Original Suppliers Research Articles

A comparative study of international automobile sourcing strategies based on stochastic process analysis

In global supply chains, increasing global sourcing costs have urged multinational automotive manufacturing firms to develop competitive international sourcing strategies. Faced with different international sourcing strategies between Original Equipment Manufacturers (OEMs) and suppliers in the automotive industry, this paper focuses on the comparative study of two popular ones (Risk Sharing or RS and Early Commitment or EC) and then tries to find out which of these is a better strategy in different situations. Using the real-options approach, the valuation models of the RS and EC sourcing strategies are established. By means of the binomial lattice technique depicting the uncertain exchange rate factor, we present the numerical simulation and sensitivity analysis of two Stochastic Dynamic Programming (SDP) problems. The results of our comparison analysis suggest that the EC sourcing strategy is better than its RS counterpart, especially when the foreign exchange rate is highly volatile in the global automobile supply chain.

Study on suppliers’ flexibility in supply chains: is real-time control necessary?

In a supply chain, the suppliers’ flexibility is considered as a tool to cope with the environmental uncertainties. Flexible suppliers are capable of supplying/processing other jobs in addition to the one for which they are the original supplier. In a cluster of flexible suppliers, it is expected that flexibility of suppliers be utilized more expressively through better control of the supply chain. The online real-time information system is considered as one of the tools for effective control of the supply chain. However, in a cluster of flexible suppliers, the physical and operating characteristics of alternative suppliers (available by virtue of suppliers’ flexibility) may vary from each other for doing the same operation, which may result in a different lead-time to process the same job. This paper presents a simulation study on suppliers’ flexibility level (SFL) in relation to information system automation level of the supply chain and physical characteristics of the flexible suppliers. This paper contributes an approach for decision-makers to identify the information system automation level and variations in physical characteristics of the alternative suppliers with respect to suppliers’ flexibility level that can help in improving the overall delivery lead-time. A decision-maker can reach a trade-off between benefits obtained from supplier's flexibility and the investment required to have a suitable information system automation level and physical characteristics of suppliers. Results of simulation study show that if automation level of information system is not matching to the suppliers’ flexibility level then supplier's flexibility may become counterproductive. Further, a relative change in physical characteristics of the alternative flexible suppliers as compared to the original supplier is more than a certain limit then suppliers’ flexibility may again be counterproductive. However, a cost intensive real-time information system may not be needed when suppliers’ flexibility levels are lower. Study identifies the productive and counterproductive performance regions for suppliers’ delivery lead-time.

Re-Creation of Historical Chrysotile-Containing Joint Compounds

Chrysotile-containing joint compound was commonly used in construction of residential and commercial buildings through the mid 1970s; however, these products have not been manufactured in the United States for more than 30 years. Little is known about actual human exposures to chrysotile fibers that may have resulted from use of chrysotile-containing joint compounds, because few exposure and no health-effects studies have been conducted specifically with these products. Because limited amounts of historical joint compounds are available (and the stability or representativeness of aged products is suspect), it is currently impossible to conduct meaningful studies to better understand the nature and magnitude of potential exposures to chrysotile that may have been associated with historical use of these products. Therefore, to support specific exposure and toxicology research activities, two types of chrysotile-containing joint compounds were produced according to original formulations from the late 1960s. To the extent possible, ingredients were the same as those used originally, with many obtained from the original suppliers. The chrysotile used historically in these products was primarily Grade 7RF9 from the Philip Carey mine. Because this mine is closed, a suitable alternate was identified by comparing the sizes and mineral composition of asbestos structures in a sample of what has been represented to be historical joint compound (all of which were chrysotile) to those in samples of three currently commercially available Grade 7 chrysotile products. The re-created materials generally conformed to original product specifications (e.g. viscosity, workability, crack resistance), indicating that these materials are sufficiently representative of the original products to support research activities.

