Lean Launch: Managing Product Introduction Risk Through Response-Based Logistics

New product launch research has identified four strategic issues that involve activities essential to introduce a new product to its target market. The sum of these decisions is critical to new product success. Substantial research has focused on decisions guiding the proper product, price, and promotion mix to favorably impact market goals. Considerably less research has centered on determining how place capabilities such as logistics and supply chain relationships impact launch performance. Logistics and supply chain collaboration—the processes involved in planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements—can greatly reduce risk associated with new product launch. They combine to provide a structure to facilitate rapid response to developing demand by location and intensity. In this article, an effort is made to fill the gap in extant knowledge regarding new product launch strategies by reviewing relevant literature and comparing traditional launch strategies based on anticipatory demand forecasts with alternative lean launch strategies based on the principles of response-based logistics. The result is a lean launch model for continued empirical testing and managerial review. The article contrasts traditional logistics support of new product launch with an emerging logic called lean launch strategy. The traditional launch strategy is forecast driven and is based on anticipatory logistics (push). The lean launch strategy is formulated on principles of postponement and is based on response-based logistics (pull) and supply chain management. Response-based logistics systems provide flexibility that enables better management of inventory levels. Improved replenishment times and in-stock availability of products from a centralized inventory allows managers to rapidly react to actual demand. Lean launch enhances successful introduction by allowing greater flexibility in product variant selection while minimizing out-of-stock potential. Lean launch also can cut losses in product launch failures by reducing launch inventory exposure. Finally, lean launch can improve chances of new product success by helping limited volume technical successes achieve profitability.     

Structuring and contracting in competing supply chains

This paper considers two competing supply chains, each with multiple upstream suppliers producing complementary products and selling to a single buyer (e.g., assembler or retailer), who then sells the finished assembled product to a market that involves both demand uncertainty and competition. Our main research questions focus on what supply chain structure (integration vs. decentralization) and which contracting strategy a business should choose. We find that supply chains that decentralize perform better under strong market competition (i.e., high degree of product substitution between supply chains). However, when a large number of suppliers exist, supply chains that integrate perform better. When decentralized structures are used for both supply chains, a consignment with revenue sharing contract generally outperforms a wholesale price contract from the downstream retailer's point of view. Interestingly, for a supplier, a wholesale price contract, which pushes all demand risks to the downstream retailer, might not be preferred. For the entire supply chain, one contract strategy can outperform another depending on the degree of competition, the cost share of the buyer, and the number of suppliers.     

Impact of demand uncertainty on supply chain cooperation of single-period products

Cooperation is an approach of improving competitive advantages of a supply chain. A two-echelon supply chain consisting of a manufacturer and a retailer for a single-period product is studied, and retail-market demand uncertainty is described by coefficient of variation. We develop a cooperation mechanism to address the cooperation and its implementation between the manufacturer and the retailer, two market situations are considered: (i) the wholesale price and the order quantity are decision variables, (ii) the wholesale and the retail prices as well as the order quantity are decision variables. In both market situations, our research shows that: (1) the cooperation mechanism can improve the overall channel profits and the supply chain members’ allocated profits, (2) the described cooperation is conditional on retail-market demand uncertainty: it can be implemented if, and only if, the fluctuation of retail-market demand is relatively small and coefficient of variation of retail-market demand does not exceed an upper bound. Impacts of retail-market demand uncertainty on wholesale price, order quantity and/or retail price have also been investigated through analytical and numerical analyses. Although our research is based on the assumption that the manufacturer dominates the supply chain in the non-cooperative situation, which is not the case for most retailer-driven supply chains, this research is still significant on providing guidelines for practitioners in current China mid-level car market that is similar to situations described in the paper.     

How should you stabilise your supply chains?

This case based research paper examines the stabilisation strategies used within seven supply chains and presents a framework to help practitioners stabilise their chains. The findings show that organisations should first select a cushioning strategy and then reduce demand uncertainty to lower the level of cushion held. However, they need to recognise that other organisations within the supply chain are making similar decisions and the whole supply chain needs to be stabilised. Despite this, businesses seem to only share information about their demand uncertainty-reducing mechanisms and not their cushioning strategies. This means that companies often make decisions in isolation of each other, which can then destabilise the chain.     

