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Conference Proceedings, IRC- 2015

Book of Proceedings
ISBN: 978-969-7581-00-9
International Research Conference on Business, Economics and Social Sciences, IRC-2015
August 01-02, 2015
Istanbul, Turkey.
Nippon Hotel
Topu Caddesi No: 6 34437 Taksim / stanbul
Istanbul, Turkey.

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Conference Session Plan


International Research Conference on Business, Economics and Social Sciences, IRC-2015
August 01-02, 2015
Istanbul, Turkey.

Venue: Nippon Hotel


Topu Caddesi No: 6 34437 Taksim / stanbul
Istanbul, Turkey.

08:15- 08:30

Welcome

08:30-09:00

Registration and Caucus

09:00-09:10

Welcome Address by Conference Secretary


Location: (Samurai 2)
Address by Muhammad Umer Azeem
Johannes Kepler University, Austria.
Combined Group Photo

09:10-09:30
09:30
09:40- 10:00
10:00- 12:00
12:00- 13:00
13:00-15:00
15:00-15:30
15:30-17:30
17:30-18:00

Tea/Coffee Break
(Socialization and Networking).
Session I
Parallel Sessions (Samurai 2)
Lunch Break
Session II
Parallel Sessions (Samurai 2)
Tea/Coffee Break
(Socialization and Networking).
Session III
Parallel Sessions (Samurai 2)
Closing Ceremony
Best Presentation Awards.
Special Awards and gifts for Presenters

(Samurai 2)

Parallel Session II (Samurai 2)


Time: 1 p.m. 3 p.m.
SESSION II (Samurai 2)

PRESENTER

DURATION
15 Min each

Session Chair: Umer Azeem, Ph.D.


PAPER 1: The willingness to prolong work life an empirical

1: Katrin Zohr

analysis with respect to the level of education and gender differences


PAPER 2: The active participation of civil society in the creation of

public value

PAPER 3: New Management Approaches in Higher Education


PAPER 4: When does knowledge transfer work best within

2: Laura Boy

3: Eisa Amiri & Mokhtar

Ranjbar

multinational corporations?

4: Ruby P. Lee

PAPER 5: Emerging Political Culture And Attitudes In Post Military

5: Muhammad Reza

Nigeria

PAPER 6: About problems of specialists training on informatics in

Higher education institutions of Kazakhstan

PAPER 7: The Role of Economic Factors in total efficiency of the

securities market

Suleiman

6. Zhangissina Gulnur D.

7. Mohammad Hossein

Karbalayi.

PAPER 8: Identifying Critical Points and Improvement Strategies in

Supply Chain, Using SCOR Model, Theory of Constraint, and Six


Sigma

8. Amir Shams Koloukhi

Tea Break (Tea Hall)


Time: 3 p.m. 3:30 p.m.

FROM

TILL

Identifying Critical Points and Improvement Strategies in Supply Chain, Using Scor Model, Theory of
Constraint, and Six Sigma

Amir Shams Koloukhi , Hosein Khorsandi Akbarnejhad , Hossein Parsian


Department of Accounting, Torbat-e-Jam Branch, Islamic Azad University, Torbat-e-Jam, Iran
Department of Accounting, Torbat-e-Jam Branch, Islamic Azad University, Torbat-e-Jam, Iran
Young Researchers and Elite Club, Torbat-e-Jam Branch, Islamic Azad University, Torbat-e-Jam, Iran

