Showing papers in "Supply Chain Management in 1999"

Power, value and supply chain management

Abstract: Explains some of the thinking that informs both the case study articles that appear in the same issue of Supply Chain Management: An International Journal and the EPSRC funded research project currently being undertaken at the Centre for Business Strategy and Procurement. A review is provided of the dominant ideas that currently inform “supply chain management thinking”. This paradigm is characterised as operational effectiveness and efficiency. A case is made for understanding supply chains from a strategic as well as from an operational perspective. Current supply chain management thinking is criticised for being atheoretical and descriptive, and a case is made for an analytical approach to supply chain thinking based around the concepts of power and value appropriation. A more analytically robust way of understanding supply chains is laid out.

From reversed logistics to green supply chains

Abstract: To lower the environmental damage of business we need to examine our “ecological footprint”. We need to move forward with the business at the same time. In order to solve that dilemma, a value‐seeking and proactive approach to greening is proposed in the (general) management literature. However, literature on the role of supply chain operations, mostly published in the area of reversed logistics, has failed to develop grounded theory and frameworks to support the application of such an approach. Furthermore, research is needed that goes beyond the partial and fragmented contribution of reversed logistics. This research note looks at challenges for research on green steps to take, and green supply chains to make in practice, as a step up to lowering the ecologic footprint of supply chains.

Effectively managing vertical supply relationships: a risk management model for outsourcing

Abstract: A significant feature of business management in the 1990s has been the practice of outsourcing. Firms and public sector bodies have reconsidered where the boundary of their organisation should be set, and passed to third parties responsibility for many business activities. However, many firms have been disappointed with the results they have achieved from outsourcing, not least when it has concerned high profile functions such as information technology. Part of the reason for this disappointment, it is argued, lies in the methodologies (or lack of them) which have been employed by managers. Very few have taken into account the main risks of the practice or identified the required safeguards. This article seeks to address these shortcomings by presenting a model for effective risk management. The article also provides a case study – outsourcing at Hewlett‐Packard – which shows what can be achieved if managers use the right criteria for their decisions.

Collaborative planning: supporting automatic replenishment programs

Abstract: Automatic replenishment systems that restock inventory based on actual demand triggers rather than relying on long‐range forecasts and layers of safety stock have been implemented in a great number of firms in recent years. Now these same firms are taking supply chain cooperation to another level through involvement in collaborative planning/forecasting/replenishment (CPFR). The results of a recent survey assessing current levels of involvement in cross‐organizational collaboration among firms utilizing automatic inventory replenishment are presented. The results provide strong support for positive associations between high levels of CPFR and implementation of operating process change and information system capabilities. Results supported only a very weak association between CPFR and effectiveness in achieving operational performance goals.

Success factors in the fresh produce supply chain: insights from the UK

Abstract: Presents recent evidence of supply chain developments in the UK fresh produce industry, based on interviews with chief executives from some of the country’s most successful suppliers. A number of success factors were evident, to varying degrees, in all of the companies interviewed. These included: continuous investment (despite increasingly tight margins), good staff (to drive the process of innovation and develop good trading relationships with key customers), volume growth (to fund the necessary investments and provide a degree of confidence in the future), improvement of measurement and control of costs (in the pursuit of further gains in efficiency), and innovation (not just the product offer but also the level of service and the way of doing business with key customers).

Postponement and the reconfiguration challenge for food supply chains

Abstract: Both postponement and outsourcing have been identified as important characteristics of modern and competitive supply chains. The implementation of postponement may require extensive (spatial) reconfiguration of the supply chain. Presents findings from interviews with managers of food, electronics, automotive and clothing manufacturers in The Netherlands, Belgium and Germany. Findings reveal that in food supply chains both postponement and outsourcing are applied to a lesser extent than in other industries. Reasons, which refer to the industry‐specific characteristics, are given. Ways for food companies to assure competitiveness are then described on the dimensions of postponement, outsourcing and spatial reconfiguration. A framework is developed to position chains in terms of degree of outsourcing, level of postponement and spatial configuration. The framework can help managers diagnosing and repositioning their organizations, along the dimensions mentioned.

