Upstream Supply Chain Research Articles

Supply risk management: A case study of halal food industry in Malaysia

The purpose of this study is to identify the types of halal food supply risks, types of mitigation strategies for the upstream supply chain and to examine the relationship between halal supply risk and mitigation strategy efforts using the lens of the agency theory. Exploratory factor analysis (EFA) is used to validate the variables of the study and regression is performed to analyze the relationship of halal food supply risk and mitigation strategy. It is identified that halal food supply risk (agency uncertainties) consists of quality risk, delivery risk, and price/cost risk. The mitigation strategy efforts consist of behavior-based management, buffer-based management, and traceability-based management. Results indicate that halal food supply risk significantly increase mitigation strategy efforts of firms. However, price & cost risk does not significantly increase behavior-based management. Practical implications include suggesting the firms to invest more in buffer-oriented so as to mitigate the agency uncertainties.

A structured review of upstream supply chain process in dairy industry

A structured review of upstream supply chain process in dairy industry

Green Purchasing by Wine Retailers: Roles of Individual Values, Competences and Organizational Culture

The wine industry impacts the environment due to its massive scale of production, distribution, and retail. Wine retailers’ green purchasing is essential for changing environmental initiatives because purchasing is a key function for managing an upstream supply chain and to further achieve sustainability throughout the entire supply chain. Thus, this study was designed to identify important drivers of wine retailers’ green purchasing by incorporating both individual factors (values and competences) and organizational culture. Hierarchical linear modeling was employed to analyze the nested data obtained from 457 purchasing managers working for 10 wine retail companies in the United States. Results documented that individual values (social desire and moral attitudes), cognitive competence, and organizational culture such as the ethical behavior of top management, positively and directly influenced wine retailers’ green purchasing behavior. In addition, the study findings revealed that the effects of individual values and cognitive competence on wine retailers’ green purchasing behavior were positively enhanced when organizational culture was formed based on top management’s ethical behavior, codes of conduct and incentives. Implications for developing effective methods for improving wine retailers’ green purchasing behavior are presented and discussed.

The Determination of Yarn Supplier by Using the Weight Product Method

The Upstream Supply Chain Management is the initial component of the supply chain where the company gets raw materials from suppliers for the production process. This process is very important in the sustainability of a company’s production. The obstacle experienced at this stage is how the company decides which suppliers to choose from the many suppliers who want to offer their products. Also, it is experienced by PT. Mayer Indah Indonesia, which currently has 14 prospective suppliers, each of which has a different weight based on the assessment criteria of the company. The purpose of this study is to assist companies in making decisions to determine the best suppliers by using the Weight Product (WP) method, while the selection criteria are based on price, quality and the delivery accuracy. The results of the study can be implemented by the company to determine the right supplier in accordance with the criteria that have been required.

Decision and coordination of a low-carbon supply chain considering environmental tax policy on consumers

PurposeThis paper aims to explore how upstream supply chain companies will control the carbon emissions and price decisions of products when the government implements environmental tax policy on consumers. It provides some suggestions to control carbon emissions for the government and manufacturers.Design/methodology/approachThis study establishes two-echelon Stackelberg game models with and without the implementation of environmental tax policy on consumers in a centralized scenario and a decentralized scenario. Through the comparative analysis of the four models, the optimal emission abatement and pricing strategies are obtained.FindingsThis paper concludes that implementing environmental tax policy on consumers within the market’s acceptable range is more beneficial to the retailer and the environment, as well as the overall social welfare, except for the manufacturer. Moreover, consumer’s low-carbon preference always has a broader impact on carbon abatement and corporate profits than environmental tax coefficient. Finally, the side-payment self-executing contract can effectively ensure that the supply chain members make rational decisions spontaneously while achieving a win-win solution of centralized scenario.Originality/valueThis paper first considers how the government’s environmental tax policy on consumers will affect the decision-making of supply chain companies, and proposes an improved side-payment self-enforcing contract to maximize environmental and economic benefits of centralized scenario. In addition, it provides a reference for the government to adopt both the carbon cap policy and the environmental tax policy.

