Tag Archive | Book

Supply Chain Coordination with Contracts

Today I would like to talk about Supply Chain Coordination with Contracts, a chapter written by Cachon (2003). It has become the standard reference when it comes to teaching some key supply chain models. Coordination between the members of a supply chain is certainly very relevant but also challenging. Because the members of a supply chain are typically concerned with optimizing their own objectives, their actions might not lead to optimal supply chain performance. Therefore, contracts need to be carefully designed. The author “reviews and extends the supply chain literature on the management of incentive conflicts with contracts”. For example, Cachon presents key supply chain models, hereby extending the newsvendor model “by allowing the retailer to choose the retail price in addition to the stocking quantity” and “by allowing the retailer to exert costly effort to increase demand”. Teaching such models can help students to gain the required problem-solving competencies and abstraction capabilities that are needed in today’s business world.

Cachon, G.P. (2003). Supply Chain Coordination with Contracts. Handbooks in Operations Research and Management Science, 11 (Supply Chain Management: Design, Coordination and Operation), 227-339 https://doi.org/10.1016/S0927-0507(03)11006-7

Business vs. Economic Perspectives on the Supply Chain

I recently discovered an interesting overview, Supply Chain Perspectives and Issues: A Literature Review by Park, Nayyar & Low (2013), which has been published by the World Trade Organization. It explicitly distinguishes between the economic and business perspectives on supply chains. Indeed, many supply chain phenomena take place somewhere between these two worlds, as the “supply chain” system is broader than the “organization” system and also different from the “market” and “economy” systems. As the authors write, “[t]he economics perspective attempts to understand [supply chains] through trade theory, along with the motivations for specialisation and production location decisions. […] The focus in the business literature is more concerned with a firm-level perspective.” My impression is that SCM research has often covered the latter perspective but neglected the former one. The authors also link the supply chain management and global value chain literatures, which is a promising path to go, as I have also highlighted in a previous post.

Jay W. Forrester (1918–2016)

Jay Wright Forrester was “an electrical engineer whose insights into both computing and organizations more than 60 years ago gave rise to a field of computer modeling that examines the behavior of things as specific as a corporation and as broad as global growth”, as the New York Times writes in an obituary. Forrester was a pioneer of systems dynamics, which “deals with how things change through time, which includes most of what most people find important”, as he once wrote. Forrester’s (1961) book Industrial Dynamics had a huge impact on the development of supply chain management. Herein, he studied “the behavior of industrial systems to show how policies, decisions, structure, and delays are interrelated to influence growth and stability”. His analysis of what we call “supply chain” today revealed an effect now known as the bullwhip effect – undoubtedly the single most important theory in supply chain management. Forrester died last week at his home in Concord, Massachusetts.

Forrester, J.W. (1961). Industrial Dynamics. ISBN 0262060035

Supply Chain Textbooks in German

If you speak German, today’s post might be particularly interesting for you. Once a year, the German Academic Association for Business Research (VHB), an internationally oriented association representing more than 2,100 mostly German-speaking members, awards its Textbook Award. The award aims to “[encourage] members of the association to expand their activities in the field of teaching” and to “highlight and acknowledge the importance of scientifically founded teaching in business research”. This year, the prize was awarded to a book related to SCM for the first time. It is concisely titled “Supply Chain Management” and was written by Michael Eßig, Erik Hofmann, and Wolfgang Stölzle. Another SCM book, a German translation of the 5th edition of Chopra and Meindl’s classic textbook, has been published this year. In a recent survey, the English version was selected as the most important academic SCM book. Not only will these two books help German-speaking SCM students to get in touch with our field, these textbooks will also help lecturers to prepare and teach their SCM modules.

Chopra, S. & Meindl, P. (2014). Supply Chain Management: Strategie, Planung und Umsetzung. 5. Aufl. ISBN 3868941886

Eßig, M., Hofmann, E. & Stölzle, W. (2013). Supply Chain Management. ISBN 3800634783

Supply Chain Management Books

I recently conducted a survey with leading supply chain management researchers and asked them a simple question: “If you were teaching a doctoral seminar, what would you assign as the […] most important books for the academic field of SCM (‘must-reads’)?” The following six books were recommended most often: (1) Supply Chain Management: Strategy, Planning, and Operation by Sunil Chopra and Peter Meindl, (2) Logistics & Supply Chain Management by Martin Christopher, (3) Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies by David Simchi-Levi, Philip Kaminsky and Edith Simchi-Levi, (4) Supply Chain Management: Design, Coordination and Operation by A. G. de Kok & Stephen C. Graves, (5) Purchasing & Supply Chain Management by Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero and James L. Patterson, and (6) Foundations of Inventory Theory by Paul Zipkin. This list compares well with a list of the 10 Greatest Supply Chain Management Books of All Time identified based on Google Scholar.

