An Empirical Investigation on the Use of Buffers and Incentives in Non-Hierarchical Networks

Abstract

Delivery reliability has shifted from being an order winner to being an order qualifier in many industrial and service sectors. Thus, companies are forced to take into consideration all the aspects that might impact on such an indicator. This paper focuses on the European machinery and equipment industry, an important instance of the non-hierarchical network concept, to investigate the relationships existing among supply-side uncertainty, delivery reliability to the final market and the adoption of possible leverages to mitigate problems, namely buffers and incentives. The authors formulate the research hypotheses and test them against a set of collected data in 3 European countries. The final discussion about the results provides insights about the real effectiveness of buffer and incentive based approaches, as well as some directions for future research.