The effect of institutional pressures on business-led interventions to improve social compliance among emerging market suppliers in global value chains

Emerging market governments are incented to attract global value chain (GVC) activities to fuel economic growth. At the same time, in light of real and perceived workplace-related injustices within emerging markets, GVC lead firms are under pressure to improve social standard compliance within their upstream supply chain. Among the most common approaches to achieve these outcomes is to impose standards of conduct that are vetted by on-site audits. Research has shown, however, that improvement in GVC performance using this approach has been slow and sometimes leads to negative consequences, leading us to our research question: under what conditions do interventions by GVC lead firms yield significant improvements in social standards among upstream supplier workplaces? We hypothesize that a country’s institutions not only have direct effects on social upgrading but also indirectly affect the ability of third parties to bring about social compliance. Our findings, based on two longitudinal datasets, suggest that GVC lead firms must account for the unique country-level institutional pressures that either propel or hamper improvement over time in private social standard compliance among upstream suppliers. In addition, governments must develop new policy responses to target the prevailing institutional pressures that dampen social upgrading if they are to attract and retain GVC investment.

Upstream or Downstream? Suppliers-Customer CSR Performance Links

This study examines corporate social responsibility (CSR) performance between suppliers and customers within supply chain networks. Based on the spillover and stakeholder pressure theories, we argue that there is a spillover of CSR performance between suppliers and customers as well as downstream-upstream pressures to satisfy stakeholder demands for stronger CSR performance. Using a sample of 5,451 suppliers and 2,520 customers of U.S. firms from 1993 to 2013, we find evidence to support our hypothesis. We find that CSR performance in downstream (customers’) CSR influences the CSR performance of the upstream (suppliers’) supply chain partners but not vice versa. While extant literature in the supply chain has examined the suppliers-customers’ research and development innovations, our study extends this literature to suppliers-customers’ social innovations by establishing a link between suppliers and customers CSR performance through supply chain networks.

UPSTREAM SUPPLY CHAIN DILEMMA – SINGLE OR MULTIPLE SOURCING

Supply chains, as networks of companies, are focused on creating greater value to meet market needs with aim to achieve higher profitability. In this regard, all activities and processes within supply chain, starting from supply of raw materials until to the delivery of final products at the market, must be organized bearing in mind the aim of the supply chain. The focus of the paper is on upstream supply chian, and on solving the dilemma of supplying from single or muliple sources. The significance of this part of supply chain arises from the fact that any potential disorder or disruption in supplying can jeopardize making the value for consumers and the survival of the whole chain. Considering that due to the reduction in the complexity of upstream supply chain management, there is a trend of supplier base reduction, the aim of the paper is to determine how much this trend is present in the Republic of Serbia, with a special emphasis on the food industry. Using by regression analysis and based on the results of empirical research.

Drivers of sub-supplier social sustainability compliance: an emerging economy perspective

Purpose Tragic incidents such as the Rana Plaza building collapse call into question the value and effectiveness of supplier codes of conduct (SCC) used in multi-tier supply chains. This paper aims to investigate the barriers to sub-supplier compliance and the drivers from the perspective of suppliers that adopt a double agency role by complying with buyer-imposed SCC while managing sub-supplier compliance on behalf of the buyer. Design/methodology/approach This research adopts a sequential, mixed-methods approach. The qualitative phase develops a conceptual model with the aid of the extant the literature and semi-structured interviews with 24 senior manufacturing professionals. The quantitative phase then uses a hierarchical regression analysis to test the conceptual model using survey data from 159 apparel suppliers based in India. Findings The findings reveal that sub-supplier compliance is positively impacted by effective buyer–supplier governance and by the focal supplier having a strategic partnership with the sub-supplier. Conversely, price pressure on sub-suppliers adversely impacts their compliance, while institutional pressure on them to comply is generally ineffective. Research limitations/implications The context of the study is limited to the garment industry in India. Practical implications To improve SCC compliance rates, buyers and focal suppliers should actively develop strategic partnerships with selected upstream supply chain actors; should set a reasonable price across the supply chain; and, should include specific sub-supplier compliance requirements within the supply contract. The findings also suggest the need to develop social sustainability protocols that are cognisant of regional contexts. Originality/value The absence of prior research on SCC implementation by sub-suppliers, this study represents a pioneering empirical study into such multi-tier sourcing arrangements. It provides strong support that sub-supplier governance arrangements differ from those typically found in the focal supplier layer. It also provides empirical evidence of the critical factors that encourage sub-supplier compliance within the apparel industry of a regionally developing economy.

