A decision-making approach for investigating the potential effects of near sourcing on supply chain

Purpose - Near sourcing is starting to be regarded as a valid alternative to global sourcing in order to leverage supply chain (SC) responsiveness and economic efficiency. The present work proposes a decision-making approach developed in collaboration with a leading Italian retailer that was willing to turn the global store furniture procurement process into near sourcing. Design/methodology/approach - Action research is employed. The limitations of the traditional SC organisation and purchasing process of the company are first identified. On such basis, an inventory management model is applied to run spreadsheet estimates where different purchasing and SC management strategies are adopted to determine the solution providing the lowest cost performance. Finally, a risk analysis of the selected best SC arrangement is conducted and results are discussed. Findings - Switching from East Asian suppliers to continental vendors enables a SC reengineering that increases flexibility and responsiveness to demand uncertainty which, together with decreased transportation costs, assures economic viability, thus proving the benefits of near sourcing. Research limitations/implications - The decision-making framework provides a methodological roadmap to address the comparison between near and global sourcing policies and to calculate the savings of the former against the latter. The approach could include additional organisational aspects and cost categories impacting on near sourcing and could be adapted to investigate different products, services, and business sectors. Originality/value - The work provides SC researchers and practitioners with a structured approach for understanding what drives companies to adopt near sourcing and for quantitatively assessing its advantage

Energy policies and risks on energy markets; a cost-benefit analysis

The key question dealt with in this report is whether and how governments should be involved in taking measures regarding security of energy supply. In order to answer this question, we developed a framework for cost-benefit analysis and applied this framework to a number of policy options. Read also the press release and accompanying�document ' Increasing the reliability of electricity production: a cost-benefit analysis '. The options chosen vary from government investments in strategic oil stocks to financial incentives for consumers to reduce their consumption of electricity. The set of options comprises several types of governmental action, including subsidies, regulation and government investments. Moreover, the selection includes measures meant to address risks on all three major energy markets: oil, natural gas, and electricity. The general picture following from the cases studied is that security of supply measures are hardly ever beneficial to welfare: benefits of policy measures do generally not outweigh costs. From an economic point of view, therefore, it would be often wiser to accept consequences of supply disruptions than to pursue security of supply at any cost. This implies that governments should exercise caution in imposing measures regarding security of supply. If serious market failure is detected, careful attention should be paid to the design of the corrective measure. Establishing and maintaining well-functioning markets appears to be an efficient approach in realising a secure supply of energy. That approach would include removal of entry barriers, securing equal access to essential facilities and increasing transparency of markets.

European Energy Union? Caught between securitisation and ‘riskification’

Fears about the security of supplies have been central to debates about the development of an integrated EU energy policy over the past decade, leading to claims that energy has been ‘securitised’. Previous analyses have found, however, that although shared security concerns are frequently used as justification for further integration, they can also serve as a rationale for Member States to resist sharing sovereignty. Transcending this apparent paradox would require not just agreement about whether energy supplies are security concerns, but also agreement about what kind of security concern they are. In this article, we examine whether such an agreement could emerge through a comparative analysis of constructions of gas security in the UK and Poland. Utilising a framework that draws from both the philosophical and sociological wings of Securitisation Studies, we demonstrate that although gas has been elevated on the security agendas of both states, the specific logic of insecurity – securitisation or riskification – underpinning these constructions differs substantially, and is conditioned by distinct modes of governance in each Member State. This, we contend, limits the potential for further integration of EU energy policies in the context of the European Commission’s proposals for an ‘Energy Union’

Banks' Advantage in Hedging Liquidity Risk: Theory and Evidence from the Commercial Paper Market

This paper argues that banks have a unique ability to hedge against systematic liquidity shocks. Deposit inflows provide a natural hedge for loan demand shocks that follow declines in market liquidity. Consequently, one dimension of bank “specialness” is that banks can insure firms against systematic declines in market liquidity at lower cost than other financial institutions. We provide supporting empirical evidence from the commercial paper (CP) market. When market liquidity dries up and CP rates rise, banks experience funding inflows, allowing them to meet increased loan demand from borrowers drawing funds from pre-existing commercial paper backup lines without running down their holding of liquid assets. Moreover, the supply of cheap funds is sufficiently large so that pricing on new lines of credit actually falls as market spreads widen.

Essays on supply chain analytics: Investment and capacity planning under uncertainty

In this dissertation, we study a firm’s investment and capacity planning strategies in the presence of different types of supply uncertainties and risks. Both essays in this dissertation benefit from empirical analysis as the analytical models build on the findings and observations from the corresponding empirical investigation. Each essay shows the benefits from utilizing flexible options that are deemed to be less preferable before conducting the analysis. Wine futures investment represents the flexible option (due to its liquidity) in the first essay, however, it exhibits greater uncertainty in price than the traditional bottled wine. We find in our empirical analysis that both weather and market fluctuations influence the evolution of the price in wine futures, and thus, despite being the flexible option, it also represents the riskier investment. On the other hand, capacity expansion at a geographically remote facility represents the flexible option (due to its greater backup capabilities) in the second essay, however, it is a more costly backup alternative than a nearby facility. As a result, both essays examine the trade-offs between these flexible, yet risker and/or costlier, alternatives, and shed light on the risk-reward structure of these various operational levers

