scholarly journals Managing Cost Reduction Efforts in Supplier Encroachment

2021 ◽  
Vol 2021 ◽  
pp. 1-6
Author(s):  
Xunbo Wu ◽  
Jinling Zhao ◽  
Ming Wang
Keyword(s):  
Supply Chain ◽  
Cost Reduction ◽  
Retail Competition ◽  
Extant Literature ◽  
Managerial Implications ◽  
The Cost ◽  
Reduction Effort

The extant literature has indicated that upstream supplier encroachment on the incumbent retailer could be beneficial to the supplier, the retailer, and the entire industry, when the supplier’s marketing disadvantage satisfies specific conditions. This study extends the previous investigations about supplier encroachment to the circumstance where the supplier is capable of managing and mitigating her marketing disadvantage, which further intensifies the retail competition and provides new managerial implications about the encroachment. We find that encroachment with cost reduction efforts does not necessarily hurt the retailer and the industry but always benefit the supplier and consumers. Compared to encroachment without the cost reduction effort, encroachment with cost reduction efforts does not necessarily benefit the supplier and the industry. Between encroachment with and without cost reduction efforts, the retailer and consumers always prefer the latter and the former, respectively. Our findings provide meaningful insights to manage cost reduction efforts in supply chain encroachment.

Strategic Cost Management in the Supply Chain

2020 ◽  
Author(s):  
Lisa M. Ellram ◽  
Wendy L. Tate
Keyword(s):  
Supply Chain ◽  
Cost Reduction ◽  
Return On Investment ◽  
Cost Management ◽  
Strategic Cost Management ◽  
Supply Chain Finance ◽  
Supply Chain Costs ◽  
Definition Of ◽  
The Cost

Companies increasingly face challenging economic times, where it is not uncommon to see revenues decline or remain stagnant. This can strain business viability and reduce the return on investment for shareholders. To increase the return on investment and favorably impact profitability, organizations focus on cost reduction efforts. Cost management should be both holistic and purposeful, while taking a supply chain perspective. This is often not the case because the cost reduction efforts tend to be internal and short-term focused and do not consider the supply chain implications of decisions. Strategic cost management takes a supply chain perspective and includes several tools that can help facilitate cost management. This chapter provides a definition of strategic cost management with supporting examples. It also discusses some tools, including total cost of ownership, target costing, and supply chain finance, that can be used to holistically and strategically manage supply chain costs. The chapter closes with a discussion around the growing role of supply chain finance in cost management.

Evaluating the Modern Airlines Maintenance Parts Supply Chain Reliability and Effectiveness

2018 ◽  
Vol 3 (03) ◽  
Author(s):  
Surya Lokesh Bhargav Pentakota ◽  
Pranusha Chalasani ◽  
Sai Krishna Mekala ◽  
Samuel I Okate
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Supply Chains ◽  
Inventory Control ◽  
Analytical Model ◽  
Cost Reduction ◽  
Contextual Analysis ◽  
Rfid System ◽  
Support Organizations ◽  
The Cost

The estimation of RFID in the support of supply chains of aircraft parts is of growing interest and is analyzed, especially in the proposed analytical model of this paper. This model helps us pick up a superior comprehension of the connections between different expenses brought about and the RFID impact on an aircraft support following procedure. Utilizing a RFID system, the company specialized in aircraft parts can accumulate savings. For this we need to consider that technology can remove inaccuracy in inventory delays brought about by mishandling in the component repair. This contextual analysis represents wonder through the utilization of numerical suppositions, highlighting the advantages of RFID. Furthermore, the estimation of RFID in aircraft maintenance is assessed utilizing sensitivity analysis, as per the parameters of the model of expense decreases in misusing repair parts and inventory control. The discoveries support the industry acceptance of RFID innovation, demonstrating that this is beneficial to support organizations of aircraft parts. Finally, in this paper we are considering the mishandling of the damaged parts of the air craft and also the cost reduction and the mishandling of the inventory parts. A sensitivity analysis is also carried out for the parameters that are used for the decrease in the utilizing the parts, cost reduction and the inventory control.

