Original Design Manufacturing Research Articles

Strategic contract selection of an online retailer when implementing store branding

AbstractThis article investigates the impact of demand uncertainty on online retailers' store branding partnerships with manufacturers. The study examines whether such partnerships, involving service effort to boost demand, are effective under uncertain conditions. The supply chain comprises an intermediary and a manufacturer, with the manufacturer facing a service cost disadvantage. The benchmark case is the manufacturer's sale through the agency (AG) contract with the intermediary. Using a two‐period game‐theoretic model, the study analyzes equilibrium prices, service efforts, and profits for the AG contract and two store branding contracts: original design manufacturer (ODM) and acquisition (AC). Findings show that the intermediary adopts store branding when its service cost advantage is significant. The intermediary exhibits a preference for the ODM contract when the commission fee falls within a moderate range. Conversely, when it deviates from this middle ground, the AC contract becomes more favorable. Within the AC contract framework, with low commission fees, specifically when the service cost advantage is not particularly pronounced and demand variability is high, the intermediary opts to trigger the acquisition option exclusively when the actual demand turns out to be substantial. With high commission fees, the intermediary avoids the acquisition option. These outcomes arise from balancing the double marginalization effect caused by factors like service cost advantage, service decentralization, and wholesale price. Implementing store branding through ODM or AC contracts enhances supply chain profit when it is optimal for the intermediary. We provide insights into online retailers' decision‐making regarding store branding partnerships with manufacturers under demand uncertainty. It highlights the importance of considering factors like service cost advantage, service decentralization, and wholesale prices to determine the optimal store branding strategy. The research contributes to understanding supply chain dynamics and suggests ways to enhance supply chain profit in online retail.

How Taiwanese contract manufacturers initiate supply chain integration: the effects of bricolage, improvisation and environmental uncertainty

PurposeThis study aims to investigate how bricolage and improvisation increase the opportunities for supply chain integration of contract manufacturers. Connecting bricolage/improvisation with resource dependence theory offers an appropriate theoretical lens with which to understand the increasing focus on the view that bricolage and improvisation are feasible ways to create desired resources for contract manufacturers. Such resources can then enhance the autonomy of contract manufacturers in supply chain by building contract manufacturer–supply chain partner relationship interdependencies.Design/methodology/approachGiven that the primary focus of the study was whether and how contract manufacturers respond to resource constraints, namely, bricolage and improvisation and environmental uncertainty as a moderating effect of fastener contract manufacturers' supplier/buyer integration, only firms that had contractual agreements involving manufacturing services for original equipment manufacturer and/or original design manufacture data were included in this population. This study selected a population from a list of 674 fastener firms provided by the Taiwan Industrial Fastener Institute in 2020 using a mailed survey to test the hypotheses. By the beginning of 2022, 165 completed questionnaires were returned, and the total useable sample was 158.FindingsHypotheses are tested using 158 contract manufacturers of the Taiwanese fastener industry. Results show that bricolage can lead contract manufacturers to initiate supplier and buyer integration. The moderating effect of environmental uncertainty further strengthens the above positive relationships. Without the moderating effect of the environmental uncertainty, improvisation leads contract manufacturers to initiate only supplier but not buyer integration. However, when the moderating effect of environmental uncertainty is included, improvisation leads contract manufacturers to initiate only buyer integration.Originality/valueThis finding highlights the importance of the environmental uncertainty when contract manufacturers adopt bricolage/improvisation to initiate supply chain integration.

