Watch the working capital of tier-two suppliers: a financial perspective of supply chain collaboration in the automotive industry

2016 ◽  
Vol 21 (3) ◽  
pp. 321-333 ◽  
Author(s):  
Xosé H. Vázquez ◽  
Antonio Sartal ◽  
Luis M. Lozano-Lozano
Keyword(s):  
Supply Chain ◽  
Panel Data ◽  
Value Chain ◽  
Production Efficiency ◽  
Point Of View ◽  
Supply Chain Collaboration ◽  
Working Capital ◽  
Content Type ◽  
Novel Approach ◽  
Second Tier

Purpose This paper aims to examine how lack of financial cooperation damages the operational efficiency of supply chains. The thesis is that economic and technological forces are provoking increasing financial tensions that push companies to transfer their credit needs and inventory requirements to their weakest suppliers. Thus, what might initially seem positive from an individual perspective can in fact generate losses in production efficiency for the supply chain as a whole. Design/Methodology/approach This paper uses official data collected from 116 first- and second-tier suppliers in the Spanish automotive components sector, covering nine years (2001-2009). The relationships between the key variables are analysed using panel data estimations. Findings Significant differences were found between the working capital (WC) of first- and second-tier companies, proving additionally that although this approach may temporarily improve the results of first-tier suppliers, it leads to lower production efficiency in plants throughout the value chain. Practical implications Practitioners should avoid short-sighted attitudes when organizing the supply chain on a cooperative basis, going beyond the conventional wisdom on physical and information flows between original equipment manufacturers and their suppliers to reach upstream stages and embracing financial considerations. Originality/value The paper takes a novel approach to the issue of inter-organizational collaboration in the supply chain, aiming to go beyond conventional Lean Supply practices. From an empirical point of view, while much of the research on the topic utilizes key informant insights collected using psychometric data collection techniques, this study uses different financial proxies collected from secondary panel data.

Information exchange in vendor managed inventory

2007 ◽  
Vol 37 (2) ◽  
pp. 131-147 ◽  
Author(s):  
Astrid Vigtil
Keyword(s):  
Supply Chain ◽  
Literature Review ◽  
Information Sharing ◽  
Value Chain ◽  
Information Exchange ◽  
Supply Chain Collaboration ◽  
Vendor Managed Inventory ◽  
Content Type ◽  
Sales Forecasts ◽  
Multiple Case

PurposeVendor managed inventory (VMI) is a model for supply chain collaboration gaining ground in multiple industries around the world. Forecasting is one of several means to predict future demand. The purpose of this paper is to identify what types of advance demand data would be valuable to the supplier for successful replenishment planning in cases of VMI, frequency and means of information exchange.Design/methodology/approachThe work is based on a literature review and a multiple case study where both successful and unsuccessful VMI collaboration programs are studied. In all cases, the supplier or the customer was a manufacturer. The discussion is based on case‐observations of causes and effects that are compared with existing literature.FindingsIt is found that current inventory status and sales forecasts are the most important kinds of information to be made available to the supplier in a VMI relationship. This also conforms with the general perception of the literature review. Some kinds of information are found valuable while other kinds are found not to be of importance. It was also found that kinds of information differ with the type of supply chain activities being performed by the customer, i.e. there is a different kind of information recommended when the customer makes to stock than when he is a wholesaler or a manufacturer making to order. This observation has not been discussed in the literature reviewed.Research limitations/implicationsThe value of generalization from case studies is subject to general discussion. The cases applied in this research encompass Norwegian suppliers and dyads at the upstream end of the value chain. Geographically related cultural differences might limit the applicability of this work.Originality/valueThe findings support the existing literature and this paper takes a practitioner's perspective on information sharing. The aim is to offer a comprehensive yet educational view of information sharing and VMI.