Complexity transfer in supplier-customer systems

This paper uses a multiple case-study methodology to investigate complexity transfer (CT) in manufacturing supplier-customer systems, leading to a new model of complexity transfer. An entropic-related complexity measure is applied to three supplier-customer systems, internally within each organisation and at their supplier-customer interface. The results are compared and integrated to provide cross-case analyses and insights. Although CT has been acknowledged in the literature to occur towards upstream supply chain (SC) partners, e.g. in the context of the bullwhip effect, this paper provides evidence that CT may also occur towards downstream SC partners. This study also highlights that complexity can be managed through significant and sustained operational interventions. Our new empirically-tested model of CT identifies four organisational types: Sink, Source, Equilibrium, and Boom or Bust, according to their transfer of internally-generated and externally-accepted complexity. This new model enables an in-depth representation of the transfer of complexity and of its impact on SC partnerships. Managers may use this CT model to develop complexity management insights and to identify structural and operational changes – at organisational level, and systemic SC changes that may reduce the costs associated with complexity.

Operational Management Implemented in Biofuel Upstream Supply Chain and Downstream International Trading: Current Issues in Southeast Asia

Bioenergy is one of the alternatives to secure energy demand, despite increasing debate on the sustainability of using bioenergy as a renewable source. As the source is disseminated over a large area and affected by seasonality, the potential benefit is highly dependent on other cost and benefit trade-offs along the supply chain. This review paper aims to assess operational management research methods used in biofuel supply chain planning, including both upstream production and international downstream trading. There have been considerable operational management studies done on upstream processes in biofuel production based on different strategic and tactical decision making of a single or multiple feedstocks, considering economic and environmental factor. However, the environmental consideration is often limited to carbon emission where the other environmental impact such as land-use change, biodiversity loss, irrigation and fertilisation are often being overlooked. Biofuel supply chain and trading at international level remain as an apparent research potential where only limited numbers of global energy models explicitly simulate international bioenergy trade. The leading biofuel producing countries in Southeast Asia: Malaysia, Indonesia and Thailand, are selected as a case study to investigate further on how the supply chain management model could be applied considering the existing biofuel support policies. This study is expected to contribute to the selection of operational management research methods used for decision making under robust policy context, followed by several recommendations.

The Role of Institutional Uncertainty for Social Sustainability of Companies and Supply Chains

Global sourcing largely occurs from so-called emerging markets and developing economies (EMDEs). In these contexts, substantial leverage effects for sustainability in supply chains (SCs) can be expected by reducing adverse impacts on society and minimising related risks. For this ethical end, an adequate understanding of the respective sourcing contexts is fundamental. This case study of South Africa’s (SA) mining sector uses institutional theory and the notion of institutional uncertainty to empirically analyse the challenges associated with establishing social sustainability. The case study research is informed by 39 semi-structured interviews with top management representatives and various state and non-state decision makers in SA. Our findings suggest that (social) sustainability in the institutional field is mainly shaped by the Social and Labour Plan institution, induced by state actors and mining companies’ practices. However, four weakening factors were identified that adversely affect this regulative institution, drive institutional uncertainty and allow for mining companies’ gradual decoupling. Contrastingly, complementing pressures of non-state actors limit institutional uncertainty and push toward mainstreaming the stipulations of the institution. This study contributes to the business ethics literature by providing an in-depth exploration of institutional uncertainty’s drivers and barriers within an upstream SC setting and shedding light on multiple actors’ interplay and relevance in sector-wide sustainability. The findings are condensed into three main propositions as well as an analytical framework as a basis for follow-up research. This case study helps practitioners understand and manage complexity that results from actor plurality and institutional uncertainty in EMDEs.

The effect of upstream production on corn supply chain sustainability as broiler feed

The study aimed to identify the scheme of farmer productive factors that may give an impact on the supply chain sustainability as the upstream feedstuffs producers to satisfy the feedstuffs demand of the broiler feed industry. Collected data were analysed using descriptive statistic. This study was categorized as a descriptive quantitative study. The results of the study showed that one effective productive factor from the farmer respondents was corn farming experience. On the other hand, other productive factors including land area, corn Sheller and dryer facilities and agricultural capital were not prominent. Therefore, in order to sustain the corn supply chain from the farmers or upstream supply chain, the primary factors that should be fulfilled included the agricultural capital, land area, and corn Sheller and dryer. The productive factors of agricultural capital, land area, and corn Sheller and dryer, as well as the knowledge in farming, were determining in sustaining the corn supply chain sustainability to fulfil the demand of either final consumer or broiler feed industry.

Value added of kenaf fibre in natural fibre agroindustry supply chain network

I Indonesia is among countries that produce fibre, which potentially becomes a flagship product domestically and internationally. Domestic demand for dried kenaf fibre reaches 30,000 tonnes/year, resulting in a gap between production and consumption. This study aims to analyse supply chain condition of kenaf fibre agroindustry, as well as analysing value added gained from an upstream supply chain of kenaf fibre agroindustry. Descriptive analytics method was employed to analyse supply chain condition. Whereas, value added was analysed using a number of methods: input output analysis, Hayami, modified Hayami, Rucker plan, and Tololiu’s value added. This study has demonstrated value added of kenaf fibre in supply chain network. Input output analysis by Central Bureau of Statistics (CBS) is the most appropriate method to determining the value added of kenaf fibre. It is IDR159,982,877 and IDR1,066,718,000 for woven fabric.

