Supply Chain Members Research Articles

Protecting labor rights: Contract design and coordination between brand firms and suppliers

This paper explores the design of a contract aimed at coordinating brand firms and their suppliers to collectively protect the suppliers’ labor rights. It finds that a unilateral cost-sharing contract can incentivize suppliers to protect labor rights, while improving the profits of both brand firms and their suppliers. However, such a contract fails to coordinate the supply chain because of an insufficient incentive for both involved parties. Two improved contracts of this contract can coordinate brands firms and their suppliers to improve their efforts to protect labor rights under certain conditions while failing to achieve coordination. Accordingly, this research proposes a bilateral cost- and revenue-sharing contract. The results indicate that with an appropriate revenue-sharing proportion, this contract effectively encourages brand firms and their suppliers to participate in protecting labor rights and coordinate the supply chain. In addition, an increase in the proportion of prosocial consumers incentivizes brand firms and their suppliers to improve labor rights. Nonetheless, consumers’ excessive reliance on brand goodwill to evaluate the total supply chain efforts to protect labor rights will reduce their efforts. Finally, as the impact of labor rights protection efforts on reference prices increases, it can stimulate brand companies and suppliers to increase investment in improving labor rights. At this high impact level, the reference price in the centralized model may surpass that in the unilateral cost-sharing contract. However, if supply chain members invest little effort to protect labor rights, the increase in this impact could reduce consumers’ reference price.

Recovering from geopolitical risk: An event study of Huawei's semiconductor supply chain

Amidst the ongoing globalisation of supply chains, geopolitical issues have emerged as a significant source of supply chain risk for firms. This has recently been illustrated in the trade sanctions adopted by the US against the Chinese semiconductor industry, particularly in the accessing of semiconductor chips. A notable event here, that we focus on in this paper, involves how the leading telecommunications company Huawei has been impacted by this and most interestingly how they have been able to respond, by being able to successfully launch new chip-based products during the US semiconductor chip technology blockade, despite the sanctions ban. This has been achieved with the support of key supplier, SMIC, who has become a major 7 nm chip supplier for Huawei. Employing the event study research method, this study initially examines the stock market's response to Huawei's new product release with these new SMIC-sourced semiconductor chips. It also appraises the propagation effects on Huawei's and SMIC's supply chain partners. This exposes the differential impact on the supply chain members of Huawei (focal firm) and SMIC (main supplier). The results reveal predominantly positive responses from Huawei's suppliers and customers, as well as SMIC's suppliers and customers, to these incidents, with Huawei's suppliers' and SMIC's suppliers' and customers' share prices responding positively to the release of Huawei's new product, exhibiting substantial median stock market reaction of 1.53%, 1.62%, and 2.52% on Day 0, respectively, it shows, in contrast, that Huawei's customers did not exhibit a positive share price reaction to the development of this newly sourced product. It is noteworthy that SMIC's supply of chips to Huawei has had a significantly positive impact on both Huawei and SMIC's suppliers and customers. With the impact varying across different roles within the supply chains, this study provides useful insights for understanding the propagation effect of good news in the supply chain resulting from firms' proactive action in response to imposed sanctions for a key supply component.

Manufacturer’s Channel Strategy and Demand Information Sharing in a Retailer-Led Green Supply Chain

In the rapidly evolving landscape of e-commerce, companies are increasingly focusing on their channel strategies to gain sustainable development. However, asymmetric demand information poses challenges to these decisions. This paper explores the interplay between a retailer’s information sharing strategy and a manufacturer’s channel strategy in a retailer-led green supply chain, where the manufacturer may establish an online channel to sell its green products directly. The dominant retailer has private demand information about the market and decides whether to share private information with the manufacturer. By establishing a game model, we analyze the impacts of information sharing and the manufacturer’s channel strategy on the payoffs for all the supply chain members, considering sustainability aspects such as the environmental benefits of green products and the efficiency of supply chain operations. The results show that information sharing benefits both the retailer and the manufacturer, irrespective of the establishment of an online channel. When the retailer shares demand information, opening an online channel benefits the manufacturer but benefits the retailer under certain conditions. Furthermore, through a numerical approach, we examine the strategic preferences of the firms and derive the equilibrium strategy. Interestingly, the manufacturer consistently prefers the scenario involving both an online channel and information sharing. The retailer’s preference, however, depends on the direct selling cost; it favors information sharing with or without an online channel based on this cost. Ultimately, our findings suggest that the equilibrium strategy can either be sharing information with an online channel or not sharing information without an online channel, which is contingent upon the direct selling cost and the forecast signal precision. These insights provide actionable strategies for enhancing the sustainability of supply chain operations.

