The Effect of Socialization Mechanisms and Performance Measurement on Supplier Integration in New Product Development

This article examines the effect of socialization mechanisms and supplier performance measurement on the level of supplier integration in new product development and subsequent firm performance outcomes. Prior research has found socialization mechanisms and performance measures to be effective in managing supplier relationships, though research examining their impact within a product development context has been limited. Socialization mechanisms, such as supplier conferences and on‐site visits, help establish communication and information‐sharing routines necessary to achieve supplier integration in the product development process. Using performance measures to evaluate a supplier helps focus managerial attention on areas such as innovation and communication that are important to integration success. A structural equation model, using a sample of 142 manufacturing firms based in the United Kingdom, indicates that the level of supplier integration in new product development is positively influenced by socialization mechanisms and innovation‐focused measures of supplier performance, but not significantly associated with the use of communication measures. In turn, increased levels of supplier integration led to improvements in both collaboration outcomes and business performance. Socialization mechanisms were also found to have a direct effect on collaboration outcomes achieved by the firm. Managerial implications and future research directions are discussed.     

Competitive and Collaborative Quality and Warranty Management in Supply Chains

Product quality and product warranty coverage are two important and closely related operational decisions. A longer warranty protection period can boost sales, but it may also result in dramatically increased warranty cost, if product quality is poor. To investigate how these two decisions interact with each other and influence supply chain performance, we develop a single‐period model with a supplier that provides a product to an original equipment manufacturer, which in turn sells it to customers. Customer demand is random and affected by the length of the product warranty period. Warranty costs are incurred by both the supplier and the manufacturer. We analyze two different scenarios based on which party sets the warranty period: manufacturer warranty and supplier warranty. Product quality is controlled by the supplier, and the manufacturer determines the ordering quantity. We analyze these decentralized systems and provide the structural properties of the equilibrium strategies. We also compare the results of centralized and decentralized systems and identify the conditions under which one system provides a longer warranty and better product quality than the other. Our numerical study further shows that, in decentralized settings, when the warranty period is determined by the firm sharing the larger proportion of total warranty costs, the supply chain can achieve greater system‐wide profit. Both parties can therefore benefit from properly delegating the warranty decision and sharing the resulting additional profit. We further design a supplier‐development and buy‐back contract for coordinating decentralized supply chains. Several extensions are also discussed.     

Manufacturing Practices and Strategy Integration: Effects on Cost Efficiency,Flexibility, and Market‐Based Performance

Manufacturing plant managers have sought performance improvements through implementing best practices discussed in World Class Manufacturing literature. However, our collective understanding of linkages between practices and performance remains incomplete. This study seeks a more complete theory, advancing the idea that strategy integration and enhanced manufacturing capabilities such as cost efficiency and flexibility serve as intermediaries by which practices affect performance. Hypotheses related to this thesis are tested using data from 57 North American manufacturing plants that are past winners and finalists in Industry Week's“America's Best” competition ( Drickhamer, 2001 ). The results suggest that strategy integration plays a strong, central role in the creation of manufacturing cost efficiency and new product flexibility capabilities. Furthermore, strategy integration moderates the influences of product‐process development, supplier relationship management, workforce development, just‐in‐time flow, and process quality management practices on certain manufacturing capabilities. In turn, manufacturing cost efficiency and new product flexibility capabilities mediate the influence of strategy integration on market‐based performance. These findings have implications for practice and for future research.     

An Information‐Processing Approach for Evaluating In‐Store Retail Operational Design Strategies

We develop a model to evaluate retail store operational design strategies using an information‐processing perspective of organizational design. We propose that three model constructs pertaining to in‐store shopper task uncertainty—the product mix complexity, the service production complexity, and the product mix changeover—create shopper encounter information requirements (IR). These requirements can be met using specific retail service operational design choices for managing shopper encounters, namely, designing layouts for self‐service (SS) and providing employees with task empowerment (TE). The model is then operationalized using a two‐stage approach to develop new multi‐item, measurement scales. The psychometric properties and predictive validity of the scales and model are then confirmed by using structural equation modeling with survey data from 175 merchandise retail store managers. We find that our model can be generically applied across the retail industry to understand how shopper encounter IR motivate retailer store design choices and can be used to determine whether to design stores for SS or to provide store employees with TE. We then evaluate the efficacy of the studied store design choices on customer delivery satisfaction, and offer some suggestions for future research.     

