Internet Assisted Environmental Purchasing

The use of environmental purchasing as corporate and political instruments to further improve the environmental performance of products is becoming increasingly widespread.Information technology and more specifically the Internet, offers a range of new opportunities to make environmental purchasing operational for both small and large, public and private operations. The benefits of internet-assisted environmental purchasing systems include global system access, no paper handling, ease of operation for procurement staff and a uniform and transparent treatment of suppliers.Tele Danmark Communication (TDC) is Denmark's largest provider of telecommunication services and also operates a chain of stores across Denmark selling telephones and other telecommunication products. Co-funded by the Danish EPA and in collaboration with RAMBØLL Consultants and the Institute for Product Development at the Technical University of Denmark, TDC has developed a prototype internet-assisted environmental purchasing system that covers a wide product assortment of telephones and fax machines. This case exemplifies the particular benefits of Internet systems for environmental purchasing.One role of environmental purchasing is to increase the availability of environmentally friendly products to the end consumer, be it companies, public institutions or private consumers. If published, the information that facilitates environmental purchasing may further assist the end consumer in his or her choice of products. Linking environmental purchasing systems with environmental product declarations may form a powerful marketing tool.     

THE ROLE OF SUPPLY MANAGEMENT CAPABILITIES IN GREEN SUPPLY

Managers realize that they should avoid complex green supply initiatives when they do not have the capabilities to implement them. However, they have little guidance on how these capabilities can be developed. This paper provides an initial analysis of the role of supply management capabilities in green supply. We argue that the implementation of green supply is better explained by focusing on the development and deployment of an organization's specialized internal resources, rather than by the more usual focus on external environmental pressures on a firm. Further, we argue that capabilities appropriate for green supply are developed by a proactive corporate environmental stance and by a more strategic purchasing and supply management approach. We test our model using data from a two‐phase survey of 70 operating units within UK public limited companies. Our results indicate support for our conjecture that supply management capabilities are jointly developed by a proactive corporate environmental approach and a strategic purchasing and supply process. Our study results should be useful to business strategists, regulators, and researchers interested in the predictors of corporate green behavior. They should also assist future researchers in many branches of environmental management who are seeking to explore the role of the internal capabilities of firms in supporting environmental management.     

THE IMPACT OF ELECTRONIC DATA INTERCHANGE ON DELIVERY PERFORMANCE

After several years of use of electronic data interchange (EDI) in various industries, the literature is still inconclusive regarding the benefits gained from its usage. We investigated contextual factors of two types: non‐managerial (product diversity, product customization, production instability, and organizational size) and managerial (just‐in‐time and quality management), that might have confounded past results. Our results indicate that the extent of EDI use is significantly related to delivery performance after controlling for the above‐mentioned factors. Furthermore, the data set supported the moderating effect of production instability on the relationship between the extent of EDI use and delivery performance achieved, but failed to support the moderating effect of organizational size.     

Strategic Motive for Introducing Internet Channels in a Supply Chain

Rapid advances of information technology in recent years have enabled both the manufacturers and the retailers to operate their own Internet channels. In this study, we investigate the interaction between the capabilities of introducing the Internet channels, the pricing strategies, and the channel structure. We classify consumers into two segments: grocery shoppers attach a higher utility from purchasing through the physical channel, whereas a priori Internet shoppers prefer purchasing online. We find that when the Internet shoppers are either highly profitable or fairly unimportant, the manufacturer prefers to facilitate the channel separation either through his own Internet channel or the retailer's. In the intermediate region, however, the manufacturer encroaches the grocery shoppers and steals the demand from the retailer's physical channel. With horizontal competition between retailers, a priori symmetric retailers may adopt different channel strategies as a stable market equilibrium. The manufacturer may willingly give up his Internet channel and leverage on the retailer competition. When the manufacturer sells through an online e‐tailer, Internet shoppers may be induced to purchase through the physical channel. This reverse encroachment strategy emerges because selling through the e‐tailer leads to a more severe double marginalization problem.     

The Impact of the Online Channel on Retailers' Performances: An Empirical Evaluation

The use of the Internet as an additional sales channel offers traditional retailers opportunities to reach expanded markets while improving the efficiency of their operations. Although the potential benefits of the online channel are clear, there are significant variations in the scope and depth of online channel use among retailers. Drawing from data on more than 100 publicly traded companies, this study examines the impact of online‐channel use on retailers’ performance. The results suggest that the online channel provides significant improvements in sales, cost, inventory, and return on investments. In addition, we find that the timing of online‐channel adoption does not play a significant role in performance improvement, but having a local store presence does.     

