فصلنامه مطالعات مدیریت صنعتی
پیاپی 69 (تابستان 1402)

In today's competitive business landscape, the efficient management of supply chains has become a cornerstone of success for economic enterprises. Supplier selection, as the initial link in the supply chain, holds significant sway over various critical factors, such as product quality, return rates, and production costs. However, the real world is rife with uncertainties, making the application of a fuzzy approach highly advisable. This study's primary objective is to develop a model for supplier selection and order quantity determination for perishable protein products in a retail setting under uncertain conditions. Initially, a comprehensive fuzzy multi-objective model is designed for Kourosh Protein, a company in the closed-loop supply chain, aiming to minimize costs, waste, and maximize profit, customer satisfaction, quality, and profit margin in the face of uncertainty. Subsequently, this full-fledged fuzzy multi-objective model is transformed into a deterministic single-objective model using the Sharma and Agarwal method (2018), yielding optimal order quantities from each supplier. The model's practical implementation in an Iranian retail store for protein products, such as sausages, bologna, hamburgers, etc., demonstrates its potential to reduce costs and boost profits.IntroductionThe global population's rapid expansion and shifts in lifestyle have significantly elevated the food sector's importance in the global economy, specifically in Sustainable Food Supply Chain Management (SFSCM). SFSCM plays a pivotal role in balancing economic, social, and environmental criteria to optimize supply chain performance. Within the complex food supply chain, suppliers wield considerable influence due to their impact on product attributes, safety, quality, and perishability. Supplier selection, a critical facet of SFSCM, substantially affects a company's strategic and operational performance, product pricing, and quality. In this context, this research introduces a fully fuzzy multi-objective model (FFMOP) to enhance the sustainable supply chain performance of a retail company's protein products. Given the inherent uncertainties associated with supplier selection, the proposed model incorporates an extensive array of variables to simulate real-world scenarios. This innovative approach aims to address identified gaps in existing literature, providing a more robust and realistic tool for bolstering supply chain sustainability.Materials and MethodsThis study constructs a full fuzzy multi-objective model with the objective of determining optimal order quantities within the food supply chain while integrating sustainability criteria. The analyzed supply chain network encompasses multiple suppliers, a single retailer, and end consumers, characterized by multi-product and multi-level interactions. The model seeks to optimize profit, customer satisfaction, brand acceptance, quality, profit margin, and minimize waste production while determining the optimal order volume for each product from each supplier. Reviewing the existing literature reveals various approaches to tackle Full Fuzzy Multi-Objective Problems. This research employs the methodology proposed by Sharma & Aggarwal in 2018 to solve the FFMOP model. After defuzzification, the final model is solved using GAMS software to determine the optimal values of decision variables.ResultsThis research utilizes a case study of an Iranian retail company with eight main suppliers providing 15 protein food products. However, the focus is primarily on four key products: sausages, bologna, hamburgers, and pizza cheese, which are examined. Data for the study was collected from historical company records and interviews with experts from June 2021 to 2022. Model parameters are defined using trapezoidal fuzzy numbers. A comparison of optimal order quantities with the company's actual orders and sales reveals that the proposed model for order allocation leads to reduced ordering, maintenance, and procurement costs for the company. Additionally, the model mitigates waste resulting from unsold products.ConclusionSupplier selection stands as a pivotal process in an effective supply chain, exerting substantial influence on a company's strategic outcomes and performance metrics. This study employs a full fuzzy multi-objective model to identify the most suitable supplier and determine optimal orders within a sustainable food supply chain context. To better mimic real-world conditions, variables and parameters are treated as trapezoidal fuzzy numbers. A comparison of the model's outputs with actual sales data indicates that this methodology aligns more accurately with sales figures. Consequently, applying this model has the potential to reduce waste production and economic consequences. The study's achievement lies in selecting a supplier through a methodology that simultaneously considers sustainability criteria within a fully fuzzy environment while determining optimal order quantities from various suppliers. Moreover, the model's flexibility allows for its application across diverse industries, including dairy and dried fruit, for procuring and selling an array of products from potential suppliers.