How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis

Clean energy transition is the new driving force promoting low-carbon emissions in the manufacturing industry. It brings huge economic opportunities as well as challenges for manufacturers and the government. Original design manufacturers (ODMs) are regarded as a special group of manufacturers in clean energy transition due to their close partnership with foreign parent companies (FPC) in research, design, production, and most importantly, decision making along the supply chain. ODMs are usually restricted by contracts with FPCs and clean energy policies of the local government. To analyze the influence of technology sharing and leakage, investment mode, accountability mechanism, and penalty sharing mechanism, especially static or dynamic energy policies on the clean energy transition, this study constructs a tripartite evolutionary game model composed of ODMs, FPCs, and the local government. The model discusses the guiding effect of multiple policies on ODMs' clean energy transition and FPCs' investment behaviors with the study of stable points, double stable states, and unstable states of the evolutionary game. The results reveal that the conformity effect in clean energy transition would enable ODMs and their FPCs to achieve a win-win result in the process of the transition. The dynamic policy has also been designed considering the proportion of ODMs using clean energy to economize government resources, and the basic subsidy to the transition poses a reverse “U” shape instead of a monotonous effect on ODMs' choices. This paper concludes an optimal clean energy transition strategy for ODMs under the dual pressure of FPCs and governments, while providing theoretical support for the dynamic policy design.

Resource Centric Analysis of RSA and ECC Algorithms on FPGA

The electronics industry’s shadow side is counterfeiting, and the doom is growing. Almost every business in the supply chain is impacted by the issue, including component suppliers, distributors, Electronics Manufacturing Services (EMS) providers, Original Design Manufacturers (ODMs), Original Equipment Manufacturers (OEMs), and their clients. In fact, any electronics firm that wishes to benefit from the cheap costs associated with globalization must be aware that someone along the supply chain may be persuaded to acquire fake items and sell them as genuine. A thorough grasp of chip designs, including partitioning and prioritizing data transit and storage, as well as a range of obfuscation techniques and activity monitoring, is necessary to reduce the danger of future hardware breaches. To battle this problem, we need to enforce various security measures at different levels of the supply chain. The recent methods include implementing cryptographic ciphers into the devices. The commonly used ciphers are the hard ciphers. But owing to the advancements and increase in the number of low power and resource constrained devices, there has been a dire need to design ciphers that support such devices. This paper talks about the advantages of lightweight ciphers, aiming to secure low power devices and other embedded devices. This work mainly compares two algorithms, RSA(hard cipher) and ECC(light cipher) in terms of their device utilization and power consumption on a Kintex-7. The presented results are justified from simulations performed on the Vivado design suite.

Personal Competency and Behaviour Effect on Design Judgement Among Designers in Furniture Manufacturing

Malaysia furniture manufacturing is a lucrative industry with the majority are Small and Medium Enterprises (SME). Moving the SMEs from Original Equipment Manufacturer (OEM) to Original Design Manufacturer (ODM) is encouraged by the government in pursuit of global competitiveness. One aspect of transformation is hiring design personnel into the manufacturing organisation especially among the Bumiputra SMEs who are lagging behind the other manufacturers. The purpose of this study is to identify the qualities of designers who could improve design judgement for New Product Development (NPD) of furniture in their current operating context. This article is part of a series of studies in improving Bumiputra SMEs global competitiveness. This study in particular looks into aspects of the designer’s competencies and behaviour that will affect design judgement. A survey was conducted on 33 designers who are employed from among 106 manufacturers registered with the Bumiputera furniture manufacturer organisation of Malaysia. Statistical analyses including factor analysis, descriptive analysis, t-test, were employed to test relationships between dependent and independent variables. The study found personal skill, knowledge, ability, and experience representing designer’s personal competencies; and value, attitude, and trait representing designer’s personal behaviour are critical in making appropriate design judgement. The results are expected to contribute to the development of a Designer Personal Competency Model for the furniture NPD process to help Bumiputra furniture SME manufacturers transform their OEM practice to ODM. This study is significant in supporting Malaysia economic growth specifically among Bumiputra SME manufacturers.

