Strategic Supply Chain Research Articles

International Business Strategies in Africa: Old Supply Chains and New Competitors “Lessons from the Ethiopian—Italian Leather Trade”

Sub-Saharan Africa (SSA) has always been a major source of various raw materials and commodities to the industrialized world. This paper specifically focuses on international business (IB) strategies in supply chains and commodities using the Ethiopian-Italian hides, skins and leather trade as a case study. The aim of this paper is to test to what extent internal public policy changes and competition from companies of newly emerging economies affected the business of long standing partners in the Ethiopian-Italian leather business. For the descriptive analysis, primary and secondary data are used. The primary data is gathered using personal observation and interviews with relevant personnel on both sides of the trade. Whereas, secondary data is collected from different published and unpublished materials including annual reports of relevant institutions. The Author primarily applies two theoretical perspectives: Michael Porter’s five competitive forces model and Ronald Coase’s transaction cost theory of the firm. The paper is narrowly focused on leather supply trade, but with implications on all old and rusting, strategic and non-strategic supply chains stretching out of Africa to Europe. The purpose of the paper is to contribute in furthering research agenda on identifying strategies tailored for researchers and executives interested in expanding to Africa. The conclusion is that, it seems, European leather companies have stuck to the strategies they’ve traditionally deployed in Africa. And, the old strategies of international business firms seem no more working in the continent. Even though, it is not possible to comprehensively present all the reasons for the competitive loss of European leather companies to newly emerging companies with regard to the African supplies, it could be better explained from the perspectives of complacency trap coupled with failure to develop dynamically tailored strategies, rather than the traditional business competitiveness theories.

Strategic robust supply chain design based on the Pareto-optimal tradeoff between efficiency and risk

The strategic design of a robust supply chain has to determine the configuration of the supply chain so that its performance remains of a consistently high quality for all possible future conditions. The current modeling techniques often only consider either the efficiency or the risk of the supply chain. Instead, we define the strategic robust supply chain design as the set of all Pareto-optimal configurations considering simultaneously the efficiency and the risk, where the risk is measured by the standard deviation of the efficiency. We model the problem as the Mean–Standard Deviation Robust Design Problem (MSD-RDP). Since the standard deviation has a square root expression, which makes standard maximization algorithms based on mixed-integer linear programming non-applicable, we show the equivalency to the Mean–Variance Robust Design Problem (MV-RDP). The MV-RDP yields an infinite number of mixed-integer programming problems with quadratic objective (MIQO) when considering all possible tradeoff weights. In order to identify all Pareto-optimal configurations efficiently, we extend the branch-and-reduce algorithm by applying optimality cuts and upper bounds to eliminate parts of the infeasible region and the non-Pareto-optimal region. We show that all Pareto-optimal configurations can be found within a prescribed optimality tolerance with a finite number of iterations of solving the MIQO. Numerical experience for a metallurgical case is reported.

The Relationship Between Strategic Supply Chain Integration and Performance: A Meta‐Analytic Evaluation and Implications for Supply Chain Management Research

Although research evaluating the impact of supply chain integration on performance has advanced substantially in the last decade, inconsistency and considerable variability of empirical findings leave unanswered questions for both research and practice. Using a meta‐analysis, we examine empirical studies to clarify the actual relationship, suggest new directions, and ultimately contribute toward the development of supply chain management theory. We focus on “strategic” supply chain integration rather than on functional or operational/tactical studies, which would weaken the practical value of the analysis and findings. To ascertain focus and homogeneity of the sample, we adopt a rigorous search protocol and sample construction. We find that integration–performance relationships are complex and nuanced such that integration should not be universally viewed as improving performance. We identify relationships that are more generalizable and also those that need additional scrutiny. Finally, we discuss the implications of our findings and provide directions for future research.