In a competitive world, one of the most crucial ways to enhance the supply chain performance of manufacturing companies is through integrated scheduling of production and distribution activities. Two significant concerns for dentists and patients include delayed denture deliveries and the multiple production and correction processes for dentures. This research addresses these concerns by developing a mixed-integer linear programming model for solving the integrated production and distribution scheduling problem in a fixed denture supply chain operating under an additive manufacturing environment. The objective functions of this model aim to minimize the cost of production and distribution orders while reducing weighted delays. The Augmented Epsilon Constraint Method is employed to identify Pareto-optimal solutions. To validate the mathematical model, a numerical example and a case study are presented, and various sensitivity analyses are conducted on key model parameters. The numerical results demonstrate substantial improvements in total costs and customer satisfaction levels.IntroductionA supply chain (SC) comprises several interconnected echelons and processes, where an integrated perspective can lead to optimal overall SC performance. Simply improving an organization's internal processes is insufficient for competitiveness in the market; establishing effective relationships with suppliers, distributors, and other SC stakeholders is essential. Achieving maximum value along the SC involves focusing on cost reduction through cost-effective decision-making. In the past decade, the rising adoption of 3-D printing and additive manufacturing technologies in SCs, as a prominent disruptive technology in the Industry 4.0 era, has created numerous opportunities for improving manufacturing SCs compared to traditional production methods. These opportunities include reduced setup and production times, lower safety stock levels, and fewer processing steps. Additive manufacturing has found applications in various fields, particularly in denture production. This research addresses two primary concerns in the field: timely denture delivery and the multiple production and correction processes associated with dentures. A novel mathematical model is developed to tackle these issues, aiming to solve the integrated production and distribution scheduling problem in a fixed denture supply chain operating within an additive manufacturing environment. The objective functions of this model aim to minimize the costs associated with production and order distribution while minimizing the weighted total delays.Materials and MethodsA mixed-integer linear programming model is devised to address the problem outlined in this paper. The Augmented Epsilon Constraint Method is applied to identify Pareto-optimal solutions. To validate the mathematical model, a numerical example and a case study are presented, and several sensitivity analyses are conducted on key model parameters to elucidate their critical roles in the final solutions.Discussion and ResultsA case study is provided to demonstrate the practical applicability of the developed model. Sensitivity analyses on demand data highlight the substantial impact of demand management on final solutions. This research presents a two-objective optimization model to address the simultaneous scheduling of production and order delivery in a three-tier dental prosthesis supply chain. The first tier comprises a dental prosthesis production laboratory, while the second and third tiers include distributors and dentists (final customers). The objective functions include the minimization of total order delivery costs and the average weighted lateness of delivered products from a fixed dental prosthesis production laboratory. Constraints encompass delivery time delays, order allocation to customers, capacity limitations, calculations of time to reach each customer, and vehicle routing. Given that this research problem falls into the category of multi-objective problems, the Augmented Epsilon Constraint Method is employed to obtain Pareto-optimal solutions. To investigate and implement the proposed model, a fixed dental prosthesis production laboratory in Neka City is examined. The numerical results indicate the existence of a trade-off between the problem's objectives.ConclusionsThis paper presents a bi-objective model to address the integrated production and distribution scheduling problem in a three-tier dentures supply chain, aiming to minimize total delivery costs and the average weighted tardiness. The first tier includes a dentures production laboratory, while the second and third tiers comprise distributors and dentists, respectively. Numerical results based on a real case study demonstrate the practical applicability of the model. Several avenues for future research include considering uncertainty in input data and developing efficient meta-heuristic algorithms for solving large-scale instances.

