Effects of trust-based decision making in disrupted supply chains

The United States has experienced prolonged severe shortages of vital medications over the past two decades. The causes underlying the severity and prolongation of these shortages are complex, in part due to the complexity of the underlying supply chain networks, which involve supplier-buyer interactions across multiple entities with competitive and cooperative goals. This leads to interesting challenges in maintaining consistent interactions and trust among the entities. Furthermore, disruptions in supply chains influence trust by inducing over-reactive behaviors across the network, thereby impacting the ability to consistently meet the resulting fluctuating demand. To explore these issues, we model a pharmaceutical supply chain with boundedly rational artificial decision makers capable of reasoning about the motivations and behaviors of others. We use multiagent simulations where each agent represents a key decision maker in a pharmaceutical supply chain. The agents possess a Theory-of-Mind capability to reason about the beliefs, and past and future behaviors of other agents, which allows them to assess other agents’ trustworthiness. Further, each agent has beliefs about others’ perceptions of its own trustworthiness that, in turn, impact its behavior. Our experiments reveal several counter-intuitive results showing how small, local disruptions can have cascading global consequences that persist over time. For example, a buyer, to protect itself from disruptions, may dynamically shift to ordering from suppliers with a higher perceived trustworthiness, while the supplier may prefer buyers with more stable ordering behavior. This asymmetry can put the trust-sensitive buyer at a disadvantage during shortages. Further, we demonstrate how the timing and scale of disruptions interact with a buyer’s sensitivity to trustworthiness. This interaction can engender different behaviors and impact the overall supply chain performance, either prolonging and exacerbating even small local disruptions, or mitigating a disruption’s effects. Additionally, we discuss the implications of these results for supply chain operations

Modeling Pharmaceutical Supply Chains to Mitigate Drug Shortages

The use of medically-necessary drugs has extended the lives of countless patients. While healthcare providers rely on the pharmaceutical industry for treatments, in recent years, the drug supply in the United States has become volatile and drug shortages are common. Shortages are considered a public health crisis and are often caused by disruptions to vulnerable pharmaceutical supply chains. The tightly optimized supply chains have little redundancy and low levels of inventory. This combination can cause minor supply interruptions to become widespread shortages. I study the dynamics of shortages by developing new models of supply chains under disruption, and I identify regulations and incentives to induce companies to reduce the occurrence and impact of shortages. There has been minimal analysis on the quantitative impact of proposed policies. I present four mathematical models. The first two are static supply chain design problems (SCDD and SCDD-I). The company decides at the beginning of the horizon how to configure its supply chain. In the second model (SCDD-I), the company may also choose to hold inventory. The models are two of the first to include disruptions and recovery over time. They are solved using Sample Average Approximation. The analyses suggest that it is either not economically feasible or attractive for companies to maintain resilient supply chains for some drugs that are vulnerable to shortage. I use the models to compare policies that have been proposed to reduce shortages. It is less expensive to raise prices in combination with resilience requirements than to raise prices alone. Requiring a second supplier may have the largest incremental benefit than requiring a back-up at other levels of the supply chain. The third model (D-SCDD) is a dynamic supply chain design model. It is a multi-stage stochastic program. At the beginning of the time horizon, the company selects the supply chain configuration and may add components or stop production if disruptions occur. The formulation applies the geometrically-distributed times to recover and disruption via an inverse sampling approach to maintain stage-wise independence. It is solved using the Stochastic Dual Dynamic Integer Programming (SDDiP) algorithm. I find that substantial reductions in the lead times to add components or reducing the mean time to recover disrupted components may reduce shortages. Minor lead time reductions have little impact. The fourth model (SCR) is comprised of closed-form expressions that describe the reliability characteristics of a given supply chain configuration. The analyses provide evidence that increasing component quality would be effective at reducing shortages. The model can also be used to calculate break-even prices. This project provides insight to policymakers and companies to support the profitable production of a reliable drug supply. The implications and use of these models is widely relevant to other regulated industries and supply chains under distribution.PHDIndustrial & Operations EngineeringUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttps://deepblue.lib.umich.edu/bitstream/2027.42/155172/1/eltuck_1.pd

Examining price and service competition among retailers in a supply chain under potential demand disruption

© 2017 Elsevier Ltd Supply chain disruptions management has attracted significant attention among researchers and practitioners. The paper aims to examine the effect of potential market demand disruptions on price and service level for competing retailers. To investigate the effect of potential demand disruptions, we consider both a centralized and a decentralized supply chain structure. To analyze the decentralized supply chain, the Manufacturing Stackelberg (MS) game theoretical approach was undertaken. The analytical results were tested using several numerical analyses. It was shown that price and service level investment decisions are significantly influenced by demand disruptions to retail markets. For example, decentralized decision makers tend to lower wholesale and retail prices under potential demand disruptions, whereas a proactive retailer needs to increase service level with an increased level of possible disruptions. This research may aid managers to analyze disruptions prone market and to make appropriate decision for price and service level. The manufacturer or the retailers will also be able to better determine when to close a market based on the proposed analysis by considering anticipated disruptions. The benefits and usefulness of the proposed approach are explained through a real-life case adopted from a toy supply chain in Bangladesh

