Surgery planning include decisions of which operating rooms (ORs) to open, allocation of surgeries to ORs, sequence and time to start each surgery. The decisions are often made under uncertain surgery durations with limited data that leads to unknown distributional information; furthermore, cost data for criteria such as overtime and surgery delays are often difficult or impossible to estimate in practice. In this paper, we consider a distributionally robust (DR) formulation that recognizes practical limitations on data availability and obviates the need to provide accurate cost parameters for surgery planning. We minimize the cost of opening ORs for completing a set of surgeries, subject to a joint DR chance constraint on OR overtime. We use statistical $phi$-divergence measures to build an ambiguity set of possible distributions of random surgery durations, and derive a branch-and-cut algorithm for optimizing a mixed-integer linear programming reformulation of the DR chance-constrained model formulated based on a finite sample of scenarios. We compute instances generated from real hospital-based surgery data, demonstrate the computational efficacy of our approach, and provide insights for DR surgery planning.
{"title":"Chance-Constrained Surgery Planning Under Conditions of Limited and Ambiguous Data","authors":"Yan Deng, Siqian Shen, B. Denton","doi":"10.2139/ssrn.2432375","DOIUrl":"https://doi.org/10.2139/ssrn.2432375","url":null,"abstract":"Surgery planning include decisions of which operating rooms (ORs) to open, allocation of surgeries to ORs, sequence and time to start each surgery. The decisions are often made under uncertain surgery durations with limited data that leads to unknown distributional information; furthermore, cost data for criteria such as overtime and surgery delays are often difficult or impossible to estimate in practice. In this paper, we consider a distributionally robust (DR) formulation that recognizes practical limitations on data availability and obviates the need to provide accurate cost parameters for surgery planning. We minimize the cost of opening ORs for completing a set of surgeries, subject to a joint DR chance constraint on OR overtime. We use statistical $phi$-divergence measures to build an ambiguity set of possible distributions of random surgery durations, and derive a branch-and-cut algorithm for optimizing a mixed-integer linear programming reformulation of the DR chance-constrained model formulated based on a finite sample of scenarios. We compute instances generated from real hospital-based surgery data, demonstrate the computational efficacy of our approach, and provide insights for DR surgery planning.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"9 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2016-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77465313","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider a dynamic pricing problem in which a seller faces an unknown demand model that can change over time. The amount of change over a time horizon of T periods is measured using a variation metric that allows for a broad spectrum of temporal behavior. Given a finite variation “budget,” we first derive a lower bound on the expected performance gap between any pricing policy and a clairvoyant who knows a priori the temporal evolution of the underlying demand model, and then we design families of near-optimal pricing policies, the revenue performance of which asymptotically matches said lower bound. We also show that the seller can achieve a substantially better revenue performance in demand environments that change in “bursts” than in demand environments that change “smoothly,” among other things quantifying the net effect of the “volatility” in the demand environment on the seller’s revenue performance.
{"title":"Chasing Demand: Learning and Earning in a Changing Environment","authors":"N. B. Keskin, A. Zeevi","doi":"10.2139/ssrn.2389750","DOIUrl":"https://doi.org/10.2139/ssrn.2389750","url":null,"abstract":"We consider a dynamic pricing problem in which a seller faces an unknown demand model that can change over time. The amount of change over a time horizon of T periods is measured using a variation metric that allows for a broad spectrum of temporal behavior. Given a finite variation “budget,” we first derive a lower bound on the expected performance gap between any pricing policy and a clairvoyant who knows a priori the temporal evolution of the underlying demand model, and then we design families of near-optimal pricing policies, the revenue performance of which asymptotically matches said lower bound. We also show that the seller can achieve a substantially better revenue performance in demand environments that change in “bursts” than in demand environments that change “smoothly,” among other things quantifying the net effect of the “volatility” in the demand environment on the seller’s revenue performance.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"28 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2016-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85540521","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-05-01DOI: 10.13189/UJIBM.2016.040203
D. Makhija, P. Chugan
RFID technology is a real time tracking system, which does not require line of sight. The technology is trending in the organizations, due to various benefits that it can reap. Every organization wants to increase its efficiency, i.e., get more output with same or less input. The implementation of RFID technology can be done by integrating it with the ERP of the organization for various practices or applications. The organizations can decide the practice/application they want to adopt according to their requirement. The efficiency of the process is affected by this application. Manufacturing Organizations have wide applications of RFID technology and henceforth this sector is considered in the study. The paper focuses on various RFID practices in manufacturing organizations and its effect on the improvement in the efficiency of the organizations. It is found that implementing RFID either for Inventory Management, Work in Progress Management, Logistics Management, In-Process Logistics Management or Warehouse Management; it will lead to improvement in efficiency of the organization.