Strategic Grading in the Product Acquisition Process of a Reverse Supply Chain

Most recommerce providers have moved to a quality‐dependent process for the acquisition of used products. They acquire the products via websites at which product holders submit upfront quality statements and receive quality‐dependent acquisition prices for their used devices. Motivated by this development of reverse logistics practice, the aim of this study is to analyze the product assessment process of a recommerce provider in detail. To this end, we first propose a sequential bargaining model with complete information which captures the individual behavior of the recommerce provider and the product holder. We determine the optimal strategies of the product holder and the recommerce provider in this game. We find that the resulting strategies lead to an efficient allocation, although the recommerce provider can absorb most of the bargaining potential due to his last mover advantage. In a second step, we relax the assumption of complete information and include uncertainty about the product holder's valuation of the product. We show the trade‐off underlying the recommerce provider's optimal counteroffer decision and analyze the optimal strategy, using a logistic regression approach on a real‐life dataset of nearly 6,000 product submissions. The results reveal a significant improvement potential, compared to the currently applied strategy.     

Sourcing Strategy,Supplier Relationships and Firm Performance: An Empirical Investigation of UK Organizations

This article conceptualizes and empirically examines buyer–supplier relationships in respect of supply sourcing strategies, relationship characteristics and firm performance. Two sourcing strategies available to organizations are examined, critical and leverage, which in turn, influence the approach to managing the supplier relationship (arms‐length or collaborative). We argue that different relationship approaches are appropriate to achieving different performance outcomes. A structural equation model, using a sample of 142 manufacturing firms based in the United Kingdom, is used to test this hypothesized model. The results indicate that a critical sourcing strategy requires collaborative supplier relationships in order to achieve higher relationship and business outcomes, while leverage sourcing strategies have a direct impact on these same performance outcomes. In addition, a leverage strategy was associated with increased levels of supplier power, though this power was found not to have a significant effect on performance. Our study provides support for the importance of aligning sourcing strategies to particular supplier relationship approaches in order to improve firm performance. Managerial implications of these findings and future directions for research are then offered.     

A Structural Analysis of the Effectiveness of Buying Firms' Strategies to Improve Supplier Performance

Many manufacturing firms have increased the amount of component parts and services they outsource, while refocusing on their core capabilities. Outsourcing parts and services to independent, external suppliers means that suppliers' performance is increasingly critical to the long‐term success of these buying firms. Buying firms are increasingly using disparate supplier development strategies to improve supplier performance including supplier assessment, providing incentives for improved performance, instigating competition among suppliers, and direct involvement of the buying firm's personnel with suppliers through activities such as training of suppliers' personnel. Using resource‐based theory, internalization theory, and structural equation modeling, we examine the impact of these supplier development strategies on performance. We conclude that direct involvement activities, where the buying firm internalizes a significant amount of the supplier development effort, play a critical role in performance improvement.     

Supplier Opportunism in Buyer–Supplier New Product Development: A China‐U.S. Study of Antecedents,Consequences, and Cultural/Institutional Contexts

Collaborating with a supplier in a buying firm's new product development (NPD) project is commonly advocated and adopted, but does not always improve project performance. Some pre‐existing collaboration contexts, such as buyer–supplier NPD projects, are especially exposed to supplier opportunism due to the uncertain nature of the collaboration process. Adopting agency theory and transaction cost theory perspectives, we examine: (i) contextual antecedents and project consequences of supplier opportunism and (ii) if these causal influences vary in different cultural and institutional contexts. Using a survey sample of 214 United States (U.S.) and 212 Chinese buying firms’ responses about buyer–supplier NPD projects, we find that supplier opportunism is significantly influenced by the task and relational contexts. We also show that supplier opportunism damages both design quality and efficiency, two aspects of project performance. When comparing U.S. to China, we find that task and relational contexts have a greater impact on supplier opportunism in the U.S., but design efficiency is less hurt by supplier opportunism there. Finally, we show challenges of preventing supplier opportunism in certain NPD collaboration contexts, and offer solutions for overcoming these challenges.     