Strategies for the Development of IT Disaster Recovery Plans in the Manufacturing Industry

Information technology (IT) leaders have reported technology disruptions because of natural disasters, terror attacks, or adversarial threats. Information technology leaders are concerned with technology disruptions, as these disruptions are costing organizations as much as $22,000 per minute. Grounded in Zachman’s framework, the purpose of this qualitative multiple case study was to explore strategies IT managers in the manufacturing industry use to develop IT disaster recovery (DR) plans to support business operations. The participants included 3 manufacturing IT professionals, 2 Department of Defense manufacturing infrastructure specialists, and 1outsourcing contractor, each from firms located in the central United States who successfully developed IT DR plans to support business operations. Data collection comprised of interviews and documentation. I used Braun and Clarke’s (2006) six-step process for thematic analysis to identify 5 themes: contingency planning by priority, testing plans, levels of recovery, time requirements for recovery, and costs associations. The implications for positive social change include the potential for IT managers and leaders to contribute to strategic development of IT DR plans and prevent economic disruption for consumers, communities, and society during disaster events

Essays Examining Humanitarian Supply Chains: Investigating Operational Characteristics, Activities, and Performance

As the frequency and severity of disasters continue to increase, the need for collaboration amongst all humanitarian stakeholders in humanitarian supply chain activities during all aspects of the disaster cycle has become more critical to the success of relief operations. Humanitarian non-governmental organizations (NGOs) are voluntary organizations operating in highly dynamic and chaotic environments to provide aid to people in need. But as the impact of disaster increases and the funding becomes more limited and competitive, they face mounting pressures from stakeholders to improve the quality of their operations. Similarly, private organizations are also under higher levels of scrutiny to become more socially responsible. In response, literature has turned to service operations and corporate social responsibility research, focusing on customer service and integration improvements as a path toward more effective disaster relief outcomes. Therefore, this dissertation aims to build upon this humanitarian service research stream. This dissertation examines how the humanitarian supply chain\u27s operational characteristics affect the workforce and community integrative behaviors, operational activities in the wake of disasters, and collaborative efforts between relief actors. Essay 1 employs approach-avoidance theory to examine the effects of trauma exposure on aid worker behaviors and supply chain integration activities. It also examines the moderating effects of various forms of supervisor support. Utilizing a scenario-based vignette experiment, results indicate that trauma exposure induces both approach and avoidance behaviors. As such, it simultaneously hinders cooperative commitment and improves organizational commitment among aid workers. Furthermore, we find that supervisor support strengthens these relationships. As such, this study contributes to disaster management, integration, and leadership literature streams. It highlights environmental mechanisms to aid worker integrative behaviors and provides decision-making guidance to NGOs regarding where to direct support investments. Essay 2 combines religion with volunteer management. It employs both social capital and person-organization fit theory to examine the effects of NGO religiousness and volunteer religious fit, on volunteer behaviors and operational performance. Utilizing two scenario-based video experiments, results indicate that NGO religiousness lessens social capital, negatively impacting volunteer behaviors and operational performance. Conversely, when NGOs and volunteers experience religious fit, it helps to minimize the negative effects of NGO religiousness and improve their operational performance. As such, this study contributes to the Humanitarian Operations literature by advising strategy around religious alignment and volunteer behaviors, retention, and operational performance. Essay 3 focuses on the vital role of private organizations in disaster relief and the importance of private-NGO collaboration. Employing resource dependence and matching theory, it examines mechanisms of private organization attitudes toward private-NGO partnerships. It also examines how the influence of these mechanisms may differ across disaster relief stages. Utilizing a scenario-based vignette experiment, results indicate that NGO resource capabilities motivate private organizations and their willingness to engage in private-NGO partnerships. As such, this study contributes to the private-NGO partnership literature and informs NGOs’ strategy around private organization motivations, decision-making, and alliance formation. This dissertation produces insights across the humanitarian supply chain, informing important curiosities involving NGOs, private organizations, aid workers, and the customers/communities they serve

An Empirical Investigation Of Information Technology Mediated Customer Services In China

Information technology mediated customer service is a reality of the 21st century. More and more companies have moved their customer services from in store and in person to online through computer or mobile devices. Using 208 respondents collected from two Chinese universities, this paper investigates customer preference over two service delivery model (either in store or online) on five type of purchasing (retail, eating-out, banking, travel and entertainment) and their perception difference in customer service quality between those two delivery model. Results show that a majority of Chinese students prefer in store and in person for eating out. For ordering tickets for travel and entertainment, they prefer computer/mobile device. For retail purchasing and banking, less than half of the students prefer in person services. In general, the results show that ordering through computer/mobile devices has become more popular in China and has received higher rating for most of customer service quality except security compared to ordering in store. In addition, it is found that there exist a gender difference in purchasing preference and perception in service delivery quality in China

Essays Examining Humanitarian Supply Chains: Investigating Operational Characteristics, Activities, and Performance

