Download pdf - A blackboard-based negotiation for collaborative supply chain system

A blackboard-based negotiation for collaborative supply chain system

Teruaki Ito*, Mohd Rizal SallehDepartment of Mechanical Engineering, University of Tokushima, 2-1 Minami-Josanjima, Tokushima, 770 8506 Japan

Abstract

Supply chain management system (SCM) is an integrated network of suppliers, factories, warehouses, distribution centers and retailers,

through which the whole chain of logistic processes is managed so that it should aim at a faster and more flexible co-ordination between a

company and its customers and suppliers within the chain. Collaboration among the members of SCM plays a critical role to implement an

effective SCM, but its implementation would not be easy only with the conventional information sharing mechanism. This study employs

the idea of open tender concept with blackboard-based negotiation to develop a collaborative supply chain system. The open tender concept

is designed to provide an open and free opportunity to all participants, which make a sound competition to obtain the tender. Blackboard-

based negotiation is derived from the mechanism of negotiation among intelligent agents using a blackboard as a media where each agent

exchange information. The study applies the idea to a parts/material supply system, which is designed to function as a part of SCM. For

replenishment of parts/materials, a company issues a tender and publishes it to a public blackboard for information exchange via the

Internet using electronic tender submission form to find appropriate suppliers. Candidate suppliers to the tender are invited to issue their

quotations, which compete one another under an open environment and the most appropriate candidate is selected as a result of open

competition. # 2000 Elsevier Science B.V. All rights reserved.

Keywords: Supply chain system; Intelligent agents; Negotiation techniques; Collaborative supply chain system; Blackboard; Internet; Open tender

1. Introduction

Rapid development of new products today increases the

difficulty of production for manufacturing companies.

Dynamic markets may sometimes require the companies

to restructure their function and position in industry. Under

these circumstances, the companies need to take appropriate

actions so that they could remain competitive in the global

market situation [1]. Concurrent engineering (CE) is one of

the approaches to be competitive in the global market. CE

can be realized by simultaneous work of experts from

various functions in an enterprise, concerned with the

production of specific products, in order to achieve high

quality, functionality and manufacturability of products in

the shortest time with the minimum cost. The idea of supply

chain management system (SCM) also attracts their atten-

tion as an effective approach to comply with these difficult

situations. SCM is an integrated network of suppliers,

factories, warehouses, distribution centers and retailers,

through which the whole chain of logistic processes is

managed so that it should aim at a faster and more flexible

co-ordination between a company and its customers and

suppliers within the chain. Collaboration among the mem-

bers of SCM plays a critical role to implement an effective

SCM, but its implementation would not be easy only with

the conventional information sharing mechanism.

This study employs the idea of open tender concept with

blackboard-based negotiation to develop a collaborative

supply chain system (CSCS). Fig. 1 shows an illustrative

view of open tender concept with blackboard-based nego-

tiation. The open tender concept is designed to provide an

open and free opportunity to all participants, which make a

sound competition to obtain a tender. Blackboard-based

negotiation is based on the mechanism of negotiation among

intelligent agents (IAs) using a blackboard as a media where

each agent exchange information for collaboration. CSCS is

designed to enhance the supply speed and certainty through

all relevant key members of SCS. The key members com-

municate and interact each other in order to generate the

solution for efficient material supply process. Although the

paper mainly focuses on a parts/materials supply system in

SCM, ultimate objective of the study is to integrate all of

these techniques and systems including agents, negotiation

techniques and CSCS so that realization of CE should be

achieved (Fig. 2).

This paper describes the roles of IAs in CSCS, and their

interaction which works for the success of communication

and negotiation process between the manufacturers and the

Journal of Materials Processing Technology 107 (2000) 398403

* Corresponding author.

E-mail addresses: [email protected],

[email protected] (T. Ito).

0924-0136/00/$ see front matter # 2000 Elsevier Science B.V. All rights reserved.PII: S 0 9 2 4 - 0 1 3 6 ( 0 0 ) 0 0 7 3 0 - 5

suppliers. Then, the paper addresses IAs negotiation life

cycle, describes the collaboration and negotiation process in

CSCS and presents an example of open trading for parts/

materials replenishment through prototype system.

