Customer Supplier Research Articles

A case study of Indonesian SMEs: an empirical evidence of SCM practices and their impact on firm performance

This present research seeks to explore SCM practices by Indonesian SMEs and to empirically examine the impact of the SCM practices on firm financial performance. Empirical data was collected in 2013 through a survey using structured face-to-face interviews. Thirty-nine SMEs producing food, handicraft, clothing and leather in Yogyakarta, Indonesia, are taken as studied cases. Structural equation modelling was applied to test the causation relationship between the SCM practices and the financial performance. Findings generally confirm that the SMEs put high importance on operational efficiency particularly high on downstream but with less attention on the supplier side, which is consistent with previous studies. The findings also demonstrate the significant positive causal relationship between the SCM practices and the financial performance, implying that higher implementation levels of the SCM practices lead to better financial performance. Customer relationship management, supplier relationship, and information system, are found to be the three most practices which contribute significantly to the firm performance. Potential improvement areas and their associated strategies (e.g., horizontal collaboration and vertical partnership) are also discussed.

System design of blood supply chain management based on Supplier Customer Relationship Management (SCRM) approach

Blood supply chain management is very complex system. By considering blood’s demand that characterized as stochastic, therefore information and communication among stakeholders are considered as important cycle in supply chain. This research is objected to design interactive communication model based on information technology with android as platform to create effective customer-supplier relationship to support Customer Relationship Management or better known as CRM. The methods that suggested in designing its information system are Quality Function Deployment (QFD) approach, Kano Model and Morphological Chart. From mentioned methods, attributes of design and specification priorities of purposed android system technology design are established. Attributes of design will be adjusted with customers’ requirements derived from customer voice that will further be integrated with technical responds in QFD. Technical responds will provide priorities on each design’s attribute of android information system and will be forwarded to the specifications determination by using morphological chart. Later, work flow of design system will be generated by using Data Flow Diagram (DFD). The result of the research will demonstrate the design of information system technology based on android that already adjusted with the requirement of donors as means of communication between suppliers and customers in blood supply chain.

Addressing a product management's orphan: How to externally implement product eliminations in a B2B setting

While product eliminations (PEs) may help suppliers reduce unprofitable products and the cost of increasingly complex portfolios, they often have deleterious consequences for customer–supplier relationships. This dilemma even increases as a supplier's attempt to mitigate deleterious consequences for customers through customer-oriented PE implementation may at the same time hinder optimal internal adjustments and related cost-saving potential, thus running counter to the actual purpose of PEs. This study investigates whether and how a supplier should act in the customer's interest to maximize gains from implementing PEs. We identify key approaches of customer-oriented PE implementation and performance outcomes. Using a multiple-informant supplier sample and a customer validation sample, we show that, depending on the availability of alternatives to customers and the type of PE implementation activity, customer-oriented PE implementation can either pay off considerably or be disadvantageous to a supplier. While PE compensation is always detrimental to overall PE performance, both PE communication and PE support are mostly beneficial. By contrast, PE participation is ambiguous to overall PE performance, as it generally helps retain customer goodwill but also decreases supplier cost-savings from PEs.

A bi-objective model for a multi-echelon supply chain design considering efficiency and customer satisfaction: a case study in plastic parts industry

One of the fundamental challenges of today’s manufacturing systems is the contradiction between cost efficiency and customer satisfaction. Finding a good balance between good customer satisfaction and supply chain efficiency is a critical problem in the supply chain management. To achieve this goal, a bi-objective mathematical model is suggested in this paper to maximize the efficiency of network and also customer satisfaction. This multi-period and multi-product supply chain network design model consists of suppliers, factories, distribution centers (DCs), and customers. The proposed bi-objective mixed-integer non-linear programming (MINLP) model is a member of the NP-hard class of optimization problems. Hence, two well-known multi-objective metaheuristic algorithms namely, Non-dominated Sorting Genetic Algorithm II (NSGA-II) and Non-dominated Ranked Genetic Algorithm (NRGA) are employed to solve the proposed model. The author uses Taguchi method for tuning the parameters of algorithms in order to achieve better performances. Moreover, a case study in the plastic industry is performed to collect data from the north region of Iran. Some well-known multi-objective metrics such as analysis of variance (ANOVA) is used to measure the performance of the proposed framework. Finally, results demonstrate the efficiency of the proposed framework.

