Why Do Companies Need Operational Flexibility to Reduce Waste at Source?

We analyze the environmental benefits of operational flexibility that emerge in the form of less product waste during the sourcing process by reducing overproduction. We consider three different options for operational flexibility: (1) lead-time reduction, (2) quantity-flexibility contracts, and (3) multiple sourcing. We use a multiplicative demand process to model the evolutionary dynamics of demand uncertainty. We then quantify the impact of key modeling parameters for each operational-flexibility strategy on the waste ratio, which is measured as the ratio of excess inventory when a certain operational-flexibility strategy is employed to the amount when an offshore supplier is utilized without any operational flexibility. We find that the lead-time reduction strategy has the maximum capability to reduce waste in the sourcing process of buyers, followed by the quantity-flexibility and multiple-sourcing strategies, respectively. Thus, our results indicate that operational-flexibility strategies that rely on the localization of production are key to reducing waste and improving environmental sustainability at source.

A bilevel game model for ascertaining competitive target prices for a buyer in negotiation with multiple suppliers

In this paper, a decision-support is developed for a strategic problem of identifying target prices for the single buyer to negotiate with multiple suppliers to achieve common goal of maintaining sustained business environment. For this purpose, oligopolistic-competitive equilibrium prices of suppliers are suggested to be considered as target prices. The problem of identifying these prices is modeled as a multi-leader-single-follower bilevel programming problem involving linear constraints and bilinear objective functions. Herein, the multiple suppliers are considered leaders competing in a Nash game to maximize individual profits, and the buyer is a follower responding with demand-order allocations to minimize the total procurement-cost. Profit of each supplier is formulated on assessing respective operational cost to fulfill demand-orders by integrating aggregate-production-distribution-planning mechanism into the problem. A genetic-algorithm-based technique is designed in general for solving large-scale instances of the variant of bilevel programming problems with multiple leaders and single follower, and the same is applied to solve the modeled problem. The developed decision support is appropriately demonstrated on the data of a leading FMCG manufacturing firm, which manufactures goods through multiple sourcing.

Negotiating Government-to-Government Food Importing Contracts: A Nash Bargaining Framework

Problem definition: Inspired by India’s challenges in importing pulses, we study the negotiation of government-to-government food importing contracts, with a focus on ad hoc and forward negotiations with multiple suppliers (henceforth referred to as multiple-sourcing negotiations). Academic/practical relevance: We are the first to comprehensively study ad hoc and forward multiple-sourcing negotiations for food importing. Such problems are widespread, especially in developing nations, and thus the research can be relevant to the wellbeing of large underprivileged populations. Methodology: We develop an analytical negotiation model in the Nash bargaining framework and adopt the Nash-in-Nash framework to analyze multiple-sourcing negotiations. Results: We find that while forward negotiations are not necessarily better than ad hoc negotiations for the buyer, it would be true with sufficiently many suppliers. When facing a supplier pool, we show that it may be optimal to mix forward and ad hoc suppliers. In general, fewer suppliers should be assigned as ad hoc as the pool size increases. We also find that adding a hybrid supplier (engaged in a forward negotiation with an ad hoc negotiation as the fallback option) may be better or worse than adding a forward supplier in the presence of other suppliers. Managerial implications: Our findings inform how a food importer should strategically utilize ad hoc and forward negotiations with its suppliers to improve the outcome. The work may help countries’ food importing policymaking and strategies and may improve the wellbeing of large underprivileged populations.

Designing a disruption-aware supply chain network considering precautionary and contingency strategies: A real-life case study

Due to the high risk in the business environment, supply chains must adopt a tailored mechanism to deal with disruptions. This research proposes a multi-objective formulation to design a robust and resilient forward supply chain under multiple disruptions and uncertainty. The mentioned objective functions include minimizing the total cost, environmental impacts, and the network non-resiliency associated with the supply chain simultaneously countered using an augmented ε-constraint method. A Mulvey robust optimization approach is also utilized to deal with uncertainty. Ultimately, the developed model is validated based on three datasets associated with a case study of the steel industry. The results indicate that preventive and mitigation resilience strategies have significantly promoted the supply chain's capabilities to deal with disruptions. Controlling network resiliency via non-resiliency measures has also created a risk-aware and robust structure in the incidence of disturbances. Numerical results reveal that multiple sourcing, lateral transshipment, and fortification of facilities will lead to the greatest cost-efficiency in the case study. Observations also indicate that the fortified supply chain will be highly economically viable in the long run due to the reduction of costs resulting from lost sales, unnecessary inventory holding, and the company's credit risk.