A research agenda for supply chain and business management thinking

Abstract: Summarises the key learning points in supply and value chain mapping. It demonstrates that there is no best way to manage supply chains. Concludes that the key to success in business is based on recognising the types of supply chains that exist and aligning strategy and operational practice with the specific properties of the supply chain that the company is positioned within. It is argued that some supply chain structures do not lend themselves to effective value appropriation, so that entrepreneurial rents may not be achievable in all circumstances. It is argued, in conclusion, that this way of thinking about supply chains and supply innovation – referred to here as procurement and supply competence – is underdeveloped in business management thinking.

The general principles of value chain management

Abstract: Explores the principles of value chain management, as they apply to both public and private products, and explores the impact of e‐commerce and collaborative planning through the Internet on reducing costs and uncertainty in supply chains. Drawing on experience from global initiatives with e‐centreuk, and recent applications within Nestle UK, makes a plea for simplicity and standardisation in electronic commerce, to support speedy and certain value chain management across the globe.

Efficient consumer response (ECR): a survey of the Australian grocery industry

Abstract: Efficient consumer response (ECR) is a supply chain management strategy which attempts to address the inefficiencies that have led to excessive inventory and unnecessary costs at all levels within the grocery industry supply chain. Although originating in the USA, ECR has also attracted attention and interest in many other countries. This paper presents the results of an Australian study which was designed to assess the applicability of ECR within the Australian grocery industry. The results of the study indicate that the inefficient business practices of the US supply chain are also prevalent within the Australian grocery industry and that some Australian companies had already begun to engage in business activities related to ECR as early as 1996.

The making of a lean aerospace supply chain

Abstract: Presents the details of an initiative launched in 1995 to transform an aerospace machined parts supply chain comprised of many small businesses from high cost mass production to lower cost lean production. It presents the overall conditions as they existed at the onset of the initiative, strategies and tactics that were used to bring about the desired changes, and an analysis of the business practices, cultural, and behavioural factors that contributed to successes and failures. Recommendations are given to help others in their quest to develop lean supply chains. The lessons learned are most applicable to supply chains containing a large number of small, privately held, businesses making inexpensive parts. However, many of the recommendations will also apply to supply chains containing larger publicly held companies producing more expensive parts or assemblies.

The innovation supply chain

Abstract: Outlines the problems involved when marketing to consumers in mature markets. Emphasises the need to build a direct knowledge of their consumers and to differentiate the service, product and brand from those of competitors. Asserts that small, distinct service experiences will combine to create a strong overriding impression of quality and value, and this mechanism is the foundation of achieving a strong brand. However, to be achieved in practice, these service targets need to be understood and communicated clearly up and down the innovation supply chain. This involves full co‐operation between marketers, designers, manufacturers and distributors.

The perception gap among buyer and suppliers in the semiconductor industry

Abstract: Strong and productive partnerships between buyers and suppliers are important for effective outsourcing. Such partnerships should be based on mutual understanding, which can be hampered by a perception gap between the supply chain partners with respect to what are the critical factors for a successful buyer‐supplier relationship. The nature of such a perception gap is explored by looking into the partnership between a Korean semiconductor manufacturer and its suppliers. Results indicate that there exist statistically significant differences in some of the perceptions both between the manufacturer and its suppliers and among the suppliers according to their production capability and product requirement.

Barriers to partnerships in the public sector: the case of the UK construction industry

Abstract: This article examines the changes in the relationship between government departments and the UK construction industry brought about by the privatisation of the Property Services Agency (PSA). In particular, it shows that while there has been some encouragement for closer, and more long‐term, collaboration, in reality government departments seem to be stuck in a short‐term, win‐lose orientation. The article concludes by arguing that this is a product of four factors: the lack of experience among both purchasers and providers of long‐term partnership arrangements; the risk‐aversive nature of the Civil Service; the pressure on departments from ministers to minimise risk; and government guidelines on competitive tendering which make it difficult to enter into long‐term agreements.

Genetically modified organisms, consumer scepticism and trade law: implications for the organisation of international supply chains

Abstract: Given the rapid rates of technological improvements possible, using modern biotechnology, the product life cycle of new genetically modified organisms (GMOs) is likely to be short and, hence, those investing in their development will desire access to the widest international market possible. There is, however, considerable consumer scepticism regarding GMOs, which is being translated into both government policy responses and actions by firms who are near the consumer end of the supply chain. As the licensing of GMOs is likely to vary from country to country and regulatory regimes will differ, firms involved in international supply chains for food products will be affected by the interplay of trade policy and consumer scepticism. All firms, even those not handling GMO products, will be affected because costly new monitoring procedures will be required. These additional monitoring costs suggest that competitive advantage is likely to be conferred on those supply chains which exhibit superior vertical co‐ordination.