CEO Turnovers and Disruptions in Customer–Supplier Relationships

Events that disrupt customer–supplier relationships pose a source of risk for suppliers that depend on a customer for a large portion of their revenues. We identify the replacement of a customer’s chief executive officer (CEO) as a disruptive event that results in suppliers losing substantial sales. These losses are greater when an incumbent customer CEO is more likely to be entrenched and stem largely from the successor divesting assets. Finally, we document that losses in sales following a customer CEO turnover lead to declines in a supplier’s financial performance and that suppliers experience negative abnormal stock returns to announcements of customer CEO departures.

Supply Chain Management Practices Influencing Organizational Performance: A Study of Consumer Goods Industry in Pakistan

This study was carried out to determine relationship between supply chain management practices and organizational performance in two private sectors of Pakistan. Main objective of this research article is that how the consumer goods industry can adopt supply chain management practices to improve performance at large scale The research design involved a cross sectional survey of two large manufacturing companies in Lahore, Pakistan. Data was collected using a questionnaire that was adopted. Regression analysis was used to analyze the effect of supply chain management practices and organizational performance among two large manufacturing firms in Pakistan. The findings are presented in tables. It is clear that there is a significant relationship between supply chain management practices and organizational performance explained by the three independent variables strategic supplier partnership, customer relationship and lean practices. The researcher has also recommended that future research to expand on the domain of SCM practices by considering additional dimensions and also seek to utilize multiple respondents to enhance research findings.

Structure Characteristics Analysis of Diesel Sales in Complex Network Method

With the rising profits of oil companies in the refined oil sector, the optimization of the refined oil supply chain network has received more and more attention. In most supply chains (SCs), transaction relationships between suppliers and customers are commonly considered to be an extrapolation from a linear perspective. However, this traditional linear concept of an SC is egotistic and oversimplified and does not sufficiently reflect the complex and structure of supplier–customer relationships in current economic and industrial situations. But key global knowledge can be obtained from complex network characteristics analysis of the net form sales system. For two-level network like refine oil supply network, this paper proposed an integrated framework to explore its characteristics. Through various analyses of this complex network, including visual, network scale, network agglomeration, network community and geographic information analyses, we could found the characteristics of regular network node relations and regional location characteristics, as well as a strongly correlation between correlation coefficient thresholds and the network interdependence, and also moderated the correlation between SN efficiency and SN resilience. In order to testify this supply network analysis method, we conducted a real-world SN analyses based on a Chinese province diesel supply network and describe an advanced investigation of SN theory. This method enrich the SN theory, which can benefit SN management, community economics and industrial resilience. Also the basic understanding of the diesel sales network system obtained in this paper provides guidance for further research on this network structure, which can also provide a reference for regional sales supervision and resource distribution.

Capital Structure Along the Supply Chain: How Does Customer Leverage Affect Supplier Leverage Decisions?

The bargaining theory of capital structure implies that when firms raise their leverage, their suppliers will raise their own leverage in response, so as to maintain strength in negotiations with important customers. In contrast, the theory of firm-specific investments implies that when a customer raises its leverage, a firm will respond by lowering its own leverage to minimize the risk of bankruptcy. We test these theories by examining the relationship between the leverage decisions of suppliers and customers. We find that a firm’s leverage is positively associated with its customer’s leverage. Moreover, consistent with the bargaining theory, we find that the positive leverage relationship is stronger if the customer has a higher ex-ante bargaining power. We also find some support for the relation-specific investment theory of capital structure in that the positive leverage relationship is weaker if the supplier–customer relationship requires more relation-specific investments.

