Tier Suppliers Research Articles

Sustainability supplier scorecard assessment tools: A comparison between apparel retailers

ABSTRACT The purpose of this qualitative study is to evaluate and compare eight sustainability supplier scorecard assessment tools in use among five major international apparel retailers, Walmart, Eileen Fisher, Nike, H&M, and Gap. Inductive content analysis was used to study the raw textual data and make evidence-based inferences. Results showed that the field of sustainable supply chain management (SSCM) is subject to inefficiencies because there are inadequate standards for reporting information which would expose these inefficiencies. The investigated tools varied in terms of scope, performance measurements, and scoring methodologies, which had negative effects on their comparability. This obstacle, however, does not invalidate the major findings, which revealed an evident and concerning lack of information to support the practical application of the tools investigated. Because no retailer disclosed information about its lower tier suppliers’ assessments, it is uncertain whether and how suppliers in lower tiers are engaged in sustainability assessments. Because sustainability violations occur at a higher rate within fragmented supply chains, it is critical to communicate supplier engagement throughout the value chain. The findings of this study urge the application of standardized and comprehensive scorecard assessments which would help to enhance the credibility of SSCM practice, its assessment, and its communication.

Fashion supply chain transparency: do as I say not as I do

PurposeFashion brands are under heavy criticism for often exhibiting poor working conditions and producing environmental damage. Pressure comes from initiatives such as Fashion Transparency Index (FTI) by Fashion Revolution to assess fashion brands' transparency based on information publicly disclosed. But an understanding of how such movements reflect in a Global South country characterised by institutional voids is still absent.Design/methodology/approachWhile the FTI ranks individual brands, in this study the authors have analysed 305 documents extracted from the websites of 20 Brazilian fashion brands to unpack practices and re-bundle them according to three archetypes – opaque, translucent and transparent – that display a maturity curve.FindingsThe authors show that advancement is heterogeneous, and we complement previous research exposing the limits of an NGO in driving transparency by investigating a context embedded in institutional voids. The authors show that most fashion brands restrict transparency to tier-1 suppliers. Moreover, although fashion brands increasingly demand disclosure from their suppliers, they do not clarify their own purchasing practices such as cancellation and payment policies. On the positive note, the authors show that maturity for transparent brands can include the actionability concept by engaging with consumer via surveys and educative content.Originality/valueThe authors contribute to theory by offering a maturity curve of fashion supply chain transparency. The authors contribute to practice by offering the three archetypes – opaque, translucent and transparent. This study unveils heterogeneity and asymmetry between the levels of transparency that buying firms demand from their suppliers against what they provide about their own practices.

Supply chain management ambidexterity and incumbent-startup collaborations

Today’s digital age has created the need for the transformation of incumbent firms. It requires them to explore novel opportunities, while continuing to exploit their existing ones. One way is to open the innovation path to outside firms. The automotive industry is already well known for its use of suppliers as a source of innovation. But, while maintaining their traditional partnerships with tier-1 suppliers, many automotive firms have implemented startup programs to gain access to and collaborate with small and innovative firms. As part of a 30-month participant-observation study in an incumbent automotive company we conducted a multiple case study research of 5 startup cooperations of the incumbent. In this study, we observed the use of different forms of ambidexterity within the incumbent and across its divisions in an attempt to balance their exploration and exploitation activities. The organizational structure suggests that the research and development (R&D) division uses structural ambidexterity to leverage the innovations coming from their startup collaborations. The purchasing and supply chain management (PSM) division on the other hand, as an important facilitator for all R&D cooperations, is characterized by contextual ambidexterity. Our case studies however show, that each startup project is characterized by a different combination of ambidexterity approaches by the R&D and PSM Division. We extend the ambidexterity literature by showing the different effects and challenges of combining structural and contextual ambidexterity have on startup-incumbent collaborations.