System dynamics analysis of supply chain financial management during capacity expansion

2019 ◽  
Vol 15 (2) ◽  
pp. 623-645
Author(s):  
Omogbai Oleghe
Keyword(s):  
Supply Chain ◽  
System Dynamics ◽  
Value Chain ◽  
Financial Management ◽  
Discrete Event ◽  
Capacity Expansion ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Content Type

Purpose This study aims to describe in detail, a system dynamics-based study that was used to show how a large vertically integrated aquaculture company should approach its stepwise capacity expansion program, without undermining its financial performance or affecting the performance of the value chain. Design/methodology/approach The company and its aquaculture value chain are used as case study. A system dynamics model is developed on the basis of generic end-to-end agribusiness and aquaculture supply chain models. The model includes the unique dynamics relating to an aquaculture supply chain. Also modelled is the working capital management rules of the company, with the effects of the capacity expansion program on its working capital, market share and its supply chain obligations. The model is used to determine the long-term impact of the company’s working capital management under different modes of financing and rate of expanding the capacity. Findings For a large vertically integrated company that wants to increase its capacity, there is a systematic approach to working capital management that can be used to avoid financial distress or value chain distortion. Research limitations/implications Extended the scope of system dynamics modelling within multiple disciplines, namely, agribusiness supply chain finance, supply chain capacity investment, financial management in large companies, supply chain working capital management and aquaculture value chain. Practical implications The developed model can be used to manage supply chain working capital in large vertically integrated agribusinesses, and also to assess supply chain financial risk. Originality/value To enhance the model build, discrete event simulation was used to model aspects of the system. The eventual system dynamics-discrete event simulation model is a form of hybrid simulation modelling that was used to provide a deeper understanding of how supply chain financial decisions affect an entire value chain system.

An analysis of supply chain issues relating to information flow during the automotive product development

2015 ◽  
Vol 26 (8) ◽  
pp. 1158-1176 ◽  
Author(s):  
Nikolaos Madenas ◽  
Ashutosh Tiwari ◽  
Christopher Turner ◽  
Sophie Peachey
Keyword(s):  
Supply Chain ◽  
Product Development ◽  
Information Flow ◽  
Empirical Studies ◽  
Multinational Companies ◽  
Supply Chain Collaboration ◽  
Content Type ◽  
Inadequate Information ◽  
The Individual ◽  
Number Of Customers

Purpose – The purpose of this paper is to identify measure and prioritise the perceived importance of supply chain issues within the automotive industry related to information flow during product development (PD). Design/methodology/approach – This study analyses empirical data captured from semi-structure interviews with 15 multinational companies operating in the automotive sector. Data collected are analysed using a standard methodology identified from the literature. The individual issues captured are classified against 14 clusters that represent the core and the fundamental supply chain issues of information flow. Findings – This study showed that half of the issues captured are related to the inadequate information systems used. The cluster that had the majority of individual issues is related to suppliers that are not directly connected with their customers through an enterprise system. However it was identified that two fundamental clusters justify the decision of not being directly connected. Implementing and maintaining multiple enterprise systems can be a big overhead for multinational companies working with a high number of customers. Originality/value – Although several studies have proved the benefits that can be obtained through supply chain collaboration, there are relatively little empirical studies that seek to explore the understanding of supply chain issues in regards to information flow especially during PD. By identifying, measuring and prioritising the importance of supply chain issues this study provides researchers and practitioners guidance in developing better tools and defining more efficient processes.

Accounting of gross exports and tracing foreign values in the global pharmaceutical value chain

2018 ◽  
Vol 22 (4) ◽  
pp. 348-363
Author(s):  
Chang-soo Lee ◽  
Mikyung Yun
Keyword(s):  
Value Chain ◽  
Decomposition Method ◽  
Design Methodology ◽  
Bilateral Trade ◽  
Value Chains ◽  
Vertical Specialization ◽  
Content Type ◽  
Second Tier ◽  
First Time ◽  
European Regional

Purpose The purpose of this paper is to document for the first time the vertical specialization structure of the global pharmaceutical value chain. Design/methodology/approach The paper adopts Wang et al.’s (2013) gross exports decomposition method to trace foreign values in bilateral trade between major pharmaceutical producers, using the 2014 WIOT database. Findings The paper shows that as in other sectoral value chains, the pharmaceutical value chain is heavily regional. The paper identifies a strong European regional value chain, and a less intensive, Asian regional value chain. Korea is positioned in the middle of the Asian value chain, and is connected to the European regional value chain as a second-tier supplier. Originality/value The paper documents the vertical specialization structure of the global pharmaceutical value chain through gross exports decomposition method, making use of the World Input–Output Table Database 2014 which disaggregates pharmaceuticals in its industry classification for the first time.

