OEM product design in a price competition with remanufactured product

An original equipment manufacturer (OEM) produces new products and often faces a dilemma when determining the level of interchangeability in its product design. The interchangeability is considered as a degree to which the product can be disassembled without force, and thus an increasing degree of interchangeability would decrease the OEM's production cost, but it would also lower a remanufacturer's cost in cannibalizing used items. Decreasing the level of interchangeability to deter the remanufacturer, on the other hand, would simultaneously increase the production costs of the OEM. We thus formulate a two-period supply chain model consisting of two chain members, an OEM and a remanufacturer, to investigate the product design decision of the OEM and both chain members' competitive pricing strategies. We then characterize the equilibrium decisions and profits with regard to costs and consumers' preference for the remanufactured product. We also evaluate a strategic game in which the OEM chooses the degree of interchangeability, and the remanufacturer determines its collection strategy. We find that the product-design strategy is effective for the OEM in competing with the remanufacturer, but it is not necessarily harmful to the remanufacturer.     

Impact of product proliferation on the reverse supply chain

Product variety is one of the most important advantages in highly competitive markets. However, excessive product proliferation's reducing the profit margin has caused increased focus on developing a management method for maximal profit. In a closed-loop supply chain, product proliferation affects the reverse supply chain as well as the forward supply chain. Although increasing the number of product types can better satisfy diverse customer needs, complexity in the product recycling, remanufacturing, and resale processes may erode a firm's overall profits. In this study, we develop a mathematical model for analyzing a capacitated reverse supply chain consisting of a single manufacturer and multiple retailers. We reveal closed-form solutions for the optimal batch size and maximal profit, and discuss managerial insights into how the number of products and other factors can affect both batch size and profit. Finally, we investigate the relationship between product proliferation and the choice of logistics strategy.     

Integrated scheduling and inventory management of an oil products distribution system

The oil supply chain is facing new challenges due to emerging issues such as new alternative energy sources, oil sources scarcity, and price variability with high impact on demand and production and profit margins reduction. Additionally, the existence of large, complex and world wide spread businesses implies a complex system to be managed where distribution can be seen as one of the key areas that needs to be efficiently and effectively managed. Different types of distribution modes characterize the oil supply chain where the pipeline mode is one of the most complex to operate when having multiproduct characteristics. This paper addresses the planning of a generic oil derivatives transportation system characterized by a multiproduct pipeline that connects a single refinery to a storage tank farm. Two alternative mixed integer linear programming models (MILP) that aim to attain a set of planning objectives such as fulfilling costumers’ demands (which is mandatory) while minimizing the medium flow rate are developed. Additionally, final inventory levels are avoided to be excessively low. A real world scenario of a Portuguese company is used to validate and compare the two alternative MILP models developed in this paper.     

Supplier integration and company performance: A configurational view

Supplier integration is considered a key managerial strategy for improving buyer performance. This study adopts a configurational approach to supplier integration, based on the interaction and complementarity between supply chain management practices. In this perspective, this study explores the impact of supplier integration and measures aimed at creating a fast supply network structure on buyer performance. This research also attempts to ascertain whether these practices can exert a synergic effect. After examining data from a sample of 186 manufacturing plants, we can conclude that while taken singly supplier integration and fast supply network structure practices have a markedly positive effect on the performance goals considered (i.e., efficiency, schedule attainment and flexibility); in addition, they interact to produce an additional synergic effect on efficiency and schedule attainment. The analyses also reveal that investing in FSNS or SI initiatives alone can be risky. On one hand, when companies fail to make any effort to structure their supply network in order to achieve fast lead times, the impact of supplier integration on efficiency and schedule attainment may be hindered and, in extreme cases, supplier integration might even have no impact at all. On the other hand, investing only in fast supply network structure initiatives, without striving to achieve an adequate level of supplier integration might well be useless: indeed, even detrimental to any improvement in performance. These findings provide useful guidelines for managers who must decide how to combine supplier integration and fast supply network structure initiatives in order to improve or maximize performance.     