Lamb‐buying preferences of Canadian abattoirs and producer marketing groups: implications for the Canadian supply chain

Abstract: The Canadian lamb industry is small compared to lamb industries in many other countries and the supply chain for lamb is weak and fragmented. Without improvements in the flow of information, product quality and continuity of supply, the formal supply chain in Canada may collapse and Canadian lamb will become a local cottage industry with the retail chain and institutional markets serviced by offshore suppliers. Examines one of the key interfaces in the Canadian lamb supply chain. Conjoint analysis is used to assess the attitudes of the major commercial buyers of lambs ‐ abbatoirs and producer marketing groups ‐ towards key attributes of the lamb supply chain. The relative importance of a number of characteristics are assessed: a regular supplier, the basis of payment, reduced handling of lambs from farm to abattoir and the price paid for the lambs.

Supply chain competitiveness and capabilities of constituent firms: an exploratory study of the Korean home appliance industry

Abstract: Addresses the issue of supply chain competitiveness from the manufacturing capability perspective. Six supply chains are analysed, based on three manufacturers in the Korean home appliance industry. The case study findings demonstrate the strong connection between capability requirements of suppliers of critical parts and competitive priorities of manufacturing customers. For suppliers of non‐critical items, delivery and cost are the most important capability dimensions. The factors influencing congruence between customer requirements and the capabilities of constituent firms are also examined. Mutual co‐operative behaviour, specificity of transaction‐related assets, and “criticalness” of traded parts are identified as the key factors influencing congruence.

Satisficing dependent customers: on the power of suppliers in IT systems integration supply chains

Abstract: Provides both a descriptive and an analytical understanding of the supply chain for IT systems integration. It explains which firms in the chain have power and how this impacts upon value appropriation. The article is structured around three parts. The first is a descriptive mapping of the supply chain based on the key functional stages. The second is a descriptive mapping of the corresponding value chain based on the revenues and gross profit margins typically being earned at each functional stage. The final section contains a discussion of the structures of power and the competitive dynamics, and by extension the appropriation of value, in the chain. Buyer ignorance and information asymmetries are identified as the key factors in this case that determines the appropriation of value.

Standardisation of crates: lessons from the Versfust (Freshcrate) project

Abstract: The large‐scale introduction of a new packaging concept requires co‐ordination in two areas: organisational co‐ordination is necessary (negotiations between the parties involved), as well as technical co‐ordination (technical specifications). These aspects are analysed in this paper on the basis of standardisation and strategic management literature. The theory is illustrated using the successful introduction in The Netherlands of the Versfust (Freshcrate): a standard crate for the distribution of fresh food products. A systematic approach to standard packaging is both desirable and possible, as emerges from literature and from the Freshcrate product.

The impact of coupled‐consolidation: experiences from the Irish food industry

Abstract: The Irish food industry is of significant importance to the Irish economy. Given its dependence on UK multiple retailers, their supply chain management practices have considerable implications for the whole of the Irish economy. Retailers’ attempts at improving efficiency at their regional distribution centres have resulted in the growing use of consolidation centres whereby food products from several manufacturers are consolidated into full loads for delivery into RDCs. Results of three case studies suggest that the use of a particular form of consolidation (i.e. coupled‐consolidation where in‐bound logistics are coupled with consolidation services) results in the imposition of costs, especially in terms of lost flexibility, to food manufacturers. The distribution of these costs is asymmetric, with smaller firms bearing the greater costs.

Preconditions and dynamics of logistics networks in the Dutch building industry

Abstract: Argues that logistics networks in the building industry will develop in relation to transaction‐specific investments in new information technologies such as EDI and PDI. This is particularly the case where strategic considerations play a subordinate role and efficiency arguments are stressed. The limitations of the transaction cost approach are also discussed. In the building industry, logistics networks are not only directed towards a minimisation of transaction costs, but are also striving for joint value maximisation. Co‐operation between designing and constructing parties makes it possible to present a “total product” to the market. Opportunistic behaviour is replaced by mutual trust. Instead of bounded rationality, know‐how is transferred between firms for product development. This change will fundamentally alter the nature of competition in the building industry in the near future.