scholarly journals An empirical study of oil and gas value chain agility in the UAE

2018 ◽  
Vol 25 (9) ◽  
pp. 3541-3569 ◽  
Author(s):  
Ala Shqairat ◽  
Balan Sundarakani
Keyword(s):  
Supply Chain ◽  
United Arab Emirates ◽  
Value Chain ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Value Chains ◽  
Study Region ◽  
Content Type ◽  
Moderate Effect ◽  
The Impact

Purpose The purpose of this paper is to investigate the agility of oil and gas value chains in the United Arab Emirates (UAE) and to understand the impact of implementing supply disruption (SD) strategies, outsourcing strategies (OS) and management strategies (MS) on oil and gas value chain agility (VCA). The results can support the oil and gas industry across the UAE to build resilience in the value chain. Design/methodology/approach The research design consists of a comprehensive literature review, followed by questionnaire-based survey responses of 106 participants and comprehensive statistical analysis, thus validate the developed theoretical framework and contribute to both practical and methodological approaches. Findings The findings indicate that oil and gas value chain in the UAE has moderate a significant degree of SD, when OS in place that are synchronized with the overall MS. Among the hypotheses developed, two were accepted thus warranting both SD strategies (r=+0.432) and MS (r= +0.457) found to have a positive moderate effect on VCA. The third hypothesis was rejected by revealing OS (r=+0.387) found to have a positive moderate relationship with VCA. Therefore, implementation of all three strategies has a positive moderate effect on the agility of the value chain and, therefore, supports to sustain competitive position. Research limitations/implications Some of the limitations of this research include the geographic coverage of the study region and other methodological limitation. Practical implications The research provides guidance for oil and gas supply chain managers to better understand the critical factors that impact and determine VCA. The paper also describes relevant strategies that should be taken into consideration by these managers in order to build their agile value chains. Social implications The research contributes to the social dimensions of supply chain sustainability of how resilient is the oil and gas value chain during uncertain conditions, so that it can respond to uncertain changes in order to contribute to corporate social responsibility. Originality/value This research is the first of its kind in the UAE region to assess the link between dimensions of agile value chain, OS, SD strategies and MS primarily from the Emirates of Abu Dhabi and Dubai.

Relational asymmetry, trust, and innovation in supply chain management: a non-linear approach

2019 ◽  
Vol 30 (1) ◽  
pp. 303-328 ◽  
Author(s):  
Marek Michalski ◽  
Jose Luis Montes ◽  
Ram Narasimhan
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Institutional Environment ◽  
Least Squares Method ◽  
Cross Sectional ◽  
Chain Management ◽  
Content Type ◽  
Relationship Analysis ◽  
Novel Approach ◽  
Non Linear

PurposeThe purpose of this paper is to examine the non-linear aspects of the asymmetry-performance relationship under varying conditions of trust and innovation. Its novel approach is useful for addressing the strategic elements of supply chain management (SCM) relationships based on trust and innovation decisions.Design/methodology/approachResults are based on a study of 90 managers from small- and medium-sized firms in Spain. Instead of a classical linear relationship analysis, the authors performed a non-linear analysis, using polynomial modeling and Warp 3 partial least squares method, which provides a more nuanced view of the data and constitutes an original approach to empirical research in SCM.FindingsThis study adds a new viewpoint on SC relationships by suggesting that not all trust and innovation development leads directly to performance improvement. The principal finding is, in varying trust and innovation contexts, that the influences of asymmetry on performance have uneven characteristics and follow non-linear paths.Research limitations/implicationsThis study focuses on only one particular institutional environment in one country. The data are also cross-sectional, which makes it difficult to empirically test causality.Practical implicationsThe findings provide rational insights to managers on when it is appropriate to reduce (or not) asymmetric relationships with partners.Originality/valueTrust and innovation are important and ones of the key requirements of supply chain relationships in any environment, this study argues that the interactions of key SCM elements that drive members to better performance are more complex and non-linear.