Meta-inventory management decisions: A theoretical model

The manufacturing industry leverages the traceability and visibility of Industrial 4.0 to integrate digital and physical twins for solving the intricacy of a production system. Physical entities can be converted into digital twins with smart IoT (Internet of Things) devices and computational techniques. Research efforts have generally focused on the development of digital twin models for basic practical applications. Advanced applications of digital twins have not been widely reported. An innovative use of digital twins for inventory management has only been analysed theoretically and reported as meta-inventory management for the first time by Wang and Huang (2023). This paper extends the novel concept of meta-inventory by using a theoretical Newsvendor model for original equipment manufacturing (OEM) and own brand manufacturing (OBM) factories. The impacts of meta-inventory on both supply chain members, including the factory and its downstream retailer, are investigated through two kinds of response models (e.g., hybrid and separate response models). Analytical and numerical results show that a factory achieves better performance by using a separate model since it clarifies the responsibility of digital twins. The hybrid response model holds a higher proportion of digital inventory, but its final profits are less than that in the separate model due to fewer orders and higher prices and costs of uncertainty. OBM can better leverage the advantage of digital twins than OEM. Also, both supply chain members benefit from the implementation of meta-inventory out of profit increase, price reduction, and risk hedging. This research provides guidance for manufacturing sites to implement digital twins and reduce their concerns on investing in meta-inventory.

Dual channel closed-loop supply chain coordination with exchange policy, sales efforts and green innovation under uncertain market

ABSTRACT This paper explores a dual-channel supply chain within an uncertain environment where a manufacturer produces a green product and a retailer makes sales efforts to attract a higher customer base. Moreover, we incorporate a reverse supply chain model in which the manufacturer retrieves end-of-used products from customers through a collection initiative. Simultaneously, the retailer gathers end-of-used products from customers by implementing an exchange policy facilitated through a coupon applied to the product’s selling price. Then, we explore centralized, manufacturer Stackelberg, option contracts and cost-sharing contracts strategies to maximize supply chain profits under various circumstances. Subsequently, a numerical example is undertaken to showcase the utility of the models and explore sensitivity that examines how different parameters impact the supply chain’s profit. Findings suggest that the supply chain members will be profitable if they engage in the option contract model under a suitable value of the option price and exercise price.

Optimal supply chain performance: risk aversion to green innovation

PurposeAlthough many countries are focusing on the management of construction and demolition waste (CDW) resource utilization, the effect of risk aversion of the green innovation-led enterprise on the performance of the CDW resource utilization supply chain is unclear when considering different green innovation contexts (green innovation led by the building materials remanufacturer or by the construction waste recycler). This study aims to investigate how the level of risk aversion of the green innovation-led enterprise affects CDW resource utilization under different green innovation contexts based on contingency theory.Design/methodology/approachUsing Stackelberg game theory, this study establishes a decision model consisting of a building materials remanufacturer, construction waste recycler and CDW production unit and investigates how the level of risk aversion of the green innovation-led enterprise under different green innovation contexts influences the performance level of the supply chain.FindingsThe conclusions are as follows. (1) For the green innovation-led enterprise, the risk-averse behaviour is always detrimental to his own profits. (2) For the follower, the profits of the construction waste recycler are negatively correlated with the level of risk aversion of the green innovation-led enterprise in the case of a small green innovation investment coefficient. If the green innovation investment coefficient is high, the opposite result is obtained. (3) When the green innovation investment coefficient is low, the total supply chain profits decrease as the level of risk aversion of the green innovation-led enterprise increases. When the green innovation investment coefficient is high, total supply chain profit shows an inverted U-shaped trend with respect to the degree of risk aversion of the green innovation-led enterprise.Originality/value(1) This study is the first to construct a green innovation context led by different enterprises in the CDW resource utilization supply chain, which provides a new perspective on green management and operation. (2) This study is the first to explore the operation mechanism of the CDW resource utilization supply chain based on contingency theory, which provides new evidence from the CDW resource utilization supply chain to prove contingency theory. At the same time, this study examines the interactive effects of the green innovation cost coefficient and the degree of risk aversion of green innovation-led enterprises on the performance of supply chain members, expanding the contingency theory research on contingencies affecting enterprise performance. (3) This study will guide members of the CDW resource utilization supply chain to rationally face risks and achieve optimal supply chain performance.

