Supply chain decision making supported by an Open books policy

Based on a study of a buyer–seller relationship in the automotive industry, this article identifies 17 different decision-making processes where openly sharing cost data—a so-called open books policy—plays an important supporting role. These processes relate to supplier selection, various activities that occur prior to production, and the full-speed production stage of the exchange process. Overall, open books plays the greatest role in the pre-production stage, although it is found to support decision-making relating to supplier selection and decision-making during full-speed production to a greater extent than the literature recognizes

Moving Towards Performance-Based Specifications in Public Procurement

There are environmental benefits associated with the procurement of services instead of, or in addition to, discrete products. Under the right conditions, transitioning to a more service-intensive purchasing model can reduce natural resource consumption in the production, use and disposal phases of product life cycles. Generally, financial savings can be realized too—even in the short term. In order for public procurers who purchase goods, services, buildings and infrastructure on a significant scale to take advantage of these potential savings and benefits, performancebased specifications are invaluable tools. Performance-based specifications allow public authorities to specify their needs in general terms by describing what general functions they require (e.g. lighting, mobility, information management) rather than specifying the minute details of the inputs and process required to get there. The private sector can then innovate and generate savings in resource use and in operating costs. Generally speaking, suppliers are better suited than public procurers to know what options are available in the market, or to innovate and commercialize towards new products and services in order to meet a required performance level. Performance-based specifications are thus a tool with which, under the right conditions, public procurers can stimulate markets to deliver innovative and environmentally sound solutions

Japanese Supplier Relations: A Comparative Perspective

This paper describes major characteristics of Japanese supplier relations in a comparative perspective. The supplier relations in Japan, particularly automobile industry, are examined in comparison with those in the United States. The primary purpose of the study is to characterize significant features of Japanese supplier relations and to provide economic rationale for those relationships. In addition, comparing supplier relations in Japan and the U.S., convergence in the nature of those are discussed. Significant features of Japanese supplier relations are characterized: long-term relationships and commitments; forced competition among few suppliers; transaction-specific investments in plant, equipment, and human capital; significant involvement of suppliers in product development with sharing of information. Supplier relations in the U.S. are changing and moving close to the Japanese counterpart. There has been a limited, yet noticeable, convergence in the nature of U.S. and Japanese supplier relations.Long-term relationships, Procurement, Supplier relations, Transaction-specific investments

The development of decentralized supplier networks in East Germany: a challenge to the German model of industrial organization

The paper examines the relationship between supplier network organization and regional economic development. A distinctive feature of the German economy is theexistence of a large and productive base of small and medium companies,commonly called the Mittelstand. Chambers of Commerce, trade associations, local research institutes and other para-public institutions provide a public infrastructure helping groups of Mittelstand companies develop research and development, quality control, training and other important competencies that they are too small to invest in individually. The paper argues that sophisticated firms must also engage these institutions if they are to function. Case studies of the newest East German car production networks show that final assemblers are creating supplier chains with minimal technical collaboration with local suppliers and the delegation rather thansharing of contracting risks. As a result, few sophisticated companies are engaginglocal para-public institutions, with negative consequences for the development of local Mittelstand companies in the two regions. -- In dem Papier werden die Beziehungen zwischen den organisatorischen Strukturen der Zulieferer-Netzwerke und der regionalen Wirtschaftsentwicklung untersucht. Ein typisches Element der deutschen Volkswirtschaft ist die Existenz einerweitgefächerten und produktiven Basis kleiner und mittlerer Unternehmen,gemeinhin als Mittelstandbezeichnet. Industrie- und Handelskammern,Wirtschaftsverbände, lokale Forschungsinstitute und andere para-staatliche Institutionen bilden eine öffentliche Infrastruktur, die den mittelständischen Unternehmen hilft, Forschung und Entwicklung, Qualitätskontrollen sowie Ausbildungskapazitäten aufzubauen und andere wichtige Kompetenzen zuentwickeln, in die zu investieren sie alleine zu klein wären.In dem Diskussionspapier wird die Meinung vertreten, daß aufgeweckte Unternehmen sich aber auch dieser Institutionen bedienen müssen, sollen sie funktionieren. Fallstudien der erst kürzlich aufgebauten Produktionsnetzwerke vonAutoherstellern in Ostdeutschland zeigen, daß die Endhersteller Zuliefererketten aufbauen, die nur in geringem Umfang mit den lokalen Zuliefereren technisch kooperieren. Außerdem versuchen die Endhersteller, Vertragsrisiken abzuwälzen statt sie gemeinsam mit den Zulieferern zu übernehmen. Als Ergebnis kann festgestellt werden, daß nur einige clevere Unternehmen diese lokalen und regionalen para-staatlichen Institutionen nutzen. Dies hat negative Konsequenzen für die Entwicklung der lokalen und regionalen mittelständischen Unternehmen inden beiden untersuchten Regionen Sachsen und Thüringen.