Sustainable logistics barriers of fruits and vegetables

2018 ◽  
Vol 25 (8) ◽  
pp. 2589-2610 ◽  
Author(s):  
Rakesh Raut ◽  
Bhaskar B. Gardas
Keyword(s):  
Supply Chain ◽  
Value Chain ◽  
Fruits And Vegetables ◽  
Structural Model ◽  
Fresh Produce ◽  
Sustainable Transportation ◽  
Three Dimensions ◽  
Interpretive Structural Modeling ◽  
Content Type ◽  
Sustainable Logistics

PurposeThe reduction of food wastage at every stage of a fresh produce supply chain helps in achieving balance among all three dimensions (social, ecological and economic) of the sustainability and helps in stimulating the growth and development in the agricultural domain. The purpose of this paper is to address the causal factors of post-harvesting losses (PHLs) occurring in the transportation phase.Design/methodology/approachThrough exhaustive literature survey and expert opinions, 12 crucial barriers to sustainable transportation of fruits and vegetables (F&V) are identified. The interpretive structural modeling (ISM) methodology, a multi-criteria decision-making (MCDM) approach, is employed for developing a structural model of the identified barriers.FindingsThe results of the analysis highlighted that two factors, namely, the non-availability of refrigerated vehicles, and excessive loading on the vehicles, are the most significant barriers to sustainable transportation which are found to have the highest driving power.Research limitations/implicationsThe results of the present research are applicable to the F&V supply chains only. The established interrelation among the identified factors depends on the judgments given by the experts which could be biased. The developed ISM model is intended to guide the policy and decision makers for formulating the policies for the performance improvement of the fresh produce value chain.Originality/valueIt is the first research of its kind focusing on the model development of critical factors causing PHLs in the transportation phase of the agricultural fresh produce supply chain using MCDM process.

Moving towards “Slow Food”, the new frontier of culinary innovation in India

2016 ◽  
Vol 8 (4) ◽  
pp. 444-460 ◽  
Author(s):  
Sandeep Munjal ◽  
Sanjay Sharma ◽  
Pallavi Menon
Keyword(s):  
Supply Chain ◽  
Value Chain ◽  
Positive Impact ◽  
Round Table Discussion ◽  
Bottom Line ◽  
Slow Food ◽  
Content Type ◽  
Hospitality Sector ◽  
Integrated Supply Chain ◽  
Backward Integration

Purpose The paper aims to research the current understanding of Slow Food in the Indian hospitality sector and to identify how the industry can embrace the concept and its sustainability. To begin, underpinnings are considered in relation to traditional, locally produced food for patrons that is actually “farm to fork” in terms of its delivery model as evidenced by backward integration in the supply of key ingredients. The economics of the backward integration is analysed to measure its impact on businesses’ bottom-line in the context of an inflationary economy. Design/methodology/approach Existing published literature is reviewed with reference to the “Slow Food movement” from both an international and Indian perspective. Vedatya’s approach to sustainable culinary value chain creation and its applicability for industry adoption with an intent to offer Slow Food on commercial menus is documented and discussed. A round table discussion with key food and beverage leaders is also documented and analysed to establish the current state of awareness and readiness of the sector to offer “Slow Food” through an integrated supply chain in India. Findings Slow Food as a concept is new to India; there is a huge shift in many parts of the world towards food that is fresh, traditional and drawn from locally available ingredients. This research shares Vedatya’s experience in developing an integrated value chain that can provide a sustainable Slow Food model for the Indian hospitality and restaurant sector to deploy with a positive impact on profitability too. Research limitations/implications There is need for more research to better understand the feasibility of hospitality businesses working on supply chain with backward integration, to offer “Slow Food” to consumers. While there seems to be a demand for traditional food, this paper does not research that aspect; further research is required to ascertain the potential demand for Slow Food in India. Practical implications The popularity of Slow Food is global; however, the Indian hospitality sector is yet to warm up to this potential. The customer focus on healthy, traditional, fresh food opens an opportunity to innovate, and businesses that build capacity to offer real farm-to-fork menus can become market leaders and will reap bottom-line benefits through lower input costs because of supply chain integration. Originality/value This paper is unique in terms of offering a discussion on the potential of Slow Food as the next realm of culinary innovation in India. It also adds value by sharing the Vedatya experience in terms of developing an integrated supply chain that facilitates the Slow Food offering in a farm-to-fork format. The model can be emulated by commercial hospitality businesses resulting in cost advantages and higher satisfaction levels of customers.

