End-to-End Supply Chains: The Solution?

Joachim Kuhn
Quality Management
Daimler AG
6th of October City, Egypt
Accounting, Finance and Operations Management
Anglia Ruskin University
Cambridge/Chelmsford, United Kingdom
joachim.kuhn@t-online.de

Abstract—The focus onto the final customer is one of the
major sources to design and improve the value adding processes
of a company. By having the customer’s delight [1] in the mind it
is required to direct the majority of processes to this delightful
momentum. End-to-end supply chain management is exactly
stressing on this focus. However, this end-to-end point of view is
not new: the customer order cycle is already addressing this since
many decades. Hence the question arises “What’s new?” Answer:
the strong commitment to the circular logistical momentum.
Several process layers are linked together and controlled by a
customer supply chain controller. In this article these different
process layers are explored and a controlling tool developed to
achieve such a customer-focused supply chain management.
Based on empirical examples of the automotive industry and
literature research the different aspects for this paper are
retrieved. After these explanations a critical conclusion shows
limits of such an end-to-end supply chain and gives ideas for
further research fields.
Keywords—supply chain management; automotive logistics;
flow principle
I. INTRODUCTION
When the borders opened between West and East
Germany in 1990 two economical systems confronted each
other. One of the significant differences was the treatment of
waste. Following a more linear way of thinking the waste
treatment was mainly based on dumping in West-Germany.
Nevertheless due to economical constraints in East-Germany it
had to recycle quite a substantial amount of waste due to the
scarcity of hard currency. As a side effect the circular waste
handling was apparent in the whole eastern part of Germany.
Some decades later the circular waste treatment is common
sense in whole Germany.
However, also in non-waste related processes the circular
idea is generating new approaches in business as well. In this
paper the circular flow of goods/material and information is
examined with a particular focus on automotive logistics. The
architecture of end-to-end (E2E) supply chains is described in
the next chapter followed by a brief review about the delta to
the linear logistical flow. The paper is concluded by some
critical remarks about this “new” circular perspective and
further research fields.
II. ARCHITECTURE OF END-TO-END SUPPLY CHAINS
Supply chains are targeted by intensive discussions to
reduce the lead time, improve the customer satisfaction by
having a good service level for instance and decrease the
related cost burden of logistical processes or other manifold
targets [2]. Puzzling all targets together for the big picture the
main area to look for improvement is the architecture of the
supply chain itself: it includes the processes (e.g. the just-in-
time delivery of parts), the structural elements for these
processes (racks and advanced guided vehicles for example)
and the function of the area as for example to provide a proper
line feeding.
Looking at the process level first the supply chain consists of
five elements [3]:
1. Transportation
2. Storage
3. Cross-docking
4. Sequencing
5. Commissioning (kit creation).
These five process clusters link together several structural
elements. One of them is human resources. By fulfilling the
assigned tasks the employee is processing any given material
and information into a specified output. The description of the
different process steps is codified in the work instruction and
standard work sheet [4]. By following the sequence of the
different steps any process in itself is structured. Only certain
innovations or continuous improvement activities should
initiate this processing to change based on experimental field
results as given in figure 1.

978-1-4799-1891-1/15/$31.00 ©2015 IEEE

 Fig. 2. Supply chain for the car kit delivery to Egypt.
Value Lean
Stream Outsourcing Logistics
Agility E2E SCM
... ...