Enhancing the business-to-business supply chain: Insights from partitioning the supply-side

A market orientation has long been established as the key to success in supply chain management. A central concept of this orientation is market segmentation. The concept of market segmentation, however, has primarily been focused on the demand side of the supply chain; its potential application on the supply side has not thoroughly been addressed. This paper extends the purview of the concept behind segmentation by presenting the concept of “supply-side partitioning” to refer to the management of heterogeneities on the supplier side of the supply chain. Further, the concept of “transvectional alignment” is proposed for the purpose of simultaneously aligning market segments with appropriate suppliers at all levels of the supply chain by identifying, evaluating, and selecting supply groups that satisfy the demand function(s) of each segment. This paper discusses supply-side partitioning, includes a model for the supply chain utilizing transvectional alignment, and offers implications for the application of supply-side partitioning in the business-to-business marketspace.     

Service-based capacity strategy for manufacturing service duopoly of differentiated prices and lognormal random demand

Globalization of production has ushered in vibrant manufacturing service industries whose business is to serve the production needs of product engineering firms. In these engineering–manufacturing chains, risk of capacity supply is an important concern for product firms as manufacturers are normally conservative in capacity expansion, especially when demand uncertainty and investment risk are high. To provide quality manufacturing services, this risk must be taken into consideration in formulating a capacity strategy. This paper presents a competition analysis method based on supply risk for a manufacturing duopoly of differentiated prices and lognormal random demand. A novel service-based demand rationing rule is first proposed. Reaction curves and equilibrium of capacity strategy are next derived. Finally, competition behavior of the duopoly is analyzed.     

Passing through the supply chain: Implications for market power

In this paper, we study the connection between pass-through and market power in the Brazilian Liquefied Petroleum Gas (LPG) industry. We use a state tax shock and apply a difference-in-differences strategy to estimate pass-through – at different levels of the supply chain – and an instrumented difference-in-differences strategy to estimate demand, and then feed a theoretical model to make inferences about a conduct parameter – that measures market power. We find an incomplete pass-through at the distribution level and for the supply chain as a whole, and a more-than-complete one at the retail level. Furthermore, we estimate price-elasticity of demand to be greater than one. When we feed a theoretical model of pass-through under imperfect competition with these estimates, we obtain a high conduct parameter at the whole supply chain level and an even higher one at the retail level alone. These results show that considering only the whole supply chain pass-through may lead to hasty conclusions about market power. Besides contributing to the empirical literature that connects pass-through with market power, we contribute to on-going national discussions regarding competitiveness in the LPG industry.     

Aligning the sustainable supply chain to green marketing needs: A case study

The research explores the challenges facing organisations in aligning sustainable procurement requirements and marketing needs and the attendant shifts in supply chain management practices. Whilst external influences are readily understood (e.g. regulation and customer demand), less is understood about the implications for suppliers trying to meet sustainable procurement requirements and the organisational challenges of aligning marketing with sustainable supply chain management. An exploratory case study of a UK University catering department has been undertaken, to explore the strategies, processes and relationships associated with synthesising sustainable supply chain and green marketing needs. The empirical findings illustrate the divergence between organisational perspectives on sustainability and procuring sustainable products with marketing demands. Thus, the findings extend the theoretical discussion on sustainable supply chains by providing empirical data based on real-life implementation and from this an emergent aligned supply chain model is proposed, which confirms two drivers for alignment, ‘lean and resource efficient’ and ‘local and seasonal’ — contingent on market demand. The findings emphasise the benefits of a reverse information flow, the importance of intermediaries, and relationships in its fulfilment, while indicating the resurgence of a supply ‘push’ of sustainable products into core markets. Future research directions are also posited.     

下游行业需求不旺 炼焦煤市场难有起色——来自2012年(第二届)国际炼焦煤资源与市场高峰论坛的报道

介绍了国际炼焦煤资源与市场需求的最新状况,就宏观能源战略、钢铁行业焦煤需求、国际炼焦煤供给、中国炼焦煤供给等相关问题进行了分析和探讨。认为,未来几年我国钢材需求增速放缓,炼焦煤整体供过于求。并建议作为钢铁行业的上游,炼焦煤生产企业应积极寻求精细化发展,控制产能保价格,坚持煤炭市场化改革。     

Sequential price and quantity decisions under supply and demand risks

Firms need to deal with not only risks from stochastic demand but also risks from supply side. The supply side risk may be due to parts/service outsourcing, third party logistics, or random yield in production processes. In this paper, we study how firms sequentially make price and quantity decisions under these two risks. The first question we try to answer is how these two risks affect the decisions and profits of the firm. We find that increased supply risk usually causes increased quantity/stocking decision, however, there exists a threshold level of supply risk above which the firm reduces quantity/stocking amount as supply risk increases. This observation may be used in a supply chain setting, where reduction of the supply risk can cause higher delivered quantity and improve supply chain performance. This observation also provides support and insights on prioritizing the risk reduction efforts from marketing and operations to achieve better coordination. At the same time, reduction of the risks help not only firms but also consumers as the optimal price decreases. To further improve decision making process under both uncertainties, we study the impact from information revelation and postponement of decisions. We compare results from different sequential decision making cases. As illustrated in the paper, firms gain competing advantage when decision postponement is available and this advantage becomes further significant as the risks increase. Our numerical examples also indicate that price postponement strategy is usually preferred but the relative profit difference between price postponement and quantity postponement become smaller as consumers become more sensitive to the price.     