Dynamic Capabilities Towards Original Design Manufacturing: Perspectives of Resource-Based and Relational Views, and Institutional Theory

Dynamic Capabilities Towards Original Design Manufacturing: Perspectives of Resource-Based and Relational Views, and Institutional Theory

Guangzuo Ivory Carving: Intercultural Communication on the "Maritime Silk Road" During the 17 th -19 th Century

Ivory carving, jade carving, cloisonne and carved lacquer were once known as the four great masters of Chinese arts and crafts, and they are also one of the artistic symbols recording the process of human civilization. From the 17th to 19th century, Guangzuo, namely Canton style, ivory carving was one of the quintessence of Chinese crafts that was deeply welcomed by the western world and there are many monographs and articles discussed by predecessors. However, the exploration of the relationship between Guangzuo ivory carving and the intercultural communication of the Maritime Silk Road is still weak. By excavating and combing the source of raw materials, technical characteristics, source and export development process of Guangzuo ivory carving, this paper discussed the relationship between overseas market expansion of Guangzuo ivory carving and intercultural communication on the Maritime Silk Road, and puts forward the following understandings: (1) Since the Tang and Song Dynasties, especially from the 17th to the mid-19th century, ivory materials were mainly obtained through the Maritime Silk Road trade with the South China Sea as the starting point. (2) The typical ivory carvings exported in the 17th-19th century included ivory balls, baskets, fans, jewel cases, sewing boxes, card cases, letter holders, and brooches etc. In spite of the category, the quantity of ivory products is far less than the other export goods. But the Guangzuo ivory carvings were still one of the important export commodities at that time for its high material value, craft skills, unique characteristics in artistry, appreciation and cultural compatibility. (3) The exquisite skills, styles and decorative patterns of Guangzuo ivory carving not only inherited Chinese traditional crafts, but also absorbed overseas skills, and were strongly influenced by European consumer culture at the meantime. The Guangzuo ivory carvings exported to the western world are actually the ODM(original design manufacturer) products made by local craftsmen in reference to the needs of overseas customers, which are representing the wisdom of Chinese skilled craftsmen and the integration of multicultural exchanges. (4) The success of the Guangzuo ivory carving foreign trade during the 17th to the 19th century showed that the intercultural communication and mutual learning are important factors, even the key factors, for expanding the international market, which may provide a typical paradigm for other precious jade and stone products exporting to foreign countries or expanding the international market today.

Will foundry become a competitor of manufacturer in ODM supply chain?

PurposeThis paper aims to study whether the upstream foundry in the original design manufacturer (ODM) supply chain will violate the commission contract and engage in the production of pirated products. Based on the conclusion, this study hopes to explain the phenomenon of pirated products in reality and provide management enlightenment for related companies.Design/methodology/approachTo understand when will foundry violates the processing contract, this paper constructs a five-stage decision-making model, this study derives a model to get three situations and draw data images to describe the characteristics of decision-making by the foundry. Finally, this paper also considers some external supervision.FindingsThe results show that processing fee and other parameters (special cost, common cost, weakening factor and product difference) jointly determine the possibility of piracy by the foundry. Moreover, the external supervision mechanism has a significant effect on the piracy behavior of the foundry.Research limitations/implicationsThe research provides some support for real business activities, which actually involve many participants and mechanisms. Thus, it could be interesting to explore more multi-stage and complex business methods in reality.Practical implicationsThe analysis highlights less-concerned moral hazard behaviors in the ODM supply chain. By recreating the complex interactions of participants, the conclusion shed light on how should different roles deal with their risks and take actions in a real business environment.Originality/valueThe biggest contribution of this study is to discuss the issue of moral hazard in the ODM supply chain. Piracy initiated by foundries may be a new type of supply chain risk and should be paid attention to.