The application of supply chain management within the construction industry presents significant challenges due to the transient nature of construction projects, high levels of customization, low repeatability of activities, absence of a production line, and interdependent relationships among activities. Construction supply chains are intricate systems, where the final performance results from numerous decisions made across multiple independent companies. Interactions among supply chain stakeholders and the unique characteristics of each project create complex phenomena with multiple interconnected elements and variables. The Viable System Model (VSM), rooted in organizational cybernetics, provides a structured approach to addressing complex and unstructured problems. This structured approach allows analysts to gain in-depth insights into the functional issues of the existing system and understand how to modify the system design to adapt to internal and external disruptions.MethodologyDespite the extensive capabilities of the Viable System Model as a diagnostic tool for assessing organizational structure and achieving viability, a systematic and distinct methodology for its application is lacking. Researchers in VSM often do not employ a specific methodology for systems analysis. In this study, we propose a methodology for applying the VSM as a diagnostic tool for organizations, derived from a review of theoretical foundations and practical requirements of VSM. Building on Jackson's methodology outlined in his book "System Thinking, Creative Holism for Managers," we have developed a methodology by integrating Jackson's approach with case study research. This methodology includes stages such as designing a diagnostic framework, selecting case studies, identifying systems, conducting system diagnosis, and validating the model. We applied this methodology to diagnose the supply chain of an Iranian petrochemical construction project, resulting in the development of a viable system model. The validity of the research methodology and findings was confirmed through expert participation and the application of multiple qualitative criteria.ResultsFollowing the selection of a case study and the identification of systems, we investigated the existence and function of five subsystems and communication channels within the focal system using a case study approach to gather information and develop the viable system model. Data was collected through semi-structured interviews conducted at various managerial and technical levels within a prominent project-oriented company in Iran's petrochemical industry. These interviews lasted between 45 and 60 minutes each. Data collection methods also included observation and document examination. The research involved a semi-structured interview with 18 individuals to explore complications within each of the five systems. Subsequently, the collected data was adapted to the model's requirements, and findings were extracted through intra-case analysis and coding. This process led to model development and the identification of weaknesses within the construction supply chain from the perspective of the five systems and communication channels, with a focus on achieving viability.ConclusionsThe developed model highlights weaknesses and bottlenecks within the focal system, shedding light on the most significant issues. A critical issue identified in the case study is the evident lack of coherence within System 4 and System 5. The results reveal that the incoherence of System 5, divided between parts of the company at level 0 and the parent company at a higher recursion level outside the focal system, results in defects within the communication channels related to this system, including C14 (Connection of System 4 with System 5), C9 (Algedonic channel), and C16 (Connection of System 5 with the homeostatic loop of Systems 3 and 4). Additionally, System 4, which is jointly managed by a segment of the company and the project management consultant, leads to disruptions in channels related to this system, particularly C13 (Homeostatic loop between Systems 3 and 4), C14 (Communication between System 4 and System 5), and C15 (Homeostat of System 4 with the future environment). Concerning common errors, the dominant error is E5, attributed to the lack of coherence between Systems 4 and 5 and the weak performance of System 2. This error largely stems from inconsistencies between the two operational units responsible for the engineering phase and the construction and installation phase. To achieve viability within the focal system, several measures should be taken, including the establishment of centralized Systems 4 and 5 within the company and strengthening communication channels with incomplete or insufficient capacity. These channels include the connection between System 4 and System 5 (C14), the Algedonic channel (C9), the connection of System 5 with the homeostatic loop of Systems 3 and 4 (C16), the homeostatic loop of System 3 and System 4 (C13), and the homeostat of System 4 with the future environment (C15). A crucial homeostatic link involves the communication and interaction between System 3 and System 4 (C13) to establish dynamic communication between the current project environment and its future. However, the interaction between these two systems is currently conflicting and misaligned due to the lack of coherence within System 4 and differences in functionality between System 3's perspective on the current state and System 4's perspective on the future state. Balancing the emphasis on System 4 and the future with the daily operations of the supply chain's operational units within System 1 is essential to avoid supply chain disruptions or inefficiencies. The lack of coherence within System 4 also affects the performance of other systems, particularly System 5, as well as the stability of System 4 in relation to the future environment. Inadequate information about the future environment can hinder informed decision-making within the system. By addressing these points within the model, the construction project's supply chain can move toward viability and better adapt to changes in the project environment. This research represents one of the limited studies in the implementation of VSM within the construction project environment.