Global sourcing in the automotive supply chain: The case of Fiat Auto "project 178" world car

Objective of this paper is to present how Fiat Auto has developed a peculiar and innovative global sourcing model in conjunction with the rolling out of its "world car" project ?178?. Differently from other OEMs, that have designed vehicles with common "global" underbody platforms adapting body, trim levels and ride characteristics to local conditions, Fiat Auto "world car" concept and globalization strategy is more ambitious and complex, since the standardization of the 5 models stemming from the 178 platform involves absolute cross-country identity not only of interior/exterior design and contents but also of quality levels, robustness and compliance with European rules in terms of safety and pollution. The international supply chain supporting this globalization process can be interpreted as a double network of operations and transactions: the ?internal? supply chain, where "makes" are exchanged between Fiat Auto plants; the ?external? supply chain where ?buys? are purchased by Fiat Auto plants from suppliers. In the "external" supply chain, Fiat Auto manages, in a global sourcing perspective, a relatively stable group of suppliers, though in a competitive perspective, in order to guarantee cross-plant and cross-market component uniformity and worldwide efficiency. After depicting Fiat Auto global sourcing policies and the related organizational structures and processes, the paper highlights achievements and challenges of the model. The paper argues that Fiat's global sourcing, while putting competitive pressure on suppliers by means of worldwide information transparency on prices, quality and service, works as a performance improvement stimulator within OEM-first tier suppliers partnership relationships ("voice" mechanism), rather than a pure and simple supplierswitching device ("exit" mechanism)

Essays in inventory decisions under uncertainty

Uncertainty is a norm in business decisions. In this research, we focus on the inventory decisions for companies with uncertain customer demands. We first investigate forward buying strategies for single stage inventory decisions. The situation is common in commodity industry where prices often fluctuate significantly from one purchasing opportunity to the next and demands are random. We propose a combined heuristic to determine the optimal number of future periods a firm should purchase at each ordering opportunity in order to maximize total expected profit when there is uncertainty in future demand and future buying price. Second, we study the complexities of bundling of products in an Assemble-To-Order (ATO) environment. We outline a salvage manipulator mechanism that coordinates the decentralized supply chain. Third, we extend our salvage manipulator mechanism to a two stage supply chain with a long cumulative lead time. With significant lead times, the assumption that the suppliers all see the same demand distribution as the retailer cannot be used.Ph.D.Committee Chair: Yih-Long Chang; Committee Member: Paul Griffin; Committee Member: Ravi Subramanian; Committee Member: Soumen Ghosh; Committee Member: Srinagesh Gavirnen

Global sourcing in the automotive supply chain:The case of Fiat Auto

Objective of this paper is to present how Fiat Auto has developed a peculiar and innovative global sourcing model in conjunction with the rolling out of its "world car" project "178". Differently from other OEMs, that have designed vehicles with common "global" underbody platforms adapting body, trim levels and ride characteristics to local conditions, Fiat Auto "world car" concept and globalization strategy is more ambitious and complex, since the standardization of the 5 models stemming from the 178 platform involves absolute cross-country identity not only of interior/exterior design and contents but also of quality levels, robustness and compliance with European rules in terms of safety and pollution. The international supply chain supporting this globalization process can be interpreted as a double network of operations and transactions: the "internal" supply chain, where "makes" are exchanged between Fiat Auto plants; the "external" supply chain where "buys" are purchased by Fiat Auto plants from suppliers. In the "external" supply chain, Fiat Auto manages, in a global sourcing perspective, a relatively stable group of suppliers, though in a competitive perspective, in order to guarantee cross-plant and cross-market component uniformity and worldwide efficiency. After depicting Fiat Auto global sourcing policies and the related organizational structures and processes, the paper highlights achievements and challenges of the model. The paper argues that Fiat's global sourcing, while putting competitive pressure on suppliers by means of worldwide information transparency on prices, quality and service, works as a performance improvement stimulator within OEM-first tier suppliers partnership relationships ("voice" mechanism), rather than a pure and simple supplierswitching device ("exit" mechanism)

Bridging “the Great Divide”: Countering Financial Repression in Transition

The large and widening gap between economic performance in Eastern European transition economies and those of the former Soviet Union has been dubbed “the Great Divide” by Berglof and Bolton (2002). This paper provides a rationale for the gap based upon the concept of financial repression. The magnified effects of transition to the market can be attributed to the government manipulation of financial markets in these countries, with the divide defined by the length of time that governments relied upon financial-market manipulation to finance government fiscal policy. Policies undertaken to assist in financing government expenditures caused financial repression and financial fragmentation, to use the terms introduced by McKinnon (1973). After an introductory section, I introduce a theoretical model of real and financial sectors in transition. The dynamic path to equilibrium from transition is derived. It is shown to have a tendency toward output contraction and hyperinflation when government policies promote financial repression. In the third section this hypothesis is examined with macroeconomic data from Ukraine for the period 1992 - 2001. These data are consistent with the hypothesis, although other factors (e.g., recession in trading partners) are also shown to be important.http://deepblue.lib.umich.edu/bitstream/2027.42/39895/3/wp510.pd