INTEGRATION OF ANALYTICAL TECHNIQUES FOR SERVICE … · 2011-12-15 · Integration Of Analytical...

INTEGRATION OF ANALYTICAL TECHNIQUES FOR SERVICE MANAGEMENT

LOGISTICAL COORDINATION AT THE COLOMBIAN SHIPBUILDING INDUSTRY

WILSON ADARME JAIMES1 1 Industrial Engineering, Production Specialist, MSc Industrial Engineer. cPhD Logistics. Professor

Universidad Nacional de Colombia - Bogotá. Research Group Director. Society, Economy and

Productivity- SEPRO Supply Chain Management. UN. [email protected]

ISABEL CRISTINA DIAZ 2 2 Industrial Engineer, Research in supply chain - logistics. Member Research Group: Society,

Economy and Productivity SEPRO - Universidad Nacional de Colombia [email protected]

JUAN PABLO CASTRELLON3 3 Industrial Engineer. Research in Supply Chain – Logistics. Member Research Group:Society,

Economy and Productivity SEPRO – Universidad Nacional de Colombia, [email protected]

mailto:[email protected]



Integration Of Analytical Techniques For Service Management

Logistical Coordination At The Colombian Shipbuilding Industry

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Adarme W., Díaz I. C., Castrellon J. P.

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Abstract

The main purpose of a supply chain (SC) is to ensure customer satisfaction, not only at

the product quality, but also at service level, which is a key success factor for present-

day organizations. In order to achieve that, it is necessary to have methodologies

focused on SC efficient service management, based on the recognition of the internal

and external clients’ requirements.

In this way, we have used the QFD technique to find strategic actions that offer solutions

to those requirements, supported by the AHP and fuzzy logic principles, which

guarantee the robustness needed to ensure their applicability in a shipbuilder, as well as

in other decentralized systems that have the necessity of implementing coordination

mechanisms, with the objective of increasing operational efficiency, profitability, and

competitive position, while satisfying the service requirements. (Wang, Y, et al 2010).

1. INTRODUCTION

A few years ago, logistics where detached from costumer service activities. Today,

besides quality, innovation and adaptability, both goods and services must offer quick

response to the time, place and quality of costumer’s requirements.(DGPYME, 2007).

Several academicians and organizations specialized in logistics have gone deep in the

study of supply chain management (SCM) from the service management perspective.

Particularly, our research group has identified a gap in the design of methodologies for

the service management in shipbuilders, to be also used as a logistical coordination

mechanism in their (SC). Moreover, in the current trends, the service management

focuses especially on the external customers performance improvement, more than in

aspects related to internal customers.

Consequently, this paper presents the results of the design and implementation of a

Service Management System, as a mechanism to coordinate a logistic environment in

the Colombian shipbuilding industry. The study is the result of an approach to the

Colombian shipbuilding industry logistic system, in which the need to redesign its

discoordinated logistical system became evident.



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The functional structure of the proposed system integrates the service strategic policies

with the operational and logistics decisions, supported by the integration of analytical

techniques (AHP, QFD, fuzzy logic), to evaluate costumer requeriments and to identify

adequate solutions that ensure costumer satisfaction and logistical coordination.

2. SERVICE MANAGEMENT IN SUPPLY CHAINS

2.1 Definitions and Importance

Supply Chain

A supply chain is a system which links agents through flows of materials, information

and money among them, with the aim of adding value. (Wang et al. 2010) exposes the

need of sinchronizing the internal processes of the agents, in order to enhance the SC

efficiency. It explains the importance of the coordination between agents.

(Cooper et al. 1997) suggests the existence of three main structural elements in a SC:

the typology of associative relationships in the SC; the structural dimensions of a SC

that include a number of agents or levels of specification, number of actors, and their

location within the chain; and finally, there are characteristics of processes developed

among agents, according to the condition of centralization or decentralization (Chu

2007), and the power relationships presented inside the SC (Cox 2001), those elements

influence the coordination efforts in a SC.

In a decentralized SC, the coordination strategies strive to align the independent

objectives of SC agents, which are one of the main features of the shipbuilders SC, and

are the framework of the methodology exposed in this article.

Customer Service

It measures the ability of the logistic system of providing a good or a service timely and

in place. The service level is directly related to the management and effectiveness of the

SC: the more effective the SC, the more the value added to the costumer (DGPYME

2007) , and hence, higher sales volume, market share, and profits for the organization

(Ballou 2004).