质量与价格双重竞争情景下的供应链协调策略分析

研究了由两个供应商和一个制造商构成的供应链系统中,在质量竞争和价格竞争同时作用下,供应链成员的协调运作策略。分析了供应链集中决策、供应商合作、供应商不合作以及混合情景下供应链成员的博弈均衡,并进一步分别讨论了价格竞争和质量竞争的激烈程度对不同情景供应链均衡解的影响。研究表明,供应商合作有助于提升供应商的质量努力程度,但会导致供应链整体利润的下降;质量竞争越激烈,在多数情景中供应商的质量努力程度就越高,这在供应商合作的情景中尤其明显,但价格竞争的激烈程度对供应商努力程度的影响较为有限,在供应商合作的情景中甚至可以忽略。     

RFID‐Enabled Visibility and Retail Inventory Record Inaccuracy: Experiments in the Field

Accurate inventory records are key to effective store execution, affecting forecasting, ordering, and replenishment. Prior empirical research, however, shows that retailer inventory records are inherently inaccurate. Radio Frequency Identification (RFID) enables visibility into the movement of inventories in the supply chain. Using two different field experiments, the current research investigates the effectiveness of this visibility in reducing retail store inventory record inaccuracy (IRI). Study 1 used an interrupted time‐series design and involved daily physical counts of all products in one category in 13 stores (8 treatments and 5 controls) of a major global retailer over 23 weeks. Results indicate a significant decrease in IRI of approximately 26% due to RFID‐enabled visibility. Using an untreated control group design with pre‐test and post‐test, Study 2 expands the number of categories to five and the number of stores to 62 (31 treatment and 31 control stores). Results show that the effectiveness of RFID in reducing IRI varies by category (ranging from no statistically significant improvement to 81%). Results also suggest that RFID ameliorates the effects of known determinants of IRI and provide the key insight that the technology is most effective for product categories characterized by these determinants.     

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.     

A pro-active and collaborative approach to reverse logistics—a case study

Reverse logistics is considered to be the key for re-manufacturing and sustainable development. It has gained increasing attention in the last decade and has been a new frontier of strategic management. One of the driving forces for firms to adopt the reverse logistics practice is cost saving from reverse logistics activities. Another motivation to put reverse logistics forward is probably due to environmental impacts on non-returnable materials. Reverse logistics, however, may require cooperation of more than one company and hence it is generally poorly managed due to self-interest of different companies. Therefore, a pro-active and collaborative approach to reverse logistics is demanded. This paper reports a case study of using returnable packaging materials between a manufacturer and an original equipment manufacturer (OEM) supplier. A cross-company team was established to pursue the goal of the reverse logistics project. Tangible and intangible benefits of reverse logistics from this case study are presented in this paper.     

The benefits of a cross-docking delivery strategy: a supply chain collaboration approach

In this study, two models are developed to co-ordinate both production and distribution in order to reduce the relevant costs in a supply chain. According to the functions of the distribution centre, there is a distinction between an inventory co-ordination point and an inventory storage point. The former is a cross-docking strategy, and the latter is a traditional warehousing strategy. The manufacturer has distinct production processes when co-operating with the distribution centre. Case study analysis is used to illustrate the models developed, in which the following conclusions can be obtained: the cross-docking distribution strategy will result in tremendous savings in the total system cost for the supply chain. This study makes two important contributions to the production, and logistics literature. First, the range of applications was extended by studying a new combinatorial problem that incorporates cross-docking in a supply chain environment. Second, computational performance with cross docking was evaluated. The benefit delivery policy for a distribution centre was found by means of integrating manufacturer production planning and a distribution centre delivery policy.     

Quantifying the effectiveness of VMI and integrated inventory management in a supply chain with uncertain lead-times and uncertain demands

This article considers the inventory management problem in a supply chain with uncertain replenishment lead-times and uncertain demands. The optimal integrated inventory management (IIM) policy is developed using stochastic dynamic programming theory. The IIM policy is contrasted with two pull-type vendor-managed inventory policies (VMI-1 and VMI-2) and a traditional retailer-managed inventory policy (RMI). Computational results show that in such stochastic supply chains, IIM performs about 23, 15, and 3% better than the optimised RMI, VMI-1 and VMI-2 policies, respectively, while two VMI policies are about 8 and 20% better than the best RMI. The basestock-based VMI-2 is a very good form of VMI. The ANOVA analysis reveals that the replenishment lead-times have the largest effect on the relative performance between IIM and other policies. Numerical examples demonstrated that the IIM policy has good structural properties and can be characterised by a set of switching curves.