Resilience of organisations and territories: The role of pivot firms

How can organisations and territories contribute to maintain a high level of innovation while at the same time adapting to a turbulent environment? We give an answer to this question by mobilizing the concept of resilience. In order to do this, we develop a conception of resilience based on two dimensions. First, an organisational dimension which refers to the capacity of an organisation to manage a disturbance to its environment and to develop a new pathway and, a territorial dimension which refers to the collective capacity of the actors to contribute to facilitate the development of territorial responses to external disturbances. We illustrate this double dimension of resilience by focusing on the role of pivot firm as major actor in a territory.     

Using Frontier Portfolios to Improve Make‐to‐Order Operations

Make‐to‐order (MTO) manufacturers face a common problem of maintaining a desired service level for delivery at a reasonable cost while dealing with irregular customer orders. This research considers a MTO manufacturer who produces a product consisting of several custom parts to be ordered from multiple suppliers. We develop procedures to allocate orders to each supplier for each custom part and calculate the associated replenishment cost as well as the probability of meeting the delivery date, based on the suppliers' jobs on hand, availability, process speed, and defective rate. For a given delivery due date, a frontier of service level and a replenishment cost frontier are created to provide a range of options to meet customer requirements. This method can be further extended to the case when the delivery due date is not fixed and the manufacturer must “crash” its delivery time to compete for customers.     

A Risk and Economic Analysis of Dirty Bomb Attacks on the Ports of Los Angeles and Long Beach

This article analyzes possible terrorist attacks on the ports of Los Angeles and Long Beach using a radiological dispersal device (RDD, also known as a "dirty bomb") to shut down port operations and cause substantial economic and psychological impacts. The analysis is an exploratory investigation of a combination of several risk analysis tools, including scenario generation and pruning, project risk analysis, direct consequence modeling, and indirect economic impact assessment. We examined 36 attack scenarios and reduced them to two plausible or likely scenarios using qualitative judgments. For these two scenarios, we conducted a project risk analysis to understand the tasks terrorists need to perform to carry out the attacks and to determine the likelihood of the project's success. The consequences of a successful attack are described in terms of a radiological plume model and resulting human health and economic impacts. Initial findings suggest that the chances of a successful dirty bomb attack are about 10-40% and that high radiological doses are confined to a relatively small area, limiting health effects to tens or at most hundreds of latent cancers, even with a major release. However, the economic consequences from a shutdown of the harbors due to the contamination could result in significant losses in the tens of billions of dollars, including the decontamination costs and the indirect economic impacts due to the port shutdown. The implications for countering a dirty bomb attack, including the protection of the radiological sources and intercepting an ongoing dirty bomb attack are discussed.     

Water rights,conservation and recreation planning

Decision making for administrative planning is a particularly important factor. Additionally, water resource management is a major problem for public agencies. Therefore, a case study was developed on the Illinois water rights laws, their implications for planning, and the need to use a total system approach to water resource planning to prevent a massive chaotic situation. Many of the problems created in Illinois because of the lack of a coordinated approach to water rights laws and planning were identified, and suggestions were made to alleviate the situation. While the article relates to a specific environment and a particular set of laws, it raises questions which will be pertinent to water resource planners in many other locations.     

A Multi‐Supplier Sourcing Problem with a Preference Ordering of Suppliers

We study a sourcing problem faced by a firm that seeks to procure a product or a component from a pool of alternative suppliers. The firm has a preference ordering of the suppliers based on factors such as their past performance, quality, service, geographical location, and financial strength, which are commonly included in a supplier scorecard system. Thus, the firm first uses available inventory from supplier 1, if any, then supplier 2, if any, and so on. The suppliers differ in costs and prices. The buyer firm seeks to determine which suppliers to purchase from and in what quantities to maximize its total expected profit subject to the preference ordering constraint. We present the optimal solution to this problem, and show that it has a portfolio structure. It consists of a sub‐set of suppliers that are ordered by their underage and overage costs. This portfolio achieves a substantial profit gain compared to sourcing from a unique supplier. We present an efficient algorithm to compute the optimal solution. Our model applies to component sourcing problems in manufacturing, merchandizing problems in retailing, and capacity reservation problems in services.     

