Overview and classification of coordination contracts within forward and reverse supply chains

Among coordination mechanisms, contracts are valuable tools used in both theory and practice to coordinate various supply chains. The focus of this paper is to present an overview of contracts and a classification of coordination contracts and contracting literature in the form of classification schemes. The two criteria used for contract classification, as resulted from contracting literature, are transfer payment contractual incentives and inventory risk sharing. The overview classification of the existing literature has as criteria the level of detail used in designing the coordination models with applicability on the forward and reverse supply chains.Coordination contracts; forward supply chain; reverse supply chain

Business-to-business e-commerce: an innovative tool for food chain management

A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished goods, and the distribution of the final goods to customers. The management of food chains, particular of fresh produce chains, need to achieve two goals: (a) create efficient physical flows of products by minimising logistics cost, and reducing lead times (b) run an effective value chain by safeguarding mutual gains for all members of the chain, building trust between suppliers and buyers and at the same time maintaining quality for end consumers. Food chain management was always at a loss for tools to leveraging its efforts on achieving value for chain members and eventually the end-consumers. Although food industry, both in USA and Europe, has experimented with various alternative solutions to this multimillion chain management, yet more can be expected. Business-to-business e-commerce (B2B) appears to be an innovative tool that meets the high standards of the industry and the potential growth. This study examines the uses of B2B in food industry to give chain management solutions. It reviews the uses of B2B and, in particular, highlights the applications of B2B by small agribusiness in order to forge their ring in food chains. It builds upon communication in supply chain. It describes contracting as an example how B2B e-commerce can advance supply activities and reports the development of a B2B olive oil supply chain application. It concludes that B2B can be a strong leverage for food chain management to achieve its goals and produce value for the members of the chain and the end consumers

Information Reliability in supply chains: The case of multiple retailers

En esta tesis doctoral abordamos el estudio relativo al intercambio de información sobre la demanda dentro de una cadena de suministro cuando las partes interactúan de una forma estratégica. Los distribuidores minoristas forman una agrupación y delegan la gestión del inventario (los pedidos y la asignación) a un planificador central benévolo (CP, por sus siglas en inglés). Cada uno de los minoristas debe enfrentarse a una demanda incierta y dispone de información privada sobre ella como consecuencia de su proximidad al mercado; nos centramos en determinar si entre los minoristas y el CP se produce un intercambio fiable de información sobre la demanda. En primer lugar estudiamos el impacto de diversos mecanismos de asignación sobre el comportamiento en materia de pedidos de los minoristas, cuando la cantidad de inventario total en el almacén central es fija. Los minoristas efectúan los pedidos después conocer de manera privada su demanda. Demostramos analíticamente que los minoristas comunicarán sus necesidades reales, es decir, sus demandas realizadas, de acuerdo a una norma de asignación uniforme pero no de acuerdo a otras normas comunes como, por ejemplo, la noma proporcional o lineal; posteriormente, estudiamos una configuración donde la cantidad de inventario agrupado no es fija, sino más bien una variable de decisión, determinada por el CP después de haber solicitado información de demanda prevista de los minoristas. Las asignación del inventario total, en este caso también, se efectúa después de conocerse las realizaciones de demanda final, pero las demandas finales son de conocimiento común. Entonces, los minoristas pueden influir su asignación solo a través de la cantidad de inventario total. Mediante modelos teóricos asociados a tácticas podemos ver que el reconocimiento de la verdad y la confianza no se encuentran en una situación de equilibrio. A continuación, en un entorno de laboratorio controlado que simula la configuración de la cadena de suministro objeto de consideración, estudiamos el impacto de a) la competencia por el inventario común y b) la incertidumbre del mercado sobre la distorsión de la información, la confianza y la eficacia de la cadena de suministro. Nuestros resultados sugieren que existe una confianza continua cuando los incentivos pecuniarios están alineados y cuando no lo están, lo que viene a desmentir los casos teóricos extremos de minoristas completamente dignos de confianza o que no son fiables en absoluto; incluso aunque la información no sea totalmente fiable, el valor de la comunicación es importante. En última instancia, estudiamos el impacto de la propiedad del inventario sobre las motivaciones de las partes implicadas de cara a compartir de manera honrada sus previsiones de demanda; los inventarios específicos tampoco inducen a decir la verdad. Comparamos los inventarios resultantes y los beneficios de acuerdo con la toma de decisiones a nivel local con información más precisa con respecto a la toma de decisiones centralizada, mediante la cual se logra la coordinación de los pedidos

SUPPLY CHAIN INTEGRATION IN THE FOOD AND CONSUMER GOODS INDUSTRIES

The interorganizational structures necessary to implement and achieve the logistical performance improvements identified in the Efficient Consumer Response (ECR) initiative and related supply chain management concepts are difficult to develop. Firms continue to struggle to implement integrated programs and techniques, particularly with respect to changing operating structures, relationships, and mindsets to facilitate true supply chain integration. This research explores the logistical strategies and structures used by selected food and consumer goods firms to integrate their supply chains. It illustrates effective integration strategies and identifies critical success factors and barriers to successful ECR implementation. A framework is used to guide managers in developing the competencies essential to integrating the supply chain and to establishing the relationships necessary to operate in an ECR environment. The framework, entitled Supply Chain 2000, depicts supply chain value creation as achieving synchronization and coordination across four critical supply chain flows: product/service; market accommodation; information; and cash.Industrial Organization,

