Erik Hofmann

Industry 4.0 and the current status as well as future prospects on logistics

Industry 4.0, referred to as the “Fourth Industrial Revolution”, also known as “smart manufacturing”, “industrial internet” or “integrated industry”, is currently a much-discussed topic that supposedly has the potential to affect entire industries by transforming the way goods are designed, manufactured, delivered and payed. This paper seeks to discuss the opportunities of Industry 4.0 in the context of logistics management, since implications are expected in this field. The authors pursue the goal of shedding light on the young and mostly undiscovered topic of Industry 4.0 in the context of logistics management, thus following a conceptual research approach. At first, a logistics-oriented Industry 4.0 application model as well as the core components of Industry 4.0 are presented. Different logistics scenarios illustrate potential implications in a practice-oriented manner and are discussed with industrial experts. The studies reveal opportunities in terms of decentralisation, self-regulation and efficiency. Moreover, it becomes apparent that the concept of Industry 4.0 still lacks a clear understanding and is not fully established in practice yet. The investigations demonstrate potential Industry 4.0 implications in the context of Just-in-Time/Just-in-Sequence and cross-company Kanban systems in a precise manner. Practitioners could use the described scenarios as a reference to foster their own Industry 4.0 initiatives, with respect to logistics management.

Value-based performance measurement in supply chains: a case study from the packaging industry

This article investigates the development of a value-based performance measurement concept in supply chains on the basis of a case study from the packaging industry. The value-based view offers a direct link between operating supply chain activities and shareholder value creation expressed in the economic value added (EVA®). The present article differs from previous examinations of performance measurement since it consequently matches the operative key performance indicators directly via value drivers to the ultimate measure of the value generation of a company. In addition, the article identifies different gaps that require further research in the area of managerial accounting and performance measurement in supply chains.

Inventory financing in supply chains: A logistics service provider‐approach

– Against the background of the scanty knowledge about inventory financing in supply chains, the goal of this paper is to provide a conceptual explanation of the relevance and the implications of alternative inventory financing by a logistics service provider (LSP)., – First, based on a literature review, inventory‐related conflicts of interest between actors in the supply chain are discussed. Second, a concept of inventory financing through an LSP is developed. Third, the concept introduced is illustrated by means of a numerical example., – The results of an illustrative example from Switzerland and a rough revenue and expenditure calculation highlight the effects that inventory financing through a logistics service provider may have for LSP. For the LSP profit depends mainly on the value and amount of the goods to be financed., – The results of this paper can be applied to logistics service providers. The model developed can accordingly be used to calculate the additional effects of inventory financing service., – This research offers initial insights into the importance of inventory financing from an LSP perspective. As activities in this field may offer additional profits and differentiation options, decision makers at logistics service providers might want to estimate the potential resting in this expansion of their service catalogue.

Linking corporate strategy and supply chain management

Purpose – The purpose of this paper is to research the nature of supply chain strategy (SCS). It represents one stage of an on‐going research initiative aimed at providing a framework for systematic understanding of the linkages between corporate strategy (CS) making and supply chain management (SCM).Design/methodology/approach – The paper explored the theory and literature related to strategic management and SCM. Four generic levels of strategy were linked to SCM, and synthesized into an explanatory SCS‐framework. Propositions for future research were presented based on the framework.Findings – The paper shows that most of the literature on SCS relates to the functional level. Largely undiscovered are the links between corporate and business unit strategies with supply chain strategies and capabilities, especially on the network level (NL).Practical implications – A fit between CS and SCM positively impacts the performance of a firm. The framework developed can be used by managers to assist in thinking t...