The development of a green supply chain dual-objective facility by considering different levels of uncertainty

This paper presents a dual-objective facility programming model for a green supply chain network. The main objectives of the presented model are minimizing overall expenditure and negative environmental impacts of the supply chain. This study contributes to the existing literature by incorporating uncertainty in customer demand, suppliers, production, and casting capacity. An industrial case study is also analyzed to reveal the feasibility of the proposed model and its application. A fuzzy approach which is known as TH is used to solve the suggested dual-objective model. TH approach is integration of a max–min method (LH) and modified version of Werners’ approach (MW). The outcome of this study reveals that the presented model can support green supply chain network in different levels of uncertainty. In presented model, cost and negative environmental impacts derived from the supply chain network will increase of higher levels of uncertainty.

In search of paradox management capability in supplier–customer co-development

Companies increasingly involve their customers in development and innovation activities (i.e. co-development). This happens particularly in business-to-business markets, where customers provide the requisite knowledge for the development of complex product and service systems that help to solve customers' problems. Existing literature indicates that co-development involves inherent challenges, contradictions and tensions in the relationship between suppliers and their customers. Many of these take a form of paradox – a persistent contradiction between different alternatives in the co-development context. However, suppliers' capability to manage such paradoxes remains poorly understood. To address this gap, the framework proposed here elucidates paradox management capability in terms of two key dimensions — polarizing and juxtaposing — that occur in temporal and spatial contexts. Polarizing means focusing on one side of the paradox; juxtaposing addresses both sides simultaneously. We empirically analyze three co-development paradoxes related to 1) contractual and relational governance, 2) knowledge sharing and protection and 3) customer-specific and general development goals, and suggest specific management approaches that help solve these paradoxes via polarizing and juxtaposing. The results provide theoretical and practical insights for managing paradoxes that occur in co-development.

Seasoned equity offerings and customer–supplier relationships

Abstract We investigate how seasoned equity offerings (SEOs) by issuers with large customers affect both trading partners’ market values and the relationship's health. We hypothesize that SEOs reveal adverse information about an issuer's major customers and find that issuers and their large customers experience negative returns on SEO announcements. These results are more pronounced when customers have higher levels of information asymmetry and when customer-supplier relationships are particularly important. Large customers of issuers experience larger declines in post-SEO sales, operating performance, and credit ratings than large customers of non-issuers. Also, SEO issuer sales to large customers and relationship duration significantly decline.

Toward Cross-Border Engineering Management: Development and Test of a Practice for Idea Generation in Customer–Supplier DFM Teams

Growing inter-organizational dependence within business ecosystems necessitates more intensive cooperation between various organizational functions, not only sales and purchasing. Engineering management is one of the functions typically regarded as an in-house activity. Prior research acknowledges certain cooperative forms such as early supplier involvement, but it falls short on identifying practices of grass-roots level cooperation. However, it is the quality of the interaction between supplier and customer that is decisive if the advantages of collaboration are to materialize. This study aims to fill this obvious gap in both theory and practice by developing and testing an inter-organizational practice for co-ideation in a supplier-customer relationship. Specifically, a way of working for idea generation to improve inter-organizational learning within specific Design for Manufacturing meetings between an industrial corporation and two of its important suppliers is developed. The evaluation of the tested co-ideation practice indicated that, in comparison to the traditional way of working, the new practice contributed to a greater number of generated ideas, was found useful in practice, and expert ratings suggested that the ideas generated were of adequate quality. The implication for practice is the proposed procedure that aims to build a safe psychological environment and help participants to transcend existing behavioral roles as representatives of suppliers and customers.

Practical Applications of Abnormal Stock Returns Using Supply Chain Momentum and Operational Financials

Practical Applications Summary A supply chain or supply network is a multicompany material-flow ecosystem, and operational data of customer companies can provide an indication of supplier companies’ future operations and business performance. In Abnormal Stock Returns Using Supply Chain Momentum and Operational Financials , published in the Winter 2017 issue of The Journal of Portfolio Management , authors Antti Paatela , Elias Noschis , and Ari-Pekka Hameri explain how an understanding of the interrelationships among supply chain partners’ businesses can provide an opportunity to gain abnormal investment returns in the stock market. Diverging from previous research, they focus on whole supply chains instead of single companies, on actual company financial data instead of more speculative stock market prices, and on the special dynamics of supplier–customer links.