Enhancing healthcare supply chain resilience: decision-making in a fuzzy environment

PurposeResilience is a fundamental component of healthcare supply chains, as the quality and endurance of human life are dependent on them. However, there are numerous resilience-building measures, and there is a need for prioritization of those strategies. This research study aims to prioritize resilience strategies for healthcare supply chains while considering the risks that most severe, probable to occur and have the lengthiest periods of recovery.Design/methodology/approachThis research study has used multi-criteria decision-making (MCDM) techniques for analysis. Initially, the criteria for prioritization of risks, i.e. severity, probability of occurrence and recovery time were assigned with importance weights through the fuzzy analytical hierarchy process (AHP). Then, these weights were used in the fuzzy technique for order preference by similarity to ideal solution (TOPIS) analysis for prioritization of risks. Subsequently, the identified risks were used for highlighting the appropriate resilience strategies through the fuzzy quality function deployment (QFD) technique.FindingsResults indicate that Industry 4.0, multiple sourcing, risk awareness, agility and global diversification of suppliers, markets and operations are the most significant resilience strategies.Research limitations/implicationsThis study's limitation is that it is conducted in a general perspective, rather than reducing the context to a developing or developed country. Different areas have variable market factors, due to which potential risks occur in a different form. Moreover, resilience strategies work differently in different environments. Therefore, for future endeavors, the studies should be carried out in a limited context.Originality/valueThis research study proposes a novel MCDM-based approach for ranking resilience strategies, in light of the most probable, severe and long-lasting risks. In addition, this approach has been employed for the enhancement of resilience in healthcare supply chains.

Teknik Pengambilan Keputusan pada Pemilihan Supplier : A Literature Review

The presence of the internet and the development of technology make information exchange faster so that consumer preferences for products quickly change. This has an impact on increasingly shorter product life cycles. The company needs to improve the efficiency of supply chain performance in order to have competitive competitiveness. Supplier selection is one of the important activities in the purchasing process and has an impact on the design strategy of supply chain design. This research presents a literature review of supplier selection decision making methods for single sourcing and multiple sourcing cases by collecting articles from relevant international journals from 2010 to early 2020 to find research recommendations for supplier selection in the future. From the results of literature studies that have been carried out, it is necessary to develop a decision-making method that combines qualitative and quantitative criteria to select potential suppliers. The process of selecting suppliers that not only ranks but also determines cut-offs to distinguish which are included in the category of potential suppliers and which are not.

Public procurement in Malaysia: objectives and procurement principles

PurposeThe objectives of this paper are twofold. Firstly, to examine the importance of Malaysian public procurement objectives and secondly, to investigate the extent to which government suppliers adhere to public procurement principles.Design/methodology/approachFor achieving the objectives, a questionnaire survey was used. A total of 250 questionnaires were distributed to government suppliers involved in the government tendering process. In return, a total of 107 useable questionnaires were received, representing a response rate of 42.8%. Descriptive statistics of the means score, standard deviation and mean score ranking were used to analyse the data.FindingsThe results revealed that the most important public procurement objective is “to ensure a continuous supply of material and services to meet the government needs from the best and reliable sources”. On the other hand, the objectives “to expand the local industrial sector by means of transfer of technology and expertise to suit the nation's needs” and “to promote alternative and multiple sourcing through supplier development according to the aspirations and vision of the government” are perceived as not important by the government suppliers. The findings also discovered a moderate level of adherence to Malaysia's public procurement principles, which consist of public accountability, transparency, open and fair competition, fair dealing and value for money. Amongst these principles, the most adhered to is the open and fair competition principle and the least adhered to is the transparency principle.Originality/valueThis study is one of the few studies that assess the government suppliers' perceptions of public procurement in Malaysia. More importantly, this study may give some ideas to various parties concerning the areas in which improvement is required to ensure that equal importance is given to the public procurement objectives and better adherence to the public procurement principles in Malaysia.

UPSTREAM SUPPLY CHAIN DILEMMA – SINGLE OR MULTIPLE SOURCING

Supply chains, as networks of companies, are focused on creating greater value to meet market needs with aim to achieve higher profitability. In this regard, all activities and processes within supply chain, starting from supply of raw materials until to the delivery of final products at the market, must be organized bearing in mind the aim of the supply chain. The focus of the paper is on upstream supply chian, and on solving the dilemma of supplying from single or muliple sources. The significance of this part of supply chain arises from the fact that any potential disorder or disruption in supplying can jeopardize making the value for consumers and the survival of the whole chain. Considering that due to the reduction in the complexity of upstream supply chain management, there is a trend of supplier base reduction, the aim of the paper is to determine how much this trend is present in the Republic of Serbia, with a special emphasis on the food industry. Using by regression analysis and based on the results of empirical research.

Strategic Sourcing as a Tool for Improving Firm’s Performance

Purpose The purpose of this paper is to investigate effectiveness of strategic sourcing for improving firm’s performance. Design/Methodology/Approach A cross-sectional approach was adopted with primary data collected. The data yielded a response rate of 375 from electricity firms in Kenya. The data collected were put through rigorous statistical analysis to test content validity as well as reliability. Further, simple linear regression model was used to test relationships between strategic sourcing and firm’s performance. Findings The finding suggests that a successful implementation of strategic sourcing improves firm’s performance through adoption of multiple sourcing strategies as well as maintaining manageable supply base. Further, the paper reveals that wrong choice of suppliers can negatively compromise the quality of products and services of the firm. Research limitations/implications Strategic sourcing is complex and very sensitive issue. While the study show the effect is generally accepted strategic sourcing strategies for improving firm’s performance, not all strategic sourcing strategies are covered in the study. Also, the study can be carried on in other sector in order refine the study findings. Originality/Value The study provides an empirical analysis on the strategic sourcing strategies and their effect on firm’s performance. Again the study seeks to provide a research agenda which meets the needs of today’s business sourcing requirements.