Order Stability in Supply Chains: Coordination Risk and the Role of Coordination Stock

The bullwhip effect describes the tendency for the variance of orders in supply chains to increase as one moves upstream from consumer demand. We report on a set of laboratory experiments with a serial supply chain that tests behavioral causes of this phenomenon, in particular the possible influence of coordination risk. Coordination risk exists when individuals' decisions contribute to a collective outcome and the decision rules followed by each individual are not known with certainty, for example, where managers cannot be sure how their supply chain partners will behave. We conjecture that the existence of coordination risk may contribute to bullwhip behavior. We test this conjecture by controlling for environmental factors that lead to coordination risk and find these controls lead to a significant reduction in order oscillations and amplification. Next, we investigate a managerial intervention to reduce the bullwhip effect, inspired by our conjecture that coordination risk contributes to bullwhip behavior. Although the intervention, holding additional on‐hand inventory, does not change the existence of coordination risk, it reduces order oscillation and amplification by providing a buffer against the endogenous risk of coordination failure. We conclude that the magnitude of the bullwhip can be mitigated, but that its behavioral causes appear robust.     

IMPACT OF POS DATA SHARING ON SUPPLY CHAIN MANAGEMENT: AN EXPERIMENTAL STUDY

We examine the impact of point of sale (POS) data sharing on ordering decisions in a multi‐echelon supply chain. In particular, we focus on how exposure to POS data may help reduce the “bullwhip effect,” the tendency of orders to increase in variability as one moves up a supply chain. Theoretical studies have shown that exposure to POS data can lead to a reduction in the bullwhip effect when suppliers have no prior knowledge of the demand distribution. The benefit of sharing POS data in stable industries, where the demand distribution is commonly known, is less clear. We study this phenomenon from a behavioral perspective in the context of a simple, serial, supply chain subject to information lags and stochastic demand. We find, using a controlled simulation experiment, that sharing POS information does help reduce some components of the bullwhip effect in a stable demand setting, namely the order oscillation of upstream members. We offer one possible explanation for this improvement by examining the relationship between order decisions and demand line information.     

Information sharing in supply chains

Supply chain is defined as a system of suppliers, manufacturers, distributors, retailers and customers where material, financial and information flows connect participants in both directions. Most supply chains are composed of independent agents with individual preferences. It is expected that no single agent has the power to optimise the supply chain. Supply chain management is now seen as a governing element in strategy and as an effective way of creating value for customers. The so-called bullwhip effect, describing growing variation upstream in a supply chain, is probably the most famous demonstration that decentralised decision making can lead to poor supply chain performance. Information asymmetry is one of the most powerful sources of the bullwhip effect. Information sharing of customer demand has an impact on the bullwhip effect. Information technology has lead to centralised information, shorter lead times and smaller batch sizes. The analysis of causes of the bullwhip effect has lead to suggestions for reducing the bullwhip effect in supply chains by strategic partnership. Supply chain partnership leads to increased information flows, reduced uncertainty, and a more profitable supply chain. The cooperation is based on contacts and formal agreements. Information exchange is very important issue for coordinating actions of units. New business practices and information technology make the coordination even closer. Information sharing and strategic partnerships of units can be modelled by different network structures.     

供应链信息管理研究现状及展望

供应链信息管理问题已涉及的研究范围包括供应链上信息流特点的研究,信息分类的研究,牛鞭效应的存在、成因及弱化措施的研究,牛鞭效应以外的其它类型信息失真的研究,由信息失真引起的信息风险问题的研究,以及利用信息共享相关技术支持解决信息管理问题的研究等。对供应链上的信息分类、信息失真、信息风险和信息共享等信息管理问题的国内外研究成果进行了全面的回顾和总结。通过对供应链上信息管理问题的研究方法进行的分析和总结,针对供应链中普遍存在的信息管理问题指出了进一步研究的方向。     

Decision Making and Cognition in Multi‐Echelon Supply Chains: An Experimental Study

Supply chain performance often depends on the individual decisions of channel members. Even when individuals have access to relevant information, order variation tends to increase when moving up the supply chain, a phenomenon known as the bullwhip effect. While prior research has investigated several structural/environmental factors which can mitigate the bullwhip effect, the underlying behavioral factors contributing to it are an open question. Using a production and distribution decision‐making simulation representing a four‐stage serial supply chain, we find that the cognitive profile of decision makers contributes to the bullwhip effect. We found that the specific decision tendency to underweight the supply line is linked to an individual's level of cognitive reflection. Furthermore, performance differs for entire supply chains and for specific echelons, and holds under standard mitigation efforts. The findings have implications for supply chain design, education, and industry.     