{"title":"A Study of Effect on the Efficiency in Manufacturing Organizations: The Application of RFID Technology","authors":"D. Makhija, P. Chugan","doi":"10.13189/UJIBM.2016.040203","DOIUrl":"https://doi.org/10.13189/UJIBM.2016.040203","url":null,"abstract":"RFID technology is a real time tracking system, which does not require line of sight. The technology is trending in the organizations, due to various benefits that it can reap. Every organization wants to increase its efficiency, i.e., get more output with same or less input. The implementation of RFID technology can be done by integrating it with the ERP of the organization for various practices or applications. The organizations can decide the practice/application they want to adopt according to their requirement. The efficiency of the process is affected by this application. Manufacturing Organizations have wide applications of RFID technology and henceforth this sector is considered in the study. The paper focuses on various RFID practices in manufacturing organizations and its effect on the improvement in the efficiency of the organizations. It is found that implementing RFID either for Inventory Management, Work in Progress Management, Logistics Management, In-Process Logistics Management or Warehouse Management; it will lead to improvement in efficiency of the organization.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"44 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2016-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82598813","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is currently no theory that explains the pattern of change in a plant's performance as it implements a lean program. Does it improve at a declining, increasing, or constant rate, or in some other pattern? We use empirical data from the implementation of the Volvo Group's lean program worldwide to develop a grounded theory to explain this pattern. We find that the pattern roughly follows an S-curve shape: as a plant progresses in its implementation of lean production, its operational performance improves slowly first, then grows rapidly, and finally tapers off. The initial stage can be characterized by “exploration”, during which the plant is essentially discovering and experimenting with lean principles, and the later stages by “exploitation”, during which the plant is realizing their benefits. We derive the grounded theory from quantitative internal company data and find additional qualitative support for it from our visits to 45 Volvo plants on 5 continents and 210 interviews with employees in these plants and Volvo headquarters. The S-shape pattern has important implications. Practitioners must assess a plant's maturity in lean implementation and adjust their targets, action plans, and expectations accordingly. Scholars must take the position of the plant on the S-curve into consideration when they analyze the impact of lean programs.
{"title":"The S-Curve Effect of Lean Implementation","authors":"Torbjørn H. Netland, K. Ferdows","doi":"10.1111/POMS.12539","DOIUrl":"https://doi.org/10.1111/POMS.12539","url":null,"abstract":"There is currently no theory that explains the pattern of change in a plant's performance as it implements a lean program. Does it improve at a declining, increasing, or constant rate, or in some other pattern? We use empirical data from the implementation of the Volvo Group's lean program worldwide to develop a grounded theory to explain this pattern. We find that the pattern roughly follows an S-curve shape: as a plant progresses in its implementation of lean production, its operational performance improves slowly first, then grows rapidly, and finally tapers off. The initial stage can be characterized by “exploration”, during which the plant is essentially discovering and experimenting with lean principles, and the later stages by “exploitation”, during which the plant is realizing their benefits. We derive the grounded theory from quantitative internal company data and find additional qualitative support for it from our visits to 45 Volvo plants on 5 continents and 210 interviews with employees in these plants and Volvo headquarters. The S-shape pattern has important implications. Practitioners must assess a plant's maturity in lean implementation and adjust their targets, action plans, and expectations accordingly. Scholars must take the position of the plant on the S-curve into consideration when they analyze the impact of lean programs.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2016-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87398452","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2015-12-12DOI: 10.12660/JOSCMV8N2P52-66
P. Radanliev
Supply chain engineering requires a design that possesses the flexibility of a complex adaptive system, consisting of interlinking architecture, with external dimensions and system germane internal elements. The aim of this paper is to critically analyse the key supply chain concepts and approaches, to assess the fit between the research literature and the practical issues of supply chain architecture, design and engineering. The objective is to develop a methodology for strategy engineering, which could be used by practitioners when integrating supply chain architecture and design. Taxonomic scheme is applied to consider criteria for strategy architecture, hierarchical strategy integration design, strategy engineering, and integration of supply chain as a conceptual system. The results from this paper derived with the findings that the relationship between supply chain architecture, design and engineering is weak, and challenges remain in the process of adapting and aligning operations. This paper derived with a novel approach for addressing these obstacles, through a conceptual framework diagram and a new methodology, based on the taxonomic scheme. The novelty that derives from this paper is an engineering design methodology for integrating supply chain architecture and design, with criteria that enable decomposing and building a green-field (new and non-existent) supply chain as a system. The taxonomic scheme revealed a number of tools and mechanism, which enabled the development of a new methodology for engineering integrated architecture and design. The review derived with improvements to current and existing theories for analysing interdependencies within and between their individual contexts. This issue is addressed with a hierarchical method for network design, applied for building and combining the integration criteria. The resulting methodology is field tested through a case study with the slate mining industry in North Wales. DOI:10.12660/joscmv8n2p52-66 URL: http://dx.doi.org/10.12660/joscmv8n2p52-66