Semantic web-based supplier discovery system for building a long-term supply chain

As companies move forward to source globally, supply chain management has gained attention more than ever before. In particular, the discovery and selection of capable suppliers has become a prerequisite for a global supply chain operation. Manufacturing e-marketplaces have helped companies quickly and effectively discover new suppliers and/or buyers for their products and services. However, as the requirements and capabilities in isolation, their true meanings may not be uniformly interpreted by each other. The issue of semantics between suppliers and buyers, then, remains an obstacle. The main objective of this paper is to propose a semantic web-based supplier discovery system for building a long-term strategic supply chain. Specifically, (1) a key ontology is developed to represent the supplier’s capability information and the buyer’s requirements; (2) supplier’s potential capability is reasoned; and (3) and buyer’s requirements are semantically matched with supplier’s capability based on a similarity calculation. In order to build a long-term supply chain, the system receives supplier’s capability information composed of manufacturing capability, and non-manufacturing capability. The supplier’s non-manufacturing capability is evaluated considering information on the supplier’s finances, customers, internal business and learning and growth, based upon the Balanced Scorecard (BSC), which has been widely used to evaluate companies. In addition, a prototype for semantic web-based supplier discovery is implemented in order to demonstrate the practicality of the developed system.

Supply chain implications for one-off luxury products: cases from the yacht industry

Purpose – The paper seeks to investigate the applicability of strategic supply chain management (SCM) models in one-off luxury contexts such as the yacht industry, where durable products are manufactured with project configuration. Design/methodology/approach – A literature review was assessed in order to identify contingency-based SCM models. Then, multiple case-study analysis was performed to explore how these models are adopted in practice for drawing strategic SCM directions. Data arose from a number of interviews to the top-management of four world-leading yacht-building companies. Findings – The findings of explorative case studies suggest the implementation of various strategic SCM strategies in order to fit the requirements of the market (e.g. protect critical resources, implement a customized leagile production strategy, enhance SC flexibility). In this direction, specific SCM practices are already adopted by investigated firms. Research limitations/implications – A call to develop specific strategic directions for project-based luxury business is suggested, as the SC contingencies of this context have not been properly caught by extant literature. Practical implications – A set of practical indications are offered in order to support managers in the choice of an appropriate SCM approach and related operational practices. Identified techniques and tools aim to achieve high customisation while reducing changes in specification. Originality/value – This article represents a first attempt to investigate the SCM issue for durable luxury products in the project context.

Management Insights

Management Insights

The Effects of Strategic and Structural Supply Chain Orientation on Operational and Customer‐Focused Performance

ABSTRACTSupply chain orientation (SCO), or the implementation of a supply chain management philosophy, consists of two distinct, yet interdependent elements, namely strategic SCO and structural SCO. Strategic SCO involves integrating an SCM philosophy into the firm's strategy development, while structural SCO encompasses operational‐level behaviors and actions that reflect such a philosophy. This study extends the research on SCO by developing hypotheses on the contingent effects of strategic SCO and structural SCO on a firm's operational and customer‐focused performance. Drawing on the strategy‐structure‐performance framework, the study proposes that strategic SCO and structural SCO positively affect different dimensions of performance and that structural SCO plays a mediating role in the relationship between strategic SCO and performance. These relationships are tested using primary survey data and archival data from 183 manufacturers in the Midwestern US. Results confirm that strategic SCO is associated with both operational performance and customer‐focused performance, but structural SCO is only related to operational performance. Structural SCO acts as a mediator in linking strategic SCO with operational performance and customer‐focused performance and mediation effects are strengthened at higher levels of environmental dynamism.

Developing a business process for product development

Purpose – Organizations are identifying strategic supply chain relationships as a major source for competitive advantage. Interest in the concept is becoming prevalent in many industries, including new product development within the engineering sector. Collaborative supplier relationships are being used in new product development as a tool to share the development burden and reduce the development life cycle. The purpose of this paper is to develop a business process to act as a roadmap for optimum supplier integration.Design/methodology/approach – An Engineering case organisation (Genco Inc.) is explored to provide an understanding of the extent and timing of supplier involvement, within new product development. Subsequently a high level business process is developed to govern early supplier integration, within a product development phase gate model.Findings – The findings suggest and the business model strives to create a more holistic view of supplier integration; extending the scope beyond the individ...

