Substitution Effects in Supply Chains with Asymmetric Information Distribution and Upstream Competition

Inventory management in markets with substituting customers is extremely challenging, not only for a downstream wholesaler, but also for upstream manufacturers. Motivated by the structures in the agrochemical market, we analyze the optimal production and stocking quantities of a manufacturer and a wholesaler, respectively, in a two-stage supply chain with upstream competition and vertical information asymmetries. We characterize a monopolistic wholesaler's optimal stocking quantities and show that these quantities are not necessarily monotonic, neither in the available production quantities nor in the customers' substitution rates. We further derive the optimal production quantities of a monopolistic and a competitive manufacturer when they are incompletely informed about the wholesaler's stocking quantities. We find that the introduction of competition may lead to decreasing production quantities for some products. Furthermore, a product's end-of-season inventories at the manufacturer which arise due to information asymmetries may decrease even when initial production levels increase. Key words: customer substitution; supply chain; asymmetric information; competition; inventory managemen

Research Note--Revisiting "Retailer- vs. Vendor-Managed Inventory and Brand Competition"

In a recent paper, Mishra and Raghunathan (Mishra, B. K., S. Raghunathan. 2004. Retailer- vs. vendor-managed inventory and brand competition. Management Sci. 50(4) 445-457) claimed that retailers prefer vendor-managed inventory (VMI) because it restores competition among manufacturers and encourages them to maintain a higher stock of their own brand under VMI than would be maintained under retailer-managed inventory (RMI). This paper shows that these results do not hold in general: each manufacturer's stocking level may be higher under RMI than under VMI and the retailer may lose by adopting VMI depending on the profit margin of the retailer relative to that of the manufacturers, the magnitude of the holding costs, and the intensity of brand competition. Numerical examples show that the effect of brand competition on the system is not so significant and the transfer of holding cost to the vendor is the key incentive for the retailer's adoption of VMI.retailing, supply chain management, product substitution, inventory management, competition

Vendor managed inventory adoption in Malaysia construction industry

The growth of the Malaysian construction industry is burdened by conditions in which 'time overruns' in projects still exist. The quest to overcome construction delays motivates the industry to improve its performance by learning from the other industries. Supply chain management is an important aspect of performance in construction projects recognised by literatures in recent years. The distinctive characteristic of supply chain management in construction does compare to other industries to motivate the need to collaborate horizontally and vertically within the construction industry. Vendor- managed inventory (VMI), famous for eliminating additional costs that may result from the excessive supply and stock-in-hand inventory as practised in other industries, may potentially be adopted and implemented in the construction industry. Therefore, conditions in which VMI is suitable to be adopted, barriers to the effort to adopt VMI and the readiness of the contractors to adopt VMI were evaluated in this study. The results of the survey using 97 ClDB grade G7 registered contractors in Malaysia, show that suppliers' market competition, supplier-buyer cooperation, and demand uncertainty positively influence the intention of contractors to adopt VMI. However, notwithstanding that G7 contractors are large contractors in Malaysia, perceived lack of trust and mutual misunderstanding between supply chain partners are considered top among the many barriers to adopt VMI despite evidence that respondents of the study indicate moderate to high readiness to adopt the recommendations of the study. The study contributes to literature on VMI in the area of the construction industry which has not been explored comprehensively

Three essays on product management : how to offer the right products at the right time and in the right quantity

Across virtually all industries, firms share one common objective: they strive to match their supply with customer demand. To achieve this goal, firms need to offer the right products at the right time and in the right quantity. Only firms that excel in all three dimensions can provide products with a high customer value and achieve extraordinary profits. This thesis investigates specific challenges that a firm has to overcome on its way to a good match between supply and demand. The first essay investigates how a firm can already select the right products during the product development phase. To make good resource allocation decisions, the firm needs to collect valuable information, and incentivize information sharing across the entire organization. The key result is that the firm needs to balance individual and shared incentives to achieve this goal. However, such compensation schemes come at the cost of overly broad product portfolios. The second essay examines how uncertain customer demand patterns affect seasonal products. Specifically, the timing of the product’s availability is crucial. Too early, and high opportunity and inventory costs may devour profits. Too late, and the firm loses its customers. In short, the firm has to balance a product’s market potential with the costly market time. This tradeoff may induce a firm to stock more inventories to satisfy a smaller market potential. Lastly, the third essay investigates how customer substitution influences the inventory decisions of different supply chain members in the presence of upstream competition. We find that customer substitution has a non-monotonic effect on the supply chain members’ decisions, and that left-over inventories may decline even when initial inventories are raised

A Scholarly Review of Supply Chain Integration within the New Zealand Blueberry Industry