{"title":"Engineering Design Methodology for Green-Field Supply Chain Architectures Taxonomic Scheme","authors":"P. Radanliev","doi":"10.12660/JOSCMV8N2P52-66","DOIUrl":"https://doi.org/10.12660/JOSCMV8N2P52-66","url":null,"abstract":"Supply chain engineering requires a design that possesses the flexibility of a complex adaptive system, consisting of interlinking architecture, with external dimensions and system germane internal elements. The aim of this paper is to critically analyse the key supply chain concepts and approaches, to assess the fit between the research literature and the practical issues of supply chain architecture, design and engineering. The objective is to develop a methodology for strategy engineering, which could be used by practitioners when integrating supply chain architecture and design. Taxonomic scheme is applied to consider criteria for strategy architecture, hierarchical strategy integration design, strategy engineering, and integration of supply chain as a conceptual system. The results from this paper derived with the findings that the relationship between supply chain architecture, design and engineering is weak, and challenges remain in the process of adapting and aligning operations. This paper derived with a novel approach for addressing these obstacles, through a conceptual framework diagram and a new methodology, based on the taxonomic scheme. The novelty that derives from this paper is an engineering design methodology for integrating supply chain architecture and design, with criteria that enable decomposing and building a green-field (new and non-existent) supply chain as a system. The taxonomic scheme revealed a number of tools and mechanism, which enabled the development of a new methodology for engineering integrated architecture and design. The review derived with improvements to current and existing theories for analysing interdependencies within and between their individual contexts. This issue is addressed with a hierarchical method for network design, applied for building and combining the integration criteria. The resulting methodology is field tested through a case study with the slate mining industry in North Wales. DOI:10.12660/joscmv8n2p52-66 URL: http://dx.doi.org/10.12660/joscmv8n2p52-66","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"84 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2015-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81593201","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Buyers have two levers to enhance their supply base performance: fostering supplier competition and inducing suppliers to improve. The competition–improvement relation between the two levers has important implications for supply base design. We study a buyer facing two potential suppliers that can exert cost-reduction efforts, examining the interplay of supplier competition and supplier cost improvement under various information structures (i.e., the supplier effort is observable or unobservable) and commitment capabilities (i.e., the buyer may not commit, or may commit to a full or partial procurement mechanism, before suppliers exert efforts). We find that the two identical suppliers may choose unequal efforts, resulting in an asymmetric equilibrium outcome that enhances the performance of dual sourcing. Moreover, the competition–improvement relation depends on the effort observability. Whereas supplier competition always leads to lower improvement effort when the effort is unobservable, it may induce h...
{"title":"Supplier Competition and Cost Improvement","authors":"Cuihong Li, Zhixi Wan","doi":"10.2139/ssrn.2710343","DOIUrl":"https://doi.org/10.2139/ssrn.2710343","url":null,"abstract":"Buyers have two levers to enhance their supply base performance: fostering supplier competition and inducing suppliers to improve. The competition–improvement relation between the two levers has important implications for supply base design. We study a buyer facing two potential suppliers that can exert cost-reduction efforts, examining the interplay of supplier competition and supplier cost improvement under various information structures (i.e., the supplier effort is observable or unobservable) and commitment capabilities (i.e., the buyer may not commit, or may commit to a full or partial procurement mechanism, before suppliers exert efforts). We find that the two identical suppliers may choose unequal efforts, resulting in an asymmetric equilibrium outcome that enhances the performance of dual sourcing. Moreover, the competition–improvement relation depends on the effort observability. Whereas supplier competition always leads to lower improvement effort when the effort is unobservable, it may induce h...","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2015-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75375335","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Supply-chain management (SCM) is considered one of the essential parts of international marketplaces. SCM comprises a number of paradigms such as Lean, Agile, Resilient, and Green (LARG). This research explains that an advanced manufacturing technology has a significant effect on the relationship between LARG-supply chain (SC), and SC performance. The correlation variables LARG-SC and supply SC performance is identified. A suitable theory is also investigated. This study utilizes several library entrances toward assembly knowledge. The framework of research is to determine each variable, which comprises independent variables, moderators, and dependent variables.