Smart-Contract Enabled Blockchains for the Control of Supply Chain Order Variance

Conflicts between supply chain members emerge because individually strategic actions may not be jointly optimal. Efforts to forecast consumer demand represent a source of conflict. Coordination of forecasts require a powerful incentive alignment approach. This work proposes a smart-contract equipped consortium blockchain system that creates an incentive structure which makes coordination with respect to forecasts economically appealing to a retailer and supplier. Distortions of demand due to uncoordinated forecasting is captured by a bullwhip measure which factors both forecast error and variance. Cooperation under the system is shown to help minimize this bullwhip measure. New outcomes to supply chain participants that allow for a higher reward is provided by the system. Under a fixed payout structure, the system achieves credibility of continued cooperation thus promoting an optimal coordinated equilibrium between retailer and supplier. Blockchain technology represents a consensus formation mechanism which can intermediate the behavior of supply chain network

Smart-Contract Enabled Blockchains for the Control of Supply Chain Order Variance

Conflicts between supply chain members emerge because individually strategic actions may not be jointly optimal. Efforts to forecast consumer demand represent a source of conflict. Coordination of forecasts require a powerful incentive alignment approach. This work proposes a smart-contract equipped consortium blockchain system that creates an incentive structure which makes coordination with respect to forecasts economically appealing to a retailer and supplier. Distortions of demand due to uncoordinated forecasting is captured by a bullwhip measure which factors both forecast error and variance. Cooperation under the system is shown to help minimize this bullwhip measure. New outcomes to supply chain participants that allow for a higher reward is provided by the system. Under a fixed payout structure, the system achieves credibility of continued cooperation thus promoting an optimal coordinated equilibrium between retailer and supplier. Blockchain technology represents a consensus formation mechanism which can intermediate the behavior of supply chain network

A distributed coordination mechanism for supply networks with asymmetric information

The paper analyses the problem of coordination in supply networks of multiple retailers and a single supplier, where partners have asymmetric, private information of demand and costs. After stating generic requirements like distributedness, truthfulness, efficiency and budget balance, we use the apparatus of mechanism design to devise a coordination mechanism that guarantees the above properties in the network. The resulting protocol is a novel realisation of the widely used Vendor Managed Inventory (VMI) where the responsibility of planning is at the supplier. We prove that together with the required generic properties a fair sharing of risks and benefits cannot be guaranteed. We illustrate the general mechanism with a detailed discussion of a specialised version, assuming that inventory planning is done according to the newsvendor model, and explore the operation of this protocol through computational experiments

Trust and Information Sharing in Supply Chains

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/91120/1/poms1284.pd

Towards Asymmetric Information for the G2B Inter-Organizational Networks

With the emergence of innovative (networked) organization forms such as enhanced supply chain collaboration and modern forms of public-private partnerships (PPP), effective and efficient collaboration among network participants becomes crucial but often difficult to achieve. One of the leading factors&#; which cause such defective collaboration is the asymmetric information issue among the network participants. Two identifiable problems resulted by the asymmetric information are the moral hazard and adverse selection problems. Former studies mainly positioned asymmetric information problems within the context of traditional business environment; in this paper we suggest that similar problems may also occur in the Government to Business (G2B) context. We discuss these issues via a collaborative pilot case study (hereafter, Beer Living Lab) between the Dutch Tax and Customs Administration (DutchTCA) and a Dutch beer company (Beer Co.). The paper reveals that both moral hazard and adverse selection problems may occur during the G2B interactions and tamper the relationships between the two. In addressing these problems, we propose an advanced information technology (IT) solution, drawing upon an effective and efficient information sharing schema that can on the one hand minimize the moral hazard by enhancing supply chain management for the business and on the other hand preventing tax fraud for the government. Further we argue that the application of the advanced IT may serve as a strong signaling and screening tool for overcoming the adverse selection problem during the PPP forming and result in a win-win situation. The insights learned should benefit those involved in various inter-organizational business networks, partnership as well as supply chain management settings

The organization of transactions research with the Trust and Tracing Game

This paper presents empirical results of research on the influence of social aspects on the organization of transactions in the domain of chains and networks. The research method used was a gaming simulation called the Trust and Tracing game in which participants trade commodity goods with a hidden quality attribute. Previous sessions of this gaming simulation identified a list of variables for further investigation (Meijer et al., 2006). The use of gaming simulation as data gathering tool for quantitative research in supply chains and networks is a proof-of-principle. This paper shows results from 27 newly conducted sessions and previously unused data from 3 older sessions. Tests confirmed the use of network and market modes of organization. Pre-existing social relations influenced the course of the action in the sessions. Being socially embedded was not beneficial for the score on the performance indicators money and points. The hypothesized reduction in measurable transaction costs when there was high trust between the participants could not be found. Further analysis revealed that participants are able to suspect cheats in a session based on other factors than tracing. Testing hypotheses with data gathered in a gaming simulation proved feasible. Experiences with the methodology used are discusse