The business model and innovation mix in the transition of contract manufacturers in the greater China region

ABSTRACT Many contract manufacturers’ successful transition from original equipment manufacturers (OEM), original design manufacturers (ODM) to original brand manufacturers (OBM) is typical for studying latecomers’ business model transitions in emerging Asia. This study uses data from two industrial innovation surveys (2004–2006 and 2007–2010) in 14 cities located in the Greater China region to describe the innovation practices followed in different business models and the transitions. The results show that OEM latecomers undergo organizational changes in the transitions. ODM entrants have to enhance product innovation and market promotion, and OBM entrants must tailor their organizational and marketing practices. This paper concludes that the business model transition is the matter of firms making an effort to retool their innovation mix for realizing a new value proposition in a specific business model. Theoretical and managerial implications are suggested.

Effects of information-processing mechanisms on Internet-based purchase order financing

This paper investigates how small and medium-sized original design manufacturers (SM-ODMs) obtain sufficient purchase order financing (POF) and ultimately improve their financial performance through Internet-based supply chain financial platforms. Based on information-processing theory, this paper explores the impacts of two information-processing mechanisms (formal information integration and informal information exchange) on Internet-based POF loans and financial performance from SM-ODMs’ perspective. The posited relationships are verified through analysis of second-hand project data derived from 207 distinct customer purchase orders and first-hand survey data collected from 33 SM-ODMs, using a structural equation modeling approach. The findings indicate that SM-ODMs can secure larger Internet-based POF loans and improve their financial performance by integrating formal information more extensively. This can be done by exchanging informal information more frequently and proactively at a high level. However, exchanging informal information more frequently and proactively at a low level results in smaller Internet-based POF loans. Finally, SM-ODMs can improve their financial performance through larger Internet-based POF loans. This paper contributes substantially to the literature by shedding light on information-processing mechanisms on Internet-based supply chain financial platforms through the lens of information-processing theory.

A two-step dynamic scheduling and assignment method for tooling original design manufacturers

A two-step dynamic scheduling and assignment method for tooling original design manufacturers

Analysis of Dynamic Cournot Game in a Coopetition Supply Chain

In the original manufacturing industry, upstream encroachment has become a universal commercial phenomenon. This paper considers a coopetition supply chain consisting of an upstream original design manufacturer (ODM) and a downstream original equipment manufacturer (OEM) and proposes a dynamic Cournot game under bounded rationality. To cope with a dynamic repeated game in discrete time, a gradient adjustment mechanism is adopted. Furthermore, bifurcation diagram, largest Lyapunov exponent, basin of attraction, and critical curve are introduced to investigate the dynamic behavior of this game. The results obtained show that as the firms’ policy adjustment speeds increase, the stability region of the dynamic system gradually narrows, but one special finding is that the complex behavior of the dynamic system is alleviated as the OEM’s adjustment speed greatly increases. Moreover, when the difference between the two firms’ adjustment speeds is relatively small, the dynamic adjustment strategy is beneficial to the coopetition supply chain and both firms under certain adjustment speeds, as compared to a one-shot game. In addition, a higher product substitutability has a positive impact on the system stability, pushing the “cooperation” business alliance towards a more coordinated outcome.

Joint optimal pricing and advertising policies in a fashion supply chain under the ODM strategy considering fashion level and goodwill

The original design manufacturing (ODM) strategy has become popular in the fashion supply chain field. We consider apparel’s fashion level and advertising effort as important influential factors on goodwill, and present a differential game involving a fashion brand and a supplier. The supplier controls the design improvement effort applied to the apparel and sells it to end consumers through the fashion brand, which controls the advertising effort and retail price. In the case in which the demand for products is affected by goodwill, retail price and promotion, centralised and decentralised differential game models are constructed. The dynamic wholesale price contract is then introduced to solve the external coordination problem. Furthermore, a sensitivity analysis of the related parameters is conducted using the numerical simulation method. It is found that the introduction of the dynamic wholesale price contract increases design investment, promotion effort, and goodwill towards and demand for the products. We also derive the feasible region of wholesale prices in which both members are willing to implement the commitment scenario. The win–win region becomes larger as the effectiveness of design innovation increases, whereas it becomes smaller as price sensitivity increases.