Internationalisation and Consolidation of the Container Port Industry: Assessment of Channel Structure and Relationships

The international consolidation of the container port industry is a relatively recent, yet radical trend in international shipping and logistics. Global strategies of vertical and horizontal integration evolving around port ownership and operations are undertaken by a variety of market players, both within and outside the international shipping and logistics markets. However, while much of the available literature on the subject has focused on the bases and various motives behind the change, little work has addressed the impacts on channel structure and relationships, including such aspects as control, power and conflict. By channel, we refer to an organised network of institutions that form the combined physical and non-physical path taken by goods and services as they move from original supplier to final consumer. However, in the context of this paper, the scope of the distribution channel is reduced to active members of the international shipping and logistics industry, that is, shippers, ocean carriers, ports, agents and intermediaries. This paper investigates the extent of channel power, conflict, role, performance and strategic concentration of shipping lines as international container terminal operators. A structural equations model is used to assess the impacts of global factors and consolidation on the container port industry, and test whether the direction of change would result in an increasing or decreasing risk of commoditisation and footloose mobility.

Independent entrepreneurs as an obsolete model? considerations for the European automotive repair and service markets

Even though the European automotive repair and service markets today are still characterised by many independent small repairers, various indicators can be identified that challenge this classical entrepreneurial model. Globalisation and new technological developments already led to a consolidation in these markets. The objective of this paper is to describe the developments in these markets in more detail and to identify generic organisational models. The systematisation into three generic models, that is, the entrepreneurial, the partnership and the integrated model builds the basis for analysing the competitive potential of the different forms of value net organisation. The reasoning is building on a resource-oriented thinking framework and additional thoughts from transaction cost economics. The underlying data for the analysis are obtained from a qualitative study conducted by the International Car Distribution Programme (ICDP) containing 200 interviews with independent repairers and further expert interviews with franchisers, parts distributors, original equipment suppliers and fleet customers.

Original Equipment Suppliers Association

A look at the workings of the business economics function at the OESABusiness Economics (2006) 41, 54–55; doi:10.2145/20060407

Cyber-Coordinating Mechanism and Strategic Management Accounting

Based on the analysis of the need of a new coordinating mechanism in cyber-value chain, this paper puts forward a cyber-coordinating mechanism, which is a mechanism between market mechanism and firm hierarchical mechanism. It is the theoretical basic point for setting up the system of Strategic Management Accounting in cyber-value chain. This paper conducts the model of Strategic Management Accounting based on cyber-coordinating mechanism, and presents evidence from a case study that was conducted to understand the impact of disintegration on original suppliers and of reintegration on new suppliers in order to support our cyber-coordinating mechanism hypothesis and the application value of the new model of strategic management accounting in cyber-value chain.

Wood pallet suppliers' reaction to online reverse auctions

PurposeThe purpose of this paper is to quantitatively assess wood pallet suppliers' reaction to online reverse auctions and its impact on their business policies and practices.Design/methodology/approachSurvey method was used to determine how pallet suppliers react to online reverse auctions.FindingsDetermines that pallet suppliers do not realize the benefits claimed by online reverse auction service providers. Identifies new sources of costs which accrue to buyers and are not accounted for in so‐called “total cost” request for quotes including: retaliatory pricing practices, less cooperative relationships, and sourcing work back to the original supplier. The qualitative benefits identified for suppliers by third‐party online reverse auction service providers are overstated or false.Research limitations/implicationsThe present work can be extended to other commodity categories to identify similarities and differences in how suppliers react to online reverse auctions, understand the domain of successful and unsuccessful application of the online reverse auction tool, and provide further insight into the evolution of buyer‐seller relationships, including embedded organizational routines such as power‐based bargaining.Practical implicationsFindings mirror the results found in a previous study that examined aerospace parts suppliers' reaction to online reverse auctions, and indicates that market makers have consistently overstated the benefits of online reverse auctions to both sellers and buyers, and the use of this tool will typically result in unfavorable outcomes for both buyers and sellers.Originality/valueThis paper will be of interest to buyers, sellers, and market makers, as it identifies important problems with online reverse auctions, and suggests questions that buyers should ask market makers to ensure better sourcing decisions.

