risk. This type of innovation can presentsorganisational the supply supply chain model formulation ascomponents: complex sponse to fast changing needs through the pooling of resystem, and here we focus on the following human, and technological components. Section sources and the sharing of risk. This type of innovation can sponse to fast changing needs through the pooling of rehuman, organisational and technological components. Section system, and here we focus on the following components: sources and the sharing risk. This type of innovation can seen as aa way to deal of with growing uncertainty, complexihuman, organisational and technological components. Section be be seen way to with growing uncertainty, complexisystem, and here we and focus oncomponent, the following components: sources and the risk. This of can organisational technological components. Section 44human, analyses innovations in each section 55 presents be seen as as way to deal deal of with growing uncertainty, complexisources andaa way the sharing sharing of risk. This type type of innovation innovation can analyses innovations in each component, section presents human, organisational and technological components. Section be seen as to deal with growing uncertainty, complexi4 analyses innovations in each component, section 5 presents human, organisational and technological components. Section be seen as a way to deal with growing uncertainty, complexi44 analyses innovations in each component, section 5 presents be seen as a way to deal with growing uncertainty, complexianalyses innovations in each component, section 5 presents 4 analyses innovations in each component, section 5 presents

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ty and competition, and to facilitate learning and further innovation. It can be described as a collective process which depends on many different interactions and relationships between an organisation and its external environment, and which includes suppliers, customers, training bodies and government agencies (Gann and Salter, 2000). 3. MODEL FORMULATION Innovation is a fundamental pillar upon which competition is built and an essential component of policies seeking best practices. The outputs of innovation directly affect productivity. On the global scene, rate of innovation is considered a major driver of competitiveness (Porter and Stern, 1999). Innovation can be defined as follows: (i) the renewal and enlargements of the range of products and services and the associated markets; (ii) the establishment of new methods of production, supply, and distribution; (iii) the introduction of changes in management, work organization, and the working conditions and skills of the workforce (European Commission, 1996). Continuous improvement, learning, problem solving, product development are all among the capabilities needed to be developed to execute successfully the policies suggested by the companies. These capabilities can only be nurtured in an environment open to innovation. Sustainable supply chain system can be considered as complex system that includes four components of different types (Fig. 1): hardware, software, human factor and organization factor. In the paper have been shown that hardware and software components unite in one component for SC model. This component is named as technological component. The human and organization factor have been interpreted as two components. It is true that innovation needs an environment conducive to innovation, but still the main drivers of innovation are the employees themselves. Thus, the main resource driving the companies’ innovation strategies is their human capital.

4. INNOVATIONS 4.1 Human Component In this section, we will concentrate on issues of human resource management, training and development of employees, and employee satisfaction. Human resources management. An uncountable number of sources discuss the importance of human resources for competitiveness and conclude that human resources are at the centre of global competition. The Competitiveness Advisory Group (1999) state, for example, that the most radical change in the competitive environment and the structure of the firm, in Europe and worldwide, is the shift in paradigm toward the centrality of knowledge and intellectual capital. Keywords like problem solving organization and learning organization are cited frequently, and all have human factor at the centre. The study reveals the lack of an organization-wide training and development process, including career path planning; and employee relations. Training and development of employees. The rapid pace of change in technology, products, and markets makes training a necessity for the companies. Organizations need to invest more in developing their own people since it is indeed difficult to recruit good quality personnel. Performance measures employed for evaluating training activities in companies are several. It can be number of hours of training per employee annually, or the annual cost of training as a percentage of the employee payroll. The second performance measure needs precise definition in order to be employed as a benchmark. For example, the payroll cost of the hours spent by the employees in training is not included in the cost of training. Also, whenever training is performed by company employees other than the trainers on the payroll of the company, no trainer cost is added to the cost of training but still this performance measure provides useful insight. Employee relations. An area of major weakness in employee relations is the lack of a formal and regular process for the measurement of employee satisfaction. Employee morale is an indicator of employee satisfaction. Less than half of the

Fig. 1. The Supply Chain Model as a Complex System

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companies in the overall sample reported high levels of employee morale. Companies need to introduce some formal mechanism for measuring employee satisfaction. An important result in this context has been reported earlier (Ulusoy and Ikiz, 2001). Two areas open for improvement are employee involvement in quality activities and delegation of work to operators, which can be considered a form of employee empowerment. 4.2 Technological Component In this section we will consider technology strategy, technology monitoring and intelligence and technology acquisition and exploitation.

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is meant by flexibility here is the ability to reconfigure the product easily; to change the design easily. For a flexible design, number of parts needs to be kept at minimum; the design of the parts and components should minimize the need for jigs and fixtures so that no special tooling is needed when a part or component is redesigned. New product ideas. Top management conceives product innovation as a strategic issue to be closely monitored. Although the intensity of R&D activities in these firms is rather low in general, the fact that R&D Department is perceived as a major source of new product ideas indicates to an important function of R&D Departments; namely, to serve as a product innovation gate for their companies.