On single machine scheduling with resource constraint

The single machine scheduling with resource constraint is a nonlinear combinatorial optimization problem in cloud computing applications. Given a set of jobs and certain resource, the problem is to find a permutation of jobs and a distribution of resource to optimize certain objective function. The processing time of each job is a nonlinear function with respect to the resource assigned to it. In this paper, we propose a naive algorithm and study a subproblem in the algorithm that suppose the permutation of jobs is also given, how to find a resource distribution to minimize the total weighted flow time. We found a polynomial-time optimal solution for a special case and an approximation solution in general case.     

A visual planning solution to streamline the processes of hybrid cross-dockings

Cross-docking is a logistic strategy widely adopted both in manufacturing and distribution contexts. Despite the huge number of researches on this topic, most of them remain rather theoretical as they do not pay enough attention to operational aspects and daily functioning patterns of cross-dockings. This article aims at introducing a new focus for cross-docking research by proposing a visual planning solution to manage daily operation of a manufacturing cross-docking. By avoiding complex optimization algorithms and by adopting concepts belonging to the lean management theory, the article shows the potential of visual planning techniques to improve performance of cross-dockings. Starting from a specific industrial context, the shipping warehouse of an Italian company of the oil andand gas sector, a visual management methodology has been proposed to support the operation of cross-dockings. Although developed in a particular context, the proposed methodology and its underlying principles are to be considered general and potentially applicable to a wide range of cross-dockings. The methodology fully exploits an analytical tool, namely, the Safety Margin coefficientthat could be used for capacity planning purposes and to evaluate quantitatively the system performance at a given time instant.     

More skills of the change master

What are the skills of the change master? How can you become better prepared to deal with the change and ambiguity that has become the trademark of the health care industry? From shifting focus, to being able to act in uncertainty, to having a capacity for paradox, here are nine skills to help you deal with change effectively. These are not easy skills to acquire if they are not a natural part of your tool kit already. You can't pick them up in a few hours at a conference, or by reading a few books. It calls for a long-term, passionate commitment to becoming a learning organization, and a willingness on the part of everyone in management to follow that path even when it gets uncomfortable, difficult, and surprising.     

Modeling Growth and Reduction of Microorganisms in Foods as Functions of Temperature and Time

Food safety objectives (FSOs) are established in order to minimize the risk of foodborne illnesses to consumers, but these have not yet been incorporated into regulatory policy. An FSO states the maximum frequency and/or concentration of a microbiological hazard in a food at the time of consumption that provides an acceptable level of protection to the public and leads to a performance criterion for industry. However, in order to be implemented as a regulation, this criterion has to be achievable by the affected industry. In order to determine an FSO, the steps to produce and store that food need to be known, especially where they have an impact on contamination, growth, and destruction. This article uses existing models for growth of Listeria monocytogenes in conjunction with calculations of FSOs to approximate the outcome of more than one introduction of the foodborne organism throughout the food-processing path from the farm to the consumer. Most models for the growth and reduction of foodborne illnesses are logarithmic in nature, which fits the nature of the growth of microorganisms, spanning many orders of magnitude. However, these logarithmic models are normally limited to a single introduction step and a single reduction step. The model presented as part of this research addresses more than one introduction of food contamination, each of which can be separated by a substantial amount of time. The advantage of treating the problem this way is the accommodation of multiple introductions of foodborne pathogens over a range of time durations and conditions.     

Significance of the Dermal Route of Exposure to Risk Assessment

The skin is a route of exposure that needs to be considered when conducting a risk assessment. It is necessary to identify the potential for dermal penetration by a chemical as well as to determine the overall importance of the dermal route of exposure as compared with inhalation or oral routes of exposure. The physical state of the chemical, vapor or liquid, the concentration, neat or dilute, and the vehicle, lipid or aqueous, is also important. Dermal risk is related to the product of the amounts of penetration and toxicity. Toxicity involves local effects on the skin itself and the potential for systemic effects. Dermal penetration is described in large part by the permeability constant. When permeability constants are not known, partition coefficients can be used to estimate a chemical's potential to permeate the skin. With these concepts in mind, a tiered approach is proposed for dermal risk assessment. A key first step is the determination of a skin-to-air or skin-to-medium partition coefficient to estimate a potential for dermal absorption. Building a physiologically-based pharmacokinetic (PBPK) model is another step in the tiered approach and is useful prior to classical in vivo toxicity tests. A PBPK model can be used to determine a permeability constant for a chemical as well as to show the distribution of the chemical systemically. A detailed understanding of species differences in the structure and function of the skin and how they relate to differences in penetration rates is necessary in order to extrapolate animal data from PBPK models to the human. A study is in progress to examine anatomical differences for four species.     