ABSTRACT
This study combines Supply Chain Operation Reference (SCOR) Model, Theory of Constraint, and Six Sigma
methodology to identify critical points and offer some strategies for improving supply chain performance. To
identify critical points in supply chain, the measures of SCOR model, Shepherd and Gunter were used, facilitating
systematic measurement of supply chain. Under-study unit in this paper was machinery manufacturing of
Pillevaran. Identifying critical points revealed that planning process of supply chain is the weakest process and
improving projects execution time is the weakest element of the process. Using definition stages, measurement,
and analysis of Six Sigma, the problem was particularly defined, measured, and analyzed, offering suggestions for
its promotion.
Keywords: SCOR model, Six Sigma, Theory of Constraint, supply chain
. Introduction
For the inconsistency in customers' expectations, huge technology innovations and business globalization trends,
organizations need to upgrade their products to meet their customers' needs in relation to product diversity
increase, cost reduction, higher quality, and faster accountability. Since competition domain has spread from
single firms to the supply chain [ ], companies need to avoid acting autonomously [ ] and cooperate with others
to recognize competitive advantages [ ]. As of final costs can be directly correlated with the performance
of supply chain [ ], its quality should be permanently improved. For its quality promotion, there are different
tools; but, the most common of them is Six Sigma [ ].Using Theory of Constraint; this paper suggests that
improving critical points promotes the performance of the entire chain. It identifies these points via SCOR mode,
improving them by redesigning sigma and improvement methods.

. Review of literature
It seems that all sciences that a man needs in research and scientific centers can be divided into groups of tools
and techniques, applications and examples, and philosophies. Philosophies reflect the attitudes toward issues
regarding the conditions [ ]. A philosophy of contemporary age has been supply chain management. Zailani and
Rajagopal define a supply chain as a net of raw materials sellers, factories converting raw materials into
applicable products, and distribution system for delivering goods to the customers [ ]. Some researchers have
differentiated direct supply chain, broad supply chain, and final supply chain. Direct supply chain includes central
section of a firm, suppliers and customers. Broad supply chain consists of suppliers of suppliers and customers of
customers; and final supply chain refers to all involved organizations [ ].
. Evaluation model of supply chain performance
Table lists various models for the evaluation of supply chain performance.
* Corresponding author.
Email address: khorsandihosein@yahoo.com

Table . Performance evaluation models


Performance evaluation model

Model nature

Accounting measurement system

Financial indices

SCOR model

Good measurement indices of supply chain


including:
. Planning indices
.resource indices
.construction indices
.delivery indices
.return indices
measurement area include:
.logistic financial measurement
. logistic productivity measurement
. logistic quality
. logistic time cycle
Economic efficiency and saving
Identifying time and cost for doing each action
Managers select key performances
Organizations provide a context for connection
with stakeholders.
Provided value by the factory should be
quantitatively
An Organization is evaluated from aspects:
.finance
.customer

.internal processes
.education and growth
A valuable tool for supply chain analysis is SCOR model. It defines some measures for supply chain performance
from general concepts to operational indices. Since corresponding scales of them are hierarchical models, they
comprise more operational measures. Thus, their definition identifies more than one domain, rather than a precise
measure at operational level. Therefore, this study uses SCOR method.
. SCOR model
SCOR model is a reference model. Unlike optimization models, in SCOR model, no mathematic formula,
optimization techniques, or innovation is offered for solving a problem. Instead, some terms and processes are
standardized in it. Configuring these processes helps modeling or representing different elements in a supply
chain to be compared. In the case of good element analysis and making good decisions, performance
improvement for each element and thereby for the entire supply chain is provided [ ].
. . . SCOR model levels
Hierarchically, standard processes are divided into levels:
. Process types. There are process types including planning, resourcing, construction, delivery, and return.
They include operational activities and strategic actions.
. Process category. above-mentioned process types are divided into
categories. At this level, common
activities in business such as delayed customer orders, supplier and customer integration, and etc are identified.
Each category is allocated to planning, execution, or empowerment.
. Process element
At this level, process categories are introduced by synthesized process elements and detailed measures.
Generally, the measures of level provide an overview of supply chain to assess management. Level and
include more specific and detailed measures, regarding process categories and elements [ ].
. Theory of constraints
In the late
s, Goldrat introduced Theory of Constraints in his book. The main idea of this theory is
focusing on gorges management. It seeks continuous improvements via recognizing limitations and manufacturing
throats in the organization. Thus, the aim of this theory is identifying constraints and managing them for
increasing efficiency. Similar to just-in-time production of Japanese management, this theory focuses on
continuous improvement. Accordingly, both of them are categorized traditionally. Their difference lies in the fact
that just- in-time approach focuses on decreasing inventories and waste reduction while Theory of Constraint
concerns the limitations in the firm and removing them [ ].
. Six Sigma
Six Sigma is regular innovation, emphasizing the areas which are important for the customer. They identify the
changes in the processes and remove them. This method is precise, decreasing the changes in all important
processes for performance improvement, inducing financial economization for the organizations. Six Sigma

