Contract Manufacturing Research Articles

Establishment and Characterization of a Stable Producer Cell Line Generation Platform for the Manufacturing of Clinical-Grade Lentiviral Vectors.

Background/Objectives: To date, nearly 300 lentiviral-based gene therapy clinical trials have been conducted, with eight therapies receiving regulatory approval for commercialization. These advances, along with the increased number of advanced-phase clinical trials, have prompted contract development and manufacturing organizations (CDMOs) to develop innovative strategies to address the growing demand for large-scale batches of lentiviral vectors (LVVs). Consequently, manufacturers have focused on optimizing processes under good manufacturing practices (GMPs) to improve cost-efficiency, increase process robustness, and ensure regulatory compliance. Nowadays, the LVV production process mainly relies on the transient transfection of four plasmids encoding for the lentiviral helper genes and the transgene. While this method is efficient at small scales and has also proven to be scalable, the industry is exploring alternative processes due to the high cost of GMP reagents, and the batch-to-batch variability predominantly attributed to the transfection step. Methods: Here, we report the development and implementation of a reliable and clinical-grade envisioned platform based on the generation of stable producer cell lines (SCLs) from an initial well-characterized lentiviral packaging cell line (PCL). Results: This platform enables the production of VSV-G-pseudotyped LVVs through a fully transfection-free manufacturing process. Our data demonstrate that the developed platform will facilitate successful technological transfer to large-scale LVV production for clinical application. Conclusions: With this simple and robust stable cell line generation strategy, we address key concerns associated with the costs and reproducibility of current manufacturing processes.

Mitigating yield uncertainty from the perspectives of contract manufacturing and technology licensing

In the low-carbon environment, green manufacturing by manufacturers often requires upstream to provide precision components. However, the lack of production experience of high-tech upstream leads to yield uncertainty. To explore the impact of yield uncertainty on green supply chain operations and analyze its solution, we propose a contract manufacturing mode with technology licensing and further consider pricing licensing or production licensing. The Stackelberg game is employed to construct these three models and a benchmark model without contract manufacturing. Moreover, we discuss the supplier’s mode preference by numerical analysis. Our findings reveal that the contract manufacturing mode with technology licensing mitigates the detrimental influence of yield uncertainty, boosting supplier profitability by 49.00% and manufacturer profitability by 61.76% when the expected yield rate is small or the expected yield rate is large with a small yield fluctuation. Furthermore, when both expected yield rate and profit-sharing ratio are low, increased yield fluctuation predominantly affects the downstream, whereas a win–win–win situation can be achieved through increased profit-sharing ratio. Additionally, compared with contract manufacturing mode with technology licensing, additional pricing licensing or production licensing augments supplier profitability by more than 10.56% in certain cases. Interestingly, improving production efficiency may not enhance the contract manufacturer profitability in both modes due to potential trade-offs with competition and the high cost. This paper contributes to the development of contract manufacturing policies, guiding suppliers and contract manufacturers towards achieving synergetic economic and environmental development. Future research could examine the applicability of the proposed contract manufacturing mode in various industries or identify additional factors affecting supplier profitability.

The interaction of CM’s encroachment time and OEM’s outsourcing strategy when considering the cost-learning effect

Contract manufacturing has been widely studied in recent years. At the same time, existing research rarely considers when should the contract manufacturer (CM, she) launch a product of her own brand to encroach into the market. To fill this research gap, this study considers a two-period game consisting of one original equipment manufacturer (OEM, he) and one CM. The CM with a cost-learning ability could strategically decide whether and when to produce a final product of her own to encroach the market. The results show that when the OEM has a strong brand advantage, the CM may lose profit from encroachment into the market because her cost-learning capability contributes to grabbing the OEM’s market share and then the decrease in OEM’s orders hurts the CM herself in turn. On the contrary, facing a weak-brand-advantage OEM, the CM will encroach in both periods. Furthermore, the OEM can also derive advantages from the CM’s encroachment when the OEM possesses a strong brand advantage. However, when the OEM’s brand advantage is at a moderate level, refraining from encroachment will result in Pareto Optimality for both the OEM and CM.