CEO Incentives and Customer‐Supplier Relations

This study explores how suppliers adjust their relation‐specific investments (RSI) in response to the different risk‐taking incentives provided by the customer firm to its CEO, during normal and transition periods. We investigate this relation using 17,553 customer–supplier transactions over the 1993–2013 period. We find strong evidence consistent with the risk‐taking argument. Specifically, we find that an increase in the risk‐taking incentives of customer CEOs leads to a decline in suppliers’ RSI in normal periods, but an increase in RSI during transition periods. We employ the FAS‐123R mandate to show that an exogenous reduction in customer CEO's incentive pay increases suppliers’ RSI. We reaffirm the effect with the passage of the Sarbanes–Oxley Act as a secondary quasi‐natural experiment. Finally, we examine several scenarios that either amplify or attenuate the observed relation, based on factors such as financial constraints, distress, growth opportunities, industry competition, and other firm characteristics. Our study contributes to the literature that examines the interplay between corporate policy and product market relationships.

Innovative Geschäftsmodelle für Industrie 4.0

Today, manufacturing companies have to face multifaceted challenges, like shortened technology and innovation cycles, and the necessity to offer customized products at the cost of a large-scale production. One appropriate solution to address these challenges is represented by the Industrial Internet of Things (IIoT). This proceeding digitized connection of industrial manufacturing, also known as “Industry 4.0”, comes along with extensive organizational consequences and opportunities for established manufacturers. Existing value chains will change providing opportunities for innovative business models (BM). Although academic literature agrees on the emergence of novel BMs, recent research mainly addressed technological challenges and benefits, whereas systematic and comprehensive examinations of novel IIoT-triggered BM types have a backlog. Consequently, we aim at systematically analyzing existing literature regarding novel BMs emerging due to the IIoT. Hence, we present a comprehensive overview of novel, innovative BMs relevant for the IIoT. Further, we assign these innovate BMs to three generic BM types. In doing so, we contribute to both academic literature and managerial practice. A systematic literature review is chosen as research method, since it is systematic, transparent, and replicable for the synthesis, evaluation, and discussion of relevant literature. It revealed 13 articles in leading business journals, conference proceedings, collected editions as well as reports of research institutions published between 2007 and 2015. They were analyzed in depth in order to develop topical categories inductively, which allows novel concepts to emerge from this process. The results show that novel IIoT-triggered BMs can be grouped into three main categories: Cloud-based BMs, Service-oriented BMs, and Process-oriented BMs. Cloud-based BMs provide an online platform, offer virtual infrastructure, or grant access to software via the internet. Hence, the cloud acts as a medium that supplies customers with several values without being in need of physically possessing any hardware. Service-oriented BMs are primarily based on data, which are utilized in order to offer various services to customers, e. g. increased availability, availability on demand, and predictive maintenance. Process-oriented BMs aim at optimizing processes, e. g. by reducing downtimes, which primarily appeals to manufacturing companies. Our findings contribute to theory by systematically synthesizing previous works studying novel, IIoT-related BMs from several perspectives and with various objectives. Thereby, we provide three generic BM types, which put themselves forward for future BM research in the context of the IIoT. From a practical perspective, our findings are highly relevant as they facilitate companies’ comprehension of innovative BMs emerging from the IIoT. By providing a comprehensive and illustrative overview of future business concepts, we enable managerial decision makers to oversee the range of different BM conceptualizations that can be put on the daily agenda in order to increase their respective companies’ future competitiveness in the context of a digitized and connected industrial environment.

Knowledge transfer in the context of buyer–supplier relationship: An analysis of a supplier's customer portfolio

In the context of buyer–supplier relationship, the present study will not only analyse the role of formal and informal mechanisms to transfer knowledge but also the direct and moderating effect of trustworthiness, as relational dimensions, to understand how customers acquire knowledge from suppliers. The results related to a sample of 105 customers belonging to a medium-sized Italian manufacturer's customer portfolio show that both formal and informal transfer mechanisms positively impact knowledge acquisition. Trustworthiness positively moderates the effect of informal transfer mechanisms and negatively moderates the effect of formal transfer mechanisms on knowledge transfer. Some considerations regarding the customer portfolio are suggested to enhance our understanding of the effectiveness of knowledge transfer mechanisms in relation to different trustworthiness contexts.