Technology strategy. In the literature, numerous approaches for the management of technology are discussed. These models aim to position technology strategy into the overall framework of competitive strategy. With the technology intensity increasing in all sectors of the economy, the successful integration of technology planning with business planning gains in importance for business success. One of the five technology planning best practices reported by Metz(1996) is to establish a structured process for technology planning. Among the automotive p&c suppliers surveyed, the proportion of companies reporting that they have a systematic process for technology planning and strategy development is only 33%. This fact indicates to a major weakness in that respect.

In a study conducted among the largest companies in Europe (MERIT, 1996), the most important external source of technical knowledge for innovative activities in the company turned out to be the technical analysis of the products of the competitors, i.e., product benchmarking. Customers and suppliers follow as the next most utilized sources.

Technology monitoring and intelligence are important activities to secure the survival of the company. Most companies strongly emphasize that they monitor the developments in the field of their existing technologies. Companies strongly emphasize that they monitor technologies planned for future. The ratio of companies that monitor the technologies of competitors is subtantially lower. With respect to relative frequency of usage and benefit, customers and product benchmarking appear to be the top two knowledge sources. Universities, professional associations, consulting companies, and disclosed patents turn out to be the least frequently used sources of knowledge.

The main objective of the research methodology is that it helps in determining the best supply chain scenario that will enable sustainable supply chain performances for given circumstances. Supply chain system is a typical complex system, which is characterized by its components. In our context we consider suppliers as components of supply chain. To analyze sustainability and reliability we propose to consider supply chain model as multiple state system (MSS). MSS is mathematical model in reliability analysis that is used for description system with some (more than two) levels of performance (availability, reliability). MSS allows presenting the analyzable system in more detail than traditional Binary-State System. We use reliability analysis of MSS developed by Zaitseva (2006).

Market related risks, high innovation costs, pay-off period of innovation being too long and lack of appropriate sources of finance are cited by the companies as the major obstacles to innovation activities. [6] 5. RESEARCH METHODOLOGY 5.1 Background and mathematical model

Technology acquisition and exploitation. To a great extent, companies exploit the technologies available in their stock internally and although many companies have developed their own technological competencies, they lack experience in the external exploitation of these. The intensity level of technology transfer activities is very low. Just like in the case of technology acquisition, the highest rate of technology transfer is achieved through the mobility of qualified personnel. Equipment sale and providing consultancy services follow as the next more popular means of technology transfer. It appears that the greatest impact of new technology on operational results comes mostly as reduction in the production cycle time and as increase in the manufacturing capacity and conformance quality.

Every system component xi is characterized by probability of the performance rate:

4.3 Organizational Component

pi = Pr{xi = 1} and ri = (1 – pi) = Pr{xi = 0}

This section is devoted to good design practice and new product ideas. Good design practice is the key to manufacturing. Flexibility and cost of a product are determined largely by design. What

In MSS is proposed, that system model for reliability analysis consist of n components. The system components are denoted as xi (i = 1,…, n). A system and its every component have two states of efficiency: “zero” designates system or component failure (is not working) and state “one” declares of working of system or its component. The system reliability (system state) is depend of its components efficiency and is defined by the structure function: φ(x1, …, xn) = φ(x): {0, 1}n → {0, 1}

(1)

(2)

Definition of structure function (1) it is well known as definition of Boolean Function (Ushakov 1994, Shooman 2002, Ryabinin 2004). This condition permits to use tools of Boolean Function analysis for the structure function measure. The dynamic properties of Boolean Function are revealed through

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Logic Deferential Calculation (Bochmann & Posthoff 1981). Therefore this tool can be use for analysis of dynamic properties of structure function too. MSS probability state, R(j), is one of the best known MSS reliability measures [12]. It is the probability that system performance level is equal to the level j: R(j) = Pr{φ(x) = j}, j ∈ {0, 1, ..., m-1}.

(3)

function (1). The MSS mathematical model of this system has three levels of performance (m = 3) and four components (n = 4). The system component state 0 considers to the component failure; the component state 1 is component functioning with some unimportant restriction; the component state 2 is perfect functioning. The component probabilities in Table 1 have been determined for this system by the expertise. Table 1. Component state probability

Probability states (1) don’t enable the analysis of the change in system reliability that is caused by a change in component states. Importance analysis of SC system allows estimating the influence of every system component state changes to system performance. Consider some of importance measures and their calculation by Direct Partial Logic Derivative. Structural Importance (SI) is one of the simplest measures of component importance and this measure is concentrated on the topological aspects of the system. According to Zaitseva (2011) this measure determines the proportion of working states of system in which the working of the i-th component makes the difference between system failure and its working. SI of MSS for the i-th component state s is probability of this system performance level j decrement if the i-th component state changes from s to s-1 depending on topological properties of system: IS (si|j) = ρis, j / m n-1,

(4)

where ρis, j is number of system states when the change component state from s to s-1 results the system performance level decrement and this number is calculated as numbers of nonzero values of Direct Partial Logic Derivatives (4). There is one more definition of SI. It is modified SI that represent of the i-th system component state change influence to MSS performance level decrement for boundary system state. In terms of Direct Partial Logic Derivatives (4) modified SI is determined as: IMS (si|j) = ρis, j / ρi(s,j),

