Proactive Supply Research Articles

Proactive and reactive purchasing planning under dependent demand, price, and yield risks

The trend of globalization and outsourcing makes supply unreliable and companies begin to have supplier diversity embedded into their procurement departments. Traditionally, contract suppliers are a major supply channel for many companies, while the effectiveness of reactive supply sources, such as spot markets, is often ignored. Spot markets have negligible lead times and higher average prices comparing with contract suppliers. In our research, procurement utilizes the combinatorial benefits of proactive supply (a contract supplier) and reactive supply (a spot market). The uncertainties of yields, spot prices, and demand, and the correlations among them are also taken into consideration when designing procurement plans. The objectives of this paper were to evaluate the effectiveness of dealing with uncertain supply using the spot market along with the contract supplier and to model the dependences among all the potential uncertainties. This research also seeks high expected profits without overlooking the associated variances. The analytical expression to determine the optimal order quantity is obtained under the most general situations where commodities can be both bought and sold via the spot market. Some properties are derived to provide useful managerial insights. In addition, reference scenarios, such as pure contract sourcing and the spot market restricted for buying or selling only, are included for comparison purposes.

Antecedents of proactive supply chain risk management – a contingency theory perspective

Since supplier insolvencies are a major source of supply chain disruptions, scholars have continuously suggested managing supply chain risk management (SCRM) proactively in order to avoid their occurrence. However, business practice seems to fail with this task. This paper investigates antecedents which foster proactive SCRM implementation from a contingency theory perspective. As a major contingency we choose past supplier insolvencies as an indicator for the level of vulnerability of organisations and investigate inter-organisational, intra-organisational, and individual antecedents. By consulting supply chain management and management accounting literature, hypotheses are developed and tested via content analysis in 63 interviews with representatives from the automotive industry. The findings demonstrate that a mechanistic management control system, a rational cognitive style and relational buyer–supplier relationships have positive impacts on proactively managing supplier insolvency risks. Furthermore, past experience with supplier insolvencies has a moderating, though not a direct, effect on proactiveness. This research suggests that a holistic risk management approach is required to proactively mitigate supplier insolvency risk.

Ecological models in Paleontology: Assessing information on the extinction of South American megamammals through its potential distribution patterns

Immunological function requires metabolic support to suit the needs of lymphocytes at a variety of distinct differentiation and activation states. It is now evident that the signaling pathways that drive lymphocyte survival and activity can directly control cellular metabolism. This linkage provides a mechanism by which activation and specific signaling pathways provide a supply of appropriate and required nutrients to support cell functions in a pro-active supply rather than consumption-based metabolic model. In this way, the metabolism and fuel choices of lymphocytes are guided to specifically match the anticipated needs. If the fuel choice or metabolic pathways of lymphocytes are dysregulated, however, metabolic checkpoints can become activated to disrupt immunological function. These changes are now shown in several immunological diseases and may open new opportunities to selectively enhance or suppress specific immune functions through targeting of glucose, lipid, or amino acid metabolism.

Enhancing supply chain security with vulnerability management and new technology

This study discusses risk management tools and the mobile enterprise factory innovation process as a motor for security enhancement using new technological solutions. New technologies provide opportunities for increasing the overall security and safety of shipments by proactive supply chain risk management and introduction of powerful security solutions. Concept development methods, risk management tools and technology expertise were combined to a process that resulted in effective business solutions for enhancing supply chain security. As practical results, this study presents a new risk assessment model, the supply chain security and technology management model, and a case study of a solution for integrity monitoring of shipments.

Analysis of time delays for loss reduction in an automobile components manufacturing organisation using a proactive supply chain risk management model

Today's global market demands top priority on outstanding quality, better reliability and on-time delivery of products using effective supply chain executions to stay against fierce competition. Hence, it is essential to identify and address the various issues in supply chain executions in a cursory manner. In this research work, the major time delay issues in supply chain of an automobile components manufacturing organisation have been investigated. A proactive supply chain risk management model has been developed to analyse these issues. The predominant time delay is prioritised for risk mitigation. Corrective measures have been recommended for implementation to achieve loss reduction.

House of risk: a model for proactive supply chain risk management

PurposeIncreasingly, companies need to be vigilant with the risks that can harm the short‐term operations as well as the long‐term sustainability of their supply chain (SC). The purpose of this paper is to provide a framework to proactively manage SC risks. The framework will enable the company to select a set of risk agents to be treated and then to prioritize the proactive actions, in order to reduce the aggregate impacts of the risk events induced by those risk agents.Design/methodology/approachA framework called house of risk (HOR) is developed, which combines the basic ideas of two well‐known tools: the house of quality of the quality function deployment and the failure mode and effect analysis. The framework consists of two deployment stages. HOR1 is used to rank each risk agent based on their aggregate risk potentials. HOR2 is intended to prioritize the proactive actions that the company should pursue to maximize the cost‐effectiveness of the effort in dealing with the selected risk agents in HOR1. For illustrative purposes, a case study is presented.FindingsThe paper shows that the innovative model presented here is simple but useful to use.Research limitations/implicationsIn the proposed framework, the correlations between risk events are ignored, something that future studies should consider including.Practical implicationsThe framework is intended to be useful in practice. For the calculation processes, a simple spreadsheet application would be sufficient. However, most of the entries needed in the model are based on subjective judgment and hence cross‐functional involvement is needed.Originality/valueThe paper adds to the SC management literature, a novel practical approach of managing SC risks, in particular to select a set of proactive actions deemed cost‐effective.