“A multi-tier sustainable food supplier selection model under uncertainty”

Supplier selection in food supply chains (FSCs) is not much explored due to the inherent difficulties, complexities and nature of food industry. Food security and quality are top row topics in today’s world health scenario. During sudden food crisis, it needs extra attention where producers, suppliers, and stakeholders play the most vital roles. This paper puts forward a two-phase sustainable multi-tier supplier selection model for FSC based on an integrated decision analysis under multi-criteria perspectives considering sustainability criteria, suppliers and sub-suppliers. In the first phase, the model estimates supplier selection criteria weights using a combined version of step-wise weight assessment ratio analysis (SWARA) and level based weight assessment (LBWA) in conjunction with D-numbers. In the second phase, Measurement of Alternatives and Ranking according to the COmpromise Solution (MARCOS)-D method is applied to obtain a ranking pre-order of different tier suppliers. Moreover, several sensitivity analyses are carried out in order to examine model reliability. To check application practicability, the proposed model is implemented in a case study of WineSol Corporation in Spain. The proposed model is expected to serve as a kickoff point for developing advanced decision-making models for effectually address multi-tier supplier selection problems under uncertain environment.

Exploring systemic factors creating uncertainty in complex engineer-to-order supply chains: Case studies from Norwegian shipbuilding first tier suppliers

While it is recognised that there are varying uncertainty characteristics between industry sectors, there is little uncertainty research directly related to engineer-to-order (ETO) systems. A novel method is developed to identify the factors contributing to uncertainty in shipbuilding first-tier suppliers that inhibit the effective and efficient delivery of ETO products. The empirical data set comes from case-specific workshops involving cross-disciplinary staff from engineering, production, purchasing, planning and sales. The protocol included presentations by the researchers and the company, tours of the shopfloor and interactive sessions. The latter used ‘brown-paper’ exercises to map customer penetration-point locations, identify where uncertainties occurred and evaluate their impact-likelihood. The customer penetration-point mapping identified two ETO types; redesign-to-order (RTO) and innovate-to-order (ITO). The major challenges faced by ITO systems are caused through failures in (a) properly understanding customer requirements and translating those to product specification, (b) providing capacity and capability in engineering design teams at both first- and second-tier suppliers, (c) managing interfaces from customer through to second-tier suppliers. Engineering processes in RTO systems have poor customer configuration protocols leading to complex, overengineered products without pre-existing bill of materials. Engineering and production processes at both first- and second-tier RTO suppliers have extended lead-times with poor capacity availability. A change programme is suggested to reduce uncertainty requiring primary consideration of process and control aspects before addressing demand-side and then supply-side changes. The findings are evaluated by independent interviews indicating that the method and tools adopted have validity, and that the findings are commensurate with wider industry expectations.

Understanding the implications of pandemic outbreaks on supply chains: an exploratory study of the effects caused by the COVID-19 across four South Asian countries and steps taken by firms to address the disruptions

PurposeThe purpose of this paper is to explore the disruptions caused to supply chains by COIVD-19 as well as steps/countermeasures taken by firms to address such disruptions.Design/methodology/approachThis study employs 46 semi-structured interviews with senior managers of the three buying firms, four distribution centers and four supplying firms based in four countries (Pakistan, Sri Lanka, China and India).FindingsResults unveil that manufacturing firms are facing limited production and delays in procuring goods and services, while distribution centres are facing inventory shortages. Furthermore, supplying firms are facing increased lead times amid the COVID-19 outbreak. In addition, each affected entity has employed specific strategies to address these disruptions. For instance, manufacturing firms are refining their production schedules based on the inventory, getting better visibility to their suppliers’ performance and developing new inbound routes to meet the production challenges. They are also assessing the tier-1 supplier’s risk and activating the relationship with secondary suppliers to address the procurement issues. Second, distributors are modifying inventory policies to meet the inventory shortage. Finally, supplying firms are developing alternative outbound logistics to meet the growing demand.Research limitations/implicationsThere are some limitations to this study. First, the results of this study cannot be generalized to a wider population. Second, this study explores the interpretations of senior managers based in four Asian countries only.Originality/valueOur study contributes to the supply chain literature by exploring the disruptions caused by COVID-19 to the supply chain operations. It also contributes to theory and practice by articulating the strategies adopted by firms to address such disruptions. Firms can use the steps highlighted in this study to mitigate the impact of COVID-19 on the supply chain disruptions.

