MANAGING VENDOR INVENTORY IN A DUAL LEVEL DISTRIBUTION SYSTEM

Collaborative arrangements among members of the supply chain have received a great deal of interest in recent years as a means of reducing costs. One such arrangement is vendor managed inventory (VMI). VMI allows the vendor to make decisions concerning the quantity and timing of deliveries to the retailer. Such an arrangement offers the potential of a more efficient supply chain by removing the negative effects of retail ordering policies. A thorough review of the literature was conducted to identify factors likely to impact the performance of a VMI partnership. Computer simulation was used to study the effects of these factors from both the vendor's and retailer's perspectives. The results lend insight into the performance of VMI and guidance for managers as to the environments in which VMI is most effective.     

INDIVIDUAL AND ENVIRONMENTAL IMPACTS ON SUPPLY CHAIN INVENTORY MANAGEMENT: AN EXPERIMENTAL INVESTIGATION OF INFORMATION AVAILABILITY AND PROCEDURAL RATIONALITY

Some strategies for mitigating ordering inefficiencies in supply chains advise sharing information among decision‐makers. However, there has been little consideration of how individual perceptions intervene in the use of available information in decision‐making processes. This article reports the results of an experiment in which participants were instructed to minimize inventory holding and backlog costs for their supply chains as a whole. The analysis suggests that additional information affects supply chain inventory management costs only when rational decision‐making processes are followed. Decreased costs are observed when rational decision‐making is applied with backlog information. In contrast, increased costs are observed when consumer demand information is available.     

THE EFFECT OF INVESTMENT IN INTERORGANIZATIONAL INFORMATION TECHNOLOGY IN A RETAIL SUPPLY CHAIN

The primary purpose of this research was to investigate the effect of investment in information technology in a supply chain. The results of that investigation are presented by focusing on an empirically tested supply chain relationship model containing both behavioral and operational constructs. The four behavioral constructs represented in the model are relationship trust, relationship commitment, relationship dependence, and long‐term relationship orientation. The four operational constructs represented in the model are retailer investment in interorganizational information technology, perceived supplier investment in interorganizational information technology, logistics efficiency, and logistics effectiveness. Among other findings, the results of the investigation found that perceived supplier investment in interorganizational information technology has a significant and positive effect on logistics efficiency.     

INFORMATION GAMING IN DEMAND COLLABORATION AND SUPPLY CHAIN PERFORMANCE

Demand collaboration has recently been promoted by industry leaders as an important tool for supply chain management. Its greatest significance beyond the sharing of point‐of‐sale and forecast information stems from its potential to allow supply chain partners to extract private market information from each other for more effective planning and better supply chain performance. A simulation framework based on actual business processes is developed to investigate the underlying drivers of demand collaboration and the inherent risks and benefits of such collaboration.     

VENDOR‐OWNED INVENTORY MANAGEMENT ARRANGEMENTS IN RETAIL: AN AGENCY THEORY PERSPECTIVE

This paper undertakes two related tasks to augment current understanding regarding vendor‐owned inventory management (VOIM) arrangements implemented in the retail industry. The first task formally juxtaposes three prevalent forms of VOIM arrangements (i.e., Consignment, Pay‐On‐Scan, and Scan‐Based Trading) to one another and identifies three dimensions (i.e., Relevant Data Visibility, Timeliness of Information Release, and Shrink Responsibility) that serve to discriminate among them. The second task applies an Agency Theory lens to uncover differing profiles of characteristics underlying the retailer‐vendor relationship across the Consignment, Pay‐On‐Scan, and Scan‐Based Trading arrangements. These conceptual results contribute to and have implications for the science and practice of VOIM arrangements in the retail industry.     

INTERORGANIZATIONAL TIME‐BASED POSTPONEMENT IN THE SUPPLY CHAIN

This paper presents the results of empirical research on the use of time‐based postponement in a supply chain context using data collected from two manufacturers, a distributor, and a retailer. The analysis shows that implementing postponement at the firm level can result in the supply chain carrying more inventory. In order to achieve its full potential, postponement needs to be implemented across organizations in the supply chain.     

EXPRESSING INVENTORY CONTROL POLICY IN THE TURNOVER CURVE

Estimation of the inventory level for an entire class of items is a valuable time saver when control of inventories at the aggregate level, rather than the item level, is of interest. Inventory approximation by location in supply chain network configuration and evaluation of inventory control policy shifts, are two examples of application. In this article, various popular inventory policies are related to a general function known as an inventory turnover curve that expresses inventory levels from the combined demand of multiple items. By knowing some basic item characteristics of representative items in a product class, the type of inventory policy being used, and the current aggregate inventory level, an inventory turnover curve can be constructed. This resulting turnover curve can be used to estimate inventory levels within 4.6%, on the average, of theoretically predicted ones.     

MODELING LEAN,AGILE, AND LEAGILE SUPPLY CHAIN STRATEGIES

The merits of lean and agile supply chain strategies have been much debated among practitioners and academics. While these strategies are often viewed as opposites, this research supports the view that they must not necessarily compete and can, in fact, be employed simultaneously through a so‐called “leagile” approach. Lean, agile, and leagile strategies are illustrated by modeling their respective applications at a tier‐1 supplier to the Heating, Ventilating, and Air‐Conditioning (HVAC) industry. Simulation analyses indicate that the lean system excels in customer service performance while the leagile system results in lower enterprise‐wide inventory levels under modeled circumstances. Subsequent analysis suggests that trade‐offs exist among the systems in the base case and under varying cost conditions.     