Integrating Research on Markets for Space and Capital†

This article discusses the importance of recognizing that there are two distinct but interrelated real estate markets: the market for tenant space and the market for investment capital. The use decision is made in the space market whereas the investment decision is made in the capital market. The article points out that past research has tended to focus on a separate analysis of each of these two markets. That is, research historically has focused on understanding how changes in supply and demand affect equilibrium in either the space market or the capital market as if each market was autonomous. A graphical framework is illustrated that can be used to examine the effect of an exogenous shock to market equilibrium from either the market for space or the market for capital.     

Knowledge and information flows in supply chains: A study on pharmaceutical companies

A great deal of attention in the supply chain management literature is devoted to study material and demand information flows and their coordination. But in many situations, supply chains may convey information from different nature, they may be an important channel companies have to deliver knowledge, or specifically, technical information to the market. This paper studies the technical flow and highlights its particular requirements. Drawing upon a qualitative field research, it studies pharmaceutical companies, since those companies face a very specific challenge: consumers do not have discretion over their choices, ethical drugs must be prescribed by physicians to be bought and used by final consumers. Technical information flow is rich, and must be redundant and early delivered at multiple points. Thus, apart from the regular material channel where products and order information flow, those companies build a specialized information channel, developed to communicate to those who need it to create demand. Conclusions can be extended to supply chains where products and services are complex and decision makers must be clearly informed about technology-related information.     

Data-driven simulation of the supply-chain—Insights from the aerospace sector

With the increasing complexity of supply chains in aerospace manufacturing, simulation has become a powerful tool to assess performance. Conventional simulation models are constructed by experts, limiting their usefulness for non-experts. Here, the concept of data-driven simulation is used, where the simulation model is constructed automatically using input data from company IT systems. The paper describes the concept and operation of a supply-chain model builder that has been developed. An example model is provided from the civil aerospace sector. The study shows that data-driven simulation can be useful to support the design and improvement of supply chains. The nature of the conceptual model, model verification and validation in data-driven simulations are discussed. Data-driven simulation is not a replacement for general-purpose simulation tools, but an adjunct valuable in certain circumstances. It can allow a variety of scenarios to be explored relatively quickly without a high level of simulation expertise.     

A system-wide interdisciplinary conceptual framework for food loss and waste mitigation strategies in the supply chain

The issues of food loss and waste (FLW) in the global supply chains have recently gained attention. However, causes for FLW and their mitigation strategies for curbing FLW at different stages of the supply chains remains under researched. Our research aims to address these research gaps in a three-fold way: i), we identified key causes (through root-cause analysis) of FLW in the supply chain of developed and less developed countries; ii), systematically classified measures and policies, which have been implemented to mitigate FLW; iii), developed an interdisciplinary conceptual framework for waste utilisation practices that can contribute towards the triple bottom-line in food system. A root-cause analysis was performed, and mitigation strategies identified by systematically analysing and synthesizing the extant research published over the past 20 years (1998 to 2018) in the areas of food loss and waste in the supply chain. A conceptual model for the prevention of FLW utilising a systems approach through the circular economy concept has been proposed. Since the agri-food sector is largely interdisciplinary, we have also demonstrated a method of integrating contributions from multiple disciplines in our proposed model towards achieving a total depollution (zero waste supply chain).     

Anforderungen an den konventionellen Kraftwerkspark – wieviel und welche Kraftwerkskapazit?t wird ben?tigt?

The electricity supply system will, particularly in Germany, significantly be determined by the use of renewable energy sources. A?decreasing energetic utilization along with an increasing flexibility demand lead to chancing requirements for the conventional plant fleet. The question arises to what extent conventional generation capacity is needed in the future and if??compared to today??additional technical requirements have to be fulfilled due to the increased flexibility demand. Furthermore it has to be discussed how a required capacity level can be achieved and if??and under which conditions??today??s market design is sufficient or if additional capacity mechanism are necessary. These questions are discussed in this article. The questions as to the required capacity level and the means to achieve it depend on the perspective, which is chosen with respect to security of supply. Choosing a European perspective, i.e. a common responsibility for an appropriate level of security of supply in Europe, additional capacity mechanism are not necessary. Choosing a national perspective, i.e. requiring that national demand can??theoretically??be covered by capacity available in the particular country, does not only significantly increase the necessary amount of generation capacity but also??due to the fact that the electricity market already today is organized on a European rather than a national basis??requires additional capacity mechanisms to cover capacity demand. With respect to the flexibility demand a concerted as well as coordinated acting of the different independent market players is necessary to cover a more volatile residual load. However, there is no additional demand for technical flexibility.     