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2.2 Relationship between Supply Chain Management and Customer Service

During the last decade, several researchers have explored the relationship between

supply chain management, and adequate customer service. Among others (Korpela et

al. 2001) described how the focus of logistics is merging from the profit optimization to

offering better customer service.

To this end, SC agents are required to be aware of the close relationship between the

objectives of the SCM, and the customer service. According to this, (Witkowski 2003)

explains the need of satisfying the expectations of customers in terms of delivery times,

which requires the design of a common service strategy formulated by the SC actors.

(Duglosz 2010) highlights the necesity of aligning the strategic decisions with the

interests of customers, while the ultimate goal of a supply chain is to generate added

value to the final consumer.

2.3 Proposed Techniques

Regarding to the needs and theoretical basis exposed, a methodology has been

proposed to support the service management in the SC, based on the integration of

techniques such as QFD with fuzzy logic and AHP.

2.3.1 QFD with Fuzzy Logic

The Quality Function Deployment Methodology (QFD) was primarily designed to unify

the operations of R+D, engineering and production with customer requirements, for

product development (Griffin, Hauser 1993).

In the context of SC customer service management, the original technique of QFD is

adapted to identify actions to be taken by the management to meet customer needs.

In the QFD technique, it is necessary to establish the impact of each How (strategic

actions of SC) on each What (service factors), using quantitative scales to calculate

indicators of relative and absolute importance of each How.



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Likewise, correlations are established between the Hows, with the possibility of positive

or negative relationships (Bottani & Rizzi 2006).

Figure 1. House of Quality in QFD methodology

Source: Modified from (Bottani & Rizzi 2006)

The final result of the implementation of this technique is the determination of key

strategic actions for the organization to meet customer needs.

The assessment of relationships processes in all the stages of the QFD has a condition

of subjectivity that is solved by using fuzzy logic, which focuses on solving the

inaccuracy problem presented in the linguistic variables of the natural language

(Bojadziev 1995).

2.3.2 AHP

It is a supporting tool for the QFD model, applied to rank a set of factors which are

considered by the decision maker, according to their importance and influence on the

decisions to be taken.

The Analytical Hierarchy Process (AHP) provides the classification of the most important

service factors, from the customer point of view, as well as the strategic actions which

will conform the What’s and How’s of the QFD model.

To achieve that, (Mendoza, et al., 2007) references (Martínez 2007), who develops the

idea of an AHP based on three stages:


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- General service factors and decomposition of strategic actions, into objectives, criteria,

decision rules, in a hierarchical structure.

- Comparative judgments by pairs of the same hierarchical level between objectives and

criteria, with respect to the superior level.

- Criteria and objectives synthesis with regard to the judgments done in the previous

stage.

3. IMPLEMENTATION OF THE METHODOLOGY

3.1 Methodology Structure

The Service Management System in the Supply Chain was designed assessing three

levels:

I. Strategic level: it defines the general policy which determines the system structure

and its general objectives.

II. Tactic level: once the strategic value, the customer orientation and the integration

principles are defined, the next steps have to be followed: i) analyzing all the logistic

processes; ii) establishing what customer service factors could be used to measure

the system performance; iii) providing possible strategic actions that could be used to

meet the customer service levels expected.

III. Operative level: it corresponds to the application of the QFD techniques with fuzzy

logic and AHP. This process is complemented by a measuring system to verify the

impact of the methodology at the organization service level.

3.2 Methodology development

The process developed to construct the Service Management System includes the Key

Service Factors and Strategic Actions Selection in which the AHP technique is used to

select from a diverse set of service factors options and strategic actions, those that are

most relevant for the system from the standpoint of cost in time and money. Therefore,

the procedure of AHP is applied, for both service factors and strategic actions, as long

as the number of available alternatives is greater than three.



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3.3 QFD Model Construction

After selecting the service factors and strategic actions to be used, we proceed to apply

them in the QFD model structure. The QFD process begins with the identification of

relationships in the system, through analyst value assignment.

In the proposed methodology, the influences and relationships between service factors

and strategic actions are expressed in terms of fuzzy numbers, due to the fuzzy logic

properties of allowing the weight of subjective judgments.

The weight or correlation relationships are measured by a linguistic variable of intensity

with five terms. Those terms are translated into fuzzy sets (Bojadziev 1995), with the

purpose of giving a mathematical approach to human thinking, whose main

characteristic is the inaccurate propositions.

Fuzzy sets are described by a membership function that assigns a specific range and

specifies the belongingness level of a particular judgment in the fuzzy set.

In this case, a triangular membership function is used, due to the easiness in its

computational implementation and its wide applicability in topics related to decision

making.