This research aims to identify key components and indicators for managing green supply chains utilizing the Internet of Things (IoT). The methodology employed is a mixed approach consisting of two stages. First, through qualitative content analysis, this study reviews theoretical foundations and previous research to identify indicators associated with drivers for green supply chain management based on IoT. Subsequently, these indicators were presented to 22 experts in management and information technology to validate and verify them. The research findings reveal that the IoT-based green supply chain model encompasses nine components and 66 indicators. These components include intelligent supply chain management, real-time monitoring of object statuses in the supply chain, intelligent object transfer along the supply chain, intelligent object location in the supply chain, information transparency within the supply chain, corruption reduction, intelligent quality management within the supply chain, intelligent sourcing in the supply chain, intelligent distribution management, and intelligent inventory management. The comprehensive drivers in the proposed model emphasize the importance of incorporating IoT in supply chain management to enhance overall supply chain performance while addressing environmental concerns.IntroductionAs technology continues to advance rapidly across various industries, mankind has enjoyed an improved quality of life. However, the environmental toll of recent decades, such as global warming, water scarcity, polar ice melting, habitat destruction, and deforestation, has raised significant environmental concerns. Modern human activities have contributed to these environmental issues. Consequently, there is mounting pressure on companies to integrate environmentally responsible practices into their operations and supply chains. Recognizing the pivotal role of green supply chain management in sustainable job creation, environmental problem reduction, improved public health through safer food consumption, and enhanced agricultural land productivity, recent years have witnessed increased interest and research into the determinants of green supply chain management.MethodologyThis research adopts a mixed-method approach conducted in two stages. Firstly, qualitative content analysis is employed to review theoretical foundations and prior studies, facilitating the identification of indicators associated with drivers for green supply chain management using IoT. Subsequently, these identified indicators are validated and verified by 22 experts specializing in management and information technology.ResultsThe research findings indicate that green supply chain management, with an IoT approach, comprises nine components: intelligent supply chain management, real-time monitoring of object statuses, intelligent object transfer, intelligent object location, information transparency, corruption reduction, intelligent quality management, intelligent sourcing, intelligent distribution management, and intelligent inventory management.ConclusionsThis study highlights the presence of nine components and 66 indicators within the IoT-based green supply chain model. These components encompass various aspects of supply chain management, emphasizing the importance of incorporating IoT technology to enhance overall supply chain performance while addressing environmental considerations. Due to the growing concerns surrounding environmental issues and the emission of harmful substances by companies, it is highly recommended to incorporate the IoT into supply chain management. This integration serves to monitor and control the quantity of waste generated, and encourages the use of environmentally-friendly 3D printing for creating IoT sensors instead of traditional plastic materials. Furthermore, it is advisable to optimize waste collection schedules and routes for garbage trucks, as these measures can significantly reduce the time and resources spent on waste management. To facilitate this transition, managers should organize in-service training programs to educate employees about IoT technology and communication equipment, emphasizing the positive impact of these advancements on green supply chain management. Additionally, adopting state-of-the-art technologies like Radio-Frequency Identification (RFID) in supply chain systems can contribute to the development of a sustainable and environmentally-conscious supply chain. Legislative bodies should also play a crucial role in promoting green supply chain practices by identifying and addressing legal loopholes in existing supply chain-related laws. This can be achieved through the implementation of incentives, such as tax reductions for eco-friendly companies, or penalties, including tax hikes, financial fines, and even legal repercussions, to encourage the adoption of smoother and more environmentally responsible supply chain management practices. It's worth noting that this research has certain limitations. It primarily relied on articles within specific databases during a defined timeframe, excluding other valuable sources like foreign books and theses due to accessibility constraints. Furthermore, qualitative research inherently depends on the researcher's interpretation and perspective, potentially affecting the reliability of the results. Lastly, challenges related to the COVID-19 pandemic and respondent reluctance posed difficulties during the research process.

