Do Buyer's Supporting Efforts For Sub-Supplier Make Prime Supplier's Performance Better?

It is widely accepted that capable suppliers do important role for buyer's competitiveness in today's business environment. Moreover, not only the importance of supplier development but also the importance of sub-supplier development has been emphasized. This study examines how buyer's efforts of supporting sub-supplier development impacts on performance of prime supplier. The study results show that while buyer's effort of monitoring and information sharing to sub-suppliers improve the performance of prime supplier, buyer's effort of knowledge sharing do not improve prime supplier's performance.

Strategic interdependence in the East-West gas trade : a hierarchical Stackelberg game approach

The current and potential benefits of the East-West gas trade are enormous for all participants. Realizing those benefits requires significant upfront investments. But the new, more complex structure of the gas transit system that has emerged following changes in Eastern Europe and the former Soviet Union has created uncertainties that bear on the expected benefits from investment. The authors argue for the existence of stable contracts that would create an environment more conducive to investments and allow all participants to benefit from expansion of the gas trade. As a guide to formulating incentive-compatible, transparent, flexible contracts, they propose a framework based on a Stackelberg game, with three players (a supplier, a transiter, and an importer) under Russia's leadership. They use this framework to analyze the contract modifications that would ensue from changes affecting the gas trade. They concluded that: (a) increased competitiveness of the transiter and supplier through cost reductions would improve the payoffs to all players (the transiter's and supplier's profits and the Western importer's welfare). Strategic behavior on the part of the supplier and transiter would ultimately reduce the price to the importer, enlarging gas demand and reducing costs. If increased competitiveness is the outcome of more costly gas from sources other than Russia, both the supplier's and the transiter's payoffs would improve but the importer's welfare would deteriorate. The supplier and transiter would have leeway to strategically raise their price and transit fee, respectively, while gaining market share. But the importer would face rising costs for gas imports and would lose welfare; (b) an increase in the scope for the importer to substitute between alternative sources of gas improves welfare for all three players. The perception by the supplier and transiter of increased threat of competition leads to a preemptive move not to lose market share. The transiter and supplier reduce the transit fee and supply price, respectively, allowing the importer to face a lower gas price. Import demand expands and welfare improves. The expanded trade more than compensates for the reduction in the transit fee an supply price and allows larger payoffs for transiter and suppliers; and (c) the perception of increased reliability of Russian gas supplies expands demand for Russian gas and leads to the expansion of trade. The supplier and transiter can raise their respective charges with expanded volume, improving their payoffs. The importer's welfare deteriorates as the cost of importing gas rises. The predictability of the players'reactions to changes in the environment would build confidence in the reliability of gas trade and allow its expansion benefiting all participants.Water and Industry,Economic Theory&Research,Environmental Economics&Policies,Energy Trade,Markets and Market Access

Identification of Performance Measures for Textile Supply Chain: Case of Small & Medium Size Enterprise

Identifying the performance measures for textile supply chain network is rapidly growing multi criteria decision making problem and so the task of performance measurement due to large number of parameters involvement. Selection analysis of appropriate performance measures is critical to achieve success for textile industry in todays global competitive market. With this paper, we tried to overcome it by recognizing three areas; i) cyclic processes of supply chain network (procurement-production-distribution), ii) measures under three decision making levels iii) considering balanced scorecard (BSC) perspectives Developed a framework for supply chain performance measurement and analyzed using analytical hierarchy process

Supplier relationship management best practices applied to the manufacture of a helicopter airframe in China

Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering; in conjunction with the Leaders for Manufacturing Program at MIT, 2009.Page 67 blank.Includes bibliographical references (p. 65-66).Sikorsky's recently begun program to manufacture the S-76 helicopter airframe at a supplier in China is examined as a case study of supplier relationship management. Best practices and key principles from the literature and other industry case studies are identified. Key concepts covered include: importance of product architecture and supplier strategic role on the appropriate type of supplier relationship to develop; the different stages of relationship management; the concept of making investments in a supplier relationship as a way of achieving desired relationship closeness; the importance of geography and culture on foreign supplier relationships. The best practices and principles are then used to analyze Sikorsky's performance in the China S- 76 airframe program to date. It is found that while Sikorsky is engaged in several key supplier relationship management activities, significant improvement could be made by more carefully considering how to overcome geographic and cultural distance and by making decisions about relationship investments in a more analytical way, with a focus on bottom-line financial impact. Finally, a generalized process for managing supplier relationships is developed. The six steps are: * Determine the appropriate relationship to develop with the supplier * Determine current supply chain proximity with the supplier * Determine stage of supplier relationship management and appropriate type of investments * Develop menu of relationship investment options * Determine the attractiveness of investment options * Select, prioritize and make investments.R. Jon King.S.M.M.B.A

Manufacturing requirements and quality control of critical mechanical parts as part of a more efficient production process