Ethics and credence attributes are the humanistic basis for establishing sustainable supply chain development. It determines brand reputation, ecology and customer experience. Furthermore, good ethics and credence Attributes promote the progress of industry leadership and increase the possibility of win-win strategies, especially in terms of negotiation. Negotiation is the premise of supply chain collaboration. The purpose of collaboration is to establish a synchronized supply chain to improve the ability of industry coordination. This is also the key to creating value, and the importance of risk management cannot be ignored. It is not only a guarantee for the smooth operation of the supply chain, but also an important measure to improve the flexibility of the supply chain. Finally, the results of supply chain integration need to rely on performance metrics and benchmarking to control and improve the overall performance of the supply chain. This publication evaluates modern theories in all these areas and contextualise it to the New Zealand blueberry industry. It is important that the reader appreciates the scholarly origin of this publication

Trust and open book accounting

This thesis presents the research programme that was conducted to examine the relationship between suppliers and retailers in the UK Grocery Sector. The research focused on Trust and Open Book Accounting, with a detailed examination of a selection of suppliers to RetailCo – one of the big 4 UK Grocery Retailers. Primary data was collected from some twenty suppliers to RetailCo, which built on the industry survey made available to the researcher from the Advantage Mirror report on RetailCo. Strong Structuration Theory was used as the theoretical lens for the analysis of the case evidence, with Abduction being the methodological approach. A number of conclusions were drawn from the analysed data, which included the very real differences in the relationship styles exhibited by own-label suppliers from that shown by almost all branded suppliers. The own-label suppliers who enjoyed the most positive relationships with RetailCo were those who had adopted an Innovation-Led strategy. This helped buyers to reach their KPI targets, through the sharing of cost data, resulting in greater profitability from cost reduction and the possibility of additional innovation-led sales. The various forms of Open Book were examined, with real benefits of more collaborative working reported by some suppliers who were involved in forms of Open Book programmes

Supply Chain

Traditionally supply chain management has meant factories, assembly lines, warehouses, transportation vehicles, and time sheets. Modern supply chain management is a highly complex, multidimensional problem set with virtually endless number of variables for optimization. An Internet enabled supply chain may have just-in-time delivery, precise inventory visibility, and up-to-the-minute distribution-tracking capabilities. Technology advances have enabled supply chains to become strategic weapons that can help avoid disasters, lower costs, and make money. From internal enterprise processes to external business transactions with suppliers, transporters, channels and end-users marks the wide range of challenges researchers have to handle. The aim of this book is at revealing and illustrating this diversity in terms of scientific and theoretical fundamentals, prevailing concepts as well as current practical applications