基于条件风险值理论的供应链优化与协调模型研究

本文将近年来发展起来的金融风险控制工具--条件风险值,引入具有风险规避特性的供应链优化与协调问题的研究.建立了随机需求下由具有不同风险规避特性的单个供应商与单个零售商组成的两级供应链的条件风险值模型和基于条件风险值的最优订购量模型及协调供应链的收入共享契约模型,并对模型进行了分析,揭示了供应商和零售商的风险规避程度对最优订购量、批发价格及供应链协调的影响.最后通过一个算例对模型进行了仿真,仿真结果进一步验证了本文的研究结论.     

Supply Chain Inventory Replenishment: The Debiasing Effect of Declarative Knowledge

Previous experimental research demonstrates that inefficient replenishment decision making in the supply chain can be caused by specific judgment and decision biases. Based on the literature we use controlled experiments involving both student subjects and supply chain managers to test debiasing interventions that provide declarative knowledge, which is theorized to enhance the acquisition of procedural knowledge. We first investigate the effects of three debiasing components in a single‐echelon setting: knowledge of bullwhip, inventory position (IP), and use of a target order‐up‐to quantity. Experiment 1 (N = 1,608 decisions by 67 student subjects) using a 2 × 2 × 2 factorial design for the three components finds that the conceptual understanding of IP is salient for efficient replenishment decisions. We next examine the effects of the components in a simulated, multi‐echelon, serial supply chain, which introduces the additional complexity of coordination risk. Experiment 2 (N = 3,072 decisions by 128 student subjects) using a 2 × 2 × 2 factorial design finds that although subjects benefit from training components, there is evidence of cognitive overload with an increased quantity of information. Finally we test whether these debiasing components may be an effective training program for practicing supply chain managers who can be expected to have higher levels of procedural knowledge through experience gained in the field. Experiment 3 (N = 864 decisions by 36 supply chain managers) using a 2 × 1 design investigates the effects of an instructional training intervention which includes all three debiasing components and finds the intervention to reduce costs by 14%. We provide avenues for future research and successful practice.     

基于两单链合作下的集群式供应链牛鞭效应的H∞控制研究

以集群式供应链跨链间库存合作为背景,针对两单链情形,考察零售商的紧急库存补充渠道来自于另一供应链的零售商,建立了集群式供应链跨链间库存合作下的库存模型和牛鞭效应量化方法。并用H_∞控制理论来寻求最优订货系列,以达到降低安全库存水平,提高顾客满意度和减弱牛鞭效应的目的。仿真实验表明,实施H_∞控制和跨链间库存互补策略可以有效抑制牛鞭效应。     

On variance amplification in a three-echelon supply chain with minimum mean square error forecasting

We analyse a three echelon supply chain model. First-order autoregressive end consumer demand is assumed. We obtain exact analytical expressions for bullwhip and net inventory variance at each echelon in the supply chain. All of the three supply chain participants employ the order-up-to policy with the minimum mean square error forecasting scheme. After demonstrating that the character of the stochastic ordering process observed at each level of the supply chain is mathematically tractable, we show that the upper stream participants have complete information of the market demand process. Then we quantify the bullwhip produced by the system, together with the amplification ratios of the variance of the net inventory levels. Our analysis reveals that the level of the supply chain has no impact upon the bullwhip effect, rather bullwhip is determined by the accumulated lead-time from the customer and the local replenishment lead-time. We also find that the conditional variance of the forecast error over the lead-time is identical to the variance of the net inventory levels and that the net inventory variance is dominated by the local replenishment lead-time.     

需求信息滞后下的零售商决策与牛鞭效应分析

牛鞭效应是一种在企业经营中广泛存在的普遍现象,对企业的生产经营产生了极大的负面影响。本文考虑一个供应商和一个零售商组成的简单两级供应链系统。在这个系统中,首先建立在需求信息滞后情况下的零售商库存决策和混合决策(库存决策和定价决策)模型;然后进行决策对牛鞭效应的影响分析。结果显示:在需求信息存在滞后的情况下,零售商最优决策的定价和订货点的期望值是确定的,与需求信息滞后期的长度无关;零售商的库存决策能产生牛鞭效应,且牛鞭效应会随需求滞后期增加而逐渐减少;零售商的混合决策能否产生牛鞭效应,取决于需求自相关系数的变化,而与需求滞后期无关,但随着需求滞后期会改变期变化程度。此外,库存决策还是混合决策,在需求不具有滞后时较具有滞后时牛鞭效应表现得较为为减弱;零售商的混合决策与库存决策相比,只有在需求的自相关系数取较小值时,才表现得更为强烈,否则会减弱。因而对于零售商而言,适当的需求信息滞后以及供应商对零售商的定价柔性能减少牛鞭效应。     

PLAYING THE BEER DISTRIBUTION GAME OVER THE INTERNET

This paper describes an Internet implementation of the Beer Distribution Game. Many teachers demonstrate the bullwhip effect that is often observed in supply chains by playing this game with their students. This implementation has the advantage of considerably reducing the time required to play the game.     