Cause marketing decisions in supply chains: cause effect and marketing effect

This paper studies a cause marketing (CM) design problem incorporating donation amount, marketing expenditure, and product pricing as decision variables in a manufacturer-retailer supply chain context. We investigate five CM decision models: centralized supply chain conducting CM (Model C), manufacturer conducting CM (Model M), retailer conducting CM (Model R), manufacturer leading CM collaboration (Model MC), and retailer leading CM collaboration (Model RC). The models incorporate not only the ‘cause effect’ of consumers' increased willingness to purchase but also the ‘marketing effect’, meaning the market-base expansion associated with marketing efforts in a CM campaign. A key insight is that CM should never be adopted in the absence of marketing effect but can be adopted in the absence of cause effect. Comparing different models reveals that there can be consistency or conflict in CM mode choice among supply chain members. It is also found that an influencing parameter in CM collaboration is the allocation proportion of marketing expenditure rather than that of donation amount. These results indicate that the marketing effect, which has long been neglected in the literature, is a driving factor for firms to conduct CM, and the impact of corresponding marketing efforts should be emphasised.

Research on pricing strategies for competitive green supply chain based on corporate social responsibility

With the increasing public awareness of environmental protection, corporate social responsibility has become an important component of sustainable development and competitive advantage for many enterprises. Although there are many studies on corporate social responsibility in the supply chain, there is still a lack of research on the impact of corporate social responsibility on various decision-makers in the competitive green supply chain dominated by upstream enterprises. Therefore, taking into account the greenness and corporate social responsibility, the paper proposes three Stackelberg game models with the two-echelon supply chain consisting of two competing manufacturers and one socially responsible retailer. We develop a series of propositions and corollaries to determine the optimal solutions and offer some managerial insights. The main novelties and contributions of the paper can be demonstrated in two aspects. First, the paper simultaneously considers the impact of competition intensity and CSR level on wholesale prices, retail prices and greenness level. Second, the paper discusses the impact of two manufacturers with different market positions investing in green products on the profits and utility of supply chain members. Numerical illustrations prove that the level of corporate social responsibility is negatively correlated with retailer profitability and the retailer achieve the highest profits when sub-dominant manufacturer produces green products.

Investigating the Structural Composition of Contemporary Sustainable Organic Agriculture Supply Chains: A Case Study from Thailand

The global demand for organic produce has surged, with notable growth among Thai consumers. However, within Thailand's organic agricultural sectors, supply chain obscurity has impeded the understanding and resolution of emerging challenges associated with meeting this rising demand. Public interest has traditionally centered on mainstream economic sectors, resulting in inadequate attention to the sustainable organic farming supply chains. This study aims to explore the complexities of current sustainable organic supply chain configurations in Thailand, addressing gaps that lead to suboptimal planning and non-sustainable practices. Utilizing the Integration Definition for Function Modeling (IDEF0) framework, this research collected data from key stakeholders through in-depth interviews. Participants included representatives from each stage of the supply chain, providing comprehensive insights into the operational dynamics. The analysis identified several critical challenges within the supply chain, including insufficient collaborative planning, reduced productivity, inaccurate demand forecasting, ineffective budgetary planning, and inadequate cold chain management. These challenges highlight the fragmented nature of the current supply chain and the need for strategic improvements. To address these shortcomings, the study suggests integrating technological advancements in demand planning, operations, and budgeting, fostering collaboration among supply chain members, and forming strategic partnerships with cold chain management service providers. These recommendations aim to enhance the efficiency and sustainability of Thailand's organic produce supply chain, ensuring it can meet increasing global and domestic demands effectively.