Virtual machine monitors: current technology and future trends

Developed more than 30 years ago to address mainframe computing problems, virtual machine monitors have resurfaced on commodity platforms, offering novel solutions to challenges in security, reliability, and administration. Stanford University researchers began to look at the potential of virtual machines to overcome difficulties that hardware and operating system limitations imposed: This time the problems stemmed from massively parallel processing (MPP) machines that were difficult to program and could not run existing operating systems. With virtual machines, researchers found they could make these unwieldy architectures look sufficiently similar to existing platforms to leverage the current operating systems. From this project came the people and ideas that underpinned VMware Inc., the original supplier of VMMs for commodity computing hardware. The implications of having a VMM for commodity platforms intrigued both researchers and entrepreneurs.

Interfacial reactions of Sn-3.5% Ag and Sn-3.5% Ag-0.5% Cu solder with electroless Ni/Au metallization during multiple reflow cycles

The increasing industry awareness of lead-free activities has prompted original equipment manufacturers and suppliers to investigate lead-free solder systems in detail. The reliability of lead-free solders has been studied a lot recently, but the knowledge of it is still incomplete and many issues related to them are under heavy debate. In this study, the interfacial reactions of Sn-3.5Ag and Sn-3.5Ag-0.5Cu (wt.%) solders with Cu/Ni(P)/Au ball grid array (BGA) pad metallization were systematically investigated after multiple reflows. The peak reflow temperature was fixed at 260°C. It was found that relatively high consumption of Ni(P) was observed in the case of Sn-3.5%Ag solder alloys during multiple reflow cycles. A white layer of P rich Ni-Sn compound was observed above the dark Ni3P layer for Sn-3.5%Ag solder after several reflows. It was noticed that the mean thickness of the intermetallics and the dark P-rich Ni layer at the interface was decreased just by adding 0.5% Cu in Sn-3.5%Ag solder alloy with less overall interfacial reaction at the solder joint.

Competitive assembly: brown or green field site conventional or flexible plant what's the best?

The automobile industry has long been undergoing a profound industrial and competitive reorganisation process that manifests itself both on the demand and on the supply side. To respond to this situation automakers (traditionally called Original Equipment Manufacturers – OEMs) are developing new globalisation strategies that include among other things: a marked outsourcing of component production (that were formerly developed internally), the reduction in the number of first-tier suppliers (original equipment suppliers – OESs), the creation of new assembly plants (green field) in areas with low labour costs as opposed to the adaptation of existing plants (brown field), the fine-tuning of more flexible assembly processes capable of coping with short term changes in both volume and in product mix. This essay carries out a simulation, based upon quantitative hypotheses drawn from real situations aimed at comparing the attractiveness of the different solutions. The results confirm some of the theses currently brought forward, but fail to confirm some others.

Aerospace parts suppliers’ reaction to online reverse auctions

Presents the results of a survey conducted among aerospace part and sub‐assembly suppliers to quantitatively assess their reaction to online reverse auctions and its impact on their business policies and practices. Findings are compared to the qualitative benefits identified for suppliers by third party online reverse auction service providers. Determines that incumbent suppliers do not realize the benefits suggested by online reverse auction service providers. Identifies new sources of costs which accrue to buyers and are not accounted for in so‐called “total cost” request for quotes, including retaliatory pricing practices, less cooperative relationships, and sourcing work back to the original supplier. Concludes that both buyers and sellers participating in online reverse auctions will likely encounter unfavorable outcomes, thus questioning the effectiveness of this new purchasing tool as a means of reducing the unit price of buyer‐designed engineered components.