In light of the continuous and rapid changes in global competition, companies face the imperative of consistently introducing new products or expanding their existing product lines to maintain their competitive edge. Recognizing that numerous factors within the supply chain influence the production, design, distribution, and introduction of new products, understanding supply chain risks is crucial, spanning from the procurement of raw materials to the delivery of products to the market. Consequently, risk management stands as one of the most critical challenges within the supply chain, significantly impacting New Product Development (NPD) performance. This research seeks to answer the primary question: "How and to what extent do various supply chain risks affect newly developed products?" While prior research has employed various methods to evaluate and manage supply chain risks, few models have explored the interplay of these risks on each other and their influence on performance dimensions. In this study, based on a review of theoretical foundations and prior research within the clothing manufacturing sector, we identified dimensions of newly developed products and supply chain risks. We employed the Delphi technique through interviews to identify the most significant risks. Subsequently, we employed the Cross-Impact Analysis method to elucidate relationships between these factors. Finally, we utilized Bayesian networks to analyze the impact of identified risks on the performance of the selected new product, conducting sensitivity and scenario analyses. The findings indicate that environmental and supply risks are more likely to manifest than other risks, with three operational, distribution, and demand risks, influenced by environmental and supply risks, exerting the most direct impact on new product performance, particularly in the dimension of quality.IntroductionModern organizations recognize that traditional competitive strategies, such as improving quality and reducing costs, no longer suffice to remain competitive. Research has demonstrated that numerous new product development NPD projects face failure for various reasons. Effective risk identification and management, particularly concerning supply chain risks in NPD projects marked by a high degree of uncertainty, emerge as pivotal factors for NPD success. In this context, the clothing sector, characterized by a complex supply chain structure, has been extensively studied. However, prior research has predominantly examined existing risks individually, overlooking the interactions between risk components and their simultaneous effects on one or more project objectives. In this research, we not only assess the simultaneous impact of risks on product performance using the Bayesian network method, an effective approach in supply chain risk analysis, but also investigate the severity of risk impacts under different scenarios. This research addresses three primary

Identification of supply chain risks in the clothing industry based on background research and case studies.Determination of interdependencies among variables using conditional modeling.Evaluation of the influence of supply chain risks on new product performance using the Bayesian network method under varying scenarios.Literature reviewNumerous researchers have investigated supply chain risks and their repercussions on product and organizational performance. Asgharenjad Nouri et al. (2021), in their article titled "The Effect of Risk Management on New Product Development in the Banking Industry," explored the impact of various risk indicators on new product development. Their results underscore the significant positive influence of managing all risk indicators, including technology, market, environment, finance, organizational resources, and commercialization, on new product development. Qazi et al. (2017), in their article titled “Supply Chain Risk Network Management,” prioritized risks and corresponding strategies through a case study involving semi-structured interviews. They initially identified organizational performance criteria and then linked them to relevant risks, using a matrix of expected profit to investigate the impact of risks on specified performance criteria. Subsequently, they employed the "weighted net evaluation" method to assess practical strategies.MethodologyIn conducting this research, we initially extracted supply chain risks and product performance dimensions from the existing literature. Subsequently, we employed the Delphi technique to select the most significant supply chain risks, providing indicators to participating experts through questionnaires with a 5-point Likert scale. We then used the Content Validity Ratio (CVR) index to confirm or reject the components derived from the questionnaires. In the next step, we used the Cross-Impact Analysis method, employing pairwise comparisons via questionnaires, to reveal relationships between the key risk criteria. Finally, we investigated the impact of identified risks on the performance of the selected new product within the supply chain of Happy Land factory using the Bayesian network method under various scenarios.Discussion and ResultsThe results from the Bayesian network