Pricing and Financing Strategies of Dual-Channel Green Supply Chain with Risk Aversion and Consumer Preferences

Nowadays, considering the growing tendency of companies toward e-commerce as well as green production, dual-channel green supply chain management has become particularly important. This paper investigates pricing decisions within a dual-channel green supply chain framework while considering the capital constraints faced by risk-averse manufacturers. Simultaneously, the impact of the degree of risk aversion, consumer green preferences, and channel preferences on the optimal decision-making process of green supply chain members is analyzed. We address the issue of financial constraints faced by manufacturers through bank loans and trade credit financing and compare the two cases. Our findings illustrate that trade credit financing outperforms bank loan financing in the dual-channel green supply chain. Moreover, pricing decisions under different models are influenced by consumer preferences and risk aversion. Specifically, the greenness of the product, wholesale price, and sale price exhibit negative correlations with manufacturers’ risk aversion but positive correlations with consumer preferences.

Risk Transmission in Low-Carbon Supply Chains Considering Corporate Risk Aversion

In order to study the impact of risk aversion characteristics of enterprises on supply chain risk transmission, the risk aversion utility function is introduced, and the risk elasticity coefficient is used to construct a supplier-dominated low-carbon supply chain risk transmission model. Simulation analysis is conducted to investigate the transmission of emission reduction and revenue risks caused by internal and external contingent risk factors. The study reveals that under conditions of market demand uncertainty, the risk transmission effect is unaffected by the risk aversion characteristics of members in the low-carbon supply chain. While the risk-aversion characteristics of suppliers can decrease their own profit risk, they have a negative effect on the profit risk of manufacturers and the emission reduction risk of supply chain nodes. There exists a critical threshold for the impact of the risk-aversion degree of suppliers on their own emission reduction risk transmission effect. When this threshold is exceeded, the emission reduction risk decreases with increasing risk aversion intensity of suppliers, and vice versa. The risk aversion characteristics of manufacturers can weaken the negative effect of supplier risk aversion on the fluctuation risk of manufacturer profits, but they exacerbate the emission reduction risk transmission effect of manufacturers under asymmetric information influence. The findings have important theoretical and practical implications for supply chain risk management.

Impacts of dual carbon emission reduction technology and technology spillovers of deterioration reduction on supply chain system's performances considering government incentives and contract design

Investments in carbon emission reduction and deterioration reduction are important aspects for the firms to construct a low-carbon supply chain systems of deteriorating products with the increasing preferences of customers for environmentally friendly and fresh products. In this study we develop a two-echelon supply chain system consists of one manufacturer and one retailer. The manufacturer implements dual carbon emission reduction technology to strengthen the carbon emission reduction efficiency under cap-and-trade regulation and both manufacturer and the retailer invest in deterioration reduction technology to reduce the deterioration and increase the stock level of the fresh items. To increase the demand, the retailer takes the responsibility of promoting the low-carbon and fresh products among the customers. Deterioration reduction technology spills over from the manufacturer to the retailer. Then a differential game model is formulated and the equilibrium strategies are analysed by Stackelberg differential game approach in long term scenario. Numerical analysis has been done to analyse the theoretical results more rigorously by MATLAB software and sensitivity of some major parameters on the demand and profits of the manufacturer and the retailer have also been done to obtain some managerial insights. The impacts of implementing dual carbon emissions reduction technology and the effects technology spillovers are discussed. The results show that when the manufacturer invests in dual carbon emission reduction technology over single reduction technology, it increases the emission reduction level and hence the environmental performance and also the demand and hence economic profits of the both the supply chain members. If the deterioration reduction technology spills over from the manufacturer to retailer, it increases the profit of the manufacturer but the retailer will be beneficial when his/her marginal profit will be high. In addition, we have incorporated government subsidy on manufacturer's emission reduction investment and a cost-sharing contract on the promotional effort of the retailer in our work and then found that joint impacts of them on the supply chain system. We have shown that these two incentives provide the pareto improved solution for the supply chain system and take the supply chain members to a win-win situation as economically and environmentally. The discussions of the results of this study can be beneficial for the industries which produced deteriorating products and emits high carbon during the production process in terms of taking optimal decisions. It also gives a lesson to the government how to inspired the practitioners towards developing a sustainable system.