The Market for Audit Services: The Role of Market Power

The market for audit services has been the subject of extensive academic research since the 1970’s. The prevailing view is that audit markets are characterized by tiers of suppliers (Big 4 vs. non-Big 4, and industry specialists vs. non-specialists) where the upper-tier suppliers produce and sell a systematically higher level of assurance, while competition among suppliers within tiers is essentially perfect and a uniform price prevails within the submarkets. We discuss three papers that challenge this orthodoxy. These papers argue and find that the price of an audit is essentially unique to each (auditor, client) pair and that this price depends on both audit firm size and client size. Furthermore, audit firm size is linked with the firm’s capital investments which enhance auditor efficiency and market power. We conclude that audit markets are atomistic and that local market power is an important determinant of audit prices and audit fees.

Strategies to mitigate the impact of COVID-19 on supply chain disruptions: a multiple case analysis of buyers and distributors

PurposeThis paper explores the steps/countermeasures taken by buying and distributing firms to address supply chain disruptions caused by COVID-19.Design/methodology/approachThis study employs a multiple case study methodology and conducts 36 semi-structured interviews with senior managers of nine different firms producing, procuring or distributing products from China and other highly impacted South Asian regions (Pakistan, Sri Lanka, India).FindingsResults reveal that buying firms are moving to agile production, focusing on tier-1 supplier risk, enhancing inbound material visibility and temporarily closing production facilities to respond to the challenges posed by COVID-19. Furthermore, distribution centres are modifying their inventory policies, evaluating alternative outbound routes and sources of supply to manage disruptions caused to their business operations amid COVID-19 outbreak.Practical implicationsSupply chain firms can use the countermeasures provided in this study to mitigate the impact of COVID-19 and make the best out of this pandemic.Originality/valueThis study contributes to the supply chain literature by exploring the countermeasures taken by firms to mitigate the impact of COVID-19. In particular, this study explores such countermeasures from the perspective of two different entities (buyers and distributors) along the supply chain. Firms can use the countermeasures highlighted in this study to mitigate the impact of COVID-19 on the supply chain.

Multi-tier supply chain sustainability in the pulp and paper industry: a framework and evaluation methodology

ABSTRACT The pulp and paper industry has significant sustainability implications and necessarily requires a careful consideration of direct and lower-tier suppliers for effective sustainable supply chain management. This paper utilized an extensive literature review and semi-structured interviews of experts in the Chinese pulp and paper industry to unearth the factors that highly influence multi-tier supply chain sustainability. A Technological-Organizational-Environmental (TOE) and Human-Organizational-Technological (HOT-fit) based theoretical framework was employed to classify the identified factors. Then, an Analytical Hierarchy Process (AHP) based methodology was applied to determine the relative importance of the factors. A comparison analysis of the relative importance of the factors as determined by the experts in the focal companies, Tier-1 suppliers and Tier-2 suppliers of the Chinese pulp and paper industry is presented. The results show that institutional and technological factors are most critical to actualizing multi-tier supply chain sustainability. Thus, the study outcomes present relevant theoretical and practical implications for the managers and practitioners in the pulp and paper industry on how to facilitate multi-tier supply chain sustainability for increased competitiveness. Furthermore, this study provides guidelines for other industries as well and sets the stage for subsequent theorization and exploration of multi-tier supply chain sustainability for expected performance gains.

Designing supply chain performance system: a strategic study on Indian manufacturing sector

PurposeA well-designed supply chain performance measurement system, should account for not only the capabilities and performance attributes of the focal firm but also its supply chain partners. The purpose of this paper is to help design a system that strikes a balance between the strategic objectives of the focal firm and its supply partners vis-à-vis the requirements of supply chain performance (cost, quality, speed and customer taste).Design/methodology/approachA theoretical framework on the strategic supply chain performance measurement system is developed based on existing literature and subsequently tested using a survey on 136 successful manufacturing organizations in India. The organizations were clustered into three strategy types and compared using analysis of variance on ranks to look for differences in preference for performance parameters.FindingsThe study examined the five dimensions of the supply chain practices, namely, strategic supply/distribution network, customer relationship, internal operations, information sharing and social and environmental responsiveness. The empirical results demonstrate the inclusion of business strategy orientation in designing today’s supply chain and hence its performance measurement system. Not supported hypotheses were addressed in the light of contextual factors.Research limitations/implicationsThe study is confined to finding preferences of non-financial aspects of supply chain performance and tier-1 suppliers. The research helps better design and benchmark supply chain performance metrics, based on the strategic choice of the firm.Originality/valueThis paper highlights the shortcomings in the existing performance measurement and gaps in the existing literature in the supply chain context. Further, it gives a holistic view of strategic supply chain performance measurement design.