TEACHING SUPPLY CHAIN MANAGEMENT THROUGH GLOBAL PROJECTS WITH GLOBAL PROJECT TEAMS

In this article, we describe the Global Project Coordination Course, a course in which project teams composed of three students from each of two overseas universities execute company‐sponsored projects dealing with global supply chain management issues. The $75,000 to $100,00 contributed in total by the three to four sponsoring companies funds all course expenses. We assess the benefits and challenges of the use of cross‐cultural project teams with diverse educational backgrounds. We conclude that the course provides a unique and effective vehicle for furthering students' knowledge of Supply Chain Management and Information Systems, improving understanding of “soft” issues, and training students to work in diverse, global, cross‐cultural project teams.     

E‐Procurement Infusion and Operational Process Impacts in MRO Procurement: Complementary or Substitutive Effects?

The procurement of maintenance, repair, and operating (MRO) goods has remained a relatively understudied topic in the literature. Though vital cost efficiencies can be extracted from procurement processes through investments in e‐procurement systems, there is little empirical work that addresses how such systems should be deployed within organizations. In this study, we focus on the role of e‐procurement systems in MRO procurement and study two critical aspects of infusion. The first dimension captures the depth of e‐procurement use within the procurement function, while the second dimension depicts the breadth of use. We argue that these two dimensions of e‐procurement use, and their interaction, will be related to the performance of the MRO procurement process. Using survey data from 193 service organizations and structural equation modeling techniques, we show that the two infusion dimensions are significantly associated with improved process performance. Additionally, we show a substantial substitutive effect between the two use dimensions on performance. Our work has significant implications for managers who seek to gain efficiencies by the deployment of Internet‐based technologies within operational processes. Our conceptualization of e‐procurement infusion along two dimensions provides a more fine‐grained analysis of performance benefits accruing from the infusion of information technologies within organizations.     

REALIZATION OF THE VIRTUAL ENTERPRISE PARADIGM IN THE CLOTHING INDUSTRY THROUGH E‐BUSINESS TECHNOLOGY

This paper presents a methodology and a case study for supply chain management in the clothing industry that makes extensive use of the virtual enterprise paradigm. The main research goal was to design and implement a prototype e‐business software component and carry out tests in several industrial users. The research effort resulted in the extended production data management system (epms), which supported the business processes of customer order management, subcontractor selection, and multi‐site/multi‐firm production orders release. The enablers of this software application were business‐to‐business (b2b) e‐commerce technologies in the operating context of application service providers (asps).     

Channel Conflict and Coordination in the E‐Commerce Age

A number of factors, including developments in Internet‐based commerce and third‐party logistics, have led many companies to consider engaging in direct sales. Such a company may at once be both a supplier to and a direct competitor of any existing reseller partners (e.g., land‐based retailers), which can result in “channel conflict.” This can have momentous implications for distribution strategy. To generate managerial insights into this important issue, we develop a model that captures key attributes of such a setting, including various sources of inefficiency. We examine these in detail and identify a number of counterintuitive structural properties. For instance, the addition of a direct channel alongside a reseller channel is not necessarily detrimental to the reseller, given the associated adjustment in the manufacturer's pricing. In fact, both parties can benefit. Finally, we examine ways to adjust the manufacturer‐reseller relationship that have been observed in industry. These include changes in wholesale pricing, paying the reseller a commission for diverting customers toward the direct channel, or conceding the demand fulfillment function entirely to the reseller. The latter two schemes could be mutually beneficial in that they achieve a division of labor according to each channel's competitive advantage.     

IMPLEMENTING INITIATIVES ON QUALITY: AN INTRODUCTION TO THE SPECIAL ISSUE ON TOTAL QUALITY MANAGEMENT

In the early 1980s, companies around the world, learning from the Japanese experience, saw that they could address their severe competitive problems related to productivity and quality only by looking at the entire set of processes and organizational relationships in the context of the customer's needs. This approach was termed total quality management (TQM). As companies pursue quality-related initiatives, they must deal with a number of issues; some of these issues are addressed here: measurement of benefits, feedback and recognition, work-teams, teaching continuous improvement, and enhancing the effectiveness of statistical process control charts.     