Evaluating the Modern Airlines Maintenance Parts Supply Chain Reliability and Effectiveness

2018 ◽  
Vol 1 (01) ◽  
Author(s):  
Surya Lokesh Bhargav Pentakota ◽  
Pranusha Chalasani ◽  
Sai Krishna Mekala ◽  
Samuel I Okate
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Supply Chains ◽  
Inventory Control ◽  
Analytical Model ◽  
Cost Reduction ◽  
Contextual Analysis ◽  
Rfid System ◽  
Support Organizations ◽  
The Cost

The estimation of RFID in the support of supply chains of aircraft parts is of growing interest and is analyzed, especially in the proposed analytical model of this paper. This model helps us pick up a superior comprehension of the connections between different expenses brought about and the RFID impact on an aircraft support following procedure. Utilizing a RFID system, the company specialized in aircraft parts can accumulate savings. For this we need to consider that technology can remove inaccuracy in inventory delays brought about by mishandling in the component repair. This contextual analysis represents wonder through the utilization of numerical suppositions, highlighting the advantages of RFID. Furthermore, the estimation of RFID in aircraft maintenance is assessed utilizing sensitivity analysis, as per the parameters of the model of expense decreases in misusing repair parts and inventory control. The discoveries support the industry acceptance of RFID innovation, demonstrating that this is beneficial to support organizations of aircraft parts. Finally, in this paper we are considering the mishandling of the damaged parts of the air craft and also the cost reduction and the mishandling of the inventory parts. A sensitivity analysis is also carried out for the parameters that are used for the decrease in the utilizing the parts, cost reduction and the inventory control.

Evaluating the Modern Airlines Maintenance Parts Supply Chain Reliability and Effectiveness

2018 ◽  
Vol 2 (06) ◽  
Author(s):  
Surya Lokesh Bhargav Pentakota ◽  
Pranusha Chalasani ◽  
Sai Krishna Mekala ◽  
Samuel I Okate
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Supply Chains ◽  
Inventory Control ◽  
Analytical Model ◽  
Cost Reduction ◽  
Contextual Analysis ◽  
Rfid System ◽  
Support Organizations ◽  
The Cost

The estimation of RFID in the support of supply chains of aircraft parts is of growing interest and is analyzed, especially in the proposed analytical model of this paper. This model helps us pick up a superior comprehension of the connections between different expenses brought about and the RFID impact on an aircraft support following procedure. Utilizing a RFID system, the company specialized in aircraft parts can accumulate savings. For this we need to consider that technology can remove inaccuracy in inventory delays brought about by mishandling in the component repair. This contextual analysis represents wonder through the utilization of numerical suppositions, highlighting the advantages of RFID. Furthermore, the estimation of RFID in aircraft maintenance is assessed utilizing sensitivity analysis, as per the parameters of the model of expense decreases in misusing repair parts and inventory control. The discoveries support the industry acceptance of RFID innovation, demonstrating that this is beneficial to support organizations of aircraft parts. Finally, in this paper we are considering the mishandling of the damaged parts of the air craft and also the cost reduction and the mishandling of the inventory parts. A sensitivity analysis is also carried out for the parameters that are used for the decrease in the utilizing the parts, cost reduction and the inventory control.

Evaluating the Modern Airlines Maintenance Parts Supply Chain Reliability and Effectiveness

2018 ◽  
Vol 3 (07) ◽  
Author(s):  
Surya Lokesh Bhargav Pentakota ◽  
Pranusha Chalasani ◽  
Sai Krishna Mekala ◽  
Samuel I Okate
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Supply Chains ◽  
Inventory Control ◽  
Analytical Model ◽  
Cost Reduction ◽  
Contextual Analysis ◽  
Rfid System ◽  
Support Organizations ◽  
The Cost

The estimation of RFID in the support of supply chains of aircraft parts is of growing interest and is analyzed, especially in the proposed analytical model of this paper. This model helps us pick up a superior comprehension of the connections between different expenses brought about and the RFID impact on an aircraft support following procedure. Utilizing a RFID system, the company specialized in aircraft parts can accumulate savings. For this we need to consider that technology can remove inaccuracy in inventory delays brought about by mishandling in the component repair. This contextual analysis represents wonder through the utilization of numerical suppositions, highlighting the advantages of RFID. Furthermore, the estimation of RFID in aircraft maintenance is assessed utilizing sensitivity analysis, as per the parameters of the model of expense decreases in misusing repair parts and inventory control. The discoveries support the industry acceptance of RFID innovation, demonstrating that this is beneficial to support organizations of aircraft parts. Finally, in this paper we are considering the mishandling of the damaged parts of the air craft and also the cost reduction and the mishandling of the inventory parts. A sensitivity analysis is also carried out for the parameters that are used for the decrease in the utilizing the parts, cost reduction and the inventory control.