A global comparative analysis of guidelines for herbal medicines Pharmacopoeia and Good Manufacturing Practice, with a case study of Panax ginseng C.A Meyer

IntroductionThe use of herbal medicines is widespread, and ensuring their quality control, as guaranteed by pharmacopoeia and Good Manufacturing Practice (GMP) guidelines, has garnered significant attention. Discrepancies in quality standards across different regulatory agencies challenge the global marketing of herbal medicines and hinder public access to these products. Therefore, this research aims to compare pharmacopeia on Panax ginseng C.A. Meyer (P. ginseng) and GMP guidelines for herbal medicines to provide an evidence-based understanding of quality control standards. MethodsDefinitions of herbal medicines across regulatory authorities, including the World Health Organization (WHO), Pharmaceutical Inspection Co-operation Scheme (PIC/S), European Union (EU), China, Japan, South Korea, and Vietnam, were collected. Additionally, pharmacopeial standards on Panax ginseng case study were analysed, focusing on aspects such as origin, identification, testing methods, extractives, assay, purity, and drug information. The study also compared GMP requirements for herbal medicines, which included personnel, premises and equipment, documentation, production, quality control, contract manufacturing and analysis, complaints and product recall, and self-inspection. ResultsDefinitions of herbal medicines are similar among the WHO, PIC/S, and the EU, while distinct definitions based on scientific evidence and traditional practices were presented in China, Japan, South Korea, and Vietnam. Pharmacopeia standards varied across regulatory agencies, as evidenced by the P. ginseng case study. However, testing methods closely resembled each other between China and Vietnam, as well as between Japan and South Korea. Among pharmacopoeias, the WHO monographs offered the most comprehensive drug information on P. ginseng. In contrast, the European Pharmacopoeia lists such details separately in a P. ginseng assessment report. Regarding GMP requirements, although examined components varied among regulatory agencies, significant resemblances exist between the GMP guidelines of PIC/S, the EU, and South Korea, and between those of the WHO and Vietnam. ConclusionsDisparities in quality standards across jurisdictions highlight the necessity for international collaboration to achieve harmonization. Harmonizing these standards aims to promote the global availability of standardized herbal medicinal products, benefiting public health.

A multinational firm’s global manufacturing location and outsourcing strategies

Due to rising labor costs in China and trade friction, many multinational firms (MNFs) consider moving manufacturing outside China to Southeast Asian Countries. Based on observations in real world, we build a three-tier supply chain model consisting of one component supplier, two contract manufacturers (CMs), an MNF, and a local original equipment manufacturer (OEM). The MNF monopolizes the market in country 1 (e.g., U.S.), but competes in country 2 (e.g., China) with the local OEM. The component supplier and one CM are located in country 2, and the other CM is located in country 3 (e.g., a country in Southeast Asia). We investigate the MNF’s global manufacturing location and procurement outsourcing strategies with considerations of tariffs and market environments. Currently, the MNF outsources its manufacturing to the CM in country 2, and decides whether to continue the cooperation with the current CM or develop a new CM in country 3. The MNF also considers whether to outsource its component procurement to the corresponding CM. Our study reveals that the MNF’s optimal strategy depends on the relative market sizes, the fixed cost of developing a new CM, as well as the manufacturing cost and tariff disadvantages in country 2. Interestingly, we find that the tariff disadvantage in country 2 does not always motivate the MNF to cooperate with the CM in country 3. Instead, an appropriate tariff may be beneficial to the MNF that manufactures in country 2. In addition, the MNF’s preferred procurement strategy is related to its manufacturing location. When cooperating with the CM in country 2, the MNF would switch from direct procurement to outsourced procurement as the market size of country 1 increases.

Proposed contract manufacturing strategy for Baby Food Industry using Kepner-Tregoe and Analytic Hierarchy Process (Ahp) Approach

Purpose: The aim of this study is to select the best contract manufacturing strategy to ensure sustainable growth and fulfillment of MA baby food at PT. S.A. Methods: This study used qualitative and quantitative research methods. The qualitative approach involves conducting interviews and forum group discussions (FGD) with Subject Matter Experts (SMEs) to determine the root cause of problems using Kapner Tragoe and Why Tree Diagram analysis and to determine the criteria and alternative solutions for this problem. The quantitative approach uses the Analytical Hierarchy Process (AHP) to select the best alternative solution. Results: Using the AHP method, the most important criteria that could influence the decision-making process were schedule (32.95%), cost (30.31%), delivery (16.44%), capacity (8.66%), ability (6.79%), and quality (4.86%). The best alternative solution for the short term to resolve the business issue is “Produce in existing contract manufacturing and distribute using 3rd party trader (58,09%)”. This alternative solution will ensure fulfillment and prevent sales losses of 96 billion but with a trade-off of a 10% increase in costs. Meanwhile, the best alternative solutions for long term is “Terminate existing Manufacture & Produce in Alternative Local Contract Manufacture in Indonesia (31,55%)”. This alternative solution provides cost savings equivalent to 8.8% of the existing COGS and ensures sustainable growth and fulfillment of MA baby food at PT. S.A.