Energy System Pathways with Low Environmental Impacts and Limited Costs: Minimizing Climate Change Impacts Produces Environmental Cobenefits and Challenges in Toxicity and Metal Depletion Categories

Environmental indicators based on the life cycle assessment method are integrated into an energy system model. This integration allows for the generation of comprehensive environmental assessments of future energy systems and for determining energy scenarios with less environmental impacts and moderate cost increases. In Switzerland, which is used as a case study to demonstrate the feasibility of our approach, it is possible to generate pathways with a 5% cost increase on the cost-optimal situation, causing an impact score for climate change that is 2% higher than the minimum feasible solution. The minimization of life-cycle impacts on climate change generates substantial environmental cobenefits with regard to human health, air pollution, ozone depletion, acidification, and land transformation. However, this minimization also creates trade-offs that exacerbate the effects of metal depletion and human toxicity caused by upstream extraction and manufacturing linked to technologies such as solar panels and electric vehicles. Finally, ambitious reduction targets of 95% direct (i.e., within the country) CO2 emissions for the year 2050 might still result in substantial climate change impacts should emissions embodied in the infrastructure and upstream supply chain not be jointly mitigated jointly.

Decision-making models and support systems for supply chain risk: literature mapping and future research agenda

Supply chain disruptions have serious consequences for society and this has made supply chain risk management (SCRM) an attractive area for researchers and managers. In this paper, we use an objective literature mapping approach to identify, classify, and analyze decision-making models and support systems for SCRM, providing an agenda for future research. Through bibliometric networks of articles published in the Scopus database, we analyze the most influential decision-making models and support systems for SCRM, evaluate the main areas of current research, and provide insights for future research in this field. The main results are the following: we found that the identity of the area is structured in three groups of risk decision support models: (i) quantitative multicriteria decision models, (ii) stochastic decision-making models, and (iii) computational simulation/optimization models. We mapped six current research clusters: (i) conceptual and qualitative risk models, (ii) upstream supply chain risk models, (iii) downstream supply chain risk models, (iv) supply chain sustainability risk models, (v) stochastic and multicriteria decision risk models, and (vi) emerging techniques risk models. We identified seven future research clusters, with insights from further studies for: (i) tools to operate SCRM data, (ii) validation of risk models, (iii) computational improvement for data analysis, (iv) multi-level and multi-period supply chains, (v) agrifood risks, (vi) energy risks and (vii) sustainability risks. Finally, the future research agenda should prioritize SCRM's holistic vision, the relationship between Big Data, Industry 4.0 and SCRM, as well as emerging social and environmental risks.

Integrating site-specific environmental impact assessment in supplier selection: exemplary application to steel procurement

In times of fast-growing stakeholder interest in sustainability, the ecological and social perspective of industrial companies and its products is gaining increasing importance. In particular, the emission of greenhouse gases (GHG) in the automotive industry has come to the forefront of public and governmental attention. The transport sector accounts for 27% of all European GHG emissions and constitutes the largest emitter of CO2e (CO2 equivalents) among all energy demanding technologies. Due to increasingly efficient combustion engines and technology innovation towards e-mobility, the emissions from car manufacturing gain in importance. So far little focus has been laid upon the emissions created throughout the production process in automotive supply chains from a purchasing perspective. The purchasing of raw material from environmentally efficient suppliers can constitute a possibility to significantly reduce CO2e emissions in automotive supply chains and thus contribute to the two degrees global warming goal. Supplier selection decisions, which cover approximately 75% of the value adding process of a car, are today mainly cost and quality-driven. In order to integrate CO2e as decision criterion for supplier selections, site-specific and comparable data on CO2e emissions from the upstream supply chain is necessary, but currently lacking. To estimate CO2e emissions of steel suppliers’ production sites, a model has been developed to estimate manufacturing processes on a site-specific level without the necessity of confidential primary data. The model is applied on 22 integrated steel mills in EU-15. The results, which can be transferred and used for various products and industries, e.g. the construction industry, demonstrate the partially large disparities of manufacturing efficiency regarding CO2e emissions among steel manufacturers due to different levels of process integration and internal process know-how. A range between 1879 and 2990 (kg CO2e/t crude steel) has been revealed. Finally, the estimated data on CO2e performance of suppliers is applied in a case study of supplier selection of a German automobile manufacturer in order to simulate environmental as well as economic effects.