供应链中断下顾客缺货反应对牛鞭效应的影响研究

传统的关于供应链牛鞭效应的研究,仅关注供应链上游成员间（供应商、制造商或零售商）的协调运作,而忽略缺货发生后顾客缺货反应对供应链动态性的影响。本文利用高层级Petri-net对包含两个制造商、两个零售商的供应链系统进行建模与仿真,定量地研究不同的缺货强度下顾客缺货反应对两条相互竞争的供应链牛鞭效应的影响。研究结果表明,顾客缺货反应对缺货品牌及其竞争品牌的牛鞭效应均存在显著影响,但各种缺货反应对牛鞭效应的影响程度有所差异,且供应链中断强度（主要体现为发生缺货的品牌市场份额以及缺货持续时间）亦对牛鞭效应产生显著影响。我们建议不同产品类型（对应不同的顾客反应组合）的管理者根据品牌的市场占有率、缺货持续时间等因素对不同类型的顾客进行购买行为的引导,以缓解牛鞭效应并保持市场份额。     

Information distortion in a supply chain and its mitigation using soft computing approach

The information transferred in the form of orders between the nodes of a supply chain tends to be distorted when it moves from downstream to upstream. This phenomenon is called as bullwhip effect and this research is aimed to analyze this effect deeply in a single input single output (SISO) model. A discrete time series SISO model is developed for the analysis and it proves to be very useful in revealing the dynamics characteristics of the system. The bullwhip effect is measured from the transfer function model and the effect can be reduced by applying soft computing approach. A detailed sensitivity analysis is carried out to investigate the behavior of the model under various conditions. The applied fuzzy logic theory controls the errors and change in errors associated with forecasted demand between the nodes of a supply chain and it allows a smooth information flow in the chain. Tuning of fuzzy logic controller has been performed using adaptive neuro-fuzzy inference system (ANFIS). The method is illustrated with a numerical example. The application of soft computing approach addresses the real situation of human judgment with fuzziness helps the managers to forecast the demand with less distortion and to improve the supply chain effectiveness.     

延迟支付条件下易逝品的最优订货决策研究

本文在考虑延期支付的情况下构建了二级供应链关于易逝品的最优订货决策模型,其中供应链由单个供应商和多个面临资金约束的零售商组成。在不允许缺货的情况下,供应商为零售商提供延迟支付来缓解零售商的资金压力,同时零售商对产品的定价将随易逝品的价值变质而变化。本文利用遗传算法对模型进行了算例分析,同时对模型中的相关参数进行了敏感性分析。结果表明,延迟支付能够提高供应链总利润并降低风险,从而有利于供应链整体效益的提高。在延期支付条件下,供应链各成员获得的收益增量存在较大差距,其中供应商能够获得更多收益。最后,通过敏感性分析,我们还发现产量及易逝品保质期的变动会对供应链整体利润产生不同程度的影响。     

Supply Chain Strategies and International Tax Arbitrage

What motivates the geographic footprint of the supply chains that multinational firms (MNFs) deploy? Traditional research in the operations and supply chain management literature tends to recommend locations primarily based on differentials in production costs and the ramifications of physical distance ignoring the role of taxation. MNFs that strategically position parts of their supply chains in low‐tax locations can allocate the profits across the divisions to improve post‐tax profits. For the profit allocation to be defensible to tax authorities, the divisional operations must possess real decision authority and bear meaningful risks. Generally speaking, the greater the transfer of risk and control, the larger the allowable allocation of profit. These transfers may also create inefficiencies due to misalignment of business goals and attitudes toward risk. We model these trade‐offs in the context of placing in a low‐tax region a subsidiary that oversees product distribution (as a limited risk distributor commissionnaire, limited risk distributor, or fully fledged distributor). Our analysis demonstrates that the MNF's preferences regarding the operating structures are not necessarily an obvious ordering based on the amount of risk and decision authority transferred to the division in the low‐tax jurisdiction. We derive and analyze threshold values of the performance parameters that describe the main trade‐offs involved in selecting an operating structure. We find some of the optimal decisions to exhibit interesting non‐monotone behavior. For instance, profits can increase when the tax rate in the low‐tax jurisdiction increases. Numerical analysis shows that the Limited‐Risk Distributor structure is rarely optimal and quantifies when each alternative dominates it.     