A Competitive Newsvendor Problem with Product Substitution under the Carbon Cap-and-Trade System

This study investigates the competitive issues of the newsvendor problem with product substitution under the carbon cap-and-trade system. Building on existing research, this paper introduces the carbon cap-and-trade system under uncertain market demand and considers that the original equipment manufacturer (OEM) can choose to procure raw materials from the contract manufacturer (CM), with both final products being substitutable. Furthermore, we explore the different substitution relationships between OEM and CM products under both pure competitive and co-opetitive modes. For this problem, decision models are developed for various scenarios, and optimal solutions satisfying given conditions are provided. We find that in one-way substitution, under pure competition, an increase in the OEM’s (or CM’s) green investment and substitution rate only leads to an increase in OEM’s (or CM’s) yields, while an increase in the OEM’s (or CM’s) green investment does not necessarily reduce CM’s (or OEM’s) yields. In the co-opetitive mode, an increase in the substitution rate and green investments of both manufacturers may lead to an increase in the yields of both manufacturers. Furthermore, an increase in carbon trading prices does not necessarily inhibit the manufacturer’s yields. Moreover, we find that under the same competition mode, under certain conditions, two-way substitution between OEM and CM can bring better profits to both manufacturers and the entire supply chain. When the two modes are in the same substitution scenario, and the CM cannot substitute for the OEM, the optimal decisions and total supply chain profits of the two modes are equal. Finally, through numerical analysis, we find that neither mode is necessarily optimal when CM can substitute for OEM. Additionally, it is observed that when the same mode is in different substitution scenarios, total supply chain profits may be enhanced in the presence of product substitution.

Horizontal subcontracting and the global factory

The focus of this article is the examination of the factors that trigger the addition of horizontal subcontracting to the structure of global factories. Horizontal subcontracting takes place when one firm is contracted to produce a given item, fills as much of the order as they are able to based on their available capacity, and subsequently subcontracts the remainder to a qualitatively identical firm. We find that similar entrepreneurial backgrounds of contract manufacturers lead to strong business ties in the same industry and stage of production; low-cost, used production machinery and inexpensive factory rent lead to low barriers to entry; tightening labor markets, limited capital access and lumpy or uncertain demand lead to the need to avoid underused internal capacity, and the widespread use of digital sourcing platforms by buyers enables contract manufacturers to receive orders both small and much larger than their internal production capacity. These factors combine to produce many networked small manufacturers who use horizontal subcontracting to ensure sustained demand. Currently a largely China-based phenomenon, horizontal subcontracting is likely to spread beyond China, offering a new source of vitality to low-cost manufacturing in global factories, keeping global factories viable into the future.

Impact of a contract manufacturer's entry on two competing platforms' sourcing strategies

Many platforms, including the likes of Google, Amazon, and Microsoft, are now no longer merely satisfied with providing services or software but are increasingly eager to shape the future landscape of hardware devices. However, contract manufacturers (CMs) who supply hardware devices to such platforms might also produce competing products. This potential competition could prompt these platforms to consider in-house production for their devices. Motivated by this practice, we investigate the sourcing strategies of two competing platforms in the presence of a CM's entry and further explore the interaction between entry and sourcing strategies in a platform supply chain. The platforms select between insourcing the device through in-house production and outsourcing it to the CM. We find that, without entry, the CM's large cost advantage in producing the device relative to the platform induces the platform to choose the outsourcing strategy. In contrast, under entry, the equilibrium sourcing structures hinge upon the extent of the production cost difference between the platform and the CM in producing the device, as well as the degree of the high-efficiency platform's advantage in research and development efficiency over the low-efficiency platform in designing the platform. Particularly, when the CM enters through the platform with low efficiency, the asymmetric sourcing structure in which only the low-efficiency platform outsources is not an equilibrium, whereas the other sourcing structures may exist in equilibrium. Furthermore, in asymmetric sourcing structures, the large production cost difference prevents the CM from entering the market and, more intriguingly, the CM prefers the platforms to adopt the insourcing strategy to gain favourable market entry if the cost difference in producing the device is small. Several extensions are studied to obtain additional insights and demonstrate the robustness of the main findings from the baseline model.