"CBU-cars" for shipme nt to local dealer s

Time
M onth
G E M

We ek
A

Pre- de livery inspection of the

A N E N
M T

-1
Co ntrol chart Co ntrol chart

1
P1 P1new

Calling-off of the KD-material from the plant buf fer of

P2

1
3
P3 P2new

4
P4

P roduction of the
shipping lot

Sindelfinge n/Bre men or from suppliers

Preparing the invoice

the packing lists

P5

Data tra nsfer of

for the shipment
P6

6
Customs cle aring and delivery of the called- of f
containe r , c ontainer unloading, storing, prepara tion
a nd delivery of the parts to the production line
P3new

Loading of
P7

2
7
P4new

vessel

capacity che ck as well as a plausibility c heck f or the ability of assembling

P8 x

8
from H amburg to Ale xandria
Shipment of the KD-sets

lading for the shipment

Pre par ing the bill of

Order plac eme nt of vehicles ( inc l. options) and a supplie r rela ted
9
P5new

Material requireme nt planning in the KD a rea of

x

10
Containe r transport to Hamburg by truck

Pr eparing the
container conte nt lists
Running process Experimental field

11
3
12
Notes:

the Sindelf ingen plant location

Pn = Process n
SCM = Supply Chain Management

13
E2E = End-to-End

KD- area or of an exte rnal logistic s provider

Deliv ery of the KD- material to a buf fer store of the
of parts in KD-lot sizes a nd containe rization of pallets
Commissioning and packing

14

if financially necessar y
15

Preparing of the proforma-invoices

Fig. 1. Structured work processing and experimental field.

4
16
Machines and tools like forklifts or advanced guided

17
vehicles or storage facilities are the second structural element

Pla nt- relate d c apac ity

chec k a nd adjustment
18
related to supply chains. These hardware components are
forming the “skeleton” in which the various processes are

19
5
embedded with their specification limits. The structure itself is

20
quite immobile and rigid: Once changes have to be made for

21
this captive capital it is quite an (investment) effort to
22

De termination of
model mix
implement these. Hence structural changes are limiting the 23

flexibility to a certain degree and become maneuverable again

6

once the assets are written off or the product requires a new
24

set of hardware components (e.g. racks or tools). Reflecting MATERIAL INFORM ATION
the SDCA (Standardize-Do-Check-Act) and PDCA (Plan-Do- LOG ISTICS LOG ISTICS

Check-Act) cycles the structural changes are linked to PDCA

and the process changes are triggered by SDCA [5].
Looking at processes and structures as a couple the only
aspect left is the purpose of this arrangement: the function. In
common sense it is to achieve a product and/or service which
is beneficial for a customer. In terms of the end-to-end supply
chain the customer is determined with the end user of the
product/service. Therefore all activities are directed to the
customer’s satisfaction (base line) and delight (benchmark
level) causing a shift from the traditional supply chain:
companies are striving to minimize the logistical efforts
between the suppliers and the companies themselves, whereas
the end user is “only” reflected by a given milestone in the
supply pipeline which marks the deadline for the
product/service delivery. Supply chain models like SCOR [6]
were developed to describe the different process stages to
identify the value stream for potential time and cost saving
processes. However, shifting to an end-to-end viewpoint is not
new but the overall company target shifts its focus to the order
cycle rather than the linear flow of goods/information along
the time line as given in figure 2.
Based on this model the paper will investigate in the next
section how this supply chain will be modified once the end-
to-end perspective is the main focus.
III. THE TRADITIONAL “NEW” PERSPECTIVE: END-TO-END
SUPPLY CHAINS
Traditionally supply chains are controlled in terms of cost,
efficiency and order fulfillment or by reaching a certain
service level [7]. Taking these perspectives the time control
had been a decision making factor but the predominant ones
were related to cost efficiency: logistics was one of the
sources for cost optimization and became a potential field for
outsourcing in many companies [8]. Despite this trend of the
physical operation to be delivered from external service
provider the responsibility is still embedded inside the
enterprise. Therefore a supply chain controlling requires two
levels of control: cost and time as given in figure 3.