enables the firms to use real data and exact methodology to root the causes of process changes (production,
service, transactions) not an empirical, abstract, or hypothetical one [ ]. Six Sigma is a powerful business
strategy, leading to default, error, and problem reduction [ ]. Kumar et al. define Six Sigma as a powerful
managerial tool, inducing enormous achievements for the organization [ ].
. Common methodologies in Six Sigma
a. DMAIC
In Define, Measure, Analyze, Improve, control (DMAIC) methodology, after identifying the problem and its
measurement, improvement continues as much as possible.
Fig . Improvement methodology

Define

Measure

Analyse

Improve

Control

b. DMADV
In Define, Measure, Analyze, Design/ Redesign, Verify (DMADV) methodology, after identifying the problem
and its measurement, design/ redesign of the product or process is exerted [ ]. In this study Improvement
methodology has been utilized.
Fig . Design/ Redesign methodology [

Define

Measure

Analyse

Design/Re
design

Verify

Due to the novelty of combining SCOR Model, Theory of Constraint and Six Sigma for identifying critical points
and improvement strategies in supply chain, this paper has sufficed to the overview of the studies close to the
current research.
According to Choi et al, the way of accessing the quality level of Six Sigma in supply chain is not clear [ ].
Swartwood also supports the notion of combining SCOR Model with Six Sigma; since they can complement each
other. In a way that SCOR causes a fundamental understanding of supply chain issues while Six Sigma is used for
improving the projects [ ].Trent emphasizes the extension of Six Sigma in supply chain, offering trainings for
the suppliers of main equipment manufacturers [ ].Avery, Moore, and Baljko Shah used Six Sigma for the
companies which have problems with their suppliers [ ][ ][ ]. Raytheon studied some suppliers attempts to
reach
on time delivery, concluding that Six Sigma decreases deviations in supply chain [ ]. Burton and
Boeder offered some applications of Six Sigma for improving inventory performance and reducing supply chain
costs [ ]. Dasgupta showed in his study that how Six Sigma standards can help the organizations. Organized
methodology of this article with Six Sigma measures provided effective control and improvement for the
performance of supply chain [ ]. Wang et al. introduced an applied directory for evaluation, improvement, and
quality control in supply chain management, using Six Sigma measures. They led to significant cost reduction and
service promotion [ ]. Knowles et al. tried to prove that Six Sigma measures not only are improvement and
change strategy, but also yield important business advantages for the organization. Their offered model in that
study integrated balanced evaluation and SCOR Model and DMAIC methodology of Six Sigma in two-level
framework [ ]. Chappel and Peck reported some findings about variations of supply chain management in
Englands defense mechanism. This study had two goals: .investigating type and reason of variation in supply