Proactive supply risk management methods for building a robust supply selection process when sourcing from emerging markets

PurposeThis paper aims to identify proactive supply risk management methods which can be used to reduce or remove risk sources during the supplier selection process, in the context of Western‐based manufacturing companies that source from emerging markets.Design/methodology/approachLearning from the literature and conducting multiple‐case study analyses of five Western‐based manufacturing companies' sourcing experiences from emerging markets.FindingsThe experiences of five Western‐based manufacturing companies suggested that applying the risk management process into supplier selection was particularly important and effective for supply risk reduction when sourcing from emerging markets. Supply risk sources must be identified and proactive supply risk management methods must be used to remove or reduce risk sources for effective supply risk management. The proactive risk management methods discovered in this research are: conducting a supplier questionnaire covering a wide range of business dimensions of the supplier; performing a technical review; negotiating a risk mitigation plan; employing local‐based procurement staff; using a total cost estimate; applying a strict part qualification process.Research limitations/implicationsA multiple‐case study methodology employs a limited number of case studies and therefore may restrict the generalisation of research findings. Manufacturing companies are used as case study organisations for this research. Therefore, the research findings are particularly applicable and useful to manufacturing companies but might not be valid for other types of company. The research focuses on supply risk reduction during the supplier selection process, while further research into other stages of the supply management process is desirable.Practical implicationsThe generated proactive supply risk management methods are useful to manufacturing companies looking to source or aiming to improve their sourcing experiences from emerging markets.Originality/valueThe literature provides valuable contents in terms of concepts but lacks proactive supply risk management methods for supply risk management when sourcing from emerging markets. The generated proactive supply risk management methods based on first‐hand information are valuable both to academics and practitioners in this field.

Proactive supply chain management in the forging industry

Forging companies are nearly exclusively embedded into supply chains as suppliers and consequently have to accomplish strict requirements concerning their logistic performance. For providing products flexible and responsive to the market proactive supply chain management systems need to be introduced for a quick and reliable delivery to costumers in-time with low risks of failures. Therefore, this paper describes a comprehensive approach for the implementation of operative logistic risk management in the PPC within flexible supply chains. The method developed applies proven statistical fundamentals (e.g. trend analysis) to logistic risk management with the purpose of identifying potential logistic risks, estimating their impact and ranking them according to their importance. Hence, counter measures can be deduced and tested based on material flow simulation to counter balance the identified potential logistic risks.

Intelligent supply chain by using prognostic logistics

The use of technological tools in logistics is intended to increase visibility, capacity and control in the supply chain. Decrease of uncertainties due to asymmetric data has been the constant challenge of management. Misdiagnosis of situations and equipment, inaccurate production planning, shrinkage and counterfeiting are some of the consequences of erroneous information. The idea of prognostic logistics is to use real time information and an intelligent system to diagnose and predict early failures and hazardous situations. The automatic capture of information in prognostic logistics has the intent to reduce human errors. Automatic identification technologies enable the creation of a prognostic logistic network where real time information is used to make accurate forecasting, pushing a proactive supply chain instead of a reactive one.

Rhetoric and reality of corporate greening: a view from the supply chain management function

AbstractThe increasingly important economic role of supply chain management provides the backcloth against which this article examines what contribution the function can make to environmental protection. Theoretical perspectives on greener supply are developed and then tested against a sample of manufacturing companies. Environmental policy documents published by the sample companies seem to offer surface evidence for a proactive supply chain management role in environmental protection. Yet a more detailed examination of the three elements that constitute supply chain management – the management of the transformation of materials, the management of information flows and the management of supply chain relationships – finds a suboptimal situation for all three areas. In part this gap can be explained by limits in the technical capabilities of the supply chain. More important, however, are structural constraints that prevent the supply chain manager from actively searching for environmentally friendlier alternatives. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.