International Supply Chain
Process 1 Process 2 Process 3 Process 4
INPUT
Time-based metrics
Quality / Time
Controller
Fig. 3. Cost and time-based supply chain control.
Another traditional perspective is the flow direction:
Coming from a logistical orientation the flow of
goods/material and its related information has been a primary
focus: Source – Make – Deliver (plus: Return) are the major
process flow elements in the SCOR model. It is a linear flow
of pulled goods/material along the complete supply channel
encapsulating all n-tier suppliers from the very beginning of
the material components (to be dug out of earth or harvested
from the field) to the delivery of the finished product/service
to the final customer. But with the introduction of the
customer order cycle the unidirectional flow becomes circular
flow. Areas like the order penetration point or the mass
customization are two new aspects of a customer focused
supply chain management. Hence the order cycle is the
logistical primary layer which triggers the secondary one
being the linear flow of goods/material and information as
given in figure 4.
Primary supply chain layer
Manufacturing logistics
Delivery
Inbound logistics
Product/Services
Production programming
and scheduling
placement
Order placement
Customer
Secondary supply chain layer
Fig. 4. Cyclical and linear logistical flow in supply chains.
The order penetration point [9] is linked to the goods flow
within the company: the chain of producing these goods is
having several gateways for the order entry – depending on
the product variety (spread of product variants) and custom-
ization point (when the product gets tailored to a specific order
and linked permanently with this order). Hence it is an
individual penetration point which has to be determined by
each company accordingly.
After having this “logistical customization” the necessary
KD supplied plant
material deliveries are triggered: If logistics is customized it is
Assembly of the a tailored supplier material and if it is not linked to an
kit into the car
individual order the various material/parts are delivered in
bulk quantities or anonymous kits. The delivery is either pull-
OUTPUT Line supplied or push-driven depending on the forecast accuracy of the
car kit
required volume.
Therefore the traditional “new” perspective is the customer
Quality-based metrics order with its particular penetration point to determine the
overall logistics design of the secondary level.
IV. CONCLUSION
Shifting to a circular logistics flow is not new: the order
cycle and the related customer focus have been acknowledged
since many decades in logistics. However, the new focus is the
primacy of the circular flow over the linear one. The customer
comes first and supplier related optimizations are only
implemented if they are not contradicting the circular flow. To
control such a “customer supply chain” it requires dedicated
targets and management attention to keep alive this logistical
customer perspective without falling back to a more supplier
orientated logistics optimization. Future research should be
directed to find the proper KPI and adequate embedding into
management targets to achieve a sustainable transformation to
the circular flow. Another field to be explored is the
interdependency between the primary (customer) and
secondary (company) related supply chains. Especially a KPI
system needs to be developed to allow various simulations
within the two logistical levels. Another research area would
be to demonstrate the economic effects between the customer
(earnings related) and company (cost related) focus.
Particularly when the company faces contradictions as
mentioned above it requires solid evidence how to prioritize
the customer expectations in a right way. But finally all
decisions are made by the responsible managers with their
commitment what to put first: customer or company.
REFERENCE
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Jersey: Pearson Prentice Hall, 2006, p. 144.
[2] M. Christopher, “Logistics and Supply Chain Management”, 3rd ed.,
London et al.: FT Publishing 2005.
[3] H.-Ch. Pfohl, “Logistiksysteme [Logistics Systems]”, 8th ed., Berlin et
al.: Springer publishing, 2010.
[4] Y. Monden, “Toyota Production System”, 4th ed., Boca Raton et al.:
CRC Press, 2012.
[5] M. Imai, “Kaizen”, New York et al.: McGraw Hill, 1986, pp. 63f.
[6] R. Crandall, W. Crandall and Ch. Chen, “Principles of Supply Chain
Management”, Boca Raton et al.: CRC Press, 2010, pp. 28-31.
[7] M. Christopher, “Logistics and Supply Chain Management”, 3rd ed.,
London et al.: FT Publishing 2005, p. 65.
[8] J. Mangan, Ch. Lalwani, T. Butcher and R. Javadpour, “Global Logistics
& Supply Chain Management”, 2nd ed., Chichester: Wiley Publishing,
2012.
[9] J. Olhager, “Strategic positioning of the order penetration point”,
International Journal of Production Economics, vol. 85, no. 3: pp. 319-
329.