1

0.1

0.2

0.7

2

0.1

0.4

0.5

3

0.2

0.4

0.3

4

0.3

0.5

0.3

R(1) = (p1,1+p1,2)⋅p2,0⋅(p3,1+p3,2)⋅(p4,1+p4,2) + +p1,1⋅(p2,1+p2,2) + p1,2⋅p2,1⋅(p3,0+p3,1)⋅(p4,0+p4,1)= =0.488, R(2) = p1,2⋅p2,1⋅p3,2⋅p4,2+p1,2⋅p2,2=0.375 Therefore the performance level 1 of the SC system is more probably than system perfect functioning (the performance level 2) and system failure that have probabilities 0.137 and 0.375 accordingly. Table 2. Importance measures for the system Importance measures

Modified SI IMS is probability of MSS performance decrement depending on the i-th component state change and boundary system states. A system component with maximal value of the SI measure (IS and IMS) has most influence to MSS and this component failure causes high possibility of MSS failure (Zaitseva, 2011).

Consider the SC system in Fig. 1. The structure function of such system is declared based on an expertise for every real system. This function is defined based on the expert knowledge and influence form the area of the system application. For example, the Decision Support System has structure

2

R(0) = p1,0+(p1,1+p1,2)⋅p2,0⋅(p3,0+(p3,1+p3,2)⋅p4,0)= =0.137,

where ρis, j is defined in (4), ρi(s,j) is number of boundary system states when φ(si, x) = j (it is computed by structure function (1)).

5.2 Example of importance analysis

1

So the system state probabilities (1) for this SC system are calculated based on component probabilities in Table 1:

(5)

SI and modified SI measures don’t depend on components state probability (2) and characterize only topological aspects of MSS performance. These measures are used for prevention system analysis or reliability analysis in step of a system design previously.

m 0

i

i 1

2

3

4

IS (xi|1)

0.222

0.123

0.049

0.049

IS (xi|2)

0.123

0.099

0.025

0.025

IS (xi)

0.173

0.111

0.027

0.027

IMS (xi|1)

1

0.588

0.308

0.308

IMS (xi|2)

1

0.889

0.400

0.400

IMS (xi)

1

0.739

0.354

0.354

Importance measures of this system are in Table 2. According to data in Table 2 case the first system component change has maximal influence to the system reliability. Therefore correct functioning of special devices is important condition for reliability of the SC system with structure function (1). But need to say that the modification of the structure function of this system causes change of the importance analysis result. The positive result of importance analysis will be obtained based on investigation of some structure function of this system.

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The impediment for this analysis is caused by generation of structure function based on expert knowledge only that is subjective. 6. CONCLUSIONS In this study, we find further evidence supporting the argument that network structures and relationships that form supply networks are critical components for identifying strategic imperatives in supply chain management (Borgatti and Li, 2009; Kim et al., 2011). The paper contributes to a better understanding of the concepts of innovation and of related issues in designing sustainable supply chains. In this paper an integrated methodology is developed that guides companies in determining and managing innovations in designing sustainable supply chains. Our findings suggest improved knowledge and information flows arising from supply network accessibility influences a firm’s innovation output. We proposed innovation analysis to use for MSS reliability estimation depending on the system structure and its components states. Importance measures are widely used as tools for identifying system weaknesses, and to prioritize reliability improvement activities. The results also indicate that the research framework supports the analysis of supply chain’s innovations, and helps in finding and categorizing disturbances, vulnerability sources and appropriate design principles and strategies. Additionally, the results show that firm’s performance can be enhanced by the innovation influence of the three supply chain components . In sum, the study contributes to the body of literature on both supply chain management and innovation management by highlighting the role of the structural characteristics of supply networks.

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Turkey. Int. J. Production Economics 86, 2003. pp. 25127. Ushakov I., Eds. Handbook of Reliability Engineering,. New York: Wiley, 1994 Vlajic, J.V., van der Vorst, J.G.A.J., Hendrix, E.M.T. On robustness in food supply chain networks.In: Trienekens, et al. (Eds.), Towards Effective Food Supply Chains., Wageningen Academic Publishers, The Netherlands, 2010. pp. 63–82. Wu, Y. Robust optimization applied to uncertain production loading problems with import quota limits under the global supply chain management environment. International Journal of Production Research 44 (5), 2006.pp. 849–882. Zaitseva E.N., Reliability Analysis of Multi-State System, Dynamical Systems and Geometric Theories, 1 (2) 2003. Zaitseva E., Levashenko V., Matiasko K.: Failure Analysis of Series and Parallel Multi-State System, Eksploatacja i Niezawodność. Maintenance and Reliability, vol.30, N.2, 2006 Zhivitskaya H. Efficiency of logistics systems under conditions of unreliable information. Journal of Information, Control and Management Systems. № 11 (2013) ISSN 1336-1716. pp.177-183

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