Original design manufacturer's warranty strategy when considering retailers' brand power under different power structures

AbstractIn recent years, the original design manufacturer (ODM) has increasing interests in multichannel cooperation with different retailers. This paper considers the problem in which the ODM cooperates with two competing retailers. The manufacturer produces two substitute products and markets them through two competing retailers. For both products, the manufacturer bundles them with basic warranties and the retailers brand them with their own branding. We quantitatively model the product demands and derive the optimal decisions under two common supply chain power structures: manufacturer Stackelberg and retailer Stackelberg. We observe that when the competition between the two retailers becomes fiercer, the manufacturer charges more for both products, the product substitutability and supply chain power structures do not affect the products' price and warranty decisions, and there does exist a brand ratio interval in which the product branded by the high‐reputation retailer will not get a better warranty from the manufacturer, violating the signalization of the warranty. The leader gets the power to get higher profit while the total profit of the whole supply chain remains the same under both power structures.

Analysis on the influential factors of transformation resistance of small and medium enterprise managers

The majority of small and medium-sized enterprises (SMEs) in Taiwan are original equipment manufacturers (OEMs) or original design manufacturers (ODMs). Given the growing intensity of global competition, transformation from OEM or ODM to a branded enterprise is a key concern for SMEs. SMEs’ branding processes are subject to numerous problems and among them, resistance by organization members is considered the most critical. Previous studies have largely focused on factors contributing to branding success or resistance by an organization’s employees, and few have addressed the implications of SMEs managers’ resistance to branding. To address the research gap, this study constructs a cognitive model for managers’ resistant behavior while drawing on the theory of planned behavior. Then, applying structural equation modeling, this study confirms that four exogenous variables, perceived belief, changes in job characteristics, organizational inertia, and social factors, directly influence two endogenous variables, managers’ attitude toward resistant behavior and the subjective norms of resistant behavior. Using demographic variables as independent variables, this study conducts a logistic regression analysis to predict companies resistant to branding on the basis of their background characteristics. The results highlight that the three factors with the highest predictive powers are organizational inertia, job position, and capitalization.

Smart manufacturing business management system for network industry spin-off enterprises

ABSTRACT Enterprises are increasingly using big data analytics and intelligence to solve business processes between original equipment manufacturers (OEMs) and original design manufacturers (ODMs) to increase the competitiveness and improve the efficiency of solutions. This research applies a cloud computing-based enterprise resource planning (ERP) system and OEM/ODM system to business to business (B2B) e-commerce. The integration of smart ERP system with B2B e-commerce can achieve the expected benefits of both. It reduces cost and improves the work efficiency, thereby improving the competitiveness of enterprises. In comparison to other traditional methods, the proposed system can make business management more efficient, promote the optimisation of cost structure, enhance the accuracy of sales orders, and improve the response time. It can also make the use of resources more reasonable.

A Two-Step Dynamic Scheduling and Assignment Method for the Tooling Original Design Manufacturers

Tooling original design manufacturers have to meet highly customised product design requirements and provide a reliable delivery time for their buyers. For such mass customised tooling, high uncertainties and complexity are inevitable in the manufacturing process, especially in the labour-intensive final assembly department. We propose a two-step dynamic method that helps the tooling manufacturer in scheduling and assigning jobs at its assembling department. First, the algorithm creates a queue for incoming orders based on the bottleneck sector with a modified critical ratio (mCR). Second, the orders are assigned to assembling teams by the Hungarian method based on the availability and competitive advantage of each team. This method allows managers to update each operations team on-site, reduce the statistical dependency, and avoid work-in-process inventory build-up in the production system. In a numerical study, we illustrate the effectiveness and cost reduction potential of our method.

