Evaluation of supplier capability and performance: A method for supply base reduction

Development of partnership with suppliers is widely recognised today as a potent tool for supply chain improvement. To develop an effective partnership, it is necessary to have a small supply base and an effort to reduce the supply base to a manageable level. Despite its overwhelming importance, models of supply base reduction are rare. Supplier sorting methods, used for pre-selection of suppliers and sometimes seen as methods for supply base reduction, have limitations ranging from (1) requirement of an exhaustive database of historical information (case-based reasoning), (2) inability to predefine the number of elements in a cluster (cluster analysis) and (3) inability to identify suppliers who are both highly capable as well as high performers (data envelopment analysis). In the present work, we develop a systematic framework for carrying out the supply base reduction process. The study assumes two important dimensions of suppliers—performance and capability. Performance of a supplier represents short-term effects on the achievement of supply chain objectives while supplier capability indicates long-term effects. Many of the performance and capability factors are imprecise in nature. In order to account for the imprecision involved in numerous subjective characteristics of suppliers, we use fuzzy set approach to measure the imprecision of these factors and rank a potential list of suppliers against their performance and capability. We then display their ranks in a ‘capability–performance matrix’ that helps a decision maker arrange the suppliers in decreasing order of preference. The desired numbers of suppliers are finally selected on the basis of this ordered list. The suggested framework will be of immense help to the practising managers in reducing the supply base—a prerequisite for building a strong supplier partnership and developing an effective supply chain.     

Strategic interdependence, governance effectiveness and supplier performance: A dyadic case study investigation and theory development

Inter-organizational exchange governance approaches are often characterized as two broad types: relational and transactional. However, in fast changing business contexts, the contextual contingencies do not present ideal conditions for practicing purely relational or transactional approach. Understanding the dynamic of key contextual factors and their effects on a firm's resource capabilities and inter-organizational power structure is crucial for identifying the appropriate governance structure over time. In this paper we explore the exchanges between an OEM and five of its strategic suppliers that operate in high-end, short product life cycle motorbike industry, to understand the key contextual factors and the relationships among business context, governance structure, and exchange practices in a dyadic context. It is observed that firms deviate from the conventional choices of either transactional or relational governance to a combination of contractual and relational aspects to make the governance structure effective. Based on case studies, a theoretical framework is proposed to explain the rationale, feasibility and effectiveness of combining contractual and relational aspects in different contexts. The framework suggests that the degree of strategic interdependence between the trading partners fundamentally drives the effectiveness of governance structure and exchange practices.     

Product chain collaboration for sustainability: A business case for life cycle management

Life cycle management (LCM) is frequently described as a holistic sustainability perspective along the product chain. It has mainly been a company internal practice. However, recent developments reveal a new type of LCM where companies collaborate in product‐chain‐specific initiatives. This raises questions concerning why corporations extend “corporate LCM” toward “product chain LCM”. Here, we explore rationales and challenges for corporations engaging in one such coalition: The Sustainable Transport Initiative. The study covers five companies in different product chain positions and practitioners in different corporate functions. The results show a broad range of rationales for engaging in product chain LCM, related both to self‐interest and a shared interest in the product chain. The importance of the “business case,” both for the individual companies and the product chain, is identified. The importance of sustainability managers as actors and as facilitators in discussions between managers from different corporate functions is also identified.     

Business strategy for sustainable development: Impact of life cycle inventory and life cycle impact assessment steps in supply chain design and planning

Sustainability reporting has become a central instrument in displaying a company's strategy and engagement with a more sustainable society. Life cycle assessment (LCA) is an important tool in this context as it is aimed to analyze the entire life cycle of the product/service, instead of focusing on one focal firm. However, the lack of standardized guidelines in its application raises questions regarding the usefulness and validity of results. This study contributes to the improvement of sustainability reporting through the identification of the uncertainty sources in life cycle methodologies that have the biggest impact in the definition of business and environmental strategies, exploring a supply chain‐oriented analysis. The focus is on life cycle inventory (LCI) and life cycle impact assessment (LCIA). A multiobjective optimization‐based methodology is applied to a supply chain case study in the pulp and paper industry. Environmental and economic objectives are considered. Results show that different LCIA methods and different normalization data sets result in significantly different business and environmental strategies. However, different system models and cultural perspectives at the LCI step and variations in the characterization factors tend to lead to the same decisions. Important insights are gained regarding the impact of nonstandardized analysis of the application of LCA in supply chain design and planning decisions and consequently on business strategy definition and sustainability reporting. Furthermore, the importance of operations research methods to improve LCA‐based studies and of bridging the gap between LCA and supply chain management bodies of knowledge is highlighted in this work.     