2. Roles of agents in CSCS

Agent technologies are increasingly used in a wide range

of industrial and commercial domains. This is because of the

reason that IAs have a high degree of self-determination

capabilities, and they can decide for themselves when,

where and under what condition their action should be

performed. Interactions among IAs may even make them

work towards a particular course of action, modify a planned

course of action and come to an agreement on a common

course of action. Furthermore, collaboration among agents

is used for streamlining and integrating the entire process of

CSCS.

Several kinds of IAs play an important role in CSCS for

smooth communication and collaboration within the key

members of SCS. IA identifies the critical information from

incoming resources, monitors the information and trigger

actions based on the contents of information. According to

the contents, IA executes collective tasks on behalf of users

as an autonomous process. The application of IA in CSCS

strongly promotes co-operation among the members of

supply chain. Interactions among IAs, however, may some-

times lead to conflicts and coalitions among them. Negotia-

tion techniques are used to overcome these conflicts and

coalitions, and to come to an agreement among agents,

instead of persuading them to accept a ready solution. In

the negotiation techniques, operation for negotiation is

viewed as actual interactions among participants that lead

to mutual commitment [2]. IAs bring their goals to a

bargaining table, share the information, and seek for the

goals alternatives. IAs assist manufacturers to speed up

their product flows along the supply route, and to ensure that

the products should be available in the markets at the

required time. The function of IAs in CSCS is to simulate

members of supply team and to perform the chores accord-

ing to users requirements.

As shown in Fig. 3, each agent interacts and shares

information through a blackboard (BB). BB regulates and

provides the information to each agent, which works for the

key members of CSCS. For inventory control application, an

inventory control agent works to control the inventory levels

and negotiates with the other agents for the smooth materials

flow through information exchange. For internal information

exchange, the Intranet can be used to provide internal

communication services to achieve better results than the

conventional means of data access and transfer. Its applica-

tion also allows the users to simply access for day to day

information, and the company can easily screen the critical

information from external users.

In the mean time, the Internet allows the users to reach

each other on a global basis for the information exchanges.

The Internet is becoming used in the various industrial fields

for improving manufacturing processes [4]. For example,

Fig. 1. Open tender process between manufacturers and suppliers.

Fig. 2. Contributors to realize CE. Fig. 3. Agents interaction in CSCS.

T. Ito, M.R. Salleh / Journal of Materials Processing Technology 107 (2000) 398403 399

the Internet can be used to offer such an opportunity to

compare a number of suppliers, to choose a suitable supplier

and to ensure the selected supplier should satisfy require-

ments.

The roles of IAs are essential for the success of commu-

nication and negotiation processes between a company and

its suppliers so as to gain the information required for their

desired goals. IAs support the open tender procedure for the

group problem solving through the negotiation and colla-

boration techniques, increase the network communication

for the users satisfactions and enable both the manufactures

and the suppliers to communicate effectively.

3. IAs negotiation life cycle

Negotiation is essential to reach an agreement about the

provision of service by one agent to another, and this

approach has been used for managing the conflict which

arises among the IAs. IAs start negotiation when they begin

communicating their goals, and finish when all of them

agree to a specified decision. IAs employ a range of stra-

tegies and tactics to generate initial offers, evaluate propo-

sals and offer counter proposals. Negotiation uses the

specific set of techniques for the problem solving to derive

agreements among IAs, instead of persuading them to accept

a ready solution. Negotiation techniques assist group pro-

blem solving in various domains [5].

As shown in Fig. 4, the negotiation life cycle participants

are composed of (1) analyst and owner: to describe and

formalize the goals, (2) designer: plan for achieving the

goals through interactions among the agents, and (3) imple-

mentor: to implement the designed strategy using the

appropriate protocols and tools for the goals [3]. In the

first step of negotiation life cycle, negotiation analysis

needs to procure and model individual preferences for

the negotiation protocols and strategies. In the second

step, negotiation design seeks to define interaction protocols

and strategies for the goals requirements. In the final step,

negotiation implementation seeks to reach group com-

mitment through communication exchanges. IAs work

on behalf of participants, and they are equipped with a

special skill to manipulate the other members according

to their tasks function. IAs use the plan and particular

negotiation protocol by which they intend to interact

with the other agents. When IAs seek for negotiation,

they disclose their goals to the other members, identify

the conflicts and search the conflict resolution, and select

the ideal resolution for their goals. Negotiation techniques

assist CSCS for the realization of effective materials

flow.