Trends and Strategies in Logistics and Supply Chain Management

Trends and Strategies in Logistics and Supply Chain ManagementI am excited to announce that our new study titled Trends and Strategies in Logistics and Supply Chain Management (pdf) has now been published on behalf of BVL International. It is co-authored by Robert Handfield, Frank Straube, Hans-Christian Pfohl and me. The general observation taken from 62 interviews and 1757 international survey responses is that logistics complexity in the form of fragmented channels, increased product variations, and consumer demands for customized solutions has increased. Several trends demonstrate that a number of major challenges lie ahead, as the world becomes a more complex place. We found that the major trends that will increasingly impact organizations in 5 years are network forces such as (1) customer expectations, (2) networked economy and (3) cost pressure, and external forces such as (4) globalization, (5) talent shortfalls and (6) volatility.

Handfield, R., Straube, F., Pfohl, H.-Chr. & Wieland, A. (2013). Trends and Strategies in Logistics and Supply Chain Management – Embracing Global Logistics Complexity to Drive Market Advantage. ISBN 9783871544811

Full Product Transparency (Guest Post by Ramon Arratia, Interface)

In his new book, Full Product Transparency, sustainability pioneer Ramon Arratia argues that we have to move from corporate to product sustainability. I am happy that Ramon followed my invitation to contribute to my blog:

The conventional approach to exercising corporate responsibility in a company’s supply chain is to draft a company supplier standard and then audit for compliance using that document. Positive and usually well-intentioned, the impact is inherently limited by the narrow scope of the dialogue and the teacher–student nature of the relationship. The typical 700 questions questionnaire sent to suppliers usually asks meaningless things such as: “Does your organisation have an environmental policy in place?” Or: “Does your organisation have an environmental management system (EMS) in place?” This is just bureaucracy for the sake of it, taking lots of time from both parts and adding little transformative value to the real environmental impacts of the products. The ideal question for suppliers is: “Send me the environmental product declaration (EPD) of your product and your plan to radically improve it”. After all, you are not buying the whole company. Besides, around 80% of the environmental impacts of products are not in the manufacturer’s realms but in their supply chain.

Ramon Arratia is a sustainability director at Interface and has previously been employed in similar roles at Vodafone and Ericsson. Interface is the winner of the International Green Awards 2012. Ramon is also a blogger of Cut the Fluff.

Logistics Clusters (Guest Post by Yossi Sheffi, MIT)

Logistics clusters play an increasingly important part in logistics & supply chain management. I am happy to share the following guest post by Professor Yossi Sheffi, a distinguished expert in logistics clusters. Thank you for contributing to my blog.

Logistics clusters are agglomerations of firms that come together to share logistics expertise and know-how. As I argue in my new book Logistics Clusters: Delivering Value and Driving Growth (MIT Press, October 2012), these entities have a number of unique, and generally underestimated, attributes. First, they are self-reinforcing in that logistics clusters use the high volumes of freight they generate to capture economies of scope and scale and reduce costs while improving service quality. These benefits attract more companies, which in turn bring further efficiencies within reach. Second, resident companies use the cluster to pool expertise and equipment, which buffers them against fluctuations in demand. Third, logistics clusters are major creators of employment opportunities that tend not to be “offshorable” and not tied to the fortunes of any one industry. Finally, these entities are building considerable expertise in environmental sustainability. These are some of the reasons why I believe that the private and public sectors need to invest more in logistics clusters.

Yossi Sheffi is a professor at the Massachusetts Institute of Technology, where he serves as Director of the MIT Center for Transportation & Logistics.

Social Science Research: Principles, Methods, and Practices

I like open access. The USF Tampa Library hosts a collection of open access textbooks. One of them, which might be useful for many SCM researchers, has been published by Anol Bhattacherjee, a professor of information systems. It is titled Social Science Research: Principles, Methods, and Practices. The book, which is succinct and compact, is about the entire research process and it is designed “to introduce doctoral and graduate students to the process of scientific research”. The initial chapters 1 to 4 give an introduction to research. This includes topics such as “thinking like a researcher” and “theories in scientific research”. The chapters 5 to 8 are about the basics of empirical research (i.e, research design, construct measurement, scale reliability/validity, and sampling). The chapters 9 to 12 are concerned with data collection (i.e., survey research, experimental research, case research, and interpretive research). Both qualitative and quantitative data analysis is explained in the chapters 13 to 15. The last chapter is about research ethics.

Handbook of Management Scales

In 2010, I launched the Handbook of Management Scales. It is a collection of previously used multi-item measurement scales in empirical management research literature and contains numerous scales related to SCM research. It contains scales from high-ranked journals that are developed in a systematic scale development process and that are tested to measure a construct in terms of specification, dimensionality, reliability, and validity. For each scale at least objective items, source, and, if available, reliability (e.g. Cronbach’s alpha) are listed. Particularly, structural equation modeling might benefit from the Handbook of Management Scales. It is a wikibook and can be edited by anyone. Feel free to expand the Handbook of Management Scales by adding good scales. This can help to further develop the Handbook as a useful resource for empirical management research. Related handbooks are the Handbook of Metrics for Research in Operations Management and the Handbook of Marketing Scales.

Wieland, A. et al. (2010 ff.). Handbook of Management Scales. Wikibooks. Online: http://en.wikibooks.org/wiki/Handbook_of_Management_Scales