Research on the impact of information sharing and government subsidy on competitive power battery recycling

From the perspective of promoting the compliant recycling of retired power batteries, this paper considers a power battery recycling supply chain dominated by the electric vehicle battery (EVB) manufacturer, where the formal and informal recyclers compete for recycling. Battery information sharing between the EVB manufacturer and the formal recycler is proposed firstly and based on this, government subsidy for the formal recycler is proposed then. By establishing models and comparing the equilibrium results, the recycling prices, recycling quantities and profit changes of supply chain members under different scenarios are obtained. The study shows that battery information sharing and government subsidy can promote more retired power batteries to enter formal channels and inhibit the development of informal recyclers. In addition, under the battery information sharing model, government subsidy can improve the formal recycler's profit loss due to battery information sharing. The proposal of these measures provides a development direction worthy of reference for the recycling of EVBs and is conducive to building a benign power battery full life cycle system.

The Impact of CSR Implement Modes on Sustainable Supply Chain Pricing and Green Decision Making

Green transformation is an effective way for supply chains to achieve sustainable development. In the heterogeneous substitute product coexistence environment, it is valuable to explore the motivation behind CSR implementation as well as the advantages and differences associated with different members’ CSR implementations. In this study, we consider that the manufacturer produces both green products and ordinary products that are substitutes for each other and construct a CSR-absence scenario (Model N), a retailer implementing CSR scenario (Model R), and a manufacturer implementing CSR scenario (Model M). Applying a game-theory-based method, we obtain the optimal pricing, green decision, and supply chain profit under different scenarios. We analyze the effects of consumers’ green preference, green product function coefficient, and CSR level on decision making and performance. Through comparison and numerical analysis, we find the following: (1) Although the CSR behaviors of the manufacturer and the retailer squeeze the market demand space of the ordinary products, the greenness of the green product increases, and the retail price decreases. This not only enhances the consumer surplus of green products but also increases the profit and social welfare of the supply chain system. (2) The eco-friendliness of green products, product demand, and social welfare levels are the highest when the retailer implements CSR, followed by when the manufacturer implements CSR, and are the lowest in the CSR-absence scenario. In addition, the following retailer can enhance both its and the manufacturer’s profits through implementing CSR within a reasonable range. (3) The numerical analysis results show that, when the functional attributes of the green products meet a certain level, supply chain members implementing CSR does not affect consumers’ choice of green products.

Recycling decision and corporate social responsibility implement for closed‐loop supply chain considering green design under EPR policy

AbstractThe extended producer responsibility (EPR) policy requires producers to focus on the green design of front‐end products and the recycling of end‐of‐life waste products at the same time and fulfill dual environmental responsibilities. Under this background, we study the recycling decision and corporate social responsibility (CSR) implementation for closed‐loop supply chains (CLSC) considering green design under EPR policy. We build game models of CLSC under six situations, and analyze the interaction between the manufacturer's green design behavior and the retailer's CSR behavior, along with their influence on recycling decisions and the operational performance of CLSC. We show that both the manufacturer's green design behavior and the retailer's CSR behavior are beneficial to improving social welfare and the other party's profits, but a higher level of green design is uneconomical for the manufacturer. Similarly, a higher CSR awareness is not conducive to retailer's profitability. We also find that under the influence of the government's “Tax‐Reduction‐Subsidy” policy, the selection of the optimal recycling channel is influenced by factors such as the difficulty of recycling waste products, government subsidies, and the profit of unit reprocesses from the perspective of maximizing supply chain member's profits.

Considering the cascade threat in the food supply chain for the retailer’s “blockchain & contamination prevention effort” strategic deployment

Food contamination causes a serious risk to public health and results in large financial losses when it occurs frequently. We consider the role of blockchain in food contamination and explore its implications for the strategic deployment of retailer contamination prevention effort. A supply chain with two suppliers and one retailer was proposed in this study. Supply chain participants may take out contamination prevention efforts to lessen the probability of food contamination. Among them, the retailer can trace the source of food contamination through the implementation of blockchain to reduce the loss of profits from the cascade threat. We developed a game-theoretic model to explore the strategic deployment of the retailer’s contamination prevention effort with and without blockchain and the impact of implementing blockchain on strategic deployment and food safety. The intuition is that implementing blockchain always benefits supply chain members. However, counterintuitively, the retailer may not be able to realize greater profits. Interestingly, for contamination-vulnerable food (CVF), having blockchain increases suppliers and the retailer collaboration. Collaboration becomes less likely for contamination-resistant food (CRF). Finally, it is important to note that the implementation of blockchain, for CVF, will reduce the food contamination probability. But for CRF, it may not.