SCIENCE-BASED PRODUCT DEVELOPMENT: AN EMPIRICAL STUDY OF THE MAINFRAME COMPUTER INDUSTRY

This paper reports on the results of an empirical study of product development in a complex and novel environment. The work is based on field investigations of recent product development projects performed by all leading mainframe computer producers. The projects focused on the development of complex products based on advanced technologies and probed deeply into their science base. The results show striking differences in development lead time and research and development productivity between different projects. The analysis relates these performance differences to the process for the integration of new technology. Organizations that emphasize the accumulation of system-level knowledge of product and production process and its use in technology evaluation and selection are associated with high productivity and short development lead times. This appears to have a greater impact on development performance in this novel environment than more traditional factors, such as processes for effective crossfunctional integration and for overlapping problem solving.     

Determining Uses and Gratifications for the Internet

Uses and gratifications (U&G) is a media use paradigm from mass communications research that guides the assessment of consumer motivations for media usage and access. It has been used previously in research and decision making related to the promotion of emerging radio and television media. Recent adaptations of U&G research to the Internet are incomplete and have not identified important new Internet‐specific gratifications. This paper empirically derives dimensions of consumer Internet use and usage gratifications among customers of a prominent Internet Service Provider (ISP). Results describe three key dimensions related to consumer use of the Internet, including process and content gratifications as previously found in studies of television, as well as an entirely new social gratification that is unique to Internet use. All three dimensions of gratification are relevant to managing the Internet as a commercial medium, and measures developed from the gratification profiles identified here can serve as trait‐valid scales in future Internet and e‐commerce research.     

A TOTAL QUALITY MANAGEMENT-BASED INCENTIVE SYSTEM SUPPORTING TOTAL QUALITY MANAGEMENT IMPLEMENTATION

Although there have been many cases of total quality management (TQM) success, embracing TQM does not always lead to performance improvements. Many companies resist the changes in organizational processes such as compensation and performance appraisal systems that are required to link TQM efforts to bottom-line performance. We present the basic structure of a TQM-based compensation system that can provide incentives based on a variety of performance measures, including an explicit incentive for the reduction of variability in product variables. As a result, this approach encourages the continuous improvement central to the TQM philosophy, rather than serving as a disincentive for such improvement as do many traditional compensation systems. The set of performance measures can be adjusted periodically to focus on those measures deemed most likely to yield significant increases in customer satisfaction, further supporting the core elements of TQM. The approach is described using examples from the paper manufacturing operation where it has been successfully implemented. A longitudinal analysis of several performance measures is used to demonstrate the effectiveness of the new compensation system.     

AN EXAMINATION OF THE INDIRECT PRODUCTIVITY GAINS FROM QUALITY IMPROVEMENT

Recent theoretical work suggests that quality-improvement activities can yield significant indirect effects through process improvements and reduced factory congestion and confusion, benefits that are overlooked or hidden in most management accounting or cost of quality systems. Using time series data from two consumer durables manufacturing plants, I estimate the indirect productivity gains from quality improvement. The evidence from the plants indicates that the indirect effects from improved quality are at least two to three times the direct benefits attributable to lower scrap, rework, and inventory holding costs. An important implication of these findings is that companies that justify investments and measure performance based only on the direct costs of poor quality will motivate managers to make suboptimal decisions regarding quality-improvement activities.     

Planning and control of purchasing performance: A new concept

The slowdown in sales growth experienced by many companies in Western Europe during the 1970s has led to an increasing awareness of the importance of measuring a company's operating performance relative to that of its competitors, and to a resurgence of interest in the production function. Production managers have traditionally enjoyed a very low status within the management hierarchy and this is particularly true of purchasing managers, yet many industrial companies with high manufacturing costs find that material costs constitute a major element in total factory cost, and any improvement in purchasing costs has an immediate and beneficial impact on company profitability. In this paper, the authors suggest three ways in which management can better measure, plan and control their company's purchasing performance: they emphasize the importance of concentrating on each product rather than each commodity; they outline a simple and practical way in which to measure and monitor a product's material costs over time so as to enable realistic purchasing objectives to be set; finally, they suggest a way of separating the effects of commodity price fluctuations from the performance of the purchasing manager so that the latter can be properly judged.     