Adapting the community sector for climate extremes

Abstract People experiencing poverty and inequality will be affected first and worst by the impacts of climate change to infrastructure and human settlements, including those caused by increasingly frequent and intense extreme weather events and natural disasters. They have the least capacity to cope, to adapt, to move and to recover. Community service organisations (CSOs) play a critical role in supporting individuals, families and communities experiencing poverty and inequality to build resilience and respond to adverse changes in circumstances. As such, the services they provide comprise a critical component of social infrastructure in human settlements. However, very little is understood about CSOs own vulnerability to – or their role in managing and mitigating risks to their clients and the community from – climate change impacts to physical infrastructure. The Extreme Weather, Climate Change and the Community Sector – Risks and Adaptations project examined the relationship between physical and social infrastructure (in the form of CSO service provision). Specifically, the ways in which the climate-driven failure of CSO service delivery worsens risks to the individuals and communities they serve and, on the other hand, how preparedness may reduce vulnerability to climate change and extreme weather impacts to human settlements and infrastructure.The research comprised a comprehensive and critical scoping, examination and review of existing research findings and an audit, examination and judgment-based evaluation of the current vulnerabilities and capacities of CSOs under projected climate change scenarios. It employed three key methods of consultation and data collection. A literature review examined research conducted to date in Australia and comparative countries internationally on the vulnerability and climate change adaptation needs of CSOs. A program of 10 Community Sector Professional Climate Workshops consulted over 150 CSO representatives to develop a qualitative record of extreme event and climate change risks and corresponding adaptation strategies specific to CSOs. A national survey of CSOs, which resulted in the participation of approximately 500 organisations, produced a quantitative data set about the nature of CSO vulnerability to climate change and extreme weather impacts to infrastructure, whether and how CSOs are approaching the adaptation task and key barriers to adaptation.While the methods employed and the absence of empirical data sets quantifying CSO vulnerability to climate change impacts create limitations to the evidence-base produced, findings from the research suggest that CSOs are highly vulnerable and not well prepared to respond to climate change and extreme weather impacts to physical infrastructure and that this underlying organisational vulnerability worsens the vulnerability of people experiencing poverty and inequality to climate change. However, the project results indicate that if well adapted, CSOs have the willingness, specialist skills, assets and capacity to make a major contribution to the resilience and adaptive capacity of their clients and the community more broadly (sections of which will be plunged into adversity by extreme events). Despite this willingness, the evidence presented shows that few CSOs have undertaken significant action to prepare for climate change and worsening extreme weather events. Key barriers to adaptation identified through the research are inadequate financial resources, lack of institutionalised knowledge and skills for adaptation and the belief that climate change adaptation is beyond the scope of CSOs core business. On the other hand, key indicators of organisational resilience to climate change and extreme weather impacts include: level of knowledge about extreme weather risks, past experience of an extreme weather event and organisational size.Given its size, scope and the critical role the Australian community sector plays in building client and community resilience and in assisting communities to respond to and recover from the devastating impacts of extreme weather events and natural disasters, the research identifies serious gaps in both the policy frameworks and the research base required to ensure the sector’s resilience and adaptive capacity – gaps which appear to have already had serious consequences. To address these gaps, a series of recommendations has been prepared to enable the development and implementation of a comprehensive, sector-specific adaptation and preparedness program, which includes mechanisms to institutionalise knowledge and skills, streamlined tools appropriate to the needs and capacity of a diverse range of organisations and a benchmarking system to allow progress towards resilience and preparedness to be monitored. Future research priorities for adaptation in this sector have also been identified

Identifying common problems in the acquisition and deployment of large-scale software projects in the US and UK healthcare systems

Public and private organizations are investing increasing amounts into the development of healthcare information technology. These applications are perceived to offer numerous benefits. Software systems can improve the exchange of information between healthcare facilities. They support standardised procedures that can help to increase consistency between different service providers. Electronic patient records ensure minimum standards across the trajectory of care when patients move between different specializations. Healthcare information systems also offer economic benefits through efficiency savings; for example by providing the data that helps to identify potential bottlenecks in the provision and administration of care. However, a number of high-profile failures reveal the problems that arise when staff must cope with the loss of these applications. In particular, teams have to retrieve paper based records that often lack the detail on electronic systems. Individuals who have only used electronic information systems face particular problems in learning how to apply paper-based fallbacks. The following pages compare two different failures of Healthcare Information Systems in the UK and North America. The intention is to ensure that future initiatives to extend the integration of electronic patient records will build on the ‘lessons learned’ from previous systems

Agribusiness supply chain risk management: A review of quantitative decision models

Supply chain risk management is a large and growing field of research. However, within this field, mathematical models for agricultural products have received relatively little attention. This is somewhat surprising as risk management is even more important for agricultural supply chains due to challenges associated with seasonality, supply spikes, long supply lead-times, and perishability. This paper carries out a thorough review of the relatively limited literature on quantitative risk management models for agricultural supply chains. Specifically, we identify robustness and resilience as two key techniques for managing risk. Since these terms are not used consistently in the literature, we propose clear definitions and metrics for these terms; we then use these definitions to classify the agricultural supply chain risk management literature. Implications are given for both practice and future research on agricultural supply chain risk management

Theory of Storage: An Empirical Assessment of the European Natural Gas Market

We analyze the relation between European natural gas storage facilities and price patterns at major trading points, considering the theory of storage to derive a testable hypothesis imposed by the non-arbitrage condition. To model the efficiency of the natural gas market, we apply two indirect tests absent the scarcity of European inventory data. We find that operators of storage facilities realize seasonal arbitrage profits, and that market performance overall is substantially distinct from the competitive benchmark.Storage, energy commodity, natural gas, convenience yield