MARKETING STRATEGIES OF APOLLO TYRES

Apollo Tyres Limited is an Indian Multinational tyre manufacturing company headquartered in Gurugram, Haryana. It was incorporated in 1972, and its first plant was commissioned in Perambra in Chalakudy, Kerala (India.) The company now has five manufacturing units in India, one in Netherlands and one in Hungary. It has a network of nearly 5,000 dealerships in India, of which over 2,500 are exclusive outlets. The company generates 69% of its revenues from India, 26% from Europe and 5% from other countries. Apollo announced its entry into the two-wheeler tyre segment with contract manufacturing in March 2016. The company's second plant in Europe, was inaugurated by the Hungarian Prime Minister, Viktor Orban. in April 2017. Shares of Apollo Tyres Ltd. rose to their highest in little over two years in February, 2021 trading at ₹253.10.

A Series Production Data Set for Five-Axis CNC Milling

The described data set contains features from the machine control of a five-axis milling machine. The features were recorded during thirteen series productions. Each series production includes a changeover process in which the machine was set up for the production of a different product. In addition to the timestamps and the twenty recorded features derived from Numerical Control (NC) variables, the data set also contains labels for the different production phases. For this purpose, up to 23 phases were assigned, which are based on a generalized milling process. The data set consists of thirteen .csv files, each representing a series production. The data set was recorded in a production company in the contract manufacturing sector for components with real series orders in ongoing industrial production.

Contract manufacturer encroachment and its impact on OEM’s sales mode and social welfare in a platform-based supply chain

Contract manufacturer encroachment and its impact on OEM’s sales mode and social welfare in a platform-based supply chain

Enhancing Operational Efficiency and Cash Flow through Supply Chain Optimization in the Oil and Gas Sector

The oil and gas industry continues to play a vital role in meeting the world's energy needs. As renewable energy sources gain traction, there is an imperative to refine operational models, prioritizing sustainability, and cost-effectiveness. This study employs a comprehensive conceptual framework integrating critical analysis of business scenarios, product positioning, and market segmentation. The study adopts supply network optimization, encompassing demand forecasting, inventory management, transportation, production scheduling, cash flow management, and data analytics. The research evaluates three supply models: Satellite Manufacturing, Hub Manufacturing, and Contract Manufacturing. It employs scenario analysis to assess the impact of supply chain strategies on operating and cash cycles. The analysis reveals that Hub- based contract manufacturing is the most effective model. The research demonstrates that optimizing supply networks directly influences the operating and cash cycles of companies in the Oil and Gas industry. By reducing inventory levels, optimizing supplier payment terms, and streamlining production processes, organizations can achieve cost savings, improve efficiency, and enhance cash flow management. The study underscores the importance of thorough analysis and strategic decision-making in selecting supply chain models to enhance cost efficiency, operational effectiveness, and cash flow management. The study is limited to midstream and downstream services and may vary based on industry contexts. Future research could explore additional supply chain strategies across different sectors. This research contributes to the sustainable consumption and value co-creation literature by offering practical insights for businesses operating in the oil and gas industry or similar contexts. It provides a framework for optimizing supply chain models to improve cost efficiency and cash flow management, thereby enhancing overall business performance.

Contract development and manufacturing organization selection: critical considerations that can make or break your cell and gene therapy development

Background aimsWith the increase in cell and gene therapy (CGT) clinical trials in recent years has come a subsequent increase in the number of contract development and manufacturing organizations (CDMOs). Successful transition from development and early-phase clinical trials to commercialization of a CGT product often depends on selecting the best-suited CDMO. However, many CGT companies are small biotech companies that lack expertise in the field or do not have experience selecting and transferring a process to a CDMO. MethodsGiven the interest in this topic, a roundtable with CGT developers and CDMO members at the 2023 annual meeting of the International Society of Cell and Gene Therapy Paris discussed these critical aspects of product development, including technical expertise, risk sharing and timing of partnerships. Results and ConclusionsHere, we'll analyze the considerations discussed by the panel and elaborate on other factors crucial for CGT development.

