The Integration of Production-Distribution on Newspapers Supply Chain for Cost Minimization using Analytic Models: Case Study

Newspapers are products with special characteristics which are perishable, have a shorter range of time between the production and distribution, zero inventory, and decreasing sales value along with increasing in time. Generally, the problem of production and distribution in the paper supply chain is the integration of production planning and distribution to minimize the total cost. The approach used in this article to solve the problem is using an analytical model. In this article, several parameters and constraints have been considered in the calculation of the total cost of the integration of production and distribution of newspapers during the determined time horizon. This model can be used by production and marketing managers as decision support in determining the optimal quantity of production and distribution in order to obtain minimum cost so that company's competitiveness level can be increased.


Introduction
Due to rapid development in industries, the dependency among the supply chain members has been increasing and brings some extent of risk and uncertainty along with benefits [1]. To meet these challenges, a coordinated mechanism among the members is needed in decision making in order to mitigate the current challenges and to increase the system performance and individual profitability of the supply chain [2]. By developing this coordination, manufacturer can minimize total cost while maintaining benefits such as favorable solution considering economical, environmental, and social aspect among the supply chain members [3,4,5].
Production and distribution planning are the main activities in the supply chain [6]. Therefore, an efficient integration of production and distribution plans is critical to achieving competitive advantage [7].
Newspapers are commodities with special characteristics which are perishable, have a shorter range of time between the production and distribution, zero inventory, and decreasing sales value along with increasing in time. Due to the perishable nature of the product, the time from the start of production to the delivery of the finished product to the end-customer is shorter than for most other industries [8]. Thus, as a commodity that has been declining and in a crisis, newspapers need a coordinated production and distribution planning in their framework that can be used to meet the competitive potentials in the newspaper industry [9,10].

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Several researchers have attempted to improve the coordination of production and distribution in the supply chain. These researches attempted in developing models and simulations. Different parameters and considerations were used in the models, such as production capacity constraint [11]. The later research proposed a model that considers the problem with one facility, multiple destinations and an infinite vehicle fleet [12]. Another research even considered many uncertainties along supply chain line such as delays, queues, machine breakdown, vehicle malfunction, and environmental factor [13]. The researchers also attempted to solve the problems in production-distribution planning by different objectives, such as minimizing consideration of many uncertainties along supply chain line such as minimizing total tardiness [14], maximizing total revenue [15] and minimizing total global cost [16].
The purpose of this article is to apply development of previous research method to solve newspapers production and distribution integration problems, taking a case study in a newspaper printing company in Surakarta. The company receives orders to print newspapers from three companies and there are four types of printed newspapers. The main raw materials required in the printing process is paper and ink. The company has 2 plate maker machine units and 3 units of printing machines. There are 7 units of distribution vehicles used to deliver newspapers to 11 cities. This article aims to solve the minimization of the cost of production and distribution so that the company has a higher competitiveness.
This article consists of 4 parts, namely introduction, method, result and discussion, and conclusion. The introduction shows the reasons and importances to integrate production and distribution of newspapers. The method section discusses the steps and model formulation to solve the problem. The results of data processing using related methods are discussed and analyzed in results and discussion section. Furthermore the essence of the entire article is explained in the conclusion section.

Method
Garside developed a production-distribution integration model. In this model, it is assumed that the relationships between the variables in the objective and limiting functions are linear. In addition, some parameters in this model considered stochastic due to its accommodation of ongoing uncertainty in the supply chain. Uncertainty in the form of delay, variation of vehicle speed, machine and vehicle break down will affect the value of the parameter of production time, travel time, production time capacity and time capacity when the vehicle becomes random or certain distributed probability [13].
This article uses development from existing model. The difference with existing model is that in the developed model, it is assumed that there is no delay in the production floor, the speed is same for all vehicle, the printing machines speed in producing each newspaper is identified, production time capacity and time capacity is restricted to certain time window. This model based on deterministic data which aims to determine the types of products that must be produced, the amount of production, the quantity and the number of shipments of each plant to each distribution center (DC), as well as inventory at the plant and DC. Since the modeled products are newspapers where no inventory stored in warehouses and DC, variables related to stock up in the decision variables, parameters, the objective function, and the constraints are removed from the model and some new relevant constraints are added. , ∀ ∈ , ∈ , ∈ , ∈ (7) − ( ) ≥ 0, ∀ ∈ , ∈ , ∈ , ∈ (8) ( ). ( ) ≥ 0, ∀ ∈ , ∈ , ∈ (9) ( ) = 1, ∀ ∈ , ∈ , ∈ (10) ( ) ≥ 0 and integer number (11) This model will minimize the total cost of production set up cost, variable production cost and regular shipping cost. Constraints 2 and 3 guarantee that the production amount of each product does not exceed the capacity of production time and production capacity in each plant.

Result and Discussion
The proposed model was applied to a company that produces 4 types of newspaper and distributes to 11 cities using 7 vehicles during the planning horizon of 3 days. Here, we consider parameters such as production costs, set up cost, delivery time and demand for products for each distribution center. Data related to those parameters are presented in Table 1-4. It is important to note that the production time capacity for each period is 300 minutes, maximum transport capacity for each vehicle is 3550 exemplar and duration provided to deliver the newspapers from the factory is 240 minutes for each vehicle. Furthermore, the production capacities in the factory by coordinating 3 provided printing machines for newspaper 1, 2, 3, 4 are 24000, 28200, 12600 and 6600 exemplar respectively. Meanwhile, required time to produce each newspaper type is 217, 49, 38 and 130 minute respectively. Whereas the delivery cost of each vehicle in IDR/minute is 59, 78, 76,137, 237, 440 and 154 respectively.       Production quantity plans for each product are based on the forecast and has not considered the integration of production-distribution optimization.
Production quantity plans during the planning horizon, consider the constraints and parameters in the production-distribution integration model with the aim of minimizing costs.

Quantity of products delivered
Not all vehicles distribute products based on demand to specific destinations. Only one to two vehicles per destination are available.
Each vehicle has its own portion that has been plotted according to the distribution objectives for a certain period.

Conclusion
Analytic model of integration of production and distribution in the supply chain has been developed as a reference for newspaper production and distribution planning with the decision to minimize total cost during the planning horizon. Production and distribution planning can be applied optimally in the newspaper supply chain by integrating the production and distribution planning of four newspaper products, which are distributed to 11 cities in a daily period. Several parameters and constraints have been considered in the calculation of total cost of the integration of newspaper production and distribution during the determined planning horizon. The proposed model results IDR 10,181,000 in total cost, which is lower than the previous total cost before model is applied. The proposed model has the ability-applied to be used by the production and marketing managers as decision support in determining the optimal quantity of production and distribution in order to minimize production and distribution cost so that the level of competitiveness can be improved.