Overcoming demand management problems: The scope for improving reactive and proactive supply management in the uk health service

This paper demonstrates, using empirical cases from the National Health Services (NHS), how existing practices in demand specification, procurement and supply management fail to address the significant problems caused by the misalignment of demand and supply. When examining internal demand management a number of problems arise including: product overspecification, premature establishment of design and specification, frequent changes in specification, poor demand information, fragmentation of spend, maverick buying, inter-departmental power and politics, and the risk-averse nature and culture of the organisation. It is argued that unless these problems are addressed and eliminated the NHS will not be in a position to select the most appropriate reactive or proactive approach from the range of sourcing options available. An improvement path that NHS Trusts might follow to achieve more efficient and effective procurement and supply management is outlined.

Ericsson's proactive supply chain risk management approach after a serious sub‐supplier accident

Supply chain risk management (SCRM) is of growing importance, as the vulnerability of supply chains increases. The main thrust of this article is to describe how Ericsson, after a fire at a sub‐supplier, with a huge impact on Ericsson, has implemented a new organization, and new processes and tools for SCRM. The approach described tries to analyze, assess and manage risk sources along the supply chain, partly by working close with suppliers but also by placing formal requirements on them. This explorative study also indicates that insurance companies might be a driving force for improved SCRM, as they now start to understand the vulnerability of modern supply chains. The article concludes with a discussion of risk related to traditional logistics concepts (time, cost, quality, agility and leanness) by arguing that supply chain risks should also be put into the trade‐off analysis when evaluating new logistics solutions – not with the purpose to minimize risks, however, but to find the efficient level of risk and prevention.

Disembedding the supply chain: institutionalized reflexivity and inter-firm accounting

Pro-active supply chain practices in manufacturing have been affected by general features of institutionalized reflexivity whereby production activities are disembedded by firms whose actions have been enabled by abstract systems such as accounting and quality management. A new consciousness of the centrality of the supply chain creates increased tensions between the trust constructed through abstract systems and the risk associated with the increased reflexivity of supply chain actors. Eschewing traditional distinctions in accounting between the inside and outside of the organization, a structuration approach shows how inter-firm transactions and accounting may be analysed through the duality of structure. The theory is explored through a case of a supply chain initiative in UK electronics manufacturing. The case company set up the cost management group (CMG) which evolved into a semi-autonomous team dominated by accountants. Drawing on the wider institutionalization of supply chain practices involving outsourcing and partnering projects, the CMG became a locus of institutionalized reflexivity. As an important source of financial and cost information in supply chains, the accounting practices espoused by the CMG contributed to both dis- and re-embedding processes.

Factors that drive purchasing and supply management's use of information technology

Purchasing and supply leaders continually search for ways to improve the quality, delivery, and cost of production inputs. Their participation in these proactive supply chain activities can be a significant driver of purchasing and supply management's use of information technology (IT). Using a transaction cost analysis perspective, we surveyed purchasing and supply professionals at the director level or above from the Institute for Supply Management database to determine whether five common purchasing activities increase the need for purchasing professionals to use IT. The purchasing activities studied are (1) supplier alliance; (2) market monitoring; and (3) cost management (including cost analysis, total cost of ownership, and target costing). Of these activities, supplier alliances and cost analysis were found to significantly influence purchasing and supply management use of IT. In addition, industry effects were also discovered, where purchasing professionals in organizations that focus on producing high technology products and services utilize IT to a greater extent than purchasing professionals in traditional manufacturing and service organizations. The findings suggest that while there is evidence of a relationship between purchasing and supply management's participation in proactive activities and actual use of IT, more research is needed to understand how information and technology can better facilitate purchasing and supply management activities.

Proactive Supply Management: The Management of Risk

IN BRIEFProactive supply management is a frequently used phrase, yet no agreement exists about its precise meaning. This article argues that proactive purchasing management is risk management, a perspective that evolved from case studies of the purchasing function. To better understand risk management from the perspective of purchasing management, it is analyzed within the context of transaction cost theory and the resource dependency model. Evidence is provided from the case studies that risk management is an appropriate framework for understanding proactive purchasing management. Examples of risk management through proactive purchasing activities are presented.

Market Orientation for the Public Sector Providing Expert Services for SMEs

LERLA HUMERINTA-PELTOMAKI IS A researcher at the Turku School of Economics and Business Administration, Finland, and Niina Nummela is an Assistant Professor at the same university. In this paper, the authors attempt to characterise the small business market for expert services. The aims of the paper can be summarised as follows: to distinguish the characteristics of users and non-users of expert services; to evaluate the overall potential for future uise of expert services; to analyse the characteristics of potential users of expert services. This paper is part of a large ongoing research project concerning expert services and SMEs in Finland. The empirical analysis is based on the responses of 400 firms. The results reveal that possibilities do exist for a market orientation in the public sector. The authors have suggested a typology of SMEs according to current and future use of expert services. This typology enables the service providers to define their customers and also to design strategies for handling each customer group individually. The identification of different customer types creates an opportunity for exploiting large-scale demand, which is a requirement for the effectiveness of service providers in the public sector. SMEs see a market orientation on the supply side in terins of a more proactive supply effort to provide information regarding the services.