Emerging Strategies and Forms of Governance in High-Wage Component Manufacturing Regions

This paper provides a broad survey of the current terrain of components production in the high-wage regions of North America and Europe. Its central message is that it is unwise to believe in the unitary characterizations of the development of relations between original equipment manufacturers (OEMs) and suppliers in contemporary manufacturing. The character of the current environment aligns strategies among all parties such that heterogeneity in relations between customers and suppliers is systematically reproduced. Four broad types of strategy are shown to be both currently possible and pursued in the current market. But there is a considerable amount of hedging as well as hybridity observable among component producer strategies. In a similar way, the range of governance mechanisms currently being developed and deployed among producers in the sector is quite broad. The same problem is being addressed by a multiple of alternative institutional arrangements. Mechanisms can be either public or private, or both, and formal or informal. They can also be corporate, associational, consortial, and market-based.

IT-BASED RETENTION STRATEGIES AND CONSUMER SWITCHING COSTS IN ELECTRONIC MARKETS: A FRAMEWORK.

Academy of Management Annual Meeting Proceedings includes abstracts of all papers and symposia presented at the annual conference, plus 6-page abridged versions of the “Best Papers” accepted for inclusion in the program (approximately 10%). Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author(s) directly for the full papers. ArticlesIT-BASED RETENTION STRATEGIES AND CONSUMER SWITCHING COSTS IN ELECTRONIC MARKETS: A FRAMEWORK.Published Online:13 Dec 2017https://doi.org/10.5465/ambpp.2003.13792465AboutSectionsPDF/EPUB ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail AbstractThis article outlines the dimensions of consumer switching costs and suggests how the strategic use of information technology influences these costs in electronic markets. The key idea is that switching costs enable the original supplier to exert some monopoly power over established customers. As a result of changes in market characteristics and technological advances, the nature of switching costs has changed and the role of retention capabilities has been amplified in electronic markets. Takedown costs are defined as the costs of terminating the relationship with the incumbent provider. Relationship-specific economic costs refer to monetary costs, time and effort consumers have placed in past exchanges. Relationship-specific psychological costs are defined as the loss due to the attachment or bond that consumers have established with the incumbent. Setup costs refer to the costs of establishing a relationship with a new provider. Search costs are defined as the costs of finding alternative sources for the product or service. Learning costs are defined as the cognitive efforts and time spent on learning how to use a new Web site when consumers switch. Uncertainty costs are incurred due to uncertainty or risks about the service quality offered by the new provider.FiguresReferencesRelatedDetails Vol. 2003, No. 1 Permissions Metrics in the past 12 months History Published online 13 December 2017 Published in print 1 August 2003 InformationCopyright of Academy of Management Journal is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.KeywordsINDUSTRIAL costsELECTRONIC commerceINFORMATION technologyINFORMATION resources managementDownload PDF

Improving the Competitiveness of Companies in the UK Automotive Sector

It has been recognized that there is a lack of competitiveness in the UK-based automotive supply chain and that knowledge and creativity at all levels within a company are a source of competitive advantage. It is against this background, and in light of the increasing demands placed on the automotive supply chain through globalization and over-capacity that a number of initiatives have been established with support from the UK government – including the Society of Motor Manufacturers (SMMT) Industry Forum and The Automotive College. To improve the competitiveness of companies lower down in the automotive sector supply chain it is necessary for the original equipment manufacturers (OEMs) and first-tier suppliers to lead any initiative. With this mind, a Merseyside Automotive Group (MAG) was established, chaired by Jaguar Cars with representation from other Merseyside-based automotive companies. Its activities are managed and coordinated from the Centre for Automotive Studies at Liverpool John Moores University. The model developed by the Group consists of an integrated programme with three elements: a Manufacturing Improvement Programme, which aims to transfer the best practice from the OEMs into the supply chain, an Automotive E-Community Programme in which companies can trade, share and learn, and an E-Tools for Industry Programme to raise awareness of the benefits of information and communications technology. The paper describes this integrated programme and its impacts.