4. Collaboration and negotiation in CSCS

Companies are required to comply with customer orders

even if they may be hard to do so. Companies have to

respond to the orders quickly and efficiently in the limited

time available to fulfill the customers requirements. Unex-

pected rush orders, however, may come sometimes, which

causes the delay of delivery and decreases efficiency in all of

the supporting members. The collaboration of CSCS mem-

bers and the introduction of negotiation techniques provide a

solution to those problems [6].

Collaboration and negotiation works to find an appro-

priate supplying company in open tender trading. For parts/

materials replenishment, a company publishes a tender to

BB, which can be reviewed by the entire aviation commu-

nity of suppliers. This is the start of open tender competition.

Supplier agents (SAs) for each supplying company scour the

Internet to find any appropriate tenders. When an agent find

one, it will urge its host company to submit a quotation. BB

publishes quotations submitted by candidate supplying com-

panies, which may urge revision of quotations, or negotia-

tion among these companies. BB closes the tender when the

most appropriate quotation is selected based on selection

criteria. IAs work for communication and negotiation pro-

cesses between a company and its supplier to achieve their

mutual goal.

Collaboration and negotiation in CSCS also works to find

a solution for supplier replacement processes. For example,

when a delivery problem happens in one of the suppliers, IAs

work as a catalyst of collaboration and negotiation for

effective supply chain, and find an alternative suppliers to

replace the supplier in problem. IAs select the alternative

supplier according to the selection criteria prepared by the

manufacturer. Fig. 5 shows how this kind of activities take

place when the selected supplier fails to deliver the materials

at the right time. In this activity, the supplier in problem, the

manufacturer and the alternative supplier are controlled by

supplier agent 1 (SA1), manufacturer agent (MA) and

supplier agent 2 (SA2), respectively. When the problemFig. 4. The negotiation life cycle phase and negotiation participants.

400 T. Ito, M.R. Salleh / Journal of Materials Processing Technology 107 (2000) 398403

happens, SA1 sends a delay message to MA. After receiving

the delay message, MA refers to BB to find an alternative

supplier for the replacement. If the supplier 2 is regarded as

the alternative one, MA makes an inquiry to SA2 and asks

for the delivery situation. Then SA2 quotes the cost of

materials and time for the delivery and sends them back

to MA. If SA2 does not accept the offer, MA takes the same

procedure to find another alternative supplier. The collabora-

tion and negotiation activities among these agents assist the

manufacturer and the suppliers to solve the problems during

the delivery process.

5. An example of open trading for parts replanishmentin CSCS

This section presents an example of open trading for parts

replenishment in CSCS.

Toyo Manufacturing Industries is a car stereo company,

and is looking for a supplier of screw for car stereo top plate.

The company has some business relations with several

supplying companies because of business transactions in

the past. The company, however, wants to find the most

appropriate supplier in each occasion in a dynamic manner

using collaboration of agents, which include inventory stock

control agent (ISCA), MA, SA, supplier stock control agent

(SSCA), and blackboard control agent (BBCA), as shown in

Fig. 6. The company sets up the minimum inventory level so

that the agent can control the inventory. When the inventory

stock reaches to the level, an ISCA sends a signal to

Purchasing Department so that they can take an appropriate

action to place an order to suppliers. When it happens, an

MA urges Purchasing Department to fill out an order request

form (ORF) including several key items, such as part name,

part number, selection criteria, delivery point, order record,

etc. as shown in Fig. 7(1). MA verifies ORF and submits it to

BB as a tender. When a new tender is published, supplying

companies are notified by each SAworking for each supplier

so that they can consider their supply positions. Details of

the tender are available on BB, so that not only the issuer of

tender but also supplying companies can refer to the details

if necessary.