A Quality and Partnering-Based Model for Improving Supply Chain Performance

This study proposes a Supplier Quality Affiliation (SQA) approach that is integrated into a mixed integer programming Strategic Supply Chain Management (SSCM) model for overall improvement of the supply chain business process. A pool of acceptable quality and high quality suppliers are affiliated using multi-dimensional quality attributes for the supplier operation parameters in the SQA model. Based on the pre-defined partnering attributes, the SQA model next identifies a select group of high quality suppliers that can be converted into partners. The outcome of the SQA model is then integrated into the SSCM model for ensuring input quality while providing several options for overall business gains of the supply chain members, which include suppliers, manufacturers, and retailers. Applicability of the SQA model is investigated using a real world case study and the SSCM model is illustrated with a numerical example using random data.

A strategic decision framework for a value added supply chain

Supply chains are becoming increasingly complex. The structure of the supply chain and the suppliers who participate in it are critical decisions for managers. The supply chain is no longer simply a source of inputs or services but an integral source of value added. It is clear that in some cases strategic supply chain objectives may require trade-offs, for example, between cost and innovation capability or between managing risk and maximising flexibility. These decisions balancing trade-offs between desirable partner characteristics are critical and can make a significant contribution to business performance. A framework is outlined, based on the foundation of extant literature, within which firms can make strategic decisions on supply chain structure by categorising the characteristics they prioritise in their supply chain strategy. There is also a strong foundation in the literature on developing mathematical models that provide insight into the decision-making process. A mixed integer programming model is specified that incorporates the opportunity for diversification and provides a demand allocation decision. The model is robust enough to allow for single or diversified supplier strategies based not only on capacity constraints but also on risk pooling and minimum performance requirements for key characteristics that form the basis of the strategy. A Lagrangian relaxation is proposed and satisfactory performance results are provided.

Developing green supply chain management strategies: A taxonomic approach

Purpose: The purpose of this research is to explore the empirical green supply chain activities found in the literature, and to develop a taxonomic framework that can be used for formulating appropriate strategies for green supply chains based on characteristic dimensions for the green supply chain. Design/methodology/approach: The taxonomic framework is developed through (i) analysis of green supply chain activities found in existing empirical work or case studies recorded in the literature, (ii) identification of key dimensions that influence green supply chain management strategies, and (iii) development of a taxonomic scheme for selecting or developing green strategies. Findings: The paper finds that this study yielded a set of three characteristic dimensions that influence strategic green supply chain management, and a guided structured approach for selecting appropriate green strategies, providing useful managerial insights.

Computational comparison of two formulations for dynamic supply chain reconfiguration with capacity expansion and contraction

The strategic dynamic supply chain reconfiguration (DSCR) problem is to prescribe the location and capacity of each facility, select links used for transportation, and plan material flows through the supply chain, including production, inventory, backorder, and outsourcing levels. The objective is to minimize total cost. The network must be dynamically reconfigured (i.e., by opening facilities, expanding and/or contracting their capacities, and closing facilities) over time to accommodate changing trends in demand and/or costs. The problem involves a multi-period, multi-product, multi-echelon supply chain. Research objectives of this paper are a traditional formulation and a network-based model of the DSCR problem; tests to promote intuitive interpretation of our models; tests to identify computational characteristics of each model to determine if one offers superior solvability; and tests to identify sensitivity of run time relative to primary parameters.

