Kefeng Xu

A SUPPLY CHAIN MODEL OF VENDOR MANAGED INVENTORY

Abstract This research evaluates how vendor managed inventory (VMI) affects a supply channel. Specifically, VMI always leads to a higher buyers profit, but suppliers profit varies. In the short-term, VMI is found to reduce total costs of the channel system, but under certain cost conditions between buyer and supplier, it could decrease the purchasing price and suppliers profit. In the long-run, it could more likely increase suppliers profit than in the short-run. Finally, VMI is an effective supply chain strategy that can realize many of the benefits obtainable only in a fully integrated supply chain.

TOWARDS BETTER COORDINATION OF THE SUPPLY CHAIN

This paper analytically examines the improvement of supply chain coordination (SCC) through more effective information exchange and consistent forecasting. It shows the negative impact that independent actions taken by members of a conventional supply chain typically have on order release volatility and forecast error volatility. Such increases in variation are argued to pose tremendous planning and utilization problems. This paper demonstrates when and to what extent such fluctuations can be controlled through collaboration within the supply chain.

Logistics information technology practice in manufacturing and merchandising firms – An international benchmarking study versus world class logistics firms

Logistics information technology (IT) can be a significant source of competitive advantages. Examines logistics IT practices for different industries and global regions and identifies any IT gaps between world class logistics firms and their more average (baseline) counterparts. Overall, the merchandising firms were perceived to have a lead over the manufacturing firms for most of the nine logistics IT issues probed. Among the baseline firms, the European firms seemingly outperformed the North American and Pacific Rim firms in the five‐year improvement in LIS capability, LIS resource share increase, and the adequacy of LIS in meeting the firm’s requirements. The North American firms took a significant lead in issues related to EDI, barcode, and real time communications. However, all these baseline firms probably have to look up to the world class logistics firms for excellency in major IT practice, confirming the notion that being world class does make a difference.

Estimating customer service in a two-location continuous review inventory model with emergency transshipments

Abstract In this paper, an approximate analytical two-location inventory transshipment model is developed that combines the popular order-quantity, reorder-point (Q,R) continuous review ordering policy with a third parameter, the hold-back amount, which limits the level of outgoing transshipments. The degree to which transshipments improve both Type I (no-stockout probability) and Type II (fill rate) customer service levels can be calculated using the model. Simulation studies conducted to test the validity of the approximations in the analytical model indicate that it performs very well over a wide range of inputs.

The direct and contingency effects of supplier coordination and customer coordination on quality and flexibility performance

In todays highly competitive environment, a goal-oriented supply chain needs coordination to manage the interdependent activities of supply chain partners. The role of coordination mechanisms is critical in achieving supply chain performance. We thus suggest that supplier coordination and customer coordination influence performance, operationalised in this paper under two dimensions, e.g., quality and flexibility. Moreover, drawing on contingency theory, we suggest that the relationships are contingent upon factors such as firm size and clockspeed. Using empirical data collected from 197 production/operations managers of Chinese manufacturing firms, a regression analysis approach is employed to test the theoretical framework. The results provide support for the four direct and positive relationships between each coordination mechanism studied and quality and flexibility performance. The interaction between supplier coordination and size was directly and positively related to quality performance (large size effect). However, the interaction between customer coordination and size was directly and negatively related to flexibility performance (small size effect). The interaction between supplier coordination and clockspeed was directly and positively related to only flexibility performance. Implications for managers and academics and suggestions for future research are offered.

The effects of customer contact on conformance quality and productivity in Chinese service firms

Purpose – The purpose of this research is to examine how service enablers such as resource management and human resource management practices, identified in prior research as vital, influence both conformance quality and productivity performance. The paper also aims to study how the level of customer contact, a major service differentiator, could moderate the influence of such practices on performance.Design/methodology/approach – Using sample data from 249 service firms in China, hierarchical a regression analyses is employed to test the research questions.Findings – The results indicate that there are common resource management and human resource management practices that positively affect both conformance quality and productivity. Importantly, besides its direct and positive effect on conformance quality and on productivity performance, the level of customer contact was found to have a contingency effect on the relationships between resource management or human resource management practices, and confor...

Managing single echelon inventories through demand aggregation and the feasibility of a correlation matrix

This paper examines the assertion that partial pooling of customers is sometimes favored over complete pooling on the sole basis of demand correlation. First, the management of inventory within a supply chain is discussed, with specific attention paid to risk-pooling. Then, the claim that partial pooling can dominate is theoretically discussed. The conditions under which previous research found that partial aggregation could, at times, be preferable are investigated next. From this, methods are proposed for checking correlation matrices to ensure their validity. It is concluded that partial pooling can never do better and that examples supporting partial aggregation are based on inconsistent correlation matrices.

'Too little' or 'Too late': The timing of supply chain demand collaboration

This study examines the supply chain demand collaboration between a manufacturer and a retailer. We study how the timing of collaboration facilitates production decision of the manufacturer when the information exchanged in the collaboration is asymmetric. We investigate two collaboration mechanisms: ‘Too Little’ and ‘Too Late’, depending on the timing of information sharing between the manufacturer and the retailer. Our research results indicate that early collaboration as in the ‘Too Little’ mechanism leads to a stable production schedule, which decreases the need of production adjustment when production cost information becomes available; whereas a late collaboration as in the ‘Too Late’ mechanism enhances the flexibility of production adjustment when demand information warrants it. In addition, the asymmetric demand information confounds production decisions all the time; the manufacturer has to provide proper incentives to ensure truthful information sharing in collaboration. Information asymmetry might also reduce the difference in production decision between the ‘Too Little’ and ‘Too Late’ collaboration mechanisms. Numerical analysis is further conducted to demonstrate the performance implications of the collaboration mechanisms on the supply chain.

Transshipment incentive contracts in a multi-level supply chain

Transshipments within a supply chain can be difficult to implement as the costs and benefits are often incurred by different parties. This difficulty becomes even more problematic when the costs and benefits are not completely known by all parties. The primary purpose of this paper is to introduce the role of asymmetric information into the design of supply chain transshipment contracts. Using a representative supply chain from within the soft drink industry as an example, a multi-level contracting framework is developed that aligns incentives to encourage transshipments and improve performance in the absence of all parties having full information. Analysis of the proposed framework suggests that, even if a transshipment is likely to be unprofitable to the transshipping dyad, it may still be best for the entire supply chain. Moreover, overall supply chain inventories with transshipments do not necessarily increase relative to the no-transshipment case.

Determinants of quality and efficiency performance in service operations

Purpose – Using arguments from the knowledge-based view and resource-based view of the firm, the purpose of this paper is to propose that external knowledge (as measured by a firm’s customer orientation) and internal knowledge management (through human capital development techniques of job-related training and enhancing employee capability) together contribute to successful service delivery systems. Design/methodology/approach – The hypothesized model is tested on a large sample of 249 Chinese service firms using structural equation modeling and hierarchical regression analyses. Findings – The results indicate that the knowledge management factors of customer orientation, employee capability and job-related training had a varying influence on quality and efficiency dimensions of service system performance. Also, internal knowledge facets of employee capability and job-related training had complementary effects in inducing improved performance on both quality and efficiency. Research limitations/implicatio...