The effect of supply chain integration, modular production, and cultural distance on new product development: A dynamic capabilities approach

Little research has examined how international firms' operations strategies affect dynamic capability creation or how cultural distance affects operations management. This study addresses these gaps by bridging the work on dynamic capabilities, two operations management techniques (product modularization and supplier integration) and cultural distance. Using a sample of 111 Brazilian automobile suppliers, the study finds that new product development is marginally increased by product modularization but decreased by supplier integration. Cultural distance negatively moderated these relationships. This research extends the dynamic capabilities literature and indicates that operations management strategy is an important part of the dynamic capability formation process.     

Does a Supplier's Operational Competence Translate into Financial Performance? An Empirical Analysis of Supplier–Customer Relationships

We conduct an empirical investigation of how a supplier's operational competence, as reflected by outcomes in the areas of quality, cost, delivery, flexibility, and new product development, translates into financial gains from a key customer. In contrast to previous research directed at the firm level, this study focuses on the supplier–customer relationship level. Using survey data from 158 suppliers in the manufacturing industry, we perform structural equation modeling to map out the paths from operational competence to financial performance—via dependencies and cooperative behaviors between suppliers and their customers. This study is the first scholarly attempt to examine the link between suppliers’ operational competencies and financial performance in interorganizational relationships. It is also an early investigation into operational competence as a source of bi‐lateral dependence. Our findings show that the supplier's operational competences increase its customer's dependence by enhancing the value of its products/services. However, the resulting increase in the supplier's power is not leveraged to shape relationship behaviors or capture value from its customer. In contrast, the customer's existing power as a major buyer plays an important role in shaping cooperative behaviors and affecting the supplier's financial performance from the customer relationship.     

质量管理的核心活动与基础活动——重庆制造业的实证研究

质量管理活动的实证测度是国外运营管理领域的重要内容之一,但国内在此领域的研究却相对少见.本文以重庆市制造业企业为样本,通过两阶段问卷调查收集数据,采用探索性因子分析和结构方程的方法,对我国制造业企业质量管理活动的内容进行了实证研究.结果表明,我国制造业企业中的质量管理活动可以归纳为领导支持、员工参与、员工素质、统计控制、产品设计和流程管理等内容.同时,对质量管理活动的划分为基础活动与核心活动提供了实证支持.研究刻画了质量管理活动的运作机理,指出核心活动与基础活动的有机结合将有助于企业质量管理水平的提升.此外,研究还建议在我国企业质量管理实践中应加强对客户和供应商的重视与支持.     

基于微分博弈的供应链质量协调研究

文章以一个制造商和一个供应商所构成的两级供应链为研究对象,应用微分博弈的方法分析了四种不同的质量管理博弈情形下,制造商和供应商的最优质量管理策略、收益和整条供应链的总收益。研究结果表明,当制造商和供应商的收益分配比满足一定条件时,从Nash非合作质量管理博弈情形,到弱激励Stackelberg博弈情形,再到强激励Stackelberg博弈情形,最后到合作质量管理博弈情形,对于制造商、供应商以及整个供应链系统来说都是一种帕累托改进。所以,合作质量管理博弈情形是供应链质量管理所追求的最理想的情形,为了有效促进该情形的实现,文章应用Nash讨价还价模型对该情形下合作双方关于供应链系统的剩余利润分配进行了分析。最后,在对一家电风扇制造商的供应链进行调查来获得仿真数据的基础上,通过算例分析验证了理论推导的结果。     