Scenario-based strategic supply chain design and analysis for the forest biorefinery using an operational supply chain model

Supply chain (SC) design involves decisions for the long term, e.g. determining products, process technologies, number, location and capacity of different SC nodes, production rates, as well as suppliers, markets and partners. The forest biorefinery (FBR) is emerging as a new possibility for improving forestry companies’ business models, however introduces significant technological, economic and financial challenges—which can be systematically addressed in strategic SC design. In order to reduce the burden of such challenges, partnership with companies whose expertise brings value and experience to the forestry companies’ new business model is essential for FBR implementation. In this regard, redesigning the forestry SC in order for it to be aligned and consistent with the partner's SC, and in other words, designing a new integrated SC is of crucial importance. This paper presents a scenario-based approach to strategic SC design for the FBR, designing the SC based on the impacts of the design on operational SC activities. Two kinds of scenarios are used; market scenarios representing market volatility and SC network scenarios (referred to as alternatives) representing different biorefinery options/strategies. In order to analyze the impacts of SC alternatives on operational activities, a tactical/operational SC model examines the advantages and disadvantages of each alternative by exploiting the capability of the SC for flexibility in the case of the market scenario realization. This demonstrates the impact of each scenario on SC profitability. It will also show how integration scenarios may result in better economic performances compared to the case when the forestry company implements the biorefinery on its own and hence, it reveals how forestry companies can benefit from the created synergies.

Robust Scenario Formulations for Strategic Supply Chain Optimization under Uncertainty

Strategic supply chain optimization (SCO) problems are often modeled as two-stage optimization problems, in which the first-stage variables represent decisions on the development of the supply chain and the second-stage variables represent decisions on the operations of the supply chain. When uncertainty is explicitly considered, the problem becomes an intractable infinite-dimensional optimization problem, which is usually solved approximately using a scenario or a robust approach. This article proposes a novel synergy of the scenario and robust approaches for strategic SCO under uncertainty. Two formulations are developed, namely, naive robust scenario formulation and affinely adjustable robust scenario formulation. It is shown that both formulations can be reformulated into tractable deterministic optimization problems if the uncertainty is bounded by the infinity norm and the uncertain equality constraints can be reformulated into deterministic constraints without any assumption about the uncertainty r...

FTA 환경에서 ODM-OEM Hybrid 형태의 섬유류생산시스템의 공급망 분석

This paper presents a supply chain framework with the ODM (Original Design Manufacturing)-OEM (Original Equipment Manufacturing) hybrid production of textile industry in FTA (Free Trade Agreements) environments between Korea and other countries. The proposed supply chain framework with ODM-OEM hybrid production is a unique supply chain that has both domestic production with non-tariff advantages in FTA environment and oversea production with low labor costs. To investigate the validity of the proposed supply chain, we first construct its strategic profit model and supply chain planning and then show that each member of supply chain network-yarn manufacturer, fabric manufacturer, and apparel manufacturer-can maximize their own profits without conflicts among the members. The efficiency of the ODM-OEM hybrid production system is analytically verified in comparison with the general OEM and ODM production model using profit models. Comprehensive numerical examples are provided to illustrate the advantages of the proposed system.

Tax-efficient sourcing and supply-chain management

With such significant growth in the LNG industry and the broader energy and natural resources sector, the supply-chain risk and the cost of sourcing capital equipment and materials is increasingly difficult to manage. Many organisations are beginning to consider the merits of moving to a tax-efficient supply chain and procurement model, both through sourcing from a low-cost country and also centralising purchasing and supply operations in a tax-efficient location. Tax-efficient sourcing integrates supply chain and procurement-operating model design with tax planning to deliver significant cost reductions and profit increases through centrally controlling procurement operations. The consideration of the most efficient tax structures to support sourcing and distribution of equipment also delivers. Centrally controlled strategic and tactical supply chain and procurement operations in a tax-efficient location support an organisation in: realising benefits through leveraging scale in operations and procurement; designing a flexible framework that can be used to decide which categories of spending are managed globally, regionally, and locally;and, the acceleration and sustainability of significant procurement savings delivery from low-cost locations. Planning and management of the tax implications of physical supply-chain operations to reduce the actual taxes paid on profits and operations happen through: the potential to reduce corporate taxes on company profits; reducing absolute value-added tax (VAT) payable or cash-flow cost of VAT; reducing duty payable; optimising the indirect taxes paid on physical flows; and, change of transfer pricing driving reduction in effective corporate tax rates.