Demand forecasting in supply chain: The impact of demand volatility in the presence of promotion

The demand for a particular product or service is typically associated with different uncertainties that can make them volatile and challenging to predict. Demand unpredictability is one of the managers’ concerns in the supply chain that can cause large forecasting errors, issues in the upstream supply chain and impose unnecessary costs. We investigate 843 real demand time series with different values of coefficient of variations (CoV) where promotion causes volatility over the entire demand series. In such a case, forecasting demand for different CoV require different models to capture the underlying behavior of demand series and pose significant challenges due to very different and diverse demand behavior. We decompose demand into baseline and promotional demand and propose a hybrid model to forecast demand. Our results indicate that our proposed hybrid model generates robust and accurate forecast and robust inventory performance across series with different levels of volatilities. We stress the necessity of decomposition for volatile demand series. We also model demand series with a number of well known statistical and machine learning (ML) models to investigate their forecast accuracy and inventory performance empirically. We found that ARIMA with covariate (ARIMAX) works well to forecast volatile demand series, but exponential smoothing with covariate (ETSX) has a poor performance. Support vector regression (SVR) and dynamic linear regression (DLR) models generate robust forecasts across different categories of demands with different CoV values. In terms of inventory performance, ARIMAX and combination models have superior performance to the other presented models. The hybrid algorithm also depicts robust performance across different series with different CoVs and has low inventory costs.

Life cycle assessment of petroleum refining process: A case study in China

Climate change mainly caused by transportation fuel consumption has attracted global concern. In life cycle environmental burdens generated from transportation fuel production, petroleum refining stage is the hotspot. However, the in-depth environmental analysis of petroleum refining is very limited. China is the second largest petroleum refining country, so it is very essential to break petroleum refining stage into specific unit to analyze how Chinese refinery can be improved in environment performance. To achieve this goal, a systematic life cycle analysis of the environmental burden generated from petroleum refining process was conducted to identify the control emphasis and seek potential improvement measures. Sensitive analysis and volatile organic compounds (VOCs) emission characteristics were additional discussed to improve the accuracy of results. The significant burdens generated from petroleum refining process were freshwater ecotoxicity and climate change. Crude oil extraction and transport dominated most environmental categories, which indicated that the environmental problem exist in upstream supply chain. Catalytic cracking, feedstock and product handling, catalytic reforming, crude oil distillation, cooling water system and diesel hydrotreating were the major control units due to their direct emissions and electricity consumption. VOCs (e.g., acrolein and chlorofluorocarbons) produced from refinery fugitive emissions were the main substances for refinery to reduce human toxicity, ozone depletion and photochemical oxidant formation influences. 14% of Climate change were derived from organic chemicals emission in this study, which suggested that VOCs-related carbon emission should be involved in current carbon accounting work or greenhouse gases (GHGs) studies on the petroleum refining industry. The identified control emphasis included equipment leaks from core refining units, storage tank emissions control, energy structure optimization and catalysts consumption intensity reduction. Some feasible and useful reduction measures targeted the control emphasis were proposed for policy makers and refinery managers to formulate reduction strategies and improve the sustainability of the petrochemical industry.

The impact of market orientation on innovativeness: evidence from Yemeni SMEs

Purpose This study aims to investigate the impact of market orientation on small and medium-sizedenterprises (SMEs) innovativeness in Yemen. Design/methodology/approach The study uses empirical data collected from 206 managers, owners and operators of SME in Sana'a. By using exploratory and quantitative methods, the collected data was examined using descriptive, correlation and regression analyses. Findings The results indicated that market orientation, as a whole, has a significant impact on SME innovativeness. Specifically, while the two dimensions – customer orientation and supplier orientation – have a significant impact on SME innovativeness, the other two dimensions – competitor and inter-functional coordination – do not have a significant impact on SME innovativeness. Research limitations/implications The study focuses only on four factors that have an influence over SME innovativeness based on the perspective of managers. Practical implications SMEs represent the largest portion of businesses in Yemen’s private sector. It is anticipated that the findings of this study will help SMEs’ owners and managers to better understand market orientation and the significant impact it has on SME innovativeness. Originality/value The value of this research work is evident from the fact that the market orientation models have neglected the part of suppliers (upstream supply chain) in generating superior value for customers, even though they have concentrated on the role of customers (downstream supply chain) and competitors.