Early involvement in the design chain—a case study from the computer industry

This work presents a case study of how a design chain, with more than three tiers of organisations (customer, manufacturer, and supplier), can involve its members in the early stages of the design and development process to meet their needs more effectively. A vertical design chain model, consisting of strategy, process and information levels, is adopted to elucidate how a computer company can provide for different customers and use various suppliers to create synergy within the design chain. The results of this study demonstrate that the re-engineering of cross organisation product design flow, product data management software applications and the integration of information from various parties are critical to the early involvement in a vertical design chain. Based on this case study, the proposed early involvement model can shorten the time taken to develop new products and considerably reduce the number of engineering changes for various manufacturers.     

Supply Management Under High Goal Incongruence: An Empirical Examination of Disintermediation in the Aerospace Supply Chain

Aftermarket sales and profits are becoming an increasingly important part of an original equipment manufacturer's (OEM) business model. Because replacement parts often do not require further manufacturing, OEMs act as intermediaries in the aftermarket. As with any intermediary, the OEM must concern itself with suppliers disintermediating its supply chain selling replacement parts directly to the OEM's customers. We frame supply chain disintermediation (SCD) as a principal–agent contracting problem between an OEM buyer and a supplier. Hypotheses relate contract conditions, goal incongruence, supplier capabilities and contract enforcement to SCD. The data are collected from the aerospace industry using a multimethod study, combining an Internet‐based survey with archival data. Causal modeling with structural equation modeling (SEM) shows general support for the hypotheses. Particularly, SCD is positively related to buyer–supplier goal incongruence. The agency model offers insights that differ from previous transaction‐cost‐based models of buyer–supplier relationships. OEM buyers with a lucrative aftermarket should consider aligning goals through incentives rather than relying entirely on economic hostages associated with specific assets.     

Requirement or Promise? An Analysis of the First‐Mover Advantage in Quality Contracting

Quality contracting is critical and challenging due to the many unique issues related to quality. In this study, we analyze the first‐mover right in quality contracting by considering two different strategies for the buyer: the quality requirement strategy (QR) where buyer moves first by posting quality requirement to suppliers and quality promise strategy (QP) where buyer voluntarily gives up the first‐mover right to suppliers to ask them to promise quality. We study which strategy (1) better encourages suppliers' quality improvement efforts and (2) leads to a higher expected profit for the buyer. To analyze the drivers behind the buyer's choice between QR and QP, we start with the basic model where buyer faces only one supplier who has the opportunity to make quality improvements. We then gradually add other business features such as information asymmetry and supplier competition, analyzing how each feature adds/changes the driving forces and how they interact in the buyer's decision between QR and QP. We consider both the case where the wholesale price is fixed (when the buyer has the power to dictate price or price is set by the market) and the case where the wholesale price is included as a variable (when price is part of the negotiation). We find that QP always leads to the first‐best quality efforts from the supplier(s) while QR limits their efforts. However, this does not guarantee higher expected profit for the buyer under QP. We provide insightful guidelines in buyer's choice between QP and QR. This research enriches the limited literature on quality contracting with quality improvement opportunity and asymmetric information.     

The Roles of Supply Chain Intelligence and Adaptability in New Product Launch Success

Many new product introductions continue to be unsuccessful, and while researchers have studied product development processes, relatively few studies directly address new product launch. We do so in the present research and posit that supply chain intelligence, defined as technological and competitive knowledge sourced and integrated from suppliers, customers, and competitors, plays an important role in explaining new product launch success. We further employ the knowledge‐based view to theorize that both supply chain adaptability and product innovation capability act as important mediators of the effects of supply chain intelligence on new product launch success and firm financial performance. While the former capability refers to a firm's ability to quickly adjust its supply chain to react to market and product design changes, the latter refers to the firm's proficiency in developing innovative new products. We test hypothesized relationships among these factors utilizing data collected in a survey of 229 U.S. manufacturing firms. Results point to the central role of supply chain adaptability in capturing the benefits of supplier technological intelligence for enhanced product innovation capability, new product launch success, and firm financial performance. In contrast, product innovation capability serves as the generative means by which customer and competitor intelligence is translated into more successful new product launches, which, in turn, produce superior firm financial performance. Overall, these findings contribute to a better understanding of factors that can explain why certain product launches are more successful than others, and offer practical insights for appropriate investments in the development of related knowledge resources.     