Master Station Architecture of a SCADA System

The paper starts with a brief introduction to SCADA systems. The Differences between an Energy Management System and a SCADA system are explained. Certain salient features of a typical SCADA system are also mentioned.The Master Station Architecture of a SCADA system is the main thrust of this paper. The architecture includes the hardware components, software components, configurations, networks, performance, reliability concepts, and maintainability aspects. In earlier SCADA systems, hardware has been interfaced through unique interface protocols, and software has been written in a variety of languages and compiled with customized programs. The new trend is towards distributed computers and distributed functions, integrated using industry standards. These features allow an electric utility to replace and upgrade system hardware and software independent of the original supplier, thus enhances the potential to upgrade the SCADA system.

Factors in the Supply Chain Supporting Three-way Partnerships

Industry based around products which require tooling can benefit from three-way partnerships involving the product developer, first tier supplier and tool manufacturer. Whilst many first tier suppliers have well-established relationships with their customers, concurrent engineering across three partners is a new situation for most participants. Differing working practices, approaches to technical infrastructure and partner relationships are described amongst four partnerships featuring Swedish tool and die manufacturing companies. Despite the generally effective methods of working found within individual companies, involving original equipment manufacturer suppliers and tool manufacturers from an early stage of product development can reduce lead times by up to 50%. Establishing and implementing best practice for such partnerships therefore remains a challenge. Conclusions are drawn which are of interest and use in other industry sectors.

ISO10303-compliant computer-aided wheel-rim design system - the framework and data model

This paper focuses on developing a framework for a computer-aided part design system that considers design efficiency and facilitates product information sharing across the automotive supply chain. The system applies the concept of feature-based design to enhance the efficiency and effectiveness of auto-part design and implements the standard exchange of product (ISO10303/STEP) data model to enable the data sharing between original equipment manufacturers (OEMs), suppliers and customers. This research demonstrates the technology of standard data modelling for a feature-based CAD system to achieve cross-platform CAD/CAM integration. The framework supports technical data interchange (TDI) using international data standard to enable the concept of virtual engineering community and collaboration.

Bringing entrepreneurship back in: Explaining the industrial dynamics of Hong Kong with special reference to the textile and garment industry

Applies Kirzner’s concept of entrepreneurship to explain the economic success of Hong Kong. The city economy possesses neither natural resources, nor sophisticated technologies, and yet it has successfully developed into one of the most prosperous economies in East Asia. This study argues that Hong Kong’s industrial dynamism relies mainly on a large number of adaptive entrepreneurs who are constantly alert to opportunities, maintain a high degree of flexibility in their production and respond rapidly to change. In the textile and garment industry, firms survived by pursuing a product imitation strategy, operating at a small‐scale, extensively utilizing subcontracting networks, producing customer label garments as well as performing spatial arbitrageurship. Employing these adaptive entrepreneurial strategies, Hong Kong manufacturers have learnt from foreign firms and imitated their products. By selling improved commodities at lower prices, they have competed against the original suppliers from the western advanced countries. Furthermore, to exploit new profit opportunities, Hong Kong’s entrepreneurs have shifted their production activities from one product to another, from one industry to another, from higher cost to lower cost regions, from traditional fishing and agriculture into manufacturing, and then to finance and other services. Their efforts have brought about structural transformation in the economy and enabled Hong Kong to catch up with early industrialized nations.

Hong Kong's industrial success: an entrepreneurial perspective

This article examines the role of entrepreneurship in the industrialization of Hong Kong. Kirzner's concept of entrepreneurship is applied to explain the industrial dynamics of the economy. Using the electronics industry as illustration, this article argues that Hong Kong's manufacturing industry has been driven principally by adaptive entrepreneurship, which takes the form of small-scale enterprise, product imitation, subcontracting and spatial arbitrage. Furthermore, those firms adopting imitative strategies were able to survive, though many of them relied on very small profit margins. Radical innovative strategies were seldom adopted and were not feasible in the environment of Hong Kong. Adopting adaptive entrepreneurial strategies, Hong Kong's manufacturers learned from foreign firms and imitated their products. Later, by exporting improved commodities at lower prices, they competed against the original suppliers from economically more advanced countries. This constitutes Hong Kong's industrial success.