Big data and supply chain decisions: the impact of volume, variety and velocity properties on the bullwhip effect

The bullwhip effect is causing inefficiencies in today’s supply chains. This study deals with the potential of big data on the improvement of the various supply chain processes. The aim of this paper is to elaborate which characteristic of big data (lever) has the greatest potential to mitigate the bullwhip effect. From previous research, starting points for big data applications are derived. By using an existing system dynamics model, the big data levers ‘velocity’, ‘volume’ and ‘variety’ are transferred into a simulation. Overall, positive impacts of all the big data levers are elaborated. Findings suggest that the data property ‘velocity’ relatively bears the greatest potential to enhance performance. The results of this research will help in justifying the application of big data in supply chain management. The paper contributes to the literature by operationalising big data in the control engineering analyses.

Financial statement analysis of logistics service providers: ways of enhancing performance

Purpose – Despite the relevance of financial information relating to logistics service providers (LSPs), recent research has paid little attention to the financial analysis of LSPs. The aim of this paper is to examine the balance sheet structure of LSPs in order to find out if there are differences between single providers or defined LSP groups (clusters), respectively. Furthermore, the dependency of asset, capital and liquidity structures on LSPs specific characteristics is pointed out. Finally, we show which financial indicators positively influence profitability. Design/methodology/approach – A total of 150 quoted LSPs from all over the world, allocated to six different clusters depending on scope of service were examined. A detailed balance sheet analysis using contingency theory, complemented by a correlation analysis, provides information about the financial structure, similarities and differences within and in-between the LSP clusters. Findings – It was found that there are many differences regardi...

Exploring quality management for business services from a buyer's perspective using multiple case study evidence

Purpose – This paper aims to investigate how buying companies manage the quality for their externally sourced business services. It explores how quality management for business services influences the performance of the buying company and what the major determinants of quality management are. The paper presents case evidence on which a conceptual model with preliminary propositions is built upon.Design/methodology/approach – The paper uses case study evidence from eight manufacturing and eight service companies. Drawing on the findings of these case studies, a conceptual model with propositions is presented.Findings – The paper suggests that buying companies do not yet use quality management for externally sourced business services to its full potential. However, buying companies using quality management practices for business services report positive effects on service quality and satisfaction of internal or external customers. The major determinants affecting the intensity of quality management are the ...

Financing buyer–supplier dyads: an empirical analysis on financial collaboration in the supply chain

Awareness of capital commitment in the context of supply management has increased tremendously in recent years. However, researchers often only consider the intra-organisational perspective of financing. Consequently, a great optimisation potential, especially in globally dispersed supply chains, remains unlocked. To address this research gap, this paper presents a conceptual research model with hypotheses derived from principal–agent theory to explain the role of collaboration in the context of financing a buyer–supplier dyad and its effect on the resulting financing performance. A cross-industry survey yielding 145 responses was used to empirically test the hypotheses. The results indicate that both strategy alignment between purchasing and finance departments (intra-firm financial collaboration) as well as in the buyer–supplier dyad (inter-organisational financial collaboration) have a significant positive effect on the overall financing performance. These findings provide researchers and practitioners with a clearer understanding of upstream-oriented supply chain finance and the possibilities and constraints in its implementation.

Alignment of manufacturing strategies to customer requirements using analytical hierarchy process

The purpose of this paper is to provide new insights in the field of operations management decision-finding. It aims to combine manufacturing strategies with the service dominant logic in order to connect customer satisfaction. An analytic hierarchy process (AHP) is developed and applied within two case companies. A sensitivity analysis revealed that the manufacturing strategy selection changes when customer requirements vary. The sensitivity of manufacturing strategy alteration towards changing customer requirements is dependent on distinct product characteristics. The presented AHP offers an opportunity to define those customer requirements predominantly affecting manufacturing strategy selection. The paper provides a helpful generic framework that could serve as starting point to develop appropriate supply chain differentiation approaches.

Quantifying and setting off network performance

While many aspects of the network and the collaboration process have been discussed in management literature, quantifying and setting off the network performance have remained largely unconsidered. Network performance management is an important arena for inter-organisational interaction. Therefore, a newly developed Shareholder Value-Added (SVA) transfer model will make a contribution to ease and support improvements in network management as well as to give specific guidelines and examples for its implementation. This paper also explains the inter-relationship between network decisions and the bottom line of the firm.