The Effects of Strategic and Structural Supply Chain Orientation on Operational and Customer‐Focused Performance

Supply chain orientation (SCO), or the implementation of a supply chain management philosophy, consists of two distinct, yet interdependent elements, namely strategic SCO and structural SCO. Strategic SCO involves integrating an SCM philosophy into the firm's strategy development, while structural SCO encompasses operational‐level behaviors and actions that reflect such a philosophy. This study extends the research on SCO by developing hypotheses on the contingent effects of strategic SCO and structural SCO on a firm's operational and customer‐focused performance. Drawing on the strategy‐structure‐performance framework, the study proposes that strategic SCO and structural SCO positively affect different dimensions of performance and that structural SCO plays a mediating role in the relationship between strategic SCO and performance. These relationships are tested using primary survey data and archival data from 183 manufacturers in the Midwestern US. Results confirm that strategic SCO is associated with both operational performance and customer‐focused performance, but structural SCO is only related to operational performance. Structural SCO acts as a mediator in linking strategic SCO with operational performance and customer‐focused performance and mediation effects are strengthened at higher levels of environmental dynamism.     

Strategic Sourcing in the Presence of Uncertain Supply and Retail Competition

This study develops an analytical model to evaluate competing retail firms' sourcing strategies in the presence of supply uncertainty. We consider a common supplier that sells its uncertain supply to two downstream retail firms engaging in price competition in a horizontally differentiated product market. The focal firm has a dual‐sourcing option, while the rival firm can only source from the common supplier. We assess the system‐wide effects of supply uncertainty on the focal firm's incentive to pursue the dual‐sourcing strategy. We find that the focal firm's dual‐sourcing strategy can create a win–win situation that leads to increased retail prices and expected profits for both firms. Furthermore, under certain conditions, we show that it is beneficial for the focal firm to strategically source from the common supplier, even if its alternative supplier offers a lower wholesale price. Overall, we identify two types of incentives for adopting the dual‐sourcing strategy: the incentive of mitigating supply risk through supplier diversification and the incentive of strategic sourcing for more effective retail competition.     

An Integrated Framework for Measuring Product Development Performance in High Technology Industries

We present an integrated framework for measuring product development performance. The framework consists of a three stage model for exploring the relationships between metrics used by design, manufacturing, marketing functions, and overall commercial success. Using a cross‐sectional survey of 383 product development professionals working on 38 product development projects in the high‐tech electronic assembled goods manufacturing sector, we provide empirical evidence of the proposed framework. The findings indicate that in the high‐tech manufacturing sector (1) commercial success of new product development projects is primarily determined by market share, (2) gain in market share is primarily driven by lower unit cost and not by technical performance, and (3) reduction in unit cost is primarily driven by the increased speed of new product development and not by the R&D budget. The study failed to identify any significant association between R&D budget and technical performance, and development speed and technical performance.     

A Model for Measuring Supplier Risk: Do Operational Capability Indicators Enhance the Prediction Accuracy of Supplier Risk?

The purpose of this study was to develop a supplier risk assessment model for buyers to estimate supplier risk. It is one of the few empirical studies that considers both operational capability indicators and financial indicators; a standard logit model with five key variables (switching cost, operating profit margin, asset turnover ratio, quality capability and technological capability) was suggested as a practical tool. This model not only enhanced the accuracy of supplier risk assessment, but also served as a core element of a new supply chain management tool, ‘supplier management at risk’. More practically, the model enables purchasing firms to assess supplier risk and take proactive measures against the estimated risk.