未来十年世界石油供需格局判断

随着中国石油对外依存度逐年攀升,世界石油市场变动将对国内石油供应产生重大影响.世界存在中东、中亚—俄罗斯、非洲和中南美洲四大石油供应中心以及亚太、欧洲、北美三大石油供应洼地,北美已实现石油来源多元化,欧洲形成以中亚—俄罗斯为主、中东和非洲为辅的供应格局,亚太地区石油供应严重依赖中东.世界剩余石油资源能够满足未来十年发展需求,但不同情景的供应格局将有所差异.在高油价情景下,美洲地区能够实现石油自给,中东石油将更多地流向亚太;在低油价情景下,全球对中东地区石油的依赖将进一步增强.未来非常规石油、深水石油和伊拉克石油产量增长潜力巨大,有望成为全球石油供应增长的重要支撑.世界石油需求增幅受各国应对气候变化政策执行力度的影响而存在变数.世界石油市场全球化趋势不可逆转,中国应持续强化“走出去”战略,稳步推进石油进口来源多元化,强化关键技术装备研发,把握未来发展制高点,以全球视野保障国家石油供应安全.     

Moderating the impact of global sourcing on inventories through supply chain management

In recent years, companies have paid growing attention to supply chain management at a global level. With regard to the upstream part of the supply chain, the need for better suppliers, the research into specific competences and concerns related to international competition have forced companies to improve their ability to cope with suppliers located in different countries around the world. The literature suggests that the geographical distance of suppliers should create higher inventory levels primarily because of longer and more uncertain lead times. However, as this paper aims to demonstrate, companies can limit this effect by means of specific investments in the supply chain and in their relationships with suppliers. The empirical analysis is based on data from the last edition of the International Manufacturing Strategy Survey (IMSS). The results show that companies performing global sourcing have invested in supply chain management (SCM) and that this has been helpful in keeping their inventories under control.     

Evaluation of postponement in the soluble coffee supply chain: A case study

This paper, through a case study, evaluates postponement as an option to improve supply chain performances in a soluble coffee manufacturer. The main focus of the paper is on the development of a numerical data-driven methodology for quantifying the benefits of postponement obtained from the total inventory reduction. Our study shows that significant cost savings are achievable by delaying the labelling and packaging processes until actual orders from retailers are known. These savings include the reduction of the cycle stock, safety stock, and obsolete stock unsold from promotional events. We also discuss the cost implications of the proposed configuration that may offset the estimated potential benefits. The methodology presented in this paper can also be used in many other supply chains, particularly in the food industry with similar environments. This paper contributes to the literature in extending the very short list of published work presenting a systematic methodology of characterising the postponement benefits in real world settings and driven by numerical data.     

基于市场预测分析的我国煤炭整合营销战略研究

结合市场供求关系和产能过剩的局面,指出2015年煤炭市场仍将面临总体供求相对宽松的局面。我国煤炭企业面临的发展形势较为严峻,需要对营销战略进行调整。对2015年我国煤炭行业的发展趋势进行了预测,分析了在当前形势下将整合营销战略引入煤炭企业的必要性,最后对煤炭企业实施整合营销战略流程进行了设计。     

Modified critical fractile approach for a class of partial postponement problems

This paper studies a single period partial postponement problem, which is motivated by an inventory planning problem encountered in Reebok NFL replica jersey supply chain. We consider a group of regular products each facing a random demand. There are two stocking options. One is to procure the regular products. The other is to stock a common component which can be customized later to any one of the regular products, after demand realization.We obtain an insightful interpretation of the optimality conditions for this class of problems, and use it to obtain rules of thumb that practitioners can incorporate into their inventory models to determine the stocking levels to minimize the supply chain cost. Instead of proposing a numerical procedure to obtain the optimal solution, we propose an adaptation of the classical critical fractile approach for this class of partial postponement problem. The closed-form formula obtained are surprisingly effective. Our numerical results suggest that this simple approach to inventory planning often comes close to the performance of the optimal solution obtained from numerical method.