Sustainable procurement drivers for extended multi-tier context: A multi-theoretical perspective in the Danish supply chain

In light of the rising global importance of sustainable procurement (SP) implementation for contributing to sustainable development goals (SDGs), the main aim of this study is to perform an abductive research to analyse the drivers of SP under a Danish extended multi-tier supply chain context. Initially, the expansion of the traditional multi-tier theory to a novel extended multi-tier theory is accomplished by considering three factors: any number of upstream SC entities, the direct customer on the downstream entity, and the focal firm. This study has been done with the intention of implementing SP for the focal firm. Following that, the study develops a research framework to analyse the drivers of SP in an extended multi-tier environment by considering both upstream (1st tier and 2nd tier suppliers) and downstream (direct customer) supply chain entities together with the focal company using multiple theories such as extended multi-tier, triple bottom line (TBL), dynamic capability, institutional theory, and decision theory. Firstly, the relevant SP drivers are categorised (i.e., 7 categories of main drivers and 24 sub-drivers) based on the TBL, dynamic capability, and institutional theory. Secondly, applying the Best Worst Method (BWM), SP drivers were prioritized, and a comparative analysis was performed across the extended multi-tier context. The result shows that the top three priorities of the sub-drivers are “personal values,” “active top management support,” and “government regulation and legislation,” respectively for the focal company. Comparative analysis points to the fact that the sub-driver “government regulation and legislation” is considered important for all the SC entities; however, no mandatory government regulation currently exists to implement SP in the private sector context. On the other hand, the sub-driver “customer pressure / demand” for the sustainable products has been a low priority for the focal company and 2nd tier suppliers and it has not been considered relevant for the 1st tier supplier and direct customer. Thirdly, applying the Decision-Making Trial And Evaluation Laboratory (DEMATEL), an interrelationship analysis was performed on the key SP drivers that exist from the focal company’s perspective. Finally, relevant managerial implications and conclusions were drawn for the focal case company based on the results of the prioritization and interrelationship analysis.

Blockchain-Enabled Deep-Tier Supply Chain Finance

Problem Definition: For many supply chains, deep-tier suppliers, due to their small sizes and lack of access to capital, are most vulnerable to disruptions. In this paper, we study the use of advance payment (AP) as a financing instrument in a multitier supply chain to mitigate the supply disruption risk and compare the traditional system (deep-tier financing with limited visibility) with the blockchain-enabled system (financing with perfect visibility). The main goal of this paper is to shed light on how blockchain adoption impacts agents' operational and financial decisions as well profit levels in a multitier supply chain. Academic/Practical Relevance: Traditionally, because of the limited visibility in the deep-tiers, powerful downstream manufacturers' financing schemes offered to their immediate upstream suppliers are not effective in instilling capital into the deep-tiers. Advancements in blockchain technology improve the supply chain visibility and enable the manufacturer to better devise deep-tier financing to improve supply chain resilience. Methodology: We develop a three-tier supply chain model and take a game-theoretic approach to understand a financially constrained supply chain's optimal operational and financial strategies. Results: We find that the improved supply chain visibility (by blockchain adoption) always benefits the manufacturer by enabling her to induce the desired operational risk-mitigation investment from the tier-1 and tier-2 suppliers. However, depending on the directional change in the operational risk-mitigation investment, which depends on the suppliers' initial wealth levels, the tier-1 and tier-2 suppliers can be worse-off. The win-win-win outcome takes place only when all operational risk-mitigation measures increase, that is, when the tier-1 supplier is severely capital constrained but the tier-2 supplier is moderately capital constrained. Comparing the two types of blockchain-enabled deep-tier financing schemes, adjacent-tier delegated financing versus cross-tier direct financing, the manufacturer strictly prefers the latter. In contrast, the tier-1 supplier strictly prefers the former because the former endows the tier-1 with financial leverage over the manufacturer. The tier-2 supplier prefers the latter only when the emergency source is expensive. Managerial Implications: Our insights help firms assess opportunities and challenges associated with enhancing supply chain visibility via blockchain adoption.