Measuring servitization progress and outcome: the case of ‘advanced services’

The purpose of this paper is to establish a framework for assessing the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’ – a complex bundling of products and services, whereby manufacturers offer capabilities and outcomes instead of products alone. ‘Advanced services’ represent the most complex offering in the current servitization trend amongst manufacturers. However, current performance measures lack the breadth and focus to assess progress or outcomes, and so support research and practice of organisational transformation efforts required. To address this gap the paper investigates how a manufacturer’s efforts to become an ‘advanced services’ provider can be comprehensively measured, and develops a framework for assessing the transformation journey towards becoming an ‘advanced services’ provider. The research method is based on (1) a systematic literature review process to create a comprehensive set of service-related performance measures that are available to assess a manufacturer’s servitization efforts, followed by (2) an engagement with an expert panel to synthesise the identified measures and create a set of ‘advanced services’ performance measures. The proposed framework is presented as a scorecard that can be used in practice to assess the progress and outcome of a manufacturer’s transformation towards becoming a provider of ‘advanced services’.     

REDUTEX: a hybrid push–pull production system approach for reliable delivery time in knitting SMEs

The textile sector is composed of small and medium enterprises (SMEs) worldwide. Nowadays there is a shortage of technological knowledge in SMEs. Lead time is a critical indicator in any productive company organisation. The aim of this research was to provide an approach, called REDUTEX, based on theoretical concepts of lean and synchronous manufacturing in order to help to understand the behaviour of SMEs and to improve the manufacturing process by reducing the customer lead times. The integration of these philosophies is the basis of REDUTEX; a hybrid push–pull production system approach to knitting SMEs. With this approach, it is possible to obtain a process reliability when the restrictive resource capacity (RRC) is identified, optimised and protected. By synchronising all activities to the rhythm of RRC, through a continuous flow, it is possible to obtain high-impact results through a dual automated system and product quality, through a visual control. REDUTEX uses a push system from the RRC to the location of the supermarket, where accumulated inventory may be distributed in the internal assembly department and external family workshops, making a pull system. Subsequent re-assembly processes use a push system until the end of the product. The stages of REDUTEX are explicitly described and applied to real data, so that the staff of SMEs can easily understand the behaviour of the process and implement it. One of the advantages of REDUTEX is that it does not need highly trained staff. The research methodology was conducted as a case of study in twelve SMEs and validated and implemented in three textile companies of the southern area of the state of Guanajuato in Mexico, obtaining reliable delivery times and very promising results.     

Supplier Selection for Framework Agreements in Humanitarian Relief

In this study, we consider the supplier selection problem of a relief organization that wants to establish framework agreements (FAs) with a number of suppliers to ensure quick and cost‐effective procurement of relief supplies in responding to sudden‐onset disasters. Motivated by the FAs in relief practice, we focus on a quantity flexibility contract in which the relief organization commits to purchase a minimum total quantity from each framework supplier over a fixed agreement horizon, and, in return, the suppliers reserve capacity for the organization and promise to deliver items according to pre‐specified agreement terms. Due to the uncertainties in demand locations and amounts, it may be challenging for relief organizations to assess candidate suppliers and the offered agreement terms. We use a scenario‐based approach to represent demand uncertainty and develop a stochastic programming model that selects framework suppliers to minimize expected procurement and agreement costs while meeting service requirements. We perform numerical experiments to understand the implications of agreement terms in different settings. The results show that supplier selection decisions and costs are generally more sensitive to the changes in agreement terms in settings with high‐impact disasters. Finally, we illustrate the applicability of our model on a case study.     