Cash Hedging in a Supply Chain

2019 ◽  
Vol 65 (8) ◽  
pp. 3928-3947 ◽  
Author(s):  
Panos Kouvelis ◽  
Xiaole Wu ◽  
Yixuan Xiao
Keyword(s):  
Supply Chain ◽  
Cash Flow ◽  
Cost Reduction ◽  
Cash Flows ◽  
Market Size ◽  
Flexibility Effect ◽  
Internal Funds ◽  
Cash Flow Volatility ◽  
The Cost ◽  
The Impact

We study hedging cash-flow risks in a supply chain where firms invest internal funds to improve production efficiencies. We offer a decomposition framework to capture the cost-reduction and flexibility effect of hedging. It allows us to understand how a firm’s hedging choice depends on its supply chain partner’s decision, and how such interaction is affected by supply chain characteristics such as market size, cash-flow volatility, and correlation. When firms’ cash flows are independent of each other, they are more likely to hedge with a larger market size. When cash flows are correlated, the impact of market size and volatility on firms’ hedging decisions presents multiple patterns, contingent on whether their risks amplify or offset each other. This paper was accepted by Gustavo Manso, finance.

Unraveling Behavioral Ordering: Relative Costs and the Bullwhip Effect

2021 ◽  
Author(s):  
Brent B. Moritz ◽  
Arunachalam Narayanan ◽  
Chris Parker
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Human Behavior ◽  
Bullwhip Effect ◽  
Problem Definition ◽  
Supply Chain Costs ◽  
Cost Impact ◽  
Managerial Implications ◽  
The Cost ◽  
The Impact

Problem definition: We study the bullwhip effect and analyze the impact of human behavior. We separate rational ordering in response to increasing incoming orders from irrational ordering. Academic/practical relevance: Prior research has shown that the bullwhip effect occurs in about two-thirds of firms and impacts profitability by 10%–30%. Most bullwhip mitigation efforts emphasize processes such as information sharing, collaboration, and coordination. Previous work has not been able to separate the impact of behavioral ordering from rational increases in order quantities. Methodology: Using data from a laboratory experiment, we estimate behavioral parameters from three ordering models. We use a simulation to evaluate the cost impact of bullwhip behavior on the supply chain and by echelon. Results: We find that cost increases are not equally shared. Human biases (behavioral ordering) at the retailer results in higher relative costs elsewhere in the supply chain, even as similar ordering by a wholesaler, distributor, or factory results in increased costs within that echelon. These results are consistent regardless of the behavioral models that we consider. The cognitive profile of the decision maker impacts both echelon and supply chain costs. We show that the cost impact is higher as more decision makers enter a supply chain. Managerial implications: The cost of behavioral ordering is not consistent across the supply chain. Managers can use the estimation/simulation framework to analyze the impact of human behavior in their supply chains and evaluate improvement efforts such as coordination or information sharing. Our results show that behavioral ordering by a retailer has an out-sized impact on supply chain costs, which suggests that upstream echelons are better placed to make forecasting and replenishment decisions.

scholarly journals Quality Visibility Improvement with Effort Alignment and Cost-Sharing Policies in a Food Supply Chain

2020 ◽  
Vol 2020 ◽  
pp. 1-17
Author(s):  
Wenbo Zhang ◽  
Qin Su
Keyword(s):  
Supply Chain ◽  
Food Supply ◽  
Cost Sharing ◽  
Risk Mitigation ◽  
Pareto Improvement ◽  
Food Supply Chain ◽  
Decentralized Supply Chain ◽  
Managerial Implications ◽  
And Performance ◽  
The Cost

