¹Napier University, Edinburgh, UK

Correspondence: M Pearson, Centre for Mathematics and Statistics, Management School, Napier University, Edinburgh, Scotland EH14 1DJ, UK. E-mail: m.pearson@napier.ac.uk

Received September 2005; Accepted July 2006; Published online 11 October 2006.

Abstract

We outline recent work identifying an equilibrium solution in a supply chain network. The solution overcomes some difficulties associated with the bullwhip effect through limited cooperation and coordination along edges (links) in the supply chain network. The links constitute the stochastic modelling entities rather than the nodes of the network. We outline a range of feedback mechanisms that monitor and restore equilibrium in a supply chain. One of these is prediction capability charts which monitor the process. These charts are used by the decision makers to profile the allocation of inventory in the supply chain and identify out of control conditions. They maintain quality within the network, as well as intelligently track the way the network evolves in conditions of changing variability. We illustrate with an example simulating a push strategy in the clothing industry.