Improving collaborative forecasting performance in the food supply chain

This thesis was submitted for the award of Doctor of Philosophy and was awarded by Brunel University LondonThe dynamic structure of the Food Supply Chain (FSC) distinguishes itself from other supply chains. Providing food to customers in a healthy and fresh manner necessitates a significant effort on the part of manufacturers and retailers. In practice, while these partners collaboratively forecast time-sensitive and / or short-life product-groups (e.g. perishable, seasonal, promotional and newly launched products), they confront significant challenges which prevent them from generating accurate forecasts and conducting long-term collaborations. Partners’ challenges are not limited only to the fluctuating demand of time-sensitive product-groups and continuously evolving consumer choices, but are also largely related to their conflicting expectations. Partners’ contradictory expectations mainly occur during the practices of integration, forecasting and information exchange in the FSC. This research specifically focuses on the Collaborative Forecasting (CF) practices in the FSC. However, CF is addressed from the manufacturers’ point of view, when they collaboratively forecast perishable, seasonal, promotional and newly launched products with retailers in the FSC. The underlying reasons are that while there is a paucity of research studying CF from the manufacturers’ standpoint, associated product-groups decay at short notice and their demand is influenced by uncertain consumer behaviour and the dynamic environment of FSC. The aim of the research is to identify factors that have a significant influence on the CF performance. Generating accurate forecasts over the aforementioned product-groups and sustaining long-term collaborations (one year or more) between partners are the two major performance criteria of CF in this research. This research systematically reviews the literature on Collaborative Planning, Forecasting and Replenishment (CPFR), which combines the supply chain practices of upstream and downstream members by linking their planning, forecasting and replenishment operations. The review also involves the research themes of supply chain integration, forecasting process and information sharing. The reason behind reviewing these themes is that partners’ CF is not limited to forecasting practices, it also encapsulates the integration of chains and bilateral information sharing for accurate forecasts. A single semi-structured interview with a UK based food manufacturer and three online group discussions on the business oriented social networking service of LinkedIn enrich the research with pragmatic and qualitative data, which are coded and analysed via software package QSR NVivo 9. Modifying the results of literature review through the qualitative data makes it possible to develop a rigorous conceptual model and associated hypotheses. Then, a comprehensive online survey questionnaire is developed to be delivered to food manufacturers located in the UK & Ireland, North America and Europe. An exploratory data analysis technique using Partial Least Squares (PLS) guides the research to analyse the online survey questionnaire empirically. The most significant contributions of this research are (i) to extend the body of literature by offering a new CF practice, aiming to improve forecast accuracy and long-term collaborations, and (ii) to provide managerial implications by offering a rigorous conceptual model guiding practitioners to implement the CF practice, for the achievement of accurate forecasts and long-term collaborations. In detail, the research findings primarily emphasise that manufacturers’ interdepartmental integration plays a vital role for successful CF and integration with retailers. Effective integration with retailers encourages manufacturers to conduct stronger CF in the FSC. Partners’ forecasting meetings are another significant factor for CF while the role of forecasters in these meetings is crucial too, implying forecasters’ indirect influence on CF. Complementary to past studies, this research further explores the manufacturers’ various information sources that are significant for CF and which should be shared with retailers. It is also significant to maintain the quality level of information whilst information is shared with retailers. This result accordingly suggests that the quality level of information is obliquely important for CF. There are two major elements that contribute to the literature. Firstly, relying on the particular product-groups in the FSC and examining CF from the manufacturers’ point of view not only closes a pragmatic gap in the literature, but also identifies new areas for future studies in the FSC. Secondly, the CF practice of this research demonstrates the increasing forecast satisfaction of manufacturers over the associated product-groups. Given the subjective forecast expectations of manufacturers, due to organisational objectives and market dynamics, demonstrating the significant impact of the CF practice on the forecast satisfaction leads to generalising its application to the FSC. Practitioners need to avail themselves of this research when they aim to collaboratively generate accurate forecasts and to conduct long-term collaborations over the associated product-groups. The benefits of this research are not limited to the FSC. Manufacturers in other industries can benefit from the research while they collaborate with retailers over similar product-groups having a short shelf life and / or necessitating timely and reliable forecasts. In addition, this research expands new research fields to academia in the areas of the supply chain, forecasting and information exchange, whilst it calls the interest of academics to particular product-groups in the FSC for future research. Nevertheless, this research is limited to dyad manufacturer-retailer forecast collaborations over a limited range of product-groups. This is another opportunity for academics to extend this research to different types of collaborations and products. Key words: Food industry; Collaborative forecasting; Forecast satisfaction; External integration; Internal integration; Group forecasting; Forecasters; Information types; Information qualityBrunel Business Schoo

Examining organisational flexibility in an interorganisational context: A case study of a grocery retail supply chain.

The objective of this thesis is to clarify the complex notion of flexibility and to explore the impact of Interorganisational Information Systems (IOS) on the flexibility of organisations. Previous studies have shown that while the utilisation of IOS can contribute significantly to organisational flexibility, it does not provide equal benefits to all trading partners. Although flexibility is increasingly becoming more important for the survivability and competitiveness of organisations, its meaning is still ambiguous and a rigorous conceptualisation of the notion is lacking in the literature. Most researchers examining the impact of technology on organisational flexibility identify technological as well as organisational issues influencing flexibility, but fail to analyse flexibility as a dynamic concept embedded in the social context. Moreover, they mainly focus on the flexibility of the individual firm, paying less attention to flexibility as a property of the interaction between firms. This research proposes an interpretive approach and examines the notion of flexibility by including a thorough investigation of the organisational context within which it is embedded. Since IOS involve interaction between different organisations, issues of cooperation and relationships with trading partners are also considered. Therefore, the concept of flexibility is viewed from both an organisational and an interorganisational (business network) level, referring to the interaction of trading partners. A synthesized research framework, based on previous research and the theoretical perspectives of appreciative systems thinking and web models, enables us to perceive flexibility as a multidimensional and dynamic concept, embedded in and shaped by the organisational/interorganisational context. In the proposed framework, flexibility is presented not only as the ability of the organisation/business network to respond to environmental disturbances, but also as its capability to evolve and to change over time. A multiple case design in a grocery retail-supply chain in Greece, comprising three suppliers and four retailers, provides the empirical data to support the argument of this thesis. The analysis of the data relates differences in organisational contexts to variations in the flexibility achieved by the organisations. It shows that IOS can provide constraints even for the more competent organisations and illustrates how the interaction with trading partners may influence the flexibility achieved at an organisational level. It finally demonstrates the dynamic nature of flexibility, it describes the relation between its different dimensions and discusses their change and evolution, following and influencing the changes of the organisational and interorganisational contexts