牛鞭效应与生产平滑模型有效性问题

评述国内外关于牛鞭效应和与之紧密相关的生产平滑模型有效性问题的研究进展,也扼要 地叙述作者在这个领域所做的部分工作. 作者的工作将国际上对牛鞭效应的研究从特殊时间序列 下的两阶段模型拓展到一般ARIMA 时间序列下的多阶段模型,并以此为基础分析了需求信息在供 应链中传播的一般规律. 这些规律的发现扩展了牛鞭效应研究的一些经典结论,揭示了一些新颖现 象的存在,并为彻底解决国际学术界长达20 年的关于生产平滑模型有效性问题的争论提供了可 能. 最后,指出几个相关的研究问题,希望中国学者能在这一领域的研究中取得重要突破     

An interdependent layered network model for a resilient supply chain

This paper addresses the problem of designing supply chains that are resilient to natural or human-induced extreme events. It focuses on the development of efficient restoration strategies that aid the supply chain in recovering from a disruption, thereby limiting the impact on its customers. The proposed restoration model takes into account possible disruptions to infrastructures, e.g., transportation and communications, by explicitly formulating their logical relationships with supply chains. A problem solving process is proposed that provides for cooperation between the managers of the infrastructures and the managers of the supply chains disrupted by an extreme event. Both the model and the problem solving process are exercised with a realistic industry problem.     

Supplier Selection Behavior Under Uncertainty: Contextual and Cognitive Effects on Risk Perception and Choice

Buyers often make supplier selection decisions under conditions of uncertainty. Although the analytical aspects of supplier selection are well developed, the psychological aspects are less so. This article uses supply chain management and behavioral decision theories to propose that attributes of the purchasing situation (category difficulty, category importance, and contingent pay) affect cognition that, in turn, affects a supply manager's choice. We conducted a supplier selection behavioral experiment with practicing managers to test the model's hypotheses. When the context involves an important or difficult sourcing category, higher risk perceptions exist that increase preference for a supplier with more certain outcomes, even when that choice has a lower expected payoff. However, the presence of contingent pay decreases risk perceptions through higher perceived supplier control. We also find that a manager's risk propensity increases preferences for a supplier with less certain outcomes regardless of perceived risk. Our model and results provide a theoretical framework for further study into the cognitive aspects of supplier selection behavior and provide insight into biases that influence practicing supply chain managers.     

Durability,Transit Lags,and Optimality of Inventory Management Decisions

Two laboratory experiments on a single‐echelon inventory task show that inventory durability interacts with transit lags to create order volatility that exceeds demand volatility. Thus, inventory durability and transit lags cause managers to deviate from inventory decision optimality. Durability creates a large increase in order volatility because players adjust orders insufficiently to reflect current inventory and backlogs, much as they adjust orders insufficiently to reflect holding and backlog costs in newsvendor studies (e.g., Schweitzer and Cachon 2000). Transit lags exacerbate non‐optimal ordering by interfering with players' ability to correct prior errors. Our results suggest that non‐optimal inventory decisions can be driven by inventory and supply chain characteristics, even in the absence of the coordination and information sharing problems studied by Croson et al. (2005) and Sterman (1989a,b). We also examine the influence of features related to personality. We find little evidence that the interactive effects of durability and transit lags are altered by need for cognition, impulsiveness, or locus of control, suggesting that these features make supply chain management extremely difficult. These results imply that retailers and their upstream partners must consider the characteristics of their product and supply chains when interpreting demand signals received from downstream partners.     

The dynamics of customer dissatisfaction in supply chains

This paper describes field research and its findings that investigate the relationship of a firm's position in the supply chain to behaviour. Specifically, perceptions of requirements, performance and customer satisfaction/dissatisfaction are the behavioural issues of interest here. The field research was carried out in four European supply chains in the automotive aftermarket, or spares industry. It was proven statistically and qualitatively that, in the chains studied, upstream relationships contained more customer dissatisfaction and more misperceptions about performance than did downstream relationships. Delivery performance was identified as the major cause of these problems, This has implications for planning and control. First, the Forrester-type swings in information upstream, proven in industrial dynamics, make planning and control decisions more difficult; this research identifies the detrimental effect of this on customer satisfaction. Secondly, measurement of delivery performance is identified as being a critical issue; not only should measures be made in planning and control but also they should be communicated and agreed with customers to prevent misperceptions occurring. As this research showed these misperceptions to be positively correlated to customer dissatisfaction, efTort to remove them from relationships should be treated as a priority.