AN INVESTIGATION INTO THE EFFECT OF FULL‐SCALE SUPPLY CHAIN MANAGEMENT SOFTWARE ADOPTIONS ON INVENTORY BALANCES AND TURNS

Supply chain management (SCM) software vendors, analysts, and others claim that firms implementing SCM software stand to benefit by being able to reduce inventory holdings and increase inventory turns. We theorize that full‐scale implementations lead to system‐wide inventory optimization, which in turn leads to cost improvement associated with inventory balances and turns. To examine the question, we develop an analytical model of inventory optimization, then analyze the effects of the model with a numerical experiment, and finally confirm the results with an empirical examination. We find that firm‐wide implementation is significant in explaining improvement in inventory metrics, relative to pre‐implementation metrics for our sample. Our empirical tests indicate that implementing SCM software across only a portion of the firm does not impact inventory metrics, but that the scale of implementation does. More precisely, we find that firms implementing SCM software across the entire company significantly improve both inventory turns and inventory as a percent of revenue relative to partially‐implementing firms and non‐implementers.     

SUPPLY CHAIN MANAGEMENT: THE PURSUIT OF A CONSENSUS DEFINITION

As disciplines evolve, it is a normal part of the maturation process to regularly examine the definition of the discipline — i.e., what the discipline is and is not. The opinions of those involved in the discipline are key to this maturation (i.e., definitional) process. Developing a consensus definition of supply chain management is a widely discussed but unresolved challenge. Thus, the current study provides insight into the perceptions of logistics professionals regarding this issue based upon an Internet‐based survey.     

A STRATEGIC FRAMEWORK FOR SUPPLY CHAIN ORIENTED LOGISTICS

The Council of Logistics Management's (CLM) name change to the Council of Supply Chain Management Professionals (CSCMP) has intensified discussions regarding the difference between supply chain management and logistics. This paper merges broadly accepted paradigms from strategic management and marketing to introduce a theoretically consistent framework that differentiates supply chain management from logistics while highlighting the complementary relationship. Supply chain management is portrayed as a firm or SBU level phenomena while logistics is expressed as a competency within supply chain management possessing both strategic and structural capabilities focused exclusively on managing the move/store activities used to fulfill customer orders. Research propositions regarding the interfaces and nature of logistics within a strategic supply chain orientation are drawn to guide thought and development in the discipline.     

SUPPLY CHAIN MANAGEMENT IMPLEMENTATION AND PRIORITY STRATEGIES IN DANISH ORGANIZATIONS

There has been little discussion on how to prioritize and implement SCM strategies within organizations. This paper presents a decision tool to identify prioritized strategies for improving SCM implementation and validates its use in a study amongst SCM managers of 100 Danish organizations.     

INTERNET RETAILING INTERMEDIATION: A MULTILEVEL ANALYSIS OF INVENTORY LIQUIDITY AND FULFILLMENT GUARANTEES

Internet retailers intermediate online markets by setting prices, matching wholesalers' supply with consumers' demand, affording inventory liquidity, and meeting fulfillment guarantees to consumers. Little attention has been given to studying the two latter intermediation functions. To fill this research gap, this study examined a sample of 25 mainstream online retailers in some 704 transactions with consumers. The study evaluates the inventory liquidity and the fulfillment guarantees these Internet retailers provide to consumers. Furthermore, it presents a path‐analysis model, which suggests that retailers coordinate their actual and promised inventory‐liquidity and delivery performance to satisfy the fulfillment guarantees made to consumers. Moreover, the results show that key transactional attributes (i.e., the net price and the number of items fulfilled) commonly present in Internet markets and visible to all market participants impact both the levels of inventory liquidity and the delivery performance of the transactions between consumers and Internet retailers.     

ACTION RESEARCH IN SUPPLY CHAIN MANAGEMENT—A FRAMEWORK FOR RELEVANT AND RIGOROUS RESEARCH

In this article we present a framework that researchers can use when they prepare and conduct Action Research (AR) projects. Authors can also use the framework as a guide for how to write relevant and rigorous AR articles. AR is an applied form of case‐based research that can provide exceedingly relevant research in applied fields such as supply chain management. At the same time, AR is also a criticized research approach, particularly in terms of research rigor. With the ambition to address, as well as bridge, the gap between the relevance and rigor within AR research, we first develop a comprehensive research methodology framework that synthesizes the crucial aspects of the AR research methodology. Secondly, we review existing AR articles within logistics, operations management, and supply chain management and present the current state of AR research. After a critical review of the existing articles using our framework, we delineate vital aspects that should be addressed in future AR research. As relevance and rigor are not at odds, we believe that our comprehensive framework will pave the way for a growing stream of rigorous, as well as relevant, AR research.     

UNDERSTANDING THE FINANCIAL CONSEQUENCES OF THE BULLWHIP EFFECT IN A MULTI‐ECHELON SUPPLY CHAIN

This article is concerned with how supply chain strategies can mitigate the Bullwhip Effect and inflated inventories from the perspective of the central firm (typically a manufacturer) in the supply chain. We first outline a base case scenario with a validated system dynamics simulation model, using supply chain characteristics as reported by a real firm, in this case a Mexican electronics supplier to U.S. automobile assemblers. We find, surprisingly, that a lower Bullwhip Effect Index (BE) does not always lead to lower costs in the supply chain studied. Furthermore, sensitivity analysis suggests some interesting, counterintuitive results. The implications of these findings are further developed as we test how lead time reduction can also reduce the Bullwhip Effect in the simulated setting.