analysis in this research demonstrate that environmental risk, as an external risk within Happy Land’s supply chain, exerts the most significant influence at the highest level of the Bayesian map. Subsequently, other risks, including economic risks, supplier risks, distribution risks, operational risks, and demand risks, are categorized in subsequent levels. Additionally, sensitivity analysis scenarios, depicted in the Tornado chart, reveal that supply chain risks have a substantial impact on performance criteria. According to this scenario analysis, the primary risk affecting quality and cost target nodes is operational risk, while the major risk affecting the product delivery time node is distribution risk, and the primary risk influencing profitability is demand risk. Results from both pessimistic and optimistic scenario analyses under the second scenario of the research indicate that in the pessimistic state, the presence of a high percentage of these risks significantly negatively impacts quality performance. Conversely, in optimistic scenarios, where these risk factors are not present, improvements in quality's functional dimension exhibit the most substantial impact.ConclusionWhen introducing a new product to the market, evaluating and managing supply chain uncertainties is essential due to the mutual influence of new product development and the supply chain. Supply chain risk management, which commences with the accurate identification and assessment of risks and proceeds with appropriate responses, is crucial for providing efficient and effective new products to the market. In addition to employing the Bayesian network method, a highly effective tool in supply chain risk analysis, we have endeavored to evaluate the simultaneous impact of risks on product performance and assess the severity of risk impacts under various scenarios, including optimistic, pessimistic, and sensitivity analyses. Scenario building proves to be an effective method for validating a developed model to measure the impact of risks under different conditions on target criteria.

Cement production in Iran takes place across various geographical locations, each characterized by distinct weather conditions. The technology employed in cement production varies depending on the availability of raw materials, fuel sources, and essential resources like water. Consequently, diverse inputs and outputs assume significance in each production technology, resulting in non-homogeneity among cement factories. Despite these differences, all these facilities are engaged in cement production, warranting a comparative analysis of their efficiency. This study examines the operational processes of five different cement production technologies—dry, semi-dry, humid, semi-humid, and wet slurry—across four companies comprising a total of nine factories. The study evaluates their efficiency between 2017 and 2020 using network data envelopment analysis under non-homogeneous conditions across three modeling stages. An important aspect of this study is its focus on the entire supply chain, from raw materials to the final product. Although the raw materials employed vary among different cement production technologies, the end product remains largely consistent.IntroductionIn certain real-world scenarios, even with similar production technologies, the assumption of homogeneous decision-making units may not hold true. Practical applications often involve supply chain structures that differ significantly from others. For instance, some supply chains may, at certain stages, eject intermediate products to meet specific needs, a phenomenon not universal to all supply chains, resulting in non-homogeneous chains. The cement industry, including Iran, constitutes one of the pivotal economic sectors. Therefore, mitigating shortcomings, including resource and material waste reduction, can have a substantial impact on this industry and consequently on the broader economy. Due to varying climatic conditions, cement production employs diverse technologies, primarily categorized as dry or wet processes. This study investigates the operational processes of five different cement production methods—dry, semi-dry, humid, semi-humid, and wet slurry—across four companies with a total of nine factories. Their performance between 2017 and 2020 is evaluated using network DEA under non-homogeneous conditions, encompassing three modeling stages.Materials and MethodsIn novel approaches, DEA is utilized to assess the performance of network decision-making units. The models typically assume homogeneity among decision-making units, which may not always align with real-world conditions. Practical situations often violate assumptions of unit homogeneity and uniformity in input and output parameters. Consequently, it is imperative to present and employ methods and models capable of accommodating non-homogeneous units. This study employs a scientific library research approach and practical purposive data collection to gather relevant information. This information informs specific adjustments to operational processes. Consequently, the development of a robust system for evaluating supply chain performance becomes essential. The study utilizes common models to