The Market for Audit Services: The Role of Market Power

ABSTRACTThe market for audit services has been the subject of extensive academic research since the 1970s. The prevailing view is that audit markets are characterized by tiers of suppliers (Big 4 versus non-Big 4, and industry specialists versus non-specialists) where the upper tier suppliers produce and sell a systematically higher level of assurance, while competition among suppliers within tiers is essentially perfect and a uniform price prevails within the submarkets. We discuss three papers that challenge this orthodoxy. These papers argue and find that the price of an audit is essentially unique to each (auditor, client) pair and that this price depends on both audit firm size and client size. Furthermore, audit firm size is linked with the firm's capital investments, which enhance auditor efficiency and market power. We conclude that audit markets are atomistic and that local market power is an important determinant of audit prices and audit fees.

When Ignorance Is Not Bliss: An Empirical Analysis of Subtier Supply Network Structure on Firm Risk

Using a multitier mapping of supply-chain relationships constructed from granular global, firm-to-firm supplier–customer linkages data, we quantify the degree of financial risk propagation from the supply network beyond firms’ direct supply-chain connections and isolate structural network properties serving as significant moderators of risk propagation. We first document a baseline fact: a significant proportion of tier-2 suppliers are shared by tier-1 suppliers. We then construct two simple metrics to capture the degree of tier-2 sharing and disentangle its effect from tier-2 suppliers’ own risks. We show that the focal firms’ risk levels are significantly related to the proportion of shared tier-2 suppliers in their supply network, and the effect becomes monotonically stronger as their tier-2 suppliers become more highly shared. Finally, we uncover causal relationships behind these associations using a new source of exogenous, idiosyncratic risk events in an event study setting. We show that, as tier-2 suppliers are impacted by these events, focal firms experience negative abnormal returns, the magnitude of which is significantly larger when the impacted tier-2 suppliers are more heavily shared. Overall, our study uncovers the subtier network structure as an important risk source for the focal firm, with the degree of tier-2 sharing as the main moderator. Our results also provide the microfoundation for a common structure in idiosyncratic risks and suggest the importance of incorporating the effect of subtier supply network structure in the portfolio-optimization process. This paper was accepted by Vishal Gaur, operations management.

A Supply Chain in Flux

How will tier-1 suppliers weather a changing automotive ecosystem.

Social sustainability tensions in multi-tier supply chain: A systematic literature review towards conceptual framework development

As many unethical practices and violations of social norms originate from higher tier suppliers and their sub-suppliers, it is of paramount importance to ensure social sustainability in the entire supply chain, especially for higher tier suppliers. This has led to a considerable increase in interest among the researchers and academicians working in the domain of social sustainability. This article reviews 129 research papers published in different journals and attempted to identify drivers, issues, barriers, tensions, practices, and performances related to social sustainability in multi-tier supply chains. The prevalent theories and governance mechanisms of social sustainability in multi-tier supply chains have also been presented. The commonly used theories are stakeholder theory, institutional theory, resource based view theory, transaction cost economics theory, grounded theory, and resource dependence theory. It is observed that most of the papers have presented drivers, barriers, issues, and practices in generic ways by conducting exploratory case studies using single case or multiple cases; there is a distinct lack of multi-tier perspectives devoted to the context of emerging economies. The tension, an important aspect of implementation of social sustainability practices, has not been addressed adequately in the extant literature for multi-tier supply chains. This review also proposes a conceptual framework of social sustainability linking drivers, issues, barriers, tensions, practices, and performances. Finally, future avenues of research on social sustainability have been outlined.

