Janat Shah

Channel Coordination in Green Supply Chain Management

Environmental consciousness has become increasingly important in everyday life and business practice. The effort to reduce the impact of business activities on the environment has been labelled as green supply chain management. Any major greening project would require efforts on the part of the entire supply chain. However, very few studies have addressed the issue of coordinating the green supply chain. We consider the problem of coordination of a manufacturer and a retailer in a vertical supply chain, who put in efforts for ‘greening’ their operations. We address some pertinent questions in this regard such as extent of effort in greening of operations by manufacturer or retailer, level of cooperation between the two parties, and how to coordinate their operations in a supply chain. The greening efforts by the manufacturer and retailer result in demand expansion at the retail end. The decision variables of the manufacturer are wholesale price and greening effort, while those of the retailer are retail price and its greening effort. We find that the ratio of the optimal greening efforts put in by the manufacturer and retailer is equal to the ratio of their green sensitivity ratios and greening cost ratios. Further, profits and efforts are higher in the integrated channel as compared to the case of the decentralized channel. Finally, a two-part tariff contract is found to produce channel coordination in this problem. A numerical example illustrates the results.

Supply chain contracts with capacity investment decision: Two-way penalties for coordination

Supply chain contracting has been discussed usually under the two compliance regimes, forced and voluntary. Various contracts show different coordination characteristics in these two regimes. However, in practice, the enforcement of contracted quantities in case of forced compliance is always an issue of concern. We propose a price compliance regime for contract where the penalties, in the form of price for non-compliance on quantity, are enforceable on both parties. In this paper, we model a contract where a supplier needs to build capacity before demand is realized under the proposed price compliance regime. A need for investment in capacity can be of the form of new capacity installation or capacity enhancement or updation, and is prevalent in practice, especially in industries that witness short product life cycles, have a high rate of new product launches or deploy high technology. When a supplier makes an investment decision under uncertainty of demand, she might under-invest in capacity. This is a major concern for a manufacturer, since it directly leads to loss of sales. We include the capacity and cost to build the capacity as variables in the contract modeled and analyze how the manufacturer can influence the capacity decision of the supplier with the given contract. We analyze the impact of various penalty parameters on the suppliers capacity decision, supply chain efficiency and relative allocation of supply chain profit across partners. Further, we consider a special case of uniformly distributed demand and find analytical closed-form conditions for a sub-set of coordinating contracts. We also consider a special case where the buyer and supplier arrive at a consensus on capacity-related decision and capacity is verifiable by the buyer.

Manufacturing Priorities & Action Programmes in the Changing Environment: An Empirical Study of Indian Industries

This paper is based on a survey on manufacturing practices of Indian companies. The purpose was to get an insight into manufacturing priorities and action programmes. The study was also designed to capture the behaviour of manufacturing in the changing environment. Results indicate that manufacturing companies consider cost, quality and delivery as important objectives to be pursued, in that order, with lower priority for the flexibility – preference being for those aspects which can give immediate returns. Action programmes for achieving these objectives emphasise shop‐floor activities and also favour adapting softer options like worker training, periodic reviews etc. Companies seem to be reluctant to adopt approaches requiring either substantial investments or major organisation restructuring. Action programmes proposed by these companies for the future show no significant change when compared to the present, indicating no major shift in approach.

Distribution Centre Location Modelling for Differential Sales Tax Structure

The central sales tax (CST) in India results in a differential sales tax structure. This contributes significantly to distribution network decisions that build logistics inefficiencies in firms operating in India. In this paper, we develop a model for determining distribution centres (DCs) locations considering the impact of CST. A non-linear mixed integer-programming problem that is formulated initially is approximated to a mixed integer-programming problem. Using a numeric example, the effect of CST rates and product variety on DC locations is studied and found to be having impact. It is felt that the Indian Government proposal to switch over from the present sales tax regime to value added tax (VAT) regime would significantly contribute to reducing the logistics inefficiencies of Indian firms.

Manufacturing priorities and action programmes in the changing environment

This paper is based on a survey on manufacturing practices of Indian companies. The purpose was to get an insight into manufacturing priorities and action programmes. The study was also designed to capture the behaviour of manufacturing in the changing environment. Results indicate that manufacturing companies consider cost, quality and delivery as important objectives to be pursued, in that order, with lower priority for the flexibility – preference being for those aspects which can give immediate returns. Action programmes for achieving these objectives emphasise shop‐floor activities and also favour adapting softer options like worker training, periodic reviews etc. Companies seem to be reluctant to adopt approaches requiring either substantial investments or major organisation restructuring. Action programmes proposed by these companies for the future show no significant change when compared to the present, indicating no major shift in approach.