scholarly journals Transforming the news value chain in the social era: a community perspective

2015 ◽  
Vol 20 (3) ◽  
pp. 313-326 ◽  
Author(s):  
Maria Jose Hernandez Serrano ◽  
Anita Greenhill ◽  
Gary Graham
Keyword(s):  
Supply Chain ◽  
Conceptual Framework ◽  
Value Chain ◽  
Firm Strategy ◽  
Consumer Participation ◽  
Community Type ◽  
Local News ◽  
Content Type ◽  
The Social ◽  
News Industry

Purpose – The purpose of this paper is to develop a conceptual framework to understand the influence that the social era is having on the value chain of the local news industry. The authors theoretically advance value chain theory by, firstly, considering the influence of community type and age on consumption and, secondly, exploring the role that consumers can play in value-adding activities. The theoretical contribution of this study lies in moving from a transactional approach towards consumer relationships in the value chain towards managing consumers as a source of relational value (e.g. co-creation and integrated perspectives). Design/methodology/approach – The conceptual framework is theoretically positioned in relation to community and digital community practices in the social era. A series of research questions are presented, then these questions are explored drawing on empirical data from the Pew database. The authors then advance the framework further to consider news firm strategy towards its consumers. Fifteen in-depth executive interviews were conducted with local news organizations in the Manchester area of the UK. Findings – The authors illustrate that different types of communities (merging cohorts and locations) are influencing levels of technological and social connectivity within the value chain. The authors also found that the news industry is experimenting with reconfiguring its consumer relations from a purely transactional to a co-created and participatory value-added activity in the social era. In terms of its policy impact, the findings in this paper show that the whole strategic value chain ideology of the news industry needs to change radically; away from its largely transactional (and lack of trust) approach in the ability of consumers to create value in the supply chain (other than to buy a product) and, move towards much greater consumer involvement and participation in value chain processes (creation, production and distribution of news products and services). Originality/value – The change associated with social media and connectivity is changing the way that different community types and consumer groups are now consuming and participating in news content creation. Unlike previous studies, the authors show that there is variance and complexity in the levels of consumer participation by community type/age group. Using the Pew data, the authors contribute to knowledge on the value creation strategy of news firms in the social era, by identifying how communicative, social and communicative logics influence value and co-creation activities in the local news supply chain. Through interviews, the authors advance value co-creation theory from its strategic and marketing origins to operational and supply chain implementation.

A quantitative framework for lean and green assessment of supply chain performance

2018 ◽  
Vol 67 (2) ◽  
pp. 366-400 ◽  
Author(s):  
Shashank Thanki ◽  
Jitesh Thakkar
Keyword(s):  
Supply Chain ◽  
Performance Measures ◽  
Value Chain ◽  
Evaluation Framework ◽  
Fuzzy Decision Making ◽  
Causal Relationships ◽  
Assessment Framework ◽  
Content Type ◽  
Green Performance ◽  
Lean And Green

Purpose The purpose of this paper is to propose a balanced scorecard (BSC)- and strategy map-based quantitative framework for assessing the lean and green performance of the supply chain (SC). As the SC competitiveness demands efficient and effective utilization of resources throughout the value chain, not only adoption of lean and green SC paradigms but simultaneously its performance evaluation is also vital. Design/methodology/approach The lean and green SC performance measures are classified into four categories of BSC. A fuzzy decision-making trial and evaluation laboratory (DEMATEL) methodology combined with analytical network process is proposed for examining the causal relationships between BSC perspectives and respective assessment criteria. The application of the proposed assessment framework is demonstrated for the case of Indian textile SC. Findings The research delivers a quantitative assessment framework for evaluating lean and green performance of the SC. The results obtained for a typical case of Indian textile SC revealed that “delivery performance,” “profitability” and “operational cost” are the most crucial performance measures. The perspective of “internal processes” is the most significant of all BSC perspectives while “learning and growth” perspective acts as the driving force to improve lean and green SC performance. Originality/value The paper makes two contributions in the domain of lean and green assessment of SC performance. First, it proposes an evaluation framework to investigate into the causal relationships among the BSC perspectives and related factors. Second, it undertakes an empirical investigation for Indian textile SC to develop key managerial insights and provide policy-related recommendations.

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