evaluate efficiency under non-homogeneous conditions. Classification of operational processes and related data, followed by modeling using Lingo software, is employed in this research.Discussion and This article consists of two parts. Initially, it introduces the fundamental performance evaluation model and subsequently delves into the three-stage model of data envelopment analysis (DEA) within the supply chain context. In the second part, the production processes of Portland cement are examined, covering dry, semi-dry, humid, semi-humid, and wet slurry processes. The proposed approach assesses the performance of four cement production companies over a four-year period. Efficiency calculations for nine factories are conducted in three stages:The first stage consists of three steps as follows:First step: Input and output parameters used across the entire production process are categorized based on the different production methods.Second step: Processes utilizing similar production steps, as determined in the first stage, are grouped into four categories.Third step: Efficiency assessments for factories sharing similar production stages from the previous step are conducted, resulting in the identification of nine categories.Second stage: The efficiency of each category, characterized by a common feature from the previous step, is calculated.Third stage: To determine the overall efficiency of each factory, the efficiencies of individual processes are multiplied.ConclusionsThe results indicate that the fourth cement production company exhibits the highest efficiency, while the first company has the lowest efficiency. Notably, the lowest efficiency for the years 2017 to 2020 was recorded by the first company in 2020, while the fourth company achieved the highest efficiency in the same year. Among the factories, the lowest efficiency was observed in 2017 for the first company's five semi-dry factories, the fourth company's four semi-humid factories in 2018, the fourth company's nine wet slurry factories in 2018, the third company's seven semi-humid factories in 2020, and the fourth company's four semi-humid factories in 2020, which recorded the highest efficiency. Further examination and identification of suitable solutions to enhance efficiency in cases with lower efficiency levels can follow this study.

It is inevitable for a manager to consider the performance effects of each component of a multi-stage financial equity capital. These components serve as inputs in the first stage to raise investments. The investments, as outputs of the first stage, become inputs for the second stage and are used in bank services, such as bank facilities, which are outputs of the second stage. Therefore, when evaluating bank performance, the connectivity between the stages must be considered; otherwise, efficiency may not be calculated correctly. Traditional methods often assess multi-stage systems as black boxes, neglecting the potential connectivity that may exist among the stages. We delve into the system and propose models to improve overall efficiency and the efficiency of each stage. Additionally, the continuity and relationships among stages introduce numerous variables and constraints to linear programming for evaluating the entire system. A centralized approach calculates the efficiency score of units simultaneously by solving only one linear programming problem, significantly reducing computational complexity. This approach, especially in large organizations, is commonly employed by central managers. In this paper, we introduce a centralized method for evaluating units with a multi-stage structure. We apply the proposed models to evaluate the efficiencies of bank branches and insurance companies, demonstrating the superiority of the improved network approach and centralized method in enhancing overall system efficiency. Bank branches typically have a two-stage structure, involving labor, physical capital, and other factors.IntroductionBank branches operate under the supervision of a central management team. The central manager, acting as the decision-maker, allocates resources such as labor and financial equity capital as inputs for these branches. The goal is to optimize the overall efficiency of the branches by minimizing the total consumption of resources while maximizing the desired outputs, such as security investments. A common approach to enhancing the performance of banks involves evaluating each branch separately. However, this method does not guarantee the minimization of total resource consumption and can be time-consuming. Since all bank branches are under the control of central management, the decision-maker can optimize the efficiency scores of branches by allocating resources to them simultaneously. This approach, known as centralized Data Envelopment Analysis (DEA), is particularly relevant when certain variables are controlled by a central authority, such as a Head Office, rather than individual unit managers. DEA is a mathematical programming technique used to assess the performance of homogeneous Decision Making Units (DMUs). However, in cases where DMUs have a network structure, such as banks, where the outputs of one division or sub-process serve as inputs for