Analyzing BSE Transmission to Quantify Regional Risk

As a result of consumer fears and political concerns related to BSE as a risk to human health, a need has arisen recently for more sensitive methods to detect BSE and more accurate methods to determine BSE incidence. As a part of the development of such methods, it is important to be able to identify groups of animals with above-average BSE risk. One of the well-known risk factors for BSE is age, as very young animals do not develop the disease, and very old animals are less likely to develop the disease. Here, we analyze which factors have a strong influence on the age distribution of BSE in a population. Building on that, we develop a simple set of calculation rules for classifying the BSE risk in a given cattle population. Required inputs are data on imports and on the BSE control measures in place over the last 10 or 20 years.     

Cyber Security Risk Management: Public Policy Implications of Correlated Risk,Imperfect Ability to Prove Loss,and Observability of Self‐Protection

The correlated nature of security breach risks, the imperfect ability to prove loss from a breach to an insurer, and the inability of insurers and external agents to observe firms’ self‐protection efforts have posed significant challenges to cyber security risk management. Our analysis finds that a firm invests less than the social optimal levels in self‐protection and in insurance when risks are correlated and the ability to prove loss is imperfect. We find that the appropriate social intervention policy to induce a firm to invest at socially optimal levels depends on whether insurers can verify a firm's self‐protection levels. If self‐protection of a firm is observable to an insurer so that it can design a contract that is contingent on the self‐protection level, then self‐protection and insurance behave as complements. In this case, a social planner can induce a firm to choose the socially optimal self‐protection and insurance levels by offering a subsidy on self‐protection. We also find that providing a subsidy on insurance does not provide a similar inducement to a firm. If self‐protection of a firm is not observable to an insurer, then self‐protection and insurance behave as substitutes. In this case, a social planner should tax the insurance premium to achieve socially optimal results. The results of our analysis hold regardless of whether the insurance market is perfectly competitive or not, implying that solely reforming the currently imperfect insurance market is insufficient to achieve the efficient outcome in cyber security risk management.     

Non-significant,self-validated part identification numbers

The numbering and identification of parts within a manufacturing organization is of immense importance, for it serves as a major means of communicating information throughout the organization. The oldest, and still most prominent method of part identification is the use of meaningful, alphanumeric part numbers. With the transition to computer-assisted manufacturing systems, however, many of the weaknesses of this type of system have come to light. A newer approach to part numbering, the use of all-numeric, non-significant part numbers as a vehicle for identifying parts and accessing the required information about each, may be a major contributor to improved communications in the computer age. This paper explores both approaches to part identification, addressing the advantages and drawbacks of each. It is concluded that the use of non-significant numbering is indeed the best approach to a flexible, simple, and standardized identification system, allowing access to all pertinent part information without incorporating that information into the part number. Two case studies, one of a leading compressor manufacturer, and the other a producer of greeting cards, are presented, demonstrating the feasibility of a conversion from significant to non-significant systems and the benefits obtainable. The problem of reducing data entry errors and maintaining data integrity with non-significant part numbers is analyzed and a proposed algorithm presented. Finally, routines are demonstrated for both generating and then vetting and validating non-significant numbers.     

A structured methodology to implement judiciously the right JIT tactics

In order to enhance the competitiveness and efficiency of manufacturing operations, many companies arc looking at implementing key strategic technologies. Two of the most predominant programs are ‘just-in-time’ and ‘synchronous organizations’. However, their impacts on improving quality and reducing time-to-market have been mixed. It is not very clear why, in some cases, results are poor, when in a similar situation, programmes have proved to work well. There are conflicting reasons reported for such a discrepancy. Some have argued that during J IT implementation either a right mix of tactics was not selected at the outset or the process was not carefully monitored to see whether a mid-course correction or change in tactics was necessary. In order to (a) protect the manufacturing and strategic teams from making the same/similar mistakes and (b) sustain a series of successful activity throughout during the strategic implementation cycle, this paper outlines a structured methodology. The method utilizes a matrix-based procedure to dynamically (over time) measure the effectiveness of a line of JIT tactics against the organization's principles and objectives. The operating procedure suggests first (a) using a method for monitoring the changing conditions of market and business and then (b) using the metrics to guide the management with a new line of tactics that might have better impact on the newly aligned company goals. In an effort to help managers and engineers decide on a proper line of tactics to implement JIT, a line of JIT quality matrices (JQM) is developed. JQM provides a framework to guide group managers to ‘plan, pick and choose’ a set of effective JIT techniques. An approach similar to quality function deployment (QFD) is used to generate the JIT house and their corresponding JQM matrices. With the JQM-based structured methodology, managers can design the best line of JIT strategy blended with JIT theory and adapted to the manufacturing environments in which it is expected to operate.     