chain, . identifying if Six Sigma measures can be usefully exerted in their context. This study showed efficiency
of Six Sigma measures in defense industrys supply chain [ ]. Yeh et al. aimed to access a calculation model of
bilateral fuzzy linguistics to evaluate management performance of supply chain. In this model, management had a
high precision in applying DMAIC processes and offered a framework for performance evaluation [ ]. Shepherd
and Gunter had a critical review of contemporary literature, aiming to achieve the criteria and evaluation systems
of supply chain. Accessing effective factors in successful execution of evaluation system of supply chain and
creating preventive evaluation fields are the issues which havent received enough attention [ ].In an article
titled "integrating hierarchical analysis and balanced evaluation card", Kumar and Bhagwat sought an approach
for identifying effective factors in evaluating supply chain and its management. They offered their criteria in
groups of balanced evaluation card for financial, customer, internal processes, learning, and growth [ ]. Yang et
al. used Six Sigma measures to evaluate the success of suppliers and a model for supply chain of Samsung
Company to improve its management improvement [ ]. Jingyuexu et al. developed a conceptual model, picturing
DMAIC principals for improving supply chain [ ]. Jin et al. introduced an integrated model of Six Sigma and the
theory of constraint whose practical application was followed in a production line step by step. The results of
testing models reliability showed performance difference in production line in the form of increasing production
capacity, decreasing standard production deviation and during production goods [ ].
. Research questions
To examine the effects of oil price volatilities on macroeconomic variables, SVAR model is used. We use Impulse
Response Function and
Due to the nature of present study, this study doesnt have any hypotheses. But, the
questions of the study are as follows:
. What are the critical points of supply chain in the firms of the study?
. What are the needs of internal customers and essential actions for accessing Six Sigma levels?
. What are the criteria of performance measurement for accessing Six Sigma levels?
. What quality and quantity should the criteria have?
. What deviations in supply chain cause deviation in the product?
. Executive stages of the study
Using Theory of Constraint by which critical points improve and redesign Six Sigma, this study offers some
suggestions for improving the entire supply chain. To identify critical points in supply chain, the criteria of
Shepherd and Gunter (
) were used to provide the systematic measurement of supply chain.
Thus, the executive stages of the study are as follows:
. Identifying the weakest process in supply chain amongst the processes of a model , SCOR model
(plan, resourcing, construction, delivery, and return) by the head and counselors of the organization
. Identifying the weakest elements of the process amongst the elements of level three process , SCOR
model has been depicted weak from the view of the manager and experts
. Definition, measurement, and analysis of the problem in DMAIC or DMADV methodology
According to mentioned points, this study is applied regarding its nature; and it is descriptive-analytic regarding
its methodology. The executive model of the study is represented in Figure .

Fig . Conceptual model of the study

Identifying the weakest process in supply chain amongst the processes of SCOR model by the head and counselors of the
organization

Identifying the weakest elements of the process amongst the elements of level three process of SCOR model from the
view of the manager and experts

Definition, measurement, and analysis of the problem in DMAIC or DMADV methodology

DMADV

DMAIC

. Methodology
This study uses questionnaires. questionnaires were designed according to the elements of SCOR model for
identifying critical points. Two other questionnaires and an interview were used for defining the needs of internal
customers and evaluating current status.
These tools were utilized as depicted below:
. To identify critical points of supply chain, first questionnaire was given to the head and counselors of
producing firm to recognize the weakest process among the processes of level one in SCOR Model.
. Second questionnaire was given to decision-making team to examine and match the elements of level
three processes in SCOR Model, regarding the conditions.
. Third questionnaire was given to the managers and the experts of the weakest process to identify the
weakest elements of that process amongst localized process elements of level three in SCOR Model.
. Using questionnaire and interview with managers and experts, weak process is identified and the
customer of that process defines, measures, and analyzes DMAIC methodology of Six Sigma.
To analyze data in identifying the weakest process among the processes of level one of SCOR Model and the
weakest elements of the process in level three of SCOR Model, fuzzy-group hierarchical analysis was used. Using
interview and the questionnaires of customer needs (problem definition in DMAIC methodology), performance
measurement criteria of selected projects and their quality and quantity (problem measurement in DMAIC
methodology) and deviation determination, leading to deviation in final product (problem analysis in DMAIC
methodology) were recognized.
. Results
This section aims to answer the following question:
. Where are critical points in supply chain of Pillevaran Company?
Questionnaire was given to a team with
members to identify the weakest process in supply chain among the
processes of level of SCOR Model (planning, resourcing, construction, delivery, and return). Due to their
knowledge about the organization, decision-making team introduced planning with the weight of . as the
weakest process amongst supply chain processes of Pillevaran Company (Table ).