As the frequency and severity of disasters continue to increase, the need for collaboration amongst all humanitarian stakeholders in humanitarian supply chain activities during all aspects of the disaster cycle has become more critical to the success of relief operations. Humanitarian non-governmental organizations (NGOs) are voluntary organizations operating in highly dynamic and chaotic environments to provide aid to people in need. But as the impact of disaster increases and the funding becomes more limited and competitive, they face mounting pressures from stakeholders to improve the quality of their operations. Similarly, private organizations are also under higher levels of scrutiny to become more socially responsible. In response, literature has turned to service operations and corporate social responsibility research, focusing on customer service and integration improvements as a path toward more effective disaster relief outcomes. Therefore, this dissertation aims to build upon this humanitarian service research stream. This dissertation examines how the humanitarian supply chain\u27s operational characteristics affect the workforce and community integrative behaviors, operational activities in the wake of disasters, and collaborative efforts between relief actors. Essay 1 employs approach-avoidance theory to examine the effects of trauma exposure on aid worker behaviors and supply chain integration activities. It also examines the moderating effects of various forms of supervisor support. Utilizing a scenario-based vignette experiment, results indicate that trauma exposure induces both approach and avoidance behaviors. As such, it simultaneously hinders cooperative commitment and improves organizational commitment among aid workers. Furthermore, we find that supervisor support strengthens these relationships. As such, this study contributes to disaster management, integration, and leadership literature streams. It highlights environmental mechanisms to aid worker integrative behaviors and provides decision-making guidance to NGOs regarding where to direct support investments. Essay 2 combines religion with volunteer management. It employs both social capital and person-organization fit theory to examine the effects of NGO religiousness and volunteer religious fit, on volunteer behaviors and operational performance. Utilizing two scenario-based video experiments, results indicate that NGO religiousness lessens social capital, negatively impacting volunteer behaviors and operational performance. Conversely, when NGOs and volunteers experience religious fit, it helps to minimize the negative effects of NGO religiousness and improve their operational performance. As such, this study contributes to the Humanitarian Operations literature by advising strategy around religious alignment and volunteer behaviors, retention, and operational performance. Essay 3 focuses on the vital role of private organizations in disaster relief and the importance of private-NGO collaboration. Employing resource dependence and matching theory, it examines mechanisms of private organization attitudes toward private-NGO partnerships. It also examines how the influence of these mechanisms may differ across disaster relief stages. Utilizing a scenario-based vignette experiment, results indicate that NGO resource capabilities motivate private organizations and their willingness to engage in private-NGO partnerships. As such, this study contributes to the private-NGO partnership literature and informs NGOs’ strategy around private organization motivations, decision-making, and alliance formation. This dissertation produces insights across the humanitarian supply chain, informing important curiosities involving NGOs, private organizations, aid workers, and the customers/communities they serve

Strategies to Minimize the Impact of Supply Chain Risk on Business Performance

The exposure of companies to turbulence, uncertainty, and vulnerability in their supply chain results in supply chain disruption with an estimate cost of $10 million for each supply chain disruption. The purpose of this case study was to explore the strategies supply chain managers use to mitigate supply chain disruption on business performance in a pharmaceutical company in Maryland. Contingency theory of fit formed the conceptual framework for this study. Participant perceptions were elicited in interviews with 11 supply chain managers regarding strategies to mitigate risks associated with supply chain disruptions. Data from interviews and supporting documents were processed and analyzed using data source triangulation to discern emergent themes. Three main themes emerged: (a) supply chain design, planning, and forecasting; (b) flexible and multiple supplier base; and (c) resource allocation and demand management. The implications for positive social change include the potential of reducing supply chain risk, which could lead to lower prices of products for consumers, increased stakeholder satisfaction, and a higher standard of living

Strategies to Reduce the Impact of Disruptions in Manufacturing Transportation Supply Chains

Abstract Supply chain managers in the manufacturing transportation industry grapple with reducing the impact of disruptions in transportation supply chains since 50% of U.S. companies have experienced between six to 20 disruptions per year. Ineffective transportation disruption strategies negatively impact the performance and profitability of manufacturing organizations resulting in losses and business failure. Grounded in Goldratt’s philosophy and thinking process of the Theory of Constraints (TOC), the purpose of this qualitative multiple case study was to explore successful strategies supply chain managers in the manufacturing transportation industry used to reduce the impact of disruptions in transportation supply chains. The participants were three supply chain managers from three different manufacturing industries doing business in the Commonwealth of Massachusetts, who successfully implemented strategies that reduced the impact of disruptions in manufacturing transportation in their organizations. Data were collected through face-to-face semistructured interviews, archival records, and social media websites. Through thematic analysis, three themes emerged: (a) technology and innovative solutions, (b) supply chain collaborative efforts, and (d) logistics and transportation innovative strategies. A key recommendation is for supply chain managers to create multi-vendor transportation ecosystems to work together rather than working by themselves. The implication for positive social change includes the potential to create employment and increase local communities’ tax revenues that could be used to provide the most needed social services