Dynamic capabilities,creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation

Some scholars hold that dynamic capability (hereinafter DC) is one of the keys to achieving competitive advantage (hereinafter CA) and consequently, performance in strategic management. However, the definition and effects of DCs and the role of environmental dynamism are still under discussion. In the context of a Portuguese-like economy and from a strategic process perspective, this study defines dynamic capability as the potential to systematically solve problems, enabled by its propensity to sense opportunities and threats, to make timely decisions, and to implement strategic decisions and changes efficiently, thereby ensuring the right direction. Moreover, the ambidexterity view, exploring the indirect impact of exploitative and explorative capabilities, mediated by creativity and innovation competences (hereinafter IC) gives evidence of the influence on CA and firm's performance. Using an empirical study of 387 enterprises in Portugal, it was found that DCs, creativity and IC do significantly, positively, affect performance, while entrepreneurial orientation (hereinafter EO) is a moderator.     

Toward a theory of competencies for the management of product complexity: Six case studies

Business units in six Fortune 500 companies were studied to develop better understanding regarding drivers of product portfolio complexity and the means to manage them. Our research focuses on identifying important competencies for managing product portfolio complexity and on the development of appropriate theoretical explanations. We found three important competencies: product/technology portfolio strategy, organization and governance regarding complexity decisions, and product design and decision support systems. We explicate these competencies using a socio-technical systems theoretical perspective. Our findings provide the basis for a model describing the impact of complexity and complexity management on business unit profitability.     

Integrating sustainable development in the supply chain: The case of life cycle assessment in oil and gas and agricultural biotechnology

It is widely accepted that firms play an important stewardship role in addressing sustainable development concerns. A key challenge in this role is to balance the often conflicting pressures created by sustainable development—firm-level economic performance versus environmental degradation and social disruption. Drawing on complexity theory, risk management, stakeholder theory and the innovation dynamics literature, we discuss the problems of integrating sustainable development concerns in the supply chain, specifically the applicability of life cycle assessment (LCA). Many authors have emphasized the importance of the “cradle to grave” approach of LCA in optimizing closed-loop supply chains, improving product design and stewardship. Based on two case studies (an agricultural biotechnology and an oil and gas company) with supporting data collected from key stakeholders, we argue that sustainable development pressures have increased complexities and presented ambiguous challenges that many current environmental management techniques cannot adequately address. We provide a framework that addresses these deficiencies and discuss implications for practitioners and management theory.     

The development and application of a process model for R&D project management in a high tech firm: A field study

In R&;D organizations of high tech firms, multiple R&;D projects are executed concurrently and timeliness of project completion - i.e., developing the right products at the right times - is a matter of serious concern. Given that the priority of R&;D projects and the interdependencies between the projects in a high tech firm change dynamically, high tech R&;D project management is a complex and challenging endeavor. To improve the understanding and management of high tech R&;D projects, this paper reports the findings of a field study where we, first, develop and empirically estimate a model that relates project priority over time with the generative mechanisms of market pull and technical challenge associated with R&;D projects. Next, we develop and demonstrate the application of a process model within which the time-varying project priority model is embedded. The process model makes it possible to allocate fixed resources among competing projects with time-varying interdependencies, thereby improving the timeliness of project completion. This research was conducted in collaboration with a major U.S. high tech firm. The corporate R&;D center of the firm served as the research setting for the field study. We present an application of the process model to delineate the evolution of the R&;D organization with the merger of its (technology driven) parent firm with another (market driven) high tech manufacturing firm. The application of the process model generates theoretical insights that are used to develop testable propositions. Implications of the study findings and directions for future research are discussed.