Table . The weights of supply chain processes


Element topic
planning
resourcing
construction
delivery
return

weight
.
.
.
.

It is worth notifying that for the nature of the firm s contracts and repairs, happening in the place if necessary,
return process is regarded as insignificant.
Since planning process involved all organizational units, in the next stage all team members were polled. The
elements of planning process, introduced by Shepherd and Gunter were gathered in Questionnaire . They were
given to decision-making team to measure adoption extent of these elements with organizational activities from
one hand and add any activity considered important by the team members later from the other hand.
Before providing decision team with process elements, process elements were recognized as contradictory with
the nature of project activities of the company. Thus, the elements of planning process reduced to
elements and
were given to decision team for localization. Table shows the means and standard deviations of the elements of
the process.
Table . The means and standard deviations of process elements
Process elements
mean
Sale
profit
Capital return
Capital return rate
equity
Data transfer cost
Deviation from contracts
amount
Total costs of supply chain
Asset return
Added value of productivity
Overhead costs
Intangible cost
Encouraging cost and etc
Empowerment increase in
cost control
Capital opportunity cost
Total responsiveness time of
supply chain
Total time cycle of supply
chain
responsiveness time to
customers
Spent time for order(order
lead time)

Standard deviation

Variable
type
Cost
Cost
Cost
Cost
Cost
Cost
Cost

.
.
.
.
.
.
.

.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.
.

Cost
Cost
Cost
Cost
Cost
Cost
Cost

.
.

.
.

Cost
Time

Time

Time

Time

.
.
.

Spent time for order


execution(order execution
lead time)
Total time of current money
Business relations record
Cycle time of turning cash
into cash
Improving project execution
time
Accessing rate to quality
goal
Order entrance methods
Cooperation and presence in
planning
Orde r flexibility
Perfect order execution
Inter-unit interaction
Mixing flexibility
Using new technology

Time

.
.

Time
Time
Time

.
.

Time

Quality

.
.

Quality
Quality

.
.
.
.
.

Quality
Quality
Quality
Flexibility
innovation

.
.
.

Process elements with the mean of and higher and standard deviation of and lower were selected for
prioritization. As seen in Table ,
process elements were considered containing required conditions.
According to suggested classification of Shepherd and Gunter,
process elements were included in general
classifications (cost, time, quality, and innovation). Priority and weight of key criteria which are effective in
planning supply chain, extracted from Questionnaire , are shown in Table .
Table . Priority and weight of key criteria in planning supply chain
criteria
Index(process
process element
element)
weight
Cost ( . )
sale
.
profit
.
Capital return
Capital return rate
equity
Special earning
Deviation from
.
contracts amount
Empowerment
.
increase in cost control
Time ( . )
Total time of supply
chain
Responsiveness time
to customers
Order lead time
Total time of current
money
Business relations
.

Final weight

Critical points

.
.
.
.
.

Quality ( .

Innovation
( . )

record with suppliers


Improving project
execution time
Accessing rate to
quality goal
Order entrance
methods
Cooperation and
presence in planning
Order flexibility
Perfect order
execution
Inter-unit interaction
Using new technology

.
.

.
.

Based on Table , the weakest element of improving the time of project execution is with the final weight of . .
Due to the weight of .
of planning process , the weight of improving the time of project execution in supply
chain is .
. = . which is significant.
. What are the needs of internal customers and necessary actions for accessing Six sigma level?
To answer this question, interview technique was used. To assure about precise identification of directing
management and executive manager, Kano s questionnaire was given to them after interview.
The arguments such as quality provision along with project delivery in due time from directing manager and the
head of the firm in this study have different reasons. First, the company mentions the expected quality of the
projects in its primary contract. Also, the firm guaranties tools performance during work. Moreover, heavy
financial fines for delays in contracts are regarded and delivery delay in projects leads to damages to the firms
reputation. After interview, for making sure about precise identification of internal customer needs, Kano
questionnaire was distributed. Analyzing the questionnaires revealed that time and cost have higher priorities than
quality and innovation. Then necessary actions should in the path of reducing time and cost in the framework of
required quality.
. What are the performance measurement criteria of necessary actions for accessing Six Sigma level?
In another research framework, effective elements in firms performance were identified and measured. Among
elements of that study,
elements consistent with production area and identified needs were selected. Those
elements are as follows:
. Product design
. Precise evaluation of contractors
. Project control and plans(regarding time and costs)
. Learning new methods for cheap production
. Operation and product quality and inventory management
. Adoption with standards
. Intention of group work
. production planning
. Planning materials
. The process of equipments purchase and contracting
. The system of repair and maintenance planning
. What quality and quantity should the criteria have?

