Managing the cost-service relationship through backorder control

The backorder holds considerable promise as a supplementary measure of distribution system performance. The backorder can be viewed as the “fine-tuning” mechanism, linking distribution costs and services.     

Consistency Matters in Formally Selecting Incremental and Radical New Product Ideas for Advancement

Several new product development (NPD) scholars have argued that formal processes should be used when selecting incremental new product ideas for advancement at the very beginning of the fuzzy front end (FFE), but that such formal processes may be less beneficial when selecting radical new product ideas. However, arguments also exist for using formal idea selection processes for both types of new product ideas. In practice, informal processes are used for selecting both idea types and more formal processes are used for selecting radical ideas. Unequivocal empirical evidence for either of the opposing views or practices is lacking. This study sheds light on this matter using data from 161 of the firms that participated in the Product Development and Management Association's latest (2012) Comparative Performance Assessment Study. The results reveal that the highest idea success rate (i.e., the proportion of selected ideas that are eventually launched as new products and are successful in the marketplace) is associated with firms’ use of formal processes to select the vast majority of both incremental and radical new product ideas for advancement. This finding supports earlier claims that even for (raw) idea selection processes that take place at the very beginning of the FFE, managers need to adopt a portfolio perspective and consistently use formal idea advancement selection processes to ensure attaining the right balance between radical and incremental projects in later stages of the NPD pipeline to enhance overall NPD success. Notably, this finding shows that common managerial practices of using inconsistent approaches for selecting radical and incremental ideas for advancement need to be reconsidered.     

Shouldn't Customers Control Customized Product Development?

Nowadays, customized product development (CPD) is increasingly prevalent in business‐to‐business settings, which has motivated manufacturers into development approaches wherein the customer plays an active role. When the customer is merely viewed as a passive receiver of the customized product, the manufacturer won't be able to truly empathize with the customer and might lack important suggestions to create and improve the customized product. It is, after all, the customer that holds pertinent development information and/or expertise. Yet, customers are not always motivated to participate and often need to be convinced about the manufacturer's ability to develop customized products in a timely and cost‐effective manner. Prior literature on interorganizational relationships suggests the use of formal control, i.e., process and/or output control, to fashion activities in line with expectations so that development goals can be attained. Thereupon, this study posits that the customer's use of such formal controls may stimulate customer participation in CPD. In addition, this study investigates whether manufacturers can indeed benefit from customer participation in CPD through improved new product performance. To accomplish the research objectives, survey‐based and accounting data are collected on 63 collaborative CPD projects between a plastics manufacturer and its industrial customers. In conjunction with an add‐on experimental study regarding the effect of formal control on customer participation, this study reveals that the customer's use of formal control significantly increases the level of customer participation in CPD. Additionally, this study confirms that customer participation positively impacts new product performance. Together, these results imply that letting the customer use process and/or output control helps the customer to believe more in the pursuit of CPD goals and successful product customization, thereby encouraging the customer to participate more actively in CPD. Besides, the findings imply that increased access to market and customer need‐related information obtained through customer participation is indeed critical for successful CPD.     

Does combining traditional and information and communications technology–based extension methods improve agricultural outcomes? Evidence from field experiments in Mali

Adequate flow of appropriate information to farmers is vital for accelerating the uptake of modern agricultural technologies and improving access to markets, all of which are important for the transformation of African economies. Yet there is limited evidence regarding how information should be disseminated to farmers to achieve the needed impact. Should ICT-based approaches be used together with traditional methods, or should they be used alone? We used cluster quasi-random and randomized experiments involving 140 villages in southern Mali to study three chains of causality: does farmer training increase knowledge? Does knowledge lead to change in behavior? Do the different actions generate varying economic outcomes? We show that the role of farmer training in the uptake of extension advice may be overstated in some settings; that procrastination and inattention are more binding constraints to recommendation adherence than information per se; and that such constraints could be mitigated by timely voice SMS reminders. Although timely reminders nudged farmers to take-up recommendations, leading to meaningful improvements in some intermediate outcomes, these impacts were not large enough to generate improvements in output, prices and profits in the short term. These findings must be interpreted within the context of imperfect compliance with experimental protocols, which pose threats to both the internal and external validity of some of the impact estimates.     

The use of the Pareto shape parameter as a leading indicator of process safety performance

Metrics addressing process safety incident performance typically focus on frequency and severity statistics. Often, these lagging metrics are not overly sensitive to actual performance, making trending and forecasting difficult. This article presents the results from a statistical study of a large incident dataset where changes in the Pareto shape parameter were observed as a function of time. This approach has been found to give far better insight into process safety performance than traditional incident metrics and readily relates back to concepts such as the “incident triangle” and “layers of protection.” Through the application of this approach, trends within process safety incident performance have been observed earlier, and more accurate forecasting has allowed for the identification of anomalies. In turn, these critical observations have allowed for the better structuring and targeting of process safety programs. Although incident data are generally considered as a lagging indicator, this approach has clearly reduced the lag time associated with this type of data and has given valuable insight into the current status of process safety performance. © 2009 American Institute of Chemical Engineers Process Saf Prog 2009