Salem Y. Lakhal

On the optimization of supply chain networking decisions

Companies strive to position themselves to maximize the value they add to the supply chains in which they are embedded. This raises strategic questions such as: Which durable resources should be developed to enhance current core competencies? Which activities should be externalized and to which potential partner should they be given? Which internal activities should be preserved and developed? How should the resources of the enterprise be allocated to activities? The aim of this paper is to propose a mathematical programming model of the extended enterprise which can be used to investigate this type of strategic networking issues. A number of general network modeling constructs are first proposed. A model to optimize the supply chain structure under specific assumptions on the nature of production, cost and value functions in typical production/distribution companies is then derived. A heuristic to obtain solutions from the model is also presented. Finally, an example based on a refrigerator company is used to illustrate the usefulness of the approach. ” 2001 Elsevier Science B.V. All rights reserved.

An operational profit sharing and transfer pricing model for network-manufacturing companies

Abstract New age companies are forging partnerships with other firms to market products that have been assembled through manufacturing activities distributed at different locations. These locations belong to more than one company and the product passes through these different sites during its manufacturing stages. This manufacturing collaboration is known as network-manufacturing. According to the network philosophy, companies form alliances to manufacture a product and share in its operating profits. This paper proposes a framework and methodology for profit sharing and transfer-pricing between network companies. We propose a paradigm that enables maximization of operating profits by the manufacturing-network in its larger supply chain, suggesting a departure from the model that maximizes profits for the individual company within the sphere of its own supply chain.

Network companies and competitiveness: A framework for analysis

Abstract Business networking for the purpose of becoming globally more competitive seems to form the very basis of strategic decisions in many companies today. The concept of “network company” has recently been the subject of many studies in the literature, perhaps mostly due to its world wide practice among more successful companies. Yet, there is no model-based formal treatment of the concept per se leading to the development of frameworks that are instrumental in formulating networking strategies. This paper addresses itself to formalizing the concept of “network company” within the context of global competition. For this purpose, “network company” is positioned in the value chain of pertinent product–market chain systems and then its functioning is decomposed into a set of minimal and basic components, which are termed “elementary resources, methods, products, and activities”. The set thus defined at that detail level is used to analyze and evaluate “network companies” at any desired condensed level reflecting the needs of a project or a function for the purpose of competitive strategy formulation. The formal analytical framework developed is then discussed in association with three basic approaches to competitive strategy formulation: resource-based strategy, activity-based strategy, and strategy based on the economic theory of the firm. The usefulness of the proposed framework in connection with these approaches is expressed in terms of formal propositions.

Comparing conventional and certified organic cotton supply chains: the case of Mali

The certified organic cotton supply chain is compared to the conventional cotton supply chain in Mali. The most important differences between the two supply chains are highlighted in this study. Switching to organic production may offer a range of potential advantages to cotton farmers, including lower expenses for farm inputs, healthier soils, diverse sources of income, and higher prices. A comparison of the gross margins of both production methods indicates that Mali organic cotton may be able to offer higher gross margins than conventional cotton farming.

A model for assessing the greenness effort in a product supply chain

Many organisations are beginning to acknowledge that strategies and practices, which incorporate environmental considerations, can be tooled to acquire a competitive advantage. While proactive and value-seeking approaches have been suggested in the management literature, very few theories and frameworks have been presented in the domain of supply chain operations. In this paper, we suggest a framework, using gap analysis to compare the greenness effort for concurrent product supply chains. This praxis would help managers to achieve the following: (1) assess and benchmark a supply chain effort for a company product against similar products produced by competitors and (2) determine the gap between the current supply chain greenness effort and the ideal or targeted green supply chain. An illustrative example is used to substantiate the main argument. The results of this research would help state authorities and industrial managers keep track of the efforts made by companies when addressing environmental issues. This study responds to the needs of researchers in the green supply chain to develop models easy to understand and to apply by managers, not operational research specialists.

A market-driven transfer price for distributed products using mathematical programming☆

A distributed product has its manufacturing activities distributed among many locations. These locations could belong to one or more firms in a manufacturing network. Often, components needed to manufacture a distributed product move through different nodes in the network and sometimes across international borders. Hence, a transfer price is needed for the purpose of estimating duties and drawbacks. Being aware of the fact that transfer price can be used to manipulate taxable profits, many countries have instituted rules concerning transfer price estimation. For example, in the United Sates, the Internal Revenue Service (IRS) says that the right price is the market value. But for many components it is difficult to find a free market. Similar products may exist in the market but they may have different attributes. In such cases, it is important to be able to estimate the market-driven transfer price, given other similar products in the open market.We develop a method using a mathematical programming model and providing companies an opportunity to work proactively with the IRS in a cooperative manner in order to avoid costly audit and litigation. This way, companies avoid penalties and also gain certainty regarding tax liability. An example illustrating the method is presented.

The governance of international technology transfer: evidence from case-based analyses

This paper analyses the governance of knowledge partnerships that form a relationship, where each partner keeps its identity while knowledge is transferred from a powerful to a weaker partner. By using theories and five international cases of technology transfer, this analysis reveals specific features of knowledge partnerships, characterised mainly by an imbalanced power in knowledge and risk. The results of this paper show that many studies dealing with alliances between equal partners may lose their validity when one of the partners has more power than the other. Seven hypotheses and a conceptual diagram are suggested.

A pricing model for a new product sold over the internet

One of the problems engendered by the internet would be an increase of the prices sensitivity resulting from an easier, less expensive comparison. This paper proposes a pricing model based on formal propositions, based upon mathematical analysis, which would allow a firm to maximise its value-added, competitive advantages perceived by customers, and its market share for a product distributed to a global market via internet. Our framework study is based on any new product upon which the customer is able to estimate a value, which is based upon a products attributes compared to those of substituted or concurrent products. The conclusion is: in order to maximise simultaneously the value-added, the market share and the competitive advantages perceived by the client, the firm should share with the client the potential competitive advantage. The sharing mode depends on the demand curve of the product and on the aggressiveness of the competition.

Towards a framework for a resilient supply chain in a turbulent environment: a review of its drivers

In recent years, unexpected events such as natural disasters, including earthquakes and tsunamis, as well as revolutions and acts of vandalism have become frequent. Events such as these can break down the supply chain flow. The supply chains capacity to recover quickly and to re-establish its flow is characterised by the supply chains resilience. The resilient supply chain receives significant attention from managers and researchers operating in the supply chain field. This study focuses on developing a framework for a resilient supply chain in a turbulent environment when it is faced with unexpected events. For this purpose, the four supply chain drivers - inventory, transportation, facilities, and information - will be exploited. This framework will be used to reinforce the supply chain resilience and to minimise the negative impact of unexpected events thereby favouring a quick return to business. This work contributes to our understanding of supply chain dynamics in a turbulent environment.