The Newsvendor Problem and Price‐Only Contract When Bankruptcy Costs Exist

We study a supply chain of a supplier selling via a wholesale price contract to a financially constrained retailer who faces stochastic demand. The retailer might need to borrow money from a bank to execute his order. The bank offers a fairly priced loan for relevant risks. Failure of loan repayment leads to a costly bankruptcy (fixed administrative costs, costs proportional to sales, and a depressed collateral value). We identify the retailer's optimal order quantity as a function of the wholesale price and his total wealth (working capital and collateral). The analysis of the supplier's optimal wholesale price problem as a Stackelberg game, with the supplier the leader and the retailer the follower, leads to unique equilibrium solutions in wholesale price and order quantity, with the equilibrium order quantity smaller than the traditional newsvendor one. Furthermore, in the presence of the retailer's bankruptcy risks, increases in the retailer's wealth lead to increased supplier's wholesale prices, but without the retailer's bankruptcy risks the supplier's wholesale prices stay the same or decrease in retailer's wealth.     

Integrated planning of inbound and outbound logistics with a Rich Vehicle Routing Problem with backhauls

This paper addresses the integration of the planning decisions concerning inbound logistics in an industrial setting (from the suppliers to the mill) and outbound logistics (from the mill to customers). The goal is to find the minimum cost routing plan, which includes the cost-effective outbound and inbound daily routes (OIRs), consisting of a sequence of deliveries of customer orders, pickup of a full truck-load at a supplier, and its delivery to the mill. This study distinguishes between three planning strategies: opportunistic backhauling planning (OBP), integrated inbound and outbound planning (IIOP) and decoupled planning (DIOP), the latter being the commonly used, particularly in the case of the wood-based panel industry under study. From the point of view of process integration, OBP can be considered as an intermediate stage from DIOP to IIOP. The problem is modelled as a Vehicle Routing Problem with Backhauls, enriched with case-specific rules for visiting the backhaul, split deliveries to customers and the use of a heterogeneous fleet. A new fix-and-optimise matheuristic is proposed for this problem, seeking to obtain good quality solutions within a reasonable computational time. The results from its application to the wood-based panel industry in Portugal show that IIOP can help to reduce total costs in about 2.7%, when compared with DIOP, due to better use of the delivery truck and a reduction of the number of dedicated inbound routes. Regarding OBP, fostering the use of OIRs does not necessarily lead to better routing plans than DIOP, as it depends upon a favourable geographical configuration of the set of customers to be visited in a day, specifically, the relative distance between a linehaul that can be visited last in a route, a neighboring backhaul, and a mill. The paper further provides valuable managerial insights on how the routing plan is impacted by the values of business-related model parameters which are set by the planner with some degree of uncertainty. Results suggest that increasing the maximum length of the route will likely have the largest impact in reducing transportation costs. Moreover, increasing the value of a reward paid for visiting a backhaul can foster the percentage of OIR in the optimal routing plan.     

Price and Service Competition in an Outsourced Supply Chain

We consider a buyer who outsources the manufacturing of a product to multiple symmetric make‐to‐stock suppliers who compete on price and service (fill rate). The buyer allocates demand to the suppliers using a score function with an exponential form, which specifies the relative importance of price vs. service, in order to minimize his costs, while the suppliers choose their prices and fill rates to maximize their profits. For the case of dual‐sourcing, we characterize the optimal parameter of the exponential score function, considering the impact of the buyer's decisions on the suppliers, and considering how the suppliers compete against each other to earn a portion of the buyer's demand. We prove the existence of a unique equilibrium and characterize the equilibrium behavior of the system. We then consider a general number of suppliers and show that the equilibrium prices and fill rates, and the buyer's cost, are increasing in the number of suppliers. We compare these results to a model of single‐sourcing, in which the buyer is the Stackelberg leader and extracts all profits from the supplier. We find that the buyer always prefers single‐sourcing to multisourcing. Finally, we study a centralized system and use the results to develop a coordinating contract for the decentralized system.