the next sub-process, traditional DEA models treat two-stage DMUs as black boxes and overlook potential connectivity among the stages. In our approach, we consider the internal activities within the system and propose a non-radial model to optimize multi-stage DMUs by taking into account the connectivity among the stages. Furthermore, in previous network DEA models, constraints related to intermediate activities were treated as inequalities, which, as we will demonstrate in this paper, can lead to contradictions in optimality. We address this issue by carefully considering the connectivity among stages. The presence of connectivity among stages introduces numerous variables and constraints to the corresponding model. This model, when used to measure the overall efficiency scores of all DMUs, would traditionally require solving as many problems as there are DMUs, which can be highly time-consuming. In our paper, we introduce a centralized approach that measures the efficiency scores of multi-stage structure DMUs by solving only one linear programming problem. We have applied these proposed models to evaluate bank branches and insurance companies. This approach provides a more comprehensive and efficient way to assess and improve the performance of multi-stage organizations like banks, taking into account the interconnected nature of their operations.MethodologyWe employ the Data Envelopment Analysis approach to evaluate systems with a multi-stage structure, often referred to as a network structure. Traditional DEA models treat two-stage DMUs as black boxes and overlook the potential for connectivity among these stages. In contrast, we delve into the internal activities of the system and propose a model that optimizes multi-stage DMUs by considering the interconnections among the stages. Moreover, in previous models designed to assess network systems, constraints related to intermediate activities were typically treated as inequalities, which could lead to inconsistencies in optimization. In our approach, we enhance these constraints associated with intermediate activities to ensure more robust optimization. Additionally, we apply a centralized approach to allocate resources to DMUs, allowing for the simultaneous optimization of the efficiency scores of all DMUs through the solution of a single linear programming problem. This centralized method streamlines resource allocation and improves the overall efficiency of the DMUs.ResultsWe evaluated 20 bank branches, treating them as 20 DMUs with a two-stage structure. In the first stage, inputs included paid interest, personnel costs, paid interest related to foreign currency transactions, and personnel costs related to foreign currency transactions. The first stage produced intermediate outputs in the form of raised funds and raised funds related to foreign currency transactions. In the second stage, the outputs consisted of loans and common incomes. Notably, some loans in the second stage might become non-performing, where borrowers are unable to make full or even partial repayments. To address this, we considered non-performing loans as undesirable or bad outputs and transformed them into inverse values to treat them as good outputs. To calculate the efficiency scores of the bank branches, we employed both our improved network model and the traditional DEA approach. Our network-based method revealed that many of the bank branches under evaluation were inefficient, in contrast to the traditional method, which inaccurately identified many of the bank branches as efficient. Subsequently, we extended our network method to a centralized case, significantly reducing computation time. The network-based assessment of bank branches took nearly 5 seconds, whereas solving the centralized model required only 0.1 second. In addition to evaluating bank branches, we applied our methods to assess insurance companies. The results demonstrated that our model provided more accurate efficiency scores compared to previous network-based approaches.ConclusionIn multi-stage production systems, the production process comprises several stages. Banks, for example, operate with a network structure in which labor, physical capital, and financial equity capital serve as inputs in the first stage to generate deposits as intermediate outputs. In the second stage, these banks utilize the deposits obtained from the first stage to create loans and security investments. We have introduced models to assess the efficiency of each stage, whether it's the first, intermediate, or final stage, individually. Additionally, we have developed a non-radial SBM model designed for evaluating DMUs with multi-stage structures. The Centralized DEA approach is a valuable method for central managers, particularly in large organizations like bank branches, to allocate resources effectively. We have extended our network-based method to a centralized approach, allowing us to calculate efficiency scores by solving just one linear programming problem. The results obtained from applying our proposed models to evaluate bank branches and insurance companies, both exhibiting network structures as DMUs, demonstrate the superiority of the network centralized approach over previous models.