Contract manufacturer encroachment via the customer‐to‐manufacturer strategy under different platform selling modes

AbstractThis paper considers an outsourced supply chain comprising a contract manufacturer (CM), an original equipment manufacturer (OEM) and an online platform. In addition to providing contract manufacturing services to the OEM, the CM enters the market using the customer‐to‐manufacturer (C2M) strategy. Two baseline models and four encroachment models with different selling modes are modeled to explore the interaction among CM encroachment, selling modes and the C2M strategy. We find that the CM will always encroach if brand substitution is sufficiently high. However, the CM will still encroach despite brand substitution being low if the platform charges the OEM a high commission rate in Scenario PR. The results also show that the CM may increase or decrease the wholesale price charged to the OEM according to his dependence on the OEM channel and direct channel. Finally, we find that after CM encroachment, the OEM is worse off, while the platform may be better or worse off. The profits of the CM, OEM, and platform decrease if customers are more concerned about production flexibility. Our work provides guidance for CM encroachment from the perspective of channel choice and product strategy and offers managerial insights into C2M practice.

Tariff Hedging with a New Supplier? An Analysis of Sourcing Strategies Under Competition

Due to the U.S.-China trade war, multinational firms may develop new contract manufacturers outside China to hedge against high tariffs on Chinese exports to the U.S. market. However, tariffs exhibit high uncertainty in recent years and developing a contract manufacturer incurs costs; hence, it is challenging to decide whether to develop a new contract manufacturer. We study two competing firms’ contract manufacturer development decisions in a sequential game. First, we find that multinational firms prefer to develop new contract manufacturers when tariffs are expected to rise moderately rather than sharply. This is because the value of developing a new contract manufacturer for a multinational firm is the largest when the new contract manufacturer and the existing one compete most intensely, which happens for similar tariff-inclusive costs. This implies, when taking into account competition, an overly high tariff on Chinese exports to the United States does not necessarily serve the purpose of switching suppliers from China to other regions. Furthermore, higher tariff uncertainty can decrease development value and hence the incentive to develop a contract manufacturer. When there is an upward tariff shock that induces the equilibrium where both multinational firms develop a contract manufacturer, both firms must be worse off; only when it induces the asymmetric development equilibrium is it possible for the multinational firm developing a contract manufacturer to be better off, even with tariff increase and development cost. Second, the impact of development cost on multinational firms’ incentives to develop new contract manufacturers is nonmonotone. As the development cost increases, the equilibrium can switch from both not developing new contract manufacturers to one developing a new contract manufacturer. Third, when the future tariff is expected to be high, multinational firms should diversify their development strategies in environments with fierce competition. Furthermore, increasing competition is not necessarily harmful for multinational firms. We also extend the analysis to consider asymmetric development costs and unobservable wholesale prices, and find the major insights are robust.

When Gray Markets Meet “Made in China”: The Impacts of Global Markets and Value-Added Tax Refund

Motivated by the trend that a gray market such as overseas shopping is thriving on E-commerce platforms, this paper investigates the impacts of the gray market on global supply chain management. We consider a multinational firm (MNF) that outsources product manufacturing to a contract manufacturer (CM) in China and sells products in both the China market and overseas market. Owing to the price gap between the two markets, gray firms may purchase products in the low-price market and compete with the MNF in the high-price market. We build MNF-led Stackelberg game models under the two cases where the wholesale price between the CM and MNF is exogenously given or endogenously set by the CM. We also consider the impacts of China’s partial value-added tax (VAT) refund policy and consumers’ valuation discount for gray products. Our analysis shows that the gray market emerges if the two markets are highly asymmetric in size. Moreover, the gray market is more likely to emerge with lower values of valuation discount, substitutability, and VAT loss. We find that both the MNF and CM may be better off with the emergence of the gray market. When the gray market does not emerge but poses a threat, the MNF strategically adjusts her global pricing strategy to prevent the gray market. In this case, the threat of the gray market always hurts the MNF and CM under exogenous wholesale price, but may improve the MNF’s profit under endogenous wholesale price, since the CM is motivated to lower wholesale price to restore demand.