{"title":"The Moderating Role of Advance Manufacturing Technology (AMT) on the Relationship between LARG-Supply Chain and Supply Chain Performance","authors":"R. Esmaeel, Inda Sukati, Noriza Mohd Jamal","doi":"10.5539/ASS.V11N28P37","DOIUrl":"https://doi.org/10.5539/ASS.V11N28P37","url":null,"abstract":"Supply-chain management (SCM) is considered one of the essential parts of international marketplaces. SCM comprises a number of paradigms such as Lean, Agile, Resilient, and Green (LARG). This research explains that an advanced manufacturing technology has a significant effect on the relationship between LARG-supply chain (SC), and SC performance. The correlation variables LARG-SC and supply SC performance is identified. A suitable theory is also investigated. This study utilizes several library entrances toward assembly knowledge. The framework of research is to determine each variable, which comprises independent variables, moderators, and dependent variables.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"14 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2015-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88404373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze the impact that stochastically occurring innovations have on Schumpeterian economic growth in a region that is creative in the sense of Richard Florida. Our analysis leads to four findings. First, we delineate the so called balanced growth path (BGP) equilibrium and then compute the BGP growth rate in our creative region. Second, we discuss why the lower limit of the support of the random variable that describes the outcome of innovation quality improvements, takes the value that it does. Third, we solve the social planner's problem and derive the Pareto optimal growth rate in our creative region. Finally, we compare the BGP and the Pareto optimal growth rates, we discuss when there is either too much or too little innovation, and we conclude by commenting on the implications of our findings for future research on Schumpeterian economic growth in creative regions.
{"title":"The Effects of Probabilistic Innovations on Schumpeterian Economic Growth in a Creative Region","authors":"A. Batabyal, H. Beladi","doi":"10.2139/ssrn.2694769","DOIUrl":"https://doi.org/10.2139/ssrn.2694769","url":null,"abstract":"We analyze the impact that stochastically occurring innovations have on Schumpeterian economic growth in a region that is creative in the sense of Richard Florida. Our analysis leads to four findings. First, we delineate the so called balanced growth path (BGP) equilibrium and then compute the BGP growth rate in our creative region. Second, we discuss why the lower limit of the support of the random variable that describes the outcome of innovation quality improvements, takes the value that it does. Third, we solve the social planner's problem and derive the Pareto optimal growth rate in our creative region. Finally, we compare the BGP and the Pareto optimal growth rates, we discuss when there is either too much or too little innovation, and we conclude by commenting on the implications of our findings for future research on Schumpeterian economic growth in creative regions.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"8 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2015-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88452024","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bin packing is an algorithmic problem that arises in diverse applications such as remnant inventory systems, shipping logistics, and appointment scheduling. In its simplest variant, a sequence of T items (e.g., orders for raw material, packages for delivery) is revealed one at a time, and each item must be packed on arrival in an available bin (e.g., remnant pieces of raw material in inventory, shipping containers). The sizes of items are i.i.d. samples from an unknown distributions, but the sizes are known when the items arrive. The goal is to minimize the number of nonempty bins (equivalently waste, defined to be the total unused space in nonempty bins). This problem has been extensively studied in the Operations Research and Theoretical Computer Science communities, yet all existing heuristics either rely on learning the distribution or exhibit o(T) additive suboptimality compared to the optimal offline algorithm only for certain classes of distributions (those with sublinear optimal expected waste). In this paper, we propose a family of algorithms which are the first truly distribution-oblivious algorithms for stochastic bin packing, and achieve O(√T) additive suboptimality for all item size distributions. Our algorithms are inspired by approximate interior-point algorithms for convex optimization. In addition to regret guarantees for i.i.d. sequences, we also prove a family of novel regret bounds for general noni.i.d. input sequences, including guarantees for locally adversarially perturbed i.i.d. sequences. To the best of our knowledge these are the first such results for non-i.i.d. and non-random-permutation input sequences for online stochastic packing.