Electronic integration and capability widening for OEM suppliers

PurposeThe purpose of this paper is to investigate the effect of original equipment manufacturing (OEM) suppliers’ electronic integration with global customers on their capability widening, following the literature on electronic integration, firm innovativeness, product modularity and dynamic capabilities. It also examines the moderating roles of supplier innovativeness and product modularity in the proposed relationship.Design/methodology/approachThis study conducts empirical examination on a sample of OEM suppliers in Taiwan. It collects 201 self-reported responses via mailed surveys of 1,069 electronics companies listed in the 5000 Largest Firms in Taiwan, and the archival data are obtained from the Taiwan Economic Journal database.FindingsThe results show that electronic integration with global customers affects capability widening negatively, whereas supplier innovativeness affects capability widening positively. In addition, product modularity plays a moderating role in the relationship between electronic integration and capability widening.Research limitations/implicationsThis study contributes to the electronic integration literature by providing empirical evidences on how OEM suppliers’ electronic integration affects their capability widening. This study also adds to the supply chain management literature by demonstrating the relationship between OEM suppliers’ innovativeness and their move into higher value-added activities, as well as how product modularity interplays with electronic integration between customers and suppliers on suppliers’ capability widening in global supplier‒customer relationships.Practical implicationsFor OEM suppliers with a low level of product modularity, they may widen their capabilities by exploring other value-added activities (e.g. original design manufacturing or original brand manufacturing). For OEM suppliers with a high level of product modularity, the improvement of their manufacturing capabilities is a helpful approach to create competitive advantage.Originality/valueThis study is one of the first to examine the interplay between electronic integration and product modularity on capability widening of OEM suppliers from an emerging market. Meanwhile, this study provides support for the relationship between supplier innovativeness and innovative activities in the global supply chain context.

The Belt and Road Initiative and Its Perceived Impacts on the Textile and Garment Industry of Vietnam

The main purpose of this study was to find out the perceived impacts on the garment and textile industry of Vietnam from the Belt and Road Initiative (the BRI), a global-scale developmental and trade facilitation policy of China. The research applied both desk review and in-depth interviews with 54 leaders and high-ranked officials from public and private sectors in 2017 to identify potential impacts of the BRI on the Vietnam textile and garment industry. In addition, perceived challenges and opportunities of the BRI were also examined. Respondents from both sectors agreed that the initiative could foster textile export and the development of infrastructure. Apart from that, the main challenge is recognized as the poor competitiveness of Vietnamese textile firms on the international commercial playground. Solution insights that were offered through interviews suggested that the competence of domestic apparel brands and establishment of ODM (Original Design Manufacturing) and OBM (Own Brand Manufacturing) business models in Vietnamese textile producers may play the key roles in coping with the new challenges and in grasping opportunities that the initiative has to offer. From the perspective of the state, an improved public administration system is perceived as the key element in supporting the enterprises for upcoming challenges.

Coopetition Strategy and Pricing Timing in an Outsourcing Supply Chain With Uncertain Operation Risks

At present, an increasing number of original equipment manufacturers (OEMs) often outsource their product manufacturing to original design manufacturers (ODMs) that also produce their own-brand products and then become powerful competitors of the OEMs. Following this, our work explores whether two such direct competitors should still cooperate in their original contract manufacturing and how coopetition decisions affect their preferred pricing timing when they enter the downstream product market. We establish a multistage model including an OEM and its competitive ODM and derive some managerial insights. First, we find that the OEM and the competitive ODM prefer to cooperate in contract manufacturing as the OEM is more risk loving, the competitive ODM is more risk averse and the wholesale price is relatively small. Second, we illustrate that the two parties are more likely to achieve an agreement on cooperation in the ODM-pricing-early game relative to the two other games. Third, we show that when the OEM is sufficiently risk averse, the two parties’ preferences for pricing timing remain the same regardless of whether they cooperate in contract manufacturing. However, once the OEM becomes risk loving, it will be less willing to move later as the wholesale price increases, which is different from classical Bertrand competition.