Climate change and Australian production forests: impacts and adaptation

ABSTRACTAustralia has a highly diverse and variable climate and its forests evolved under a relatively high level of climatic variation. However, human-induced changes in climate are likely to exceed historical ranges of variability and rates of change, and have effects on forests well beyond the experience of forest managers. These conditions will require implementation of management practices appropriate to a changing climate. This paper provides an overview of the potential changes in climate in key forest-growing regions; current knowledge of the impacts of climate change on Australian forests, forest industries and forest-dependent communities; adaptation options; and approaches to potential climate change challenges. Developments in understanding are considered, and information gaps, research needs and policy changes required to support adaptation are discussed. In order to adapt well to a rapidly changing climate, forest managers will need to better understand how global climate change will impact on the local environment where their resources, assets and people are located, and consider their key vulnerabilities and how climate might affect their wider supply chains, inputs, customers and competitors. Improved monitoring can provide clear signals of change. New tools are required that integrate climate scenarios into organisational and business planning. Industry leaders will need to encourage experimentation, adopt greater flexibility in raw material supply sources, in species and genetic selection, and in plantation and native forest management practices, and have strategies in place to adapt quickly during periods of rapid change.

Do big customers influence listed firms’ performance? Based on supplier–customer relationships in China

Using hand-collected data of the top five customers disclosed by Chinese listed firms in their annual reports, this paper examines the impact of supplier–customer relationships on firms’ operating performance using the framework of DuPont analysis. The empirical results show a significantly negative correlation between customer concentration and firm performance based on return on assets. The negative impact on performance results from the decrease of the gross profit margin and accounts receivable turnover. Meanwhile, suppliers have to pay more entertainment expenses to retain their main customers and bear more financial expenses because of defaults in payment of customers. These results rely on the closeness of supplier–customer relationships and their relative bargaining power. Customer concentration increases the turnover of accounting receivables and inventories in those industries with overcapacity. The overall results provide evidence of the impact of big customers on the supplier’s performance.

Relational resources for emerging markets’ non-technological innovation: insights from China and Taiwan

PurposeThis paper aims to highlight the importance of relational resources (trust and relationship effectiveness). The authors investigate how the Chinese guanxi is utilized to create and develop service exploitation and exploration activities for adopting non-technological innovations.Design/methodology/approachThis study surveyed 252 Chinese and Taiwanese firms. The results were analyzed through structural equation model.FindingsRelational antecedents of collaborative communication and constructive conflict positively relate to trust, as well as to relationship effectiveness. Constructive conflict positively relates to exploration and exploitation. Relationship effectiveness and trust mediate two relational antecedents to exploitation. Relationship effectiveness crucially mediates two relational antecedents to exploration.Research limitations/implicationsDyadic data would be more desirable to study firm interactions.Practical implicationsChinese society perceives conflict as being detrimental to relationships. Constructive conflict enhances inter-firm trust and relationship effectiveness. Relationship effectiveness, which motivates suppliers to mobilize their guanxi network, mediates the supplier–customer interaction in broadening relationships to produce new services, as well as reinforcing networks to strengthen existing ventures.Originality/valueThis study contributes to a relatively under-explored relationship effectiveness area. Chinese suppliers capitalize their guanxi networks to achieve competitive advantages in non-technological innovation.

Estado actual de la investigación sobre Segmentación de clientes y Flexibilidad de la cadena de suministro. El desafío futuro de la Microsegmentación

Este artículo analiza el estado actual de la investigación sobre la Segmentación de Clientes (SC) y la Flexibilidad de la Cadena de Suministro (FCS). Para ello se realiza una revisión sistemática de 38 artículos que tratan sobre la relación entre SC y FCS. A partir de este análisis se destaca el consenso sobre la existencia de una relación positiva entre SC y FCS. También se destaca el desafío futuro que presenta la investigación sobre la utilización de estrategias de Microsegmentación de Clientes (MSC), como son la personalización y personalización en masa, como respuesta productiva a la necesidad de FCS.