Due to the nature and difference of amounts in contacts, no special quality can be regarded for the criteria. Since
decision team described Number out of as satisfactory during filling the questionnaires, number was
regarded as expected satisfactory quantity.
. What deviations in supply chain induce deviations in time and quality?
To identify deviations leading to time and quality deviation, the means, standard deviation, effect intensity, and
deviation amount of
above -mentioned elements are shown in Table .
Table . Deviation rate of

Elements

Product design
Precise contractor
evaluation
Controlling projects,
sketches, plans
(regarding time and
cost)
Learning new
production methods for
cheap production
Operation, product, and
inventory quality
Adoption with
standards
Intention to group work
Production plan
Materials plan
Equipment purchase
and contracting process
Repair and
maintenance planning
mechanism

elements
In case of
not using
standard
deviation
in
deviation
extent
.

Effect
intensity

Element
score in
current
state

Deviation
amount

.
.
.

.
.
.

.
.
.

.
.
.

.
.

According to Table , examining standard deviation of research questions changes deviation order. Six deviations
remain fixed. Third element (controlling projects, designs, plans) are identified as an element with the maximum
standard deviation. th, nd, th, th, and th elements (production planning, precise evaluation of contractors,
learning new methods for cheap production, equipment purchase process, and contracting) play the maximum role
in deviations. In measuring the current status, using predetermined criteria, the present status of the company was
measured. Total deviation of those
elements is ,
; but, since it is not significant, DMAIC process is
suggested for improvement.

Conclusion
Six Sigma is a considerable tool for improvement. When it is combined with Theory of Constraint, it gives
improvement priority to the weakest point, offering an effective technique for promoting total performance of the
unit. As a result of inconsistency in customers' expectations, huge innovations, and business globalization for
meeting customer demands, increasing product diversity, and higher quality, an important contemporary
philosophy of two recent decades has been supply chain. Using SCOR model, the weakest process and process
elements were identified. Using Theory of Constraint, some suggestions were provided for improving critical
points of supply chain.
The weakest process of supply chain for Pillevaran Company was planning and the weakest planning elements
(critical points - ) included improving project execution time, inter-units interaction, accessing rate to quality
goals, using new technology, sale and business relation records. Elements leading to the maximum deviation
included project control, sketches and planning, production plans, precise evaluation of contractors, learning new
production methods for cheap production, equipments purchase, contracting, and materials plan. Since the
company acts in a competitive environment, its equity is zero. From the other hand, the company usually
estimates project time lower than predicted time to win tenders in competitive conditions. Then, regarding on time
delivery and cost, the firm is under pressure.
The suggestions for this company are as follows. The firm should compensate for time shortage to halt whip effect
of lagged delivery. Although there is a good archive of the suppliers in the firm, business relations record is th
critical point because of its imprecise contractors' evaluation. Since accessibility rate to quality goals depends on
qualitative input, fortifying it in annual evaluation framework is suggested.
For inter-units interaction as the second critical point, it is suggested that proper and matching units are located in
one physical space to increase close interactions. Evaluations are in group form to involve the staff in group work.
It is also suggested that the company considers hybrid issues in production planning to control the projects and
plans precisely; for example, pieces hardness, machinery breakage, staff power, and education amount given to
the staff.
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