If a supplying company wants to obtain the tender, Sales

Department of the company checks availability of the parts

through SSCA. If it is available, then an SA urges the

department to fill out a quotation form (QF) as shown in

Fig. 7(3). SA verifies the QF and submits it to BB, which

means that the company shows an intention to join a

competition for the tender. In this way, list of supplying

companies to the tender and details of each quotation are

open through BB so that every participant can understand

what is going on regarding the tender until the final stage of

open competition and, of course, which company obtains the

tender in the end. Updated information is fed back to each

company either by MA or SA. BB in Fig. 7(2) shows that

Kurosawa Manufacturing, Bersekutu Light Industries, Inter-

national Materials Supply, etc. are among the supplier list.

At the end of open competition, BBCA ranks up these

quotations based on the selection criteria, and recommends

Kurosawa Manufacturing Industries as the most appropriate

supplier to the tender. Even though the other companies may

have lost the competition this time, they know which

company is the winner and what kind of quotation the

winner has submitted. They also know why they have lost

the competition, so that they may obtain some hints for an

effective counter measure to be more competitive in the next

opportunity.

6. Concluding remarks

The paper presented the idea of open tender concept with

BB-based negotiation to implement a CSCS in order to

achieve an efficient material flow and to shorten the produc-

tion lead-time. IAs carry the tasks through the support of

collaboration and negotiation techniques for co-ordinating

interactions, generating resolutions, and deriving agree-

ments to fulfill the users requirements. Through the support

of IAs and negotiation, CSCS enables a company and its

Fig. 5. Supplier replacement process by collaboration and negotiation.

Fig. 6. IAs interaction in open tender process.


supplier to utilize the full framework of potential commu-

nications.

There are various kinds of data that may be exchanged to

improve the integration of trading partners operations and

to reduce supply uncertainty, inventory and cost [7]. BB

plays an important role to maximize the function of all the

partners in the joint management of CSCS by providing the

information for open competition. IAs can exchange mes-

sages and co-ordinate their activities such as conflicts reso-

lution, effective planning, execution control, negotiation

strategies, etc. The benefits of CSCS can be summarized

as follows: (1) to increase the chance to find the most

appropriate supplier by open competition among the sup-

pliers, (2) to increase the efficiency of transaction in the

supply chain, and (3) to increase the productivity and

customer satisfaction.

The future work includes the development of knowledge

based subsystem that works on decision making process to

find the appropriate supplier based on the selection criteria.

For the realization of this subsystem, application of decision

analysis tools such as MAUT or ISMAUT is under con-

sideration.

References

[1] T. McGuffog, Managing the supply chain with speed and certainty,

1996. http://www.ana.org.uk/ana/.

Fig. 7. Sample of electronic forms for manufacturer and supplier usage in the prototype system.

402 T. Ito, M.R. Salleh / Journal of Materials Processing Technology 107 (2000) 398403

[2] C. Beam, A. Segev, Automated negotiations: a survey of the state of

the art, CMIT Working Paper 97-WP-1022, 1997. http://haas.berke-

ley.edu/edu/citm/wp-1022-summary.html.[3] W.N. Robinson, et al., Supporting the negotiation life cycle,

Commun. ACM 41 (5) (1998) 95102.

[4] H. Robert Frost, et al., Design for manufacturability via agent

interaction, ASME Design for Manufacturing Conference, 96-DETC/

DFM-1302, Irvine, CA, 1996.

[5] S. Franklin, A. Graesser, Is it an agent, or just a program? in:

Proceedings of the Third International Workshop on Agent Theories,

Architectures, and Languages, Springer, Berlin, 1996. http://

www.msci.memphis.edu/franklin/AgentProg.html.[6] E. Van Heck, P. Vervest, How should CIOs deal with web-based

auctions? Commun. ACM 41 (7) (1998) 99100.

[7] J.M. Tenenbaum, WISs and electronic commerce, Commun. ACM 41

(7) (1998) 8990.