Thus, the service factors, strategic actions, and the relationships between these two

elements are modeled with different membership functions according to linguistic

variables. Next, the procedure applied is explained in detail.

3.3.1 Weighted Importance of Service Factors

The QFD methodology establishes the importance of weigthing the service factors. This

weight is represented by W i* and is calculated by finding the distance di beteween the

performance expected by the customer and the current performance of the company.

The distance di is a fuzzy number, and (Bottani & Rizzi 2006) expresses it as:

) ) ∫| ) )|

Where is the universe of the fuzzy set. Based on that relationship, W i* can be found

by:


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The linguistic variable is importance, and its terms are VL= Very low importance, L=Low

Importance, M=Moderate Importance, H=High Importance, VH: Very high importance.

Figure 2. Fuzzy sets of the linguistic variable importance

Source: Modified from (Bevilacqua et al. 2006)

The membership function of each fuzzy set is:

{

{

{

{

{

And the fuzzy numbers for this model are ) ) )

) ). Those fuzzy numbers are taken into account when the

relationships between What’s and How’s are analyzed.

3.3.2 Relationship Matrix and Correlation Matrix

At this point, the values are determined, and they represent the relationship between

the j-th strategic action and the i-th service factor.

∑

)



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The linguistic variable is intensity and the scale measures the relationships in terms

of the current variable. The fuzzy numbers are the same as in the weighted importance

of service factors.

Subsequently, the values of the correlation matrix are specified; they represent the

incidence among the strategic actions. For this case the linguistic variable is relationship

and its terms are: SN = Strong Negative, WN = Weak Negative, SP = Strong Positive y,

WP = Weak Positive, as shown in Figure 3.

The fuzzy numbers for the correlation matrix are )

) ) ) The expression to evaluate the

correlation is:

∑

) )

)

Figure 3. Fuzzy sets of the linguistic variable intensity

Source: Modified from (Bevilacqua et al. 2006)

3.3.3 Weighted Importance of Strategic Actions

Based on the previous results, the importance of strategic actions must be

calculated; this can be done by applying:


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∑

)

)

The result of this analysis highlights the importance of each strategic action, according

to the impact that they have on the service factors. However, the importance must be

evaluated in a wider manner, taking into account the influence of the strategic actions

on each other. The expression formulated by (Bottani & Rizzi 2006) is:

∑

3.3.4 Cost and Marginal Benefit of Strategic Actions

The final step to complete the House of Quality is the estimation of costs and profits as

a result of the strategic actions application, in the customer service management

practices. Based on this result, decision makers judge which estrategic action is key for

satisfying customer needs.

For cost estimation, fuzzy logic is used again to valorate the judgemen of analists,

researches, employees and managers. The linguistic variable is cost, and its terms are

) ) ) ) ).

Thus, the way to calculate costs is:

∑

Once costs of strategic actions are defined, it is possible to calculate the marginal

benefits (MBs) of the implementation of each SA. (Bottani & Rizzi 2006) propose:



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3.3.5 The HOQ for Strategic Management of the Logistics Service

Final decisions are based on the strategic actions hierarchy produced by the QFD

methodology, according to the marginal benefits calculated before. But these (MBs) are

expressed in fuzzy numbers, which have to be translated into crisp values in order to

develop the comparison among the benefits of each SA. The formula proposed by

(Bojadziev 1995) to unfuzzy the numbers is:

Where the factors come from the fuzzy number ).

Thus, the critical strategic actions can be defined, and the management will have a

support tool to focus the resources on those key SA in the customer service

management.

3.3.6 Feedback system

It measures performance of the system under the methodology of QFD. The measure is

made by analyzing the improvement of the service factors after implementing the

estrategic actions of the QFD. To achieve such analysis, the improvements are

weighted taking into account the relevance that they have on the customer satisfaction.

The mathematical expression is:

∑

∑


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4. SHIPBUILDERS SUPPLY CHAIN DESCRIPTION

4.1 Shipbuilders productive structure

A shipbuilder supply chain structure corresponds to a productive system project, in

which there is a fixed position layout, and all the resources are moved to this ship’s

construction or repairing position. Regarding to the customer relationship, the

production system is defined as a build to order one, which implies that it is produced

on-demand, according to specific requirements.

4.2 Supply Chain Description

The SC structure has several differences compared to traditional approaches. Its main

characteristics are: order-based production, and not stock-based production, more

flexibility, customized production, low inventory levels and collaborative partnerships

among selected suppliers. It also presents the ‘‘pull’’ system characteristics, in which

the materials are pulled through the system based on customer orders. (Gunasekaran &

Ngai 2005).

