Effect of Responsiveness and Process Integration in Supply Chain Coordination

--Anupam Ghosh, Sujoy Das and Aashish Deshpande

It is being increasingly accepted that a primary source of competitive advantage of a firm is a responsive supply chain. Responsiveness of the supply chain or the ability to react to sudden or immediate changes in the marketplace depends on effective coordination of the activities of the chain members and seamless integration of the business processes of the firm. The purpose of this paper is to present an integrative framework relating to chain responsiveness, process integration, supply chain coordination and performance. An illustration from the garment manufacturing industry is presented to understand the role of responsiveness and process integration in supply chain coordination.

© 2014 IUP. All Rights Reserved.

Managing Behavioral Risks in Logistics-Based Networks: A Project Finance Approach

--Henry Schäfer and Sebastian Baumann

Logistic Service Providers (LSPs) are increasingly required to take over the ownership of network-specific inventories to finance related working capital. The paper examines the nature of associated uncertainties, especially behavioral risks, and illustrates the mechanisms of the project financing approach to solve many of the specific challenges of an LSP to manage a network’s working capital. Based on an idealized automotive supply chain network, working capital-related conflicts of interest between members of a supply chain are discussed. Behavioral risks in a network are examined and context factors which moderate the intensity of those risks are identified. It is argued that the principles of project financing allow the design of working capital financing within the supply chain networks. The analysis of network risk structures concludes that behavioral risks associated with working capital makes it difficult to finance network-specific inventories by LSPs. Within network structures, the project financing approach is able to facilitate cooperative behavior between network members and enables the financing of network-specific working capital. The results can be applied to supply chain networks which are affected by opportunistic behavior merely in dynamic industries with structures similar to the automotive industry. The project financing technique, which originates from the field of large infrastructure investments, is adapted to the supply chain context. The contribution provides insights into the benefits and the mechanisms of this financing approach. Industries which often reconfigure their value chains should make use of this approach.

© 2014 IUP. All Rights Reserved.

Development of Proactive Risk-Predictive Model for 4PL Transaction Center Using PLS Regression and Neural Networks

--K M Sharath Kumar, H K Narahari and Nicholas Wright

Fourth-Party Logistics (4PL) transaction center aggregates trading partner competencies to provide comprehensive supply chain solutions. Since the 4PL transaction center deals with multiple category of trading partners, it offers both opportunities and risks. Especially, estimating risk in 4PL network involves collecting information from different combination of subjective and objective parameters which lacks predictive analytics. Hence, little work is carried out in synchronizing different metric scores to predict risk for managing transaction center effectively. In the first phase, risk assessment was carried out using Cormack’s model. By combining individual scaling factors and probability arrived through request for information, risk probability index was estimated. Consequently, supply chain risk was determined considering total financial impact. Subsequently, risk evaluation of all trading partners with respect to high, moderate and low categories was performed utilizing prioritization matrix. In the second phase, predictive model was synthesized using Neural Network (NN) methodology. Moreover, optimal number of predictors was attained through Partial Least Square (PLS) regression. Finally, the NN was evaluated using verification dataset to ensure model adequacy. After achieving significant predictive accuracy, the developed model can be used by the coordinator to estimate risk proactively before conducting cross-segment integration. In addition, the model helps 4PL service provider to reduce supply disruption risks in the distribution network.

© 2014 IUP. All Rights Reserved.

An Empirical Analysis of Power in Retailer-Manufacturer Supply Chain Relationship: A Resource Dependency Perspective

--Sushil Chaurasia

With increased outsourcing of activities, apparel retailers are gaining greater control over strategic activities, which were formerly the remit of manufacturers or which were the source of the manufacturer’s competitive advantage. The study aims to investigate the factors that determine the extent to which manufacturers depend on retailers. Resource dependency theory has been used to prove that in a typical retailer-manufacturer outsourcing relationship in close culture countries like India, manufacturer’s perception of a retailer’s power is derived from the manufacturers’ perception of its dependence on the retailer. The data was collected through in-person interviews through Likert scale-based structured questionnaire from 230 respondents of 128 apparel manufacturer units of India and its respective boundary person representing the apparel retailer. A majority of the channel behavior studies conducted in Western countries have supported the relationship of power of one, based on the dependency of the other. Our research findings also confirm the same. An implication of the research findings is that dependency may be used as a strategy in dealing with channel relationships in Indian marketing channels. Looking at the attractive apparel retail market and the manufacturers’ high product diversity, manufacturers can completely skip passive dependency and engage themselves in active dependency. Also, the retailers cannot exert coercive power sources if the dependency is active.

© 2014 IUP. All Rights Reserved.

Supply Chain Risk Assessment Tools and Techniques in the Automobile Industry: A Survey

--Satyendra Kr. Sharma and Anil Bhat

The importance of managing risk beyond the boundaries of a firm is widely recognized, and the new concept, Supply Chain Risk Management (SCRM) has attracted the attention of practitioners and academicians across the globe. Supply chain risk assessment is a critical step in SCRM. Companies use different tools and techniques for risk assessment in supply chain. The purpose of this paper is to investigate SCRM practices and identify the tools and techniques used by the Indian automobile companies. A survey was carried out to address the above-mentioned research questions. The results showed that SCM managers rely on still checklist, likelihood/impact matrix and scenario analysis. Supply chain risk assessment practices can be improved by using techniques like Failure Mode Effect Analysis (FMEA), simulations and others like HaZop.

© 2014 IUP. All Rights Reserved.