Passing value to customers: on the power of regulation in the industrial electricity supply chain

Abstract: Provides both a descriptive and an analytical understanding of the supply chain for industrial electricity. It explains which actors in the chain have power and how this impacts upon the process of value appropriation. There are three main elements. The first is a descriptive mapping of the supply chain based on key functional stages, resources and resource ownership. The second is a descriptive mapping of the corresponding value chain based on the revenues and gross profit margins typically being earned at each functional stage. The final element is a discussion of the power resources that determine the competitive dynamics, and by extension the appropriation of value, in the chain. Regulatory intervention by the state is identified as a key mediating factor in this case.

Enterprise resource planning ‐ the end of the line for the sales automation market and a major step towards sales process definition standards?

Abstract: Reviews the current status of sales, marketing and customer service processes. Outlines how business processes or other disciplines are not necessarily appropriate to marketing. Asserts that there will continue to be greater emphasis to integrate ERP and sales and marketing systems and that sales and marketing departments which develop “best practice” sales process will be in a better position to exploit new technology. This implies that traditional “back office” and “front office” processes should be integrated to provide the overall supply chain management system.

A new era for efficient food manufacturing in the Lebanon: the experience of Conserves Modernes Chtaura

Abstract: Addresses the way in which Conserves Modernes Chtaura (CMC) of Lebanon is tackling the challenges of increased competition in the Lebanese food industry. Describes the company’s attempts to re‐structure its supply chain to improve links with farmers and raise quality standards, as the Lebanon enters a new era of food processing. Concludes that the continuous globalisation of food markets will necessitate the elimination of all subsidies and import control policies currently operated by the Lebanese government. Food processing will be transformed by a much higher degree of complementarity with the farming industry, through vertical alliances, and with the retail industry, through improved supply chain management. Gives the most important strategies that CMC are currently pursuing.

Power and value appropriation in the direct‐marketing publishing supply chain

Abstract: Cox contrasts the two strategic options facing the firm wishing to successfully compete in its marketplace. The first of these options is based on cost control through replicable improvements in operational efficiency. The second is based on market closure and power through the development of non‐replicable skills and competencies. This paper, on the direct‐marketing publishing supply chain, will attempt to show that strategies of efficiency are the second best option since they force the firm onto a treadmill in which value cannot be retained but instead must be passed to the customer. This abrogates the reason for the firm’s creation in the first place.

Constraints to quick response systems in the implosive industries

Abstract: Studies the problem of producing a product range with high customer service in the implosive industries. In the implosive industries a wide range of end products are manufactured from a limited number of standard materials. The problem of producing a product range with high customer service is studied within the framework of product range, capacity and customer acceptable lead time. In the existing just‐in‐time literature, strong emphasis is put on set‐up and through‐put time reduction for achieving high product availability with low cost. However, the decision regarding the product range and its implications on production control is not adequately considered. It is proposed that the relevant time scope to consider demand and capacity is the product range cycle. Three cases from the food and paper industry are studied. The cases indicate constraints for achieving quick response capability.

Creating a new culture: The CERT challenge

Abstract: Drawing on the experience gained from the recent turnaround of fortunes at The CERT Group, describes the key role of customer service and the challenges associated with establishing a service culture in one of the UK’s leading third party logistics providers. The process was so successful that the company branded it “success with service”, thereby helping internal staff buy into the company’s mission and live the company’s mission, as well as delivering direct benefits to the company’s bottom line, by assisting customer retention and winning new business.

The analysis of a conveyor belt system : a case study in hybrid systems and timed muCRL

Abstract: A Conveyor belt system, together with its safety and efficiency objectives is described and studied in the setting of timed j.LCRL [9]). First, various safety requirements, dealing with the safe transportation of trays from the front end to the back end of the belt, and the speed of the belt are stated. Subsequently, a specification in timed peRL is given for such a system. This specification is the subject of further calculations and analysis. Using various techniques and theorems, devised within the theory of timed peRL, such as the Sum Elimination Theorem and the Encapsulation and Expansion Theorem, properties of the system are proved and discussed. Also, a section is devoted to a brief comparison between the theory of Hybrid Automata [14} and timed "CRL.