The SC shipbuilder structure includes three levels that interact between each other:

suppliers, the shipbuilder, and final costumers. Many of the purchasing, warehousing,

production and distribution conditions are determined by the final order terms, which

vary widely from one to another according to the particular needs of every final

costumer.

In this SC, it is important to have a project management system, so as to ensure proper

management of the resources needed to meet production orders.

Figure 4 is a representation of an SC shipbuilder structure:



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Figure 4. Generic shipbuilder SC structure

Source: Authors

5. RESULTS AND DISCUSSION

The Service Management methodology developed here was applied in a Colombian

shipbuilder following this process:

1. Selection of service factors and strategic actions: six service factors were chosen, as

well as five strategic actions, in order to respond to the service factors. This selection

was based on the application of surveys and interviews to experts, which served as a

tool for extracting general opinion trends related to both service factors and strategic

actions that are critical in the shipbuilder sector.

2. Application of a AHP procedure: the service factors were ranked in relation to the

interests of internal and external customers, and strategic actions in accordance with

the monetary cost and ease of implementation, obtaining the following:

Sele

cte

d

SERVICE FACTOR PRIORITY

VALUE

STRATEGIC ACTION PRIORITY

VALUE

Product and/or service

quality

0,41

Monitoring suppliers

0,42

Client

e 1

Client

e k

Proveedor

m

Proveed

or 1

SHIPBUILDER

Almacén 2 SU

PP

LIE

RS

FIN

AL

CU

ST

OM

ER

S

Project 1

Project n

Pro

ject

man

ag

em

en

t

Requirements

Supply


15

15

% of correct orders 0,21

Information system traceability

0,20

Lead time 0,15

Training 0,18

Flexible in responding to

changing needs

0,13

No

t se

lecte

d

After-sales service

0,06

After-sales service system

0,15

Reliable delivery of

information

0,05

Flexible manufacturing system

0,04

Table 1. AHP results

Source: Authors

3. QFD with fuzzy logic procedure application: using the previous results, we proceed to

apply the technique using service factors and strategic actions selected, obtaining figure

5.

Ho

ws

Monitoring s

upplie

rs

Tra

ceabili

ty info

rmation

syste

m

Tra

inin

g

Whats

Product and/or service quality (4,5,6) 0,8 (3,4,5) (4,5,6) (4,5,6) (3.2,4,4.8)

% of correct orders (3,4,5) 0,6 (3,4,5) (3,4,5) (3,4,5) (1.8,2.4,3)

Lead time (2,3,4) 0,9 (3,4,5) (2,3,4) (2,3,4) (1.8,2.7,3.6)

Flexibility for responding to

changing needs

(1,2,3) 0,4 (1,2,3) (2,3,4) (3,4,5) (0.4,0.8,1,2)

(0.5, 1.5, 2.5) (-0.5, 0.5, 1.5)

(-1.5, -0.5, 0.5)



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(20.8,38,60.6) (22.6,40.1,63) (23,40.9,64.2)

(-23.2,40,190) (-1.1,77.4,247.8) (-42.5,1.1,124.8)

(2,3,4) (4,5,6) (2,3,4)

(-

11.6,13.2,47.4) (-0.2,15.5,41.3) (-21.2,0.3,31.2)

Crisp values 15,57 18,01 2,67

Figure 5. QFD with fuzzy logic application results

Source: Authors

This results show that, in relation to service factors, the strategic action "Traceability

Information System”, generates the highest utility for the company.

6. CONCLUSIONS

The methodology developed in this proposal, although based on classical techniques

(QFD, fuzzy logic, AHP) is innovative in the field of customer service management for

managing supply chains in shipbuilders. It provides an implementation methodology and

a monitoring system that allow the company to align their service activities to the

internal and external customers’ requirements.

Despite the ease of implementing the tool, analysts and executives of shipyards must

have a previous approach and clear communication channel with customers, to

determine the factors interest them the most. In other words, QFD methodology should

not be a starting point for managing customer service but should be a support for

activities that are already established.

This proposal does not contemplate how to develop selected strategic actions, so future

research should be conducted in the QFD application for the development of such

practices.


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References

Ballou, R., 2004. { ed.

ed., xico earson ducaci n.

Bevilacqua, M., Ciarapica, F.E. & Giacchetta, G., 2006. A fuzzy-QFD approach to

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Bojadziev, G., 1995. Fuzzy sets, fuzzy logic, applications, Singapore ;;River dge

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