“Do as I Do and Not as I Say”: Exploring Price‐Oriented Maverick Buying During Supplier Selection

This article empirically examines the occurrence of price‐oriented maverick buying (MB) during supplier selection, in a direct purchasing process context. Drawing on agency theory, maverick buying, and total cost of ownership (TCO) literature, the statistically significant existence of price‐oriented MB is investigated and the purchasing manager (PM)‐related factors that influence such noncompliant behavior are determined. A discrete choice experiment is designed to simulate a TCO‐based supplier selection process in which an established purchasing framework agreement stipulates PMs not necessarily be price‐oriented (i.e., select suppliers primarily based on lowest price), and then models PM choice behavior in the supplier selection process (SSP), utilizing a conditional logit model (CLM) to determine PM compliance to the established purchasing framework agreement and identify if price‐oriented MB exists. Statistical tests utilizing comprehensive primary and secondary data are then conducted to determine if correlational relationships exist between PM‐related factors and PM price‐orientation. Results indicate that three PM‐related factors bear a significant correlational relationship to PM price‐orientation.     

Global sourcing in integrated network structures: The case of hybrid purchasing organizations

An issue for companies in globally competitive markets is to adapt their organizational structures and governance in increasingly complex organizations. At the functional level of purchasing, companies are turning to hybrid purchasing organizations in order to leverage global sourcing benefits. One of the key challenges in this context is to distinguish between categories to be integrated across sites and those that are to remain under the authority of each purchasing location in order to maximize purchasing synergies.This paper presents a purchasing portfolio model that provides a comprehensive view of relevant global synergy dimensions. Based on a literature review, a theoretically-grounded purchasing portfolio model for global sourcing is developed. The theoretical basis stems from information processing theory, organizational buying behavior (OBB) and transaction cost economics. The validity of the model is explored by means of case study research. Complementing the extant literature, the theoretical contribution of the paper lies in not only addressing category selection criteria for exploiting economies of scale, but also for economies of information and learning and economies of process. Furthermore, it provides insights regarding integrated network coordination mechanisms at the functional level of purchasing.     

Adoption of e‐Processes by Service Firms: An Empirical Study of Antecedents

This paper investigates empirically antecedents of the adoption of web‐based processes (e‐processes) by service providers. We examine whether rational efficiency (expressed by expected performance benefits and access to new markets), the bandwagon effect (expressed by external pressure), and barriers (both internal and customer related) influence Internet use for transactions (e‐transactions) and/or to extend the relationships between service providers and their customers (e‐CRM). The findings, based on a sample of 338 service firms, show that rational efficiency and the bandwagon effect drive both types of e‐processes. Conversely, only internal barriers have a negative impact on adoption of e‐processes, while barriers related to customers do not have a significant impact. These findings have important academic and managerial implications, given the limited evidence regarding the implementation of e‐processes in services.     

Consumer Heterogeneity and Paid Search Effectiveness: A Large‐Scale Field Experiment

Internet advertising has been the fastest growing advertising channel in recent years, with paid search ads comprising the bulk of this revenue. We present results from a series of large‐scale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase intent are correlated, we show that returns from paid search are a fraction of non‐experimental estimates. As an extreme case, we show that brand keyword ads have no measurable short‐term benefits. For non‐brand keywords, we find that new and infrequent users are positively influenced by ads but that more frequent users whose purchasing behavior is not influenced by ads account for most of the advertising expenses, resulting in average returns that are negative.     

Optimal Design of the Online Auction Channel: Analytical,Empirical, and Computational Insights*

The focus of this study is on business‐to‐consumer (B2C) online auctions made possible by the advent of electronic commerce over an open‐source, ubiquitous Internet Protocol (IP) computer network. This work presents an analytical model that characterizes the revenue generation process for a popular B2C online auction, namely, Yankee auctions. Such auctions sell multiple identical units of a good to multiple buyers using an ascending and open auction mechanism. The methodologies used to validate the analytical model range from empirical analysis to simulation. A key contribution of this study is the design of a partitioning scheme of the discrete valuation space of the bidders such that equilibrium points with higher revenue structures become identifiable and feasible. Our analysis indicates that the auctioneers are, most of the time, far away from the optimal choice of key control factors such as the bid increment, resulting in substantial losses in a market with already tight margins. With this in mind, we put forward a portfolio of tools, varying in their level of abstraction and information intensity requirements, which help auctioneers maximize their revenues.