Improving quality visibility along a food supply chain has been considered as a critical driver of quality risk mitigation, safety and security assurance, and performance sustainability. This paper explores the coordination mechanisms in a food supply chain, where the demand and costs are sensitive to the supply chain quality visibility that depends on an upstream supplier and a downstream retailer jointly, and the effort to improve quality visibility is increasingly expensive. After comparing the centralized and decentralized supply chain models to discover an opportunity for Pareto improvement, it is proved that a pure revenue-sharing contract fails to coordinate the supply chain, while the price discount contract with effort alignment policy or effort cost-sharing policy works. The two coordinating contracts’ boundary conditions of excluding deviated actions are presented. It is shown that the contract with effort alignment policy is cheaper but more rigid, whereas the cost-sharing one allows us to arbitrarily allocate the supply chain’s profits despite more information being collected. The models are applied to a fresh chicken supply chain in order to verify their effectiveness and robustness in reality. The impacts of several specific parameters on supply chain decisions and performances are analyzed, and the results reveal some meaningful managerial implications regarding supply chain quality visibility.

scholarly journals Information sharing in two-tier supply chains considering cost reduction effort and information leakage

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Xiaomei Li ◽  
Renjing Liu ◽  
Zhongquan Hu ◽  
Jiamin Dong
Keyword(s):  
Supply Chains ◽  
Information Sharing ◽  
Cost Reduction ◽  
Information Leakage ◽  
Competition System ◽  
Reduction Efficiency ◽  
Downstream Competition ◽  
The Cost ◽  
Reduction Effort ◽  
Share Information

<p style='text-indent:20px;'>This study investigates information sharing in two-tier supply chai-ns considering cost reduction effort and information leakage, with either upstream competition (system SC) or downstream competition (system RC). Results show that in system SC without information leakage, the retailer shares information with one supplier when suppliers are efficient in cost reduction, shares information with neither supplier when suppliers are inefficient in cost reduction, and shares information with two suppliers when suppliers are intermediate in cost reduction efficiency. nformation leakage won't affect the information sharing decisions of the retailer. In system RC with or without information leakage, both retailers share information with the supplier when the supplier is efficient in cost reduction and neither retailer shares information with the supplier when the supplier is inefficient in cost reduction. However, the threshold of cost reduction efficiency without information leakage is always lower than that with information leakage, which demonstrates that it is less likely for retailers to share information with information leakage. What's more, the two retailers choose the same information sharing strategies without information leakage but the opposite information sharing strategies with information leakage when the cost reduction efficiency is intermediate.</p>

scholarly journals The Importance of Systems for Controlling Logistics Costs in the Supply Chain: A Case Study from the Slovenian Automotive Industry

2016 ◽  
Vol 28 (3) ◽  
pp. 299-310 ◽  
Author(s):  
Sebastjan Škerlič ◽  
Robert Muha
Keyword(s):  
Supply Chain ◽  
Automotive Industry ◽  
Cost Reduction ◽  
Business Processes ◽  
The Other ◽  
Other Hand ◽  
Reducing Costs ◽  
The Cost ◽  
Customer Demands

Participating in the automotive industry brings new responsibilities for suppliers who, in order to meet customer demands, must strive towards improving business processes, while at the same time reducing costs. These demands can disrupt the operations of companies that do not have a system for controlling logistics costs. On the other hand, customer demands can be the cause of other types of disruptions in companies that have such a system in place, stemming from an excessive focus on cost reduction. To tackle this problem, a survey was conducted on a sample of 30 Slovenian companies that operate as suppliers in the automotive industry. Its objective was to determine how different customer demands along the supply chain can affect the business processes of suppliers and the level of logistics costs. The survey revealed that companies that use a system for controlling logistics costs experience fewer disruptions in their business processes in their efforts to satisfy customer demands. These companies also display a higher level of integration of business processes and use a different approach when dealing with the various participants of the supply chain. The survey also sets clear participation guidelines for suppliers in the supply chain of the automotive industry and points out how companies can benefit from using a system for controlling logistics costs in other ways, aside from the cost controlling aspect.

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