Labor unrest at Wistron Corporation India plant – What went wrong?

Learning outcomes After completion of this case study, students/managers will be able to analyze reasons for the labor unrest at Wistron Corporation’s Indian manufacturing plant; examine the implementation of labor regulations applicable to the employment of contract workers by Wistron Corporation; infer the problems associated with rapid expansion in the workforce; analyze the labor regulatory challenges faced by Wistron Corporation; and demonstrate problem-solving skills. Case overview/synopsis The focus of this case study was the crisis faced by Apple’s contract manufacturer – Wistron Corporation due to labor unrest, riots and violence in its production facility located near Bangalore in India. This case study discussed the CEO’s dilemma in resolving the crisis and regaining the confidence of stakeholders, namely, the contract employees, Apple Inc. and the State Government of Karnataka. To give the readers an overview of the crisis – this case discussed in detail the underlying reasons for the labor unrest such as a rapid increase in manpower, unilateral increase in working hours without extra pay, unjustified pay cuts, understaffed and underqualified human resources (HR) department, ill-equipped attendance and payroll system. It also gave an overview of mistakes in labor management that could be avoided by a manufacturing firm. The case also discussed the pressure faced by the Wistron CEO due to probation and a new business freeze by Apple Inc. This case study is suitable for understanding the complexities of labor laws and the legal complications that can arise when a corporation disregards local labor laws while operating in foreign countries. Complexity academic level The case is best suited for postgraduate and executive MBA students studying labor law, industrial psychology and HR management in commerce and business management streams. The authors suggest that the instructor should inform students to read the case study before attending the 90-min session. It can be executed in the classroom after discussing the theoretical concepts. Supplementary materials Teaching notes are available for educators only. Subject code CSS 6: Human Resource Management.

The Value and Pitfall of CM's Sustainability Signal Considering OEM's Greenwash

It is widely observed in industry that some firms intentionally “greenwash” their products to profit from the ever-rising green consumerism; however, there are also some firms that unintentionally greenwash as a result of misinformation, a form of supplier responsibility risk. To manage this risk, the most common approach is asking for samples before the products are delivered at scale. In this article, we consider a contract manufacturer (CM) that supplies products to an original equipment manufacturer (OEM). The CM has the option to implement a green product line. Before conveying a sustainability message to consumers, we assume that the OEM can choose whether or not to ask for samples and update its belief about the final product type. We start with a base case where the CM does not sell self-branded products. In this situation, the CM always sends an authentic signal and the OEM conducts deliberate greenwash only when the risk of detection is low. However, after extending the base case to a co-opetition case, where the CM not only makes profit from its contract manufacturing business, but also sells self-branded products, the strategic interactions of the OEM and CM become more intriguing. We find the OEM may deliberately greenwash even if it is highly risky, in order to lower the wholesale price, and the CM may send nongreen samples even if a green product line is setup. More interestingly, we find the misleading signal is able to mitigate the double marginalization effect (the double markup in price) by decreasing the wholesale price and the market price of products simultaneously, and this increases consumer surplus, but may lead to higher environmental impact. This work has implications for both operations managers and regulators. We suggest managers in OEMs ask for samples before a CM delivers products at scale if the market potential is high and the CM encroaches on end market. Regulators should note that penalties alone may not curb greenwash, as an OEM may use it for strategic purpose.

Choice of Cost Reduction Mode in a Contract Manufacturing Supply Chain with Substitutable Products

Cost reduction investment is relevant for manufacturers to achieve competitive advantage. This article investigates the choice of cost reduction mode in a supply chain with one original brand manufacturer (OBM) whose product incurs common and dedicated costs and one contract manufacturer (CM) offering substitutable products. The CM sharing OBM's investment spillover may be worse off with strong spillover. A costly common component may not lead the OBM to reduce common cost, especially when its investment substantially spills over to the CM. This spillover causes intense competition so that the OBM reduces dedicated cost; this choice also applies to a costly dedicated component. The OBM is incentivized to reduce common cost if the common component is costly and the spillover is weak. This article further analyzes the case that the CM invests in cost reduction and finds its mode choice opposite to the OBM's because of the direct benefits of cost reduction. Even with a costly dedicated component and strong spillover, the CM does not necessarily reduce dedicated cost but it reduces common cost. The OBM's and CM's investments may create a win–win mode.