A multi-modal supply chain network design for recycling waterway sediments

The French waterway system consists of large navigable rivers and canals connecting many regions. Maintaining a safe navigation channel, in the Nord-Pas De Calais (NPDC) region in France, requires the regular removal of accumulated sediments which are often contaminated with zinc, lead, cadmium, and mercury. New legislations, such as the European Water Framework Directive (DCA, 2000), ensure that disposal should be reduced to minimal level and the waterways sediment should be treated. Such measures increase the research interest to find the potential costumers and create the need for establishing an efficient waterway sediment network. This paper discusses the design of a multi-modal supply chain network (SCN) in order to satisfy the demand of the treated sediments and to respect environmental, social and economic requirements. First, we reviewed models for strategic supply chain network design. After that, we proposed a multi-modal, single period, supply chain network design (SCND) model for waterway sediments problem using a mixed integer linear programming (MILP) approach. Then, results obtained solving a real case SCND model of French waterways (Voies Navigables de France: VNF) in NPDC region are presented. Finally, we present the most important results and future research opportunities.

Modeling-based Design of Strategic Supply Chain Networks for Aircraft Manufacturing

The aerospace supply chain network has evolved and become more complex over the years. New methods are needed to design and analyze the system, and to establish the interactions between aircraft (product) design and supply chain (process) design. This paper aims to introduce a strategic multi-product, multi-period design model for the manufacturing of an aircraft wing-box with a planning horizon of the full program duration. The supply chain systems consist of a number of external suppliers, candidate manufacturing sites, and a number of customers at fixed locations. The design model is a mixed-integer linear programming optimization routine that minimizes the total time-discounted network cost. The model generates a system configuration that specifies the location and capacity of the manufacturing sites, the material flow, and the transportation routes within the network. The model is implemented using open-source tools, and has a comprehensive and flexible data structure to support the decision-making process during the early aircraft design stages.

Driving a Fishery along the Bumpy Ride of Today’s Globalization: The Case of the Australian Southern Rock Lobster Association

The case of the Australian Southern Rock Lobster Association describes real issues faced by the Market Development Manager of a collective agri-food organization (SRL) representing all the southern rock lobster fishermen in Victoria, South Australia and Tasmania. The case deals with recent globalization issues faced by the Australian rock lobster industry: the rise of China as a vital and risky market of high-end food products; the financial crisis that affected the US starting from 2006 and the rise of sustainability issues that constrained the rock lobster supply. This case is designed for advanced BSc and MSc in agribusiness and international business. It is relevant for both for strategic management and supply chain management courses. In this case, managers, policy-makers and academics find challenging questions that are still open and can be similarly posed to other agribusiness industries worldwide attempting to compete collectively in international markets.

Large neighbourhood search applied to the efficient solution of spatially explicit strategic supply chain management problems

Supply chain management (SCM) has recently gained wider interest in both academia and industry given its potential to improve the benefits of a company through an integrated coordination of all its entities. Optimization problems in SCM are commonly cast as large scale mixed-integer linear programs (MILPs) that are hard to solve in short CPU times. This limitation is critical in spatially explicit SCM models since they require a large number of discrete variables to represent the geographical configuration of the network, which leads to complex MILPs. We present herein a novel solution method for this type of problems that combines the strengths of standard branch and cut techniques with the efficiency of large neighbourhood search (LNS). We illustrate the capabilities of this novel approach through its application to two case studies arising in energy applications: the design of supply chains (SCs) for bioethanol production and the strategic planning of hydrogen infrastructures for vehicle use.