How can firms implement smart manufacturing through supply chain collaboration? A multiple-case study from China

The complex system characteristics of Smart manufacturing (SM) require firms collaborating with supply chain members to implement SM transformation. However, the motives, methods, and influencing factors of such collaboration remain unclear. Addressing this gap, we conduct a multi-case study of four manufacturing firms and obtain three findings based on complex adaptive system theory. First, the motives of supply chain collaboration include the adaptation to the environment of high customisation, technical complexity, policy, and horizontal competition. Second, firms collaborate with supply chain members in terms of equipment customisation and information interconnection, to establish the data and equipment foundation of SM. This process is affected by the scale and volume of invested resources. Based on these, firms further build collaborative platforms to realise the integrated management of all supply chain links and improve the SM capability through the iteration of solutions, which are affected by the degree of security in data sharing. Third, supply chain collaboration improves the quality and satisfaction, reduces the cost, and shortens the cycle of SM implementation. This study not only addresses whether and how supply chain collaboration influences SM implementation, but also provides guidance to help companies implement SM through a gradual multi-stage collaboration in supply chain.

Mixed competition and horizontal shareholding in competing supply chains

We consider two‐tier competing supply chains wherein downstream firms are engaged in mixed (Cournot–Bertrand or Bertrand–Cournot) competition and one downstream firm horizontally holds the rival firm's profit. Our results show that the type of mixed competition plays a crucial role in determining pricing and quantity decisions. The acquiring supply chain member's profit may be lower than the rival chain in Cournot–Bertrand retail competition. However, in Bertrand–Cournot retail competition, the upstream firm's profit of acquired supply chain is always higher, but the downstream firm's profit may be lower than the acquiring supply chain.

Data-driven contract design for supply chain coordination with algorithm sharing and algorithm competition

Supply chain members can intelligently learn their decisions based on historical data by using Machine-Learning (ML) algorithms. To coordinate the supply chain, the data-driven contract design problems for three contracts—buyback, quantity flexibility, and combined quantity flexibility and rebate—were investigated for a supply chain with one manufacturer and multiple retailers under algorithm sharing and algorithm competition. The problems were formulated as bi-level optimization models by introducing nonlinear mapping from historical demand data to ordering decisions and using ML algorithms to learn the mapping parameters. The bi-level optimization models were transformed into semi-infinite programming models and solved using the (nested) cutting plane methods. Empirical studies using data from two databases showed that algorithm sharing or algorithm competition, the type of contract used, and learning algorithms were the three factors influencing the performance of supply chain coordination when using a data-driven contract design. Algorithm sharing was found to be more beneficial to the supply chain members than algorithm competition in promoting supply chain coordination. An effective incentive mechanism, such as an individualized buyback ratio and a rebate from the manufacturer to the retailers with a good forecast performance, can encourage the retailers to participate in algorithm sharing and improvement.

Sustainable supply chains – Designing a requisite holistic model

AbstractOur study explored the relationships between supply chain (SC) members and their local and global stakeholders in achieving sustainability goals based on requisite holistic analysis and system dynamics modeling, which goes beyond the previous attempts to improve SC sustainability. In this research, we first developed a model that addresses the basic holistic treatment of SC sustainability; in a second model of sustainable SC (SSC), we then considered requisite holistic interactions among its stakeholders. We used the theory‐based viable system model to diagnose the proposed holistic model of SSC. The results show that especially the low‐tier SC members require supporting frameworks to develop and maintain the capacity for sustainable interactions with nature and society. These supportive frameworks should be provided by the regulatory bodies, society, and nature representatives to surpass the limited SC profit‐oriented incentives and structures. The implications of the proposed models are aimed at developing supportive SC sustainable policies and improving the capacities of SC members to coexist with local social and natural environments. Regulators, society, and the natural environment representatives can apply the proposed models to establish new policies for sustainable interactions between SC members and other societal stakeholders.