{"title":"Interior-Point Based Online Stochastic Bin Packing","authors":"Varun Gupta, A. Radovanovic","doi":"10.2139/ssrn.2673951","DOIUrl":"https://doi.org/10.2139/ssrn.2673951","url":null,"abstract":"Bin packing is an algorithmic problem that arises in diverse applications such as remnant inventory systems, shipping logistics, and appointment scheduling. In its simplest variant, a sequence of T items (e.g., orders for raw material, packages for delivery) is revealed one at a time, and each item must be packed on arrival in an available bin (e.g., remnant pieces of raw material in inventory, shipping containers). The sizes of items are i.i.d. samples from an unknown distributions, but the sizes are known when the items arrive. The goal is to minimize the number of nonempty bins (equivalently waste, defined to be the total unused space in nonempty bins). This problem has been extensively studied in the Operations Research and Theoretical Computer Science communities, yet all existing heuristics either rely on learning the distribution or exhibit o(T) additive suboptimality compared to the optimal offline algorithm only for certain classes of distributions (those with sublinear optimal expected waste). In this paper, we propose a family of algorithms which are the first truly distribution-oblivious algorithms for stochastic bin packing, and achieve O(√T) additive suboptimality for all item size distributions. Our algorithms are inspired by approximate interior-point algorithms for convex optimization. In addition to regret guarantees for i.i.d. sequences, we also prove a family of novel regret bounds for general noni.i.d. input sequences, including guarantees for locally adversarially perturbed i.i.d. sequences. To the best of our knowledge these are the first such results for non-i.i.d. and non-random-permutation input sequences for online stochastic packing.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"159 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2015-10-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73293758","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Making long-term commitments to exclusive suppliers, or relational sourcing, is critical in industries where quality includes social, ethical, and technical elements concerning which contractual terms would be costly to verify or enforce. This study identifies supplier network topologies that best facilitate such relational sourcing. We consider a brand-owning firm that sources in an ongoing fashion from a general multi-tier network of idiosyncratic suppliers. Alternate network designs are compared in terms of three defining structural properties: network scope, the number of suppliers at each tier in the network; degree of control/delegation, the number of tiers in the network; and network connectivity, the connections between firms located at different tiers. Our analysis reveals that neither network connectivity nor the distribution of costs among suppliers affects the ability to sustain relational sourcing. Networks characterized by more delegation or less scope have the most to gain from relational sourcing, but they are also most vulnerable to exploitation of a relational agreement. We characterize this trade-off and identify preferred network topologies. Our analysis shows that, all else equal, delegation is better than control for products with higher margins, greater sourcing stability, or lower costs of noncompliant quality. Numerical analysis reveals that low-scope networks, too, are preferable for higher-margin products with greater sourcing stability; however, low-scope networks are preferred at higher costs of noncompliant quality. These results are robust to alternate information environments, supplier replaceability and equilibrium concepts.
{"title":"Supply Networks for Relational Sourcing","authors":"E. Belavina","doi":"10.2139/ssrn.2375663","DOIUrl":"https://doi.org/10.2139/ssrn.2375663","url":null,"abstract":"Making long-term commitments to exclusive suppliers, or relational sourcing, is critical in industries where quality includes social, ethical, and technical elements concerning which contractual terms would be costly to verify or enforce. This study identifies supplier network topologies that best facilitate such relational sourcing. We consider a brand-owning firm that sources in an ongoing fashion from a general multi-tier network of idiosyncratic suppliers. Alternate network designs are compared in terms of three defining structural properties: network scope, the number of suppliers at each tier in the network; degree of control/delegation, the number of tiers in the network; and network connectivity, the connections between firms located at different tiers. Our analysis reveals that neither network connectivity nor the distribution of costs among suppliers affects the ability to sustain relational sourcing. Networks characterized by more delegation or less scope have the most to gain from relational sourcing, but they are also most vulnerable to exploitation of a relational agreement. We characterize this trade-off and identify preferred network topologies. Our analysis shows that, all else equal, delegation is better than control for products with higher margins, greater sourcing stability, or lower costs of noncompliant quality. Numerical analysis reveals that low-scope networks, too, are preferable for higher-margin products with greater sourcing stability; however, low-scope networks are preferred at higher costs of noncompliant quality. These results are robust to alternate information environments, supplier replaceability and equilibrium concepts.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"35 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2015-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89921204","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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