Unreliable newsboy problem with a forecast update

In this paper, we derive an optimal ordering policy for an unreliable newsboy who can place two sequential orders before the start of a single selling season by using a demand forecast update. Supply yield is modeled using a uniform distribution considering both the minimum order guarantee and the maximum yield. Our results indicate that a firm should focus on increasing the minimum order guarantee from a first stage supplier to reduce its total supply chain cost.

Supply chain risk management in India – practical insights

This paper reviews the supply chain risk management (SCRM) literature to identify as well as to discuss and elaborate on the impact and origin of major supply chain risk factors in an Indian context. Through a combination of existing literature and a survey instrument, we identify major SCRM issues including underlying supply chain risks and thereafter identify gaps, issues and opportunities for further research. SCRM has become a popular research topic, in part owing to increased globalisation of business. Moreover competitive factors such as shorter product life cycles, technological innovations and changing government policies have brought this topic more sharply into focus. We carried out a survey among Indian supply chain professionals, based on supply chain risk constructs developed from a literature review. Statistical analysis utilised exploratory and confirmatory factor analyses to determine the major risk factors in the Indian supply chain sector. We found a range of supply chain risks prevalent in Indian supply chains, classified here as cultural, operational, infrastructure, economic, forecasting and supplier-related risks. However, for a variety of reasons and as discussed in the paper, the implications can vary considerably. Based on the findings we provide a future SCRM research agenda from an Indian perspective. As international supply chains increasingly have Indian partners and domestic firms within India seek to be globally competitive, the risks need to be better understood. This is the first detailed study on SCRM practices in an Indian context.

A Stochastic Programming with Recourse Model for Supply Chain and Marketing Planning of Short Life Cycle Products

A firm that deals with a short life-cycle product needs to make strategic supply chain decisions such as capacity planning and initial marketing decisions such as advertising well in advance under uncertain future demand. The firm initially can only generate a set of demand scenarios and provide a realistic assessment of the demand only after observing actual demand during the initial periods. In this paper, we provide an integrated marketing and supply chain framework and suggest the use of a two stage stochastic programming with recourse to analyze this situation. The original model is a stochastic non linear model with integer constraints, which is extremely difficult to solve. So, we suggest an innovative approach to convert it to a linear mixed integer stochastic program. In the numerical study, we discuss in detail the behavior of optimal pricing and advertising policies in the presence of a supply constraint and the benefits of including stochsticity and marketing decisions that can shape the demand process while planning for the new products.

Role of Inequity Perception on Counterfeiting Strategy of Retailer

Counterfeiting is a widespread phenomenon across various sectors ranging from aerospace components to software products. Retailers often cite manufacturer taking exorbitant margins as a reason for indulging in counterfeiting. In this problem, we attempt to understand retailer counterfeiting through a behavioral lens. We try to comprehend role of inequity perception of the retailer in his/her counterfeiting decision. We analyze counterfeiting from a supply chain perspective where a monopolist manufacturer has to deal with authorized retailer selling counterfeit goods. We use the Fehr and Schmidt inequity model to capture the utility of counterfeiting retailer. Our results demonstrate that if the manufacturer tries to charge high margins beyond a threshold limit the retailer tends to retaliate by increasing the market price and indulging in more counterfeiting. We evaluate the optimal pricing strategy the manufacturer should adopt based on advantageous and disadvantageous inequality and retailer perception of fair share. The results are further compared with model where the retailer objective is only profit maximization. We show that if the retailer has high advantageous and disadvantageous inequality and his perception of fair share is below a threshold value, the manufacture can set a wholesale price at which both players have better payoff than profit maximization case.

Supply Chain Contracts Under Uncertainty of Retailer Counterfeiting

We model a supply chain scenario in which the genuine manufacturer is uncertain whether a retailer sells counterfeits alongside authentic products. We evaluate the optimal strategies for players under wholesale price contracts and two-part tariff contracts and analyse the impact of the uncertainty of retailer counterfeiting on the manufacturer’s pricing and expected profits. Furthermore, we investigate whether the two-part tariff is more effective compared with the wholesale price contract.