Bilateral Opportunism in Buyer–supplier Partnerships

ABSTRACT Purpose Literature analyzes interorganizational relationships mostly from a relational perspective by emphasizing partnerships’ positive aspects. Yet business reality is often less romantic and more opportunistic. Especially within the automotive industry opportunistic behaviors often cause extreme reactions in both partners, resulting in poisoned relationships. This study examines the effects of bilateral opportunism between buyers and suppliers on both partners’ relationship induced financial performance, using an automotive industrial setting of new product development (NPD) partnerships. Furthermore, we evaluate the “opportunistic fit” between both partners to assess whether partnerships are characterized by opportunistic parity or unilateral domination. Methodology The empirical analyses are based on primary data from 147 NPD partnerships between tier-1 suppliers and automotive manufacturers (OEMs), exclusively drawn from the suppliers’ perspective. Data were statistically analyzed using structural equation modeling (SEM) with SPSS AMOS. Findings Our findings suggest that large parts of NPD partnerships between suppliers and OEMs are opportunistically lopsided, meaning that they are unilaterally dominated. With reciprocity, firms are able to counterbalance the influence of partnership opportunism and its effects on financial performance by themselves. Financial benefits achieved by opportunistically striving after economic self-interest are eliminated, in case the deprived partner attempts to opportunistically adjust its inequitable position. Our results show that opportunistic firms can benefit from immediate improvements in individual financial performance, but only until the disadvantaged partner has a counter opportunistic reaction. When the opportunism of both partners is at parity, firms cannot generate any individual increases in financial performance by acting opportunistically, highlighting the significance of bilateral opportunism for B2B business scholars. Originality This paper enhances the understanding of business relationships in industries with strong power imbalance between the buyer and the supplier firm. The authors introduce the idea of “bilateral opportunism” and “opportunistic parity” to the B2B marketing literature. These concepts shed light on the reality of business relationships, in particular in industries with high power imbalance, such as the automotive industry. Descriptive information highlights the relevance of the opportunistic parity concept.

The Security Aspects of Automotive Over-the-Air Updates

Over-the-air (OTA) update is a method for vehicle manufacturers to remotely distribute maintenance updates, performance, and feature enhancements through the vehicle's lifespan. Recalls of vehicles cost the manufactures a lot of money. OTA solves the recall issue, while allowing consumers to pay for services and features via an update. The OTA ecosystem includes the coders who first developed the firmware, the 1st Tier suppliers, the vehicle manufacturers, and the vehicle itself. Currently, manufacturers designed the networks for speed and responsiveness, and not security. This article examines these elements and drills into the security available for each. The slowest and one of the most vulnerable parts of the system is the communications within the vehicle. The vehicle networks must ensure the integrity and authenticity of messages transmitted to guarantee software programmed onto ECUs are authorized and tamper-free. Specialist hardware within the vehicle makes this possible in an operation environment, such as hardware security modules.

목표원가, 개발일정 관리가 신제품 매출에 미치는 영향: 품질목표 달성도의 매개적 역할

This study analyzes the effects of managing target cost and development time for a new product on achieving target quality level, which should be simultaneously considered in New Product Development(NPD) processes, and on sales weights of selling new products which is one of the NPD performances through the mediating role of achieving target quality level. Besides, we also explored whether R&D resource input intensity as moderating effect influences the effects of managing target cost and development time on achieving target quality level. As the results of this study, from the perspective of small and medium sized manufacturers and the first tier suppliers who play a leading role in customer and market change by developing new products before their competitors for the main products, we could empirically identify that the management of target costs and development time showed positive(+) influences on achieving the target quality level of new products. Furthermore, as a result of empirically examining the mediating role of achieving target quality level in order to specifically understand the relationships between the management of target cost along with development time and the sales weight of new products, it has a partially mediating role in the relation between the management for target cost and the sales weight, and it has fully mediating role in the relation between the management of development time and the sales weight. Finally, we found that there is no moderating effect in the positive influences of target cost management on achieving the target quality level as the size of the R&D resources increases.

Pie sharing and pie expansion in buyer-supplier new product development partnerships

Firms seek new product development (NPD) partnerships to achieve competitive advantage by pooling interorganisational resources. Although such collaborations may expand the partnership's total value pie, sharing the pie often results in poisonous win-lose rivalry amongst partners. This study investigates how automotive suppliers may gain competitive advantage and increase their financial stake within NPD partnerships with OEMs. We analyse sources of pie expansion from a resource-based view (RBV) perspective and the mediating role of fairness in pie sharing. As NPD partnerships also induce dependencies between collaborating firms, we extend the RBV with arguments from resource dependence theory (RDT). We test our predictions on a sample of 147 NPD partnerships between tier-1 suppliers and OEMs. Our findings suggest that fairness in pie sharing significantly mediates pie expansion. Moreover, NPD partnerships enable suppliers to increase OEMs' dependency on their firm, which mediates suppliers' competitive advantage, resulting in a more equitable division of the value pie.