This research aimed to find out how the manufacturing requirements of critical parts and their quality control affect the production process, how the requirements are determined, and how quality control is implemented. Qualitative research methods were used in this research. The primary data consisted of interviews. According to the research results, manufacturing requirements of critical parts and their quality control affect the production process. Without sufficient measurements and proper investigation based on the finished mechanical parts received from the suppliers, the production process can have a considerable impact. The faulty mechanical parts can cause the process to suffer to pro-duce final products in the factory, and line stoppage may happen. It is also seen that these meas-urements improve the effectiveness and efficiency of the production process. The requirements were determined based on the specification of the finished parts, the equipment, and the work-force available. Collaboration with suppliers is used in some cases to determine the require-ments. With enough crew and good testing equipment, the company is able to take preventive actions to ensure a flowing production process. Quality control was implemented in the produc-tion process using specialized testing and inspection tools and strict quality control procedures. Those tools give more detailed answers so that the currently faced quality issues can be solved, and thus, similar problems will not occur in the future. Also, in order to perform adequate quality control, the production team must collaborate and communicate effectively. The core issues of manufacturing-based definitions of quality, which focus on the supply side of the equation, are engineering and manufacturing processes. The results are only partially gener-alizable because this research was a case study. However, results can be utilized in the target organization, at least to some extent, so there are some practical implications in the research too

Ceramic supplier selection using analytical hierarchy process method

This study tried to implement the Analytical Hierarchy Process (AHP) and the weights of the criteria and sub-criteria to find the best supplier. According to QCDFR (quality, cost, delivery, flexibility, and responsiveness). This study took place in one of the biggest tile producers, ranks fifth in the world and the first in Indonesia. However, the company currently only uses quality, cost, and delivery methods to choose the best supplier of raw material, namely feldspar. This research tries to use the systematic method to find the best supplier based on the importance of the criteria. The method used the quantitative approach to enumerate the data to analyze the information.  The company analyzed six suppliers. The primary tool used in this research is a Super Decision Software version 3.2 to create and manage the AHP model, enter the judgments, get results, and perform sensitivity analysis on the results. The result found that Semarang is the best supplier. The company will choose Semarang to become the company's business partner compared to the other suppliers because Semarang has met the criteria that the company prioritizes the most. By having the best supplier selection, the company can provide the right material consistency and suitable material suitability

Systems Approach to EPC Material Procurement Strategy

The criticality of procurement and logistics to the success of Engineering Procurement Construction (EPC) projects cannot be over emphasized, as it has been a large area of opportunities that should be adequately exploited to enhance the overall performance of construction projects. EPC firms, which act as a catalyst for a nation’s economy growth, still suffer from work backlog, and this further hinders them from functioning at their optimum level. The work backlog often arises from delay caused by the stakeholders of the complex EPC system. Furthermore, the delay may arise from design or management decisions. Therefore, there is a need to study the effect of decisions taken by stakeholders to know the behaviour of the material procurement system with a focus on the timely delivery of construction materials to construction sites to ensure a smooth running of the construction process and prevent the work backlog due to shortage of materials on sites, which eventually leads to schedule and cost overrun. The purpose of this study is to develop a novel Systems Dynamics (SD) decision support model to improve the construction material supply chain performance. The model emphasizes the essence of information sharing, collaboration, and trust among stakeholders; as such, the model may help EPC managers take effective decisions in an EPC material procurement system. The context of EPC, which this study is focused is to bulk construction materials. This model will be a particularly useful tool to assist decision makers in evaluating the impact of material shortage and time delay by observing the simulated scenarios accordingly and in developing various effective policies

Effective contracting of uncertain performance outcomes : Allocating responsibility for performance outcomes to align goals across supply chain actors

This dissertation contributes to practice and literature by studying how organizations can effectively contract and sell uncertain performance outcomes. In Chapter 2, I study whether supplier shirking in response to outcome uncertainty can be mitigated by combining performance and behavior specification and evaluation. Based on the findings of this study, I advise purchasing managers to invest in the evaluation of perform

Inventory control in supply chains: Alternative approaches to a two-stage lot-sizing problem

The principal challenge of inventory control in supply chains is that the interacting autonomous enterprises have to plan their production and logistics under information asymmetry, driven by different, often conflicting objectives. In this paper, four different computational approaches are investigated to cope with this challenge: decomposition, integration, coordination, and bilevel programming. The four approaches are applied to solving the same two-stage economic lot-sizing problem, and compared in computational experiments. The prerequisites of the approaches are analyzed, and it is shown that the profits realized and the costs incurred at the different parties largely depend on the solution approach applied. This research also resulted in a novel coordination mechanism, as well as a new algorithm for the bilevel optimization approach to the investigated lot-sizing problem. A specific goal of this study is to highlight the so far less recognized application potential of the coordination and the bilevel optimization approaches for controlling inventories in a supply chain. © 2012 Elsevier B.V. All rights reserved