Profit sharing contracts and quality improvements in competing supply chains
This paper contributes to the hold-up problem resolving, quality improvement in supply chains, and the contract theory. We aim to investigate the effects of competitive environment on manufacturer's incentive to change the quality of product and the efficiency of the profit sharing contracts. Our results show that the stronger competition motivates the quality improvement and under particular parameters profit sharing contract is an efficient mechanism of coordination within the supply chain.
Recent research on closed-loop supply chains (SC) and reverse logistics extensively emphasizes the crucial role of reducing negative return flows such as emissions, waste, etc. In this study, we consider the return flows in the SC in light disruptive events in the SC. The objective of this study is to compare the performance impact of different recovery policies on return flows subject to the simultaneously optimized reconfiguration plans for material flows. We formulate a multi-objective problem with return flow reduction function for a multi-period, multi-stage, multi-product SC. We consider a recovery problem with ripple effect, performance impact assessment and re-planning decisions. The developed multi-objective hybrid linear programming-system dynamics model allows simultaneously re-computing the material flows in a multi-stage SC after a disruption and comparing the performance impact of different recovery policies subject to return flows, gradual capacity recovery, variable recovery costs and time. The results suggest that the consideration of gradual capacity recovery leads to minimization of disruption-related return flows in both upstream and down stream SC parts. Fast and expensive recovery strategy provides the lowest return costs in the upstream SC part as compared to normal and slow recovery policies. Similar, the profits and service levels are increased. In the fast and expensive recovery policy, the performance in the upstream and downstream does not change with the introduction of the gradual recovery considerations. The effects of gradual capacity recovery introduction become evident if smaller time sub-periods are considered with in the recovery period.
It has been proved by the latest research on key performance indicators (KPIs) of transportation services that their successful implementation into practice is possible only if there is a thorough database of indicators and the methodology of their calculation. To reach these goals, it is necessary to classify the indicators within the framework of the system which includes the two levels: the basic (the first) and the specific (the second) KPI. This division allows to form the complex of models to calculate the basic indicators, which characterize performance (e.g. performance per hour), time parameters, expenses, reliability, etc. The article provides the analysis of papers on the methods of transportation efficiency rating in supply chains and the ways of their development to increase the efficiency of transportation; the new approach to obtain analytic dependencies to calculate KPI of transportation on the basis of the integral (factorial) method of economic analysis; the examples of calculations of some KPIs of transportation. The suggested KPI models can be used to create programs aimed at the digitalization of transportation operations in supply chains.
The expansion of three-circuit Matrix of Core Competencies (MCC-3C) methodology aimed at improving supply chain (SC) efficiency in an innovative company is examined. It is demonstrated that analysis of production and development factor groups as part of the MCC-3C model, when analysing the supply chain structure, makes it possible to distinguish the criteria for decision-making on allocation and optimising the utilisation of competencies involved in the company’s activities. Approaches for determining the applicability limits of qualitative theories and formation of quantitative assessments are proposed that allow justifying the structure of internal SC and positioning in external ones. An example of the MCC-3C methodology application in the SC design of an international company producing final hi-tech products is provided.
Interrelations of product perishability and supply chain resilience are studied. The major distinguishing features in a supply chain with perishable products that may affect the resilience are the risks of goods write-off. Constraints on product perishability typically result in safety stock reductions and transportation frequency increase. Consideration of the production capacity disruption risks may lead to safety stock increase. The developed simulation model was run with data of a fast moving consumer goods company and revealed novel managerial insights and practical recommendations on inventory, on-time delivery and service level control. More specifically, the evidence for adjustment of production and inventory control policies during the disruption time is provided. Otherwise the delayed and backlog orders are accumulated over the disruption time. They transit as residues into the post-disruption period and do not allow full performance and operation dynamics stabilization even after full capacity recovery. An example of such a contingency production-inventory control policy is presented.
According to various estimates global GDP is about 60-70 trillion dollars, at the same time the costs of logistics in the world accounts for 12 trillion dollars per year. These figures are comparable to costs associated with armaments, public health service and other important areas of human activity.
Consequently, the search of practical ways and development of effective mechanisms for reducing logistics costs is a major problem, the solving of which will improve efficiency and competitiveness of enterprises. Thus, the purpose of this paper is the development of methods and models for EOQ calculation in supply chains as well as development of matrix of decision-making for the design of new modified EOQ models, designed to optimize logistics costs of companies in supply chains.
Supply chain management is based on the use of rather heterogeneous and uncertain information. The uncertainty of the market information or product gives rise to the asymmetry of information – the circumstances in which some of the participants in the transaction possess the important other participants do not have. This problem was first noted by K. Arrow in 1963. In 1970 G. Akerlof proposed a mathematical model of the market with asymmetric information. In such a market, the price of goods tends to decline even for goods with perfect quality. There are options for the development of a situation in which such a market disappears completely. The problem of asymmetric information has since been studied in relation to different markets and products, such as insurance markets, used car models and others, but the problem has been little studied in relation to supply chains. The presence of various types of uncertainty in supply chains makes it possible to apply the theory of fuzzy sets. Application of the fuzzy set theory allows to combine all kinds of information into a single whole and adequately consider it. To do this, it is necessary to provide information about the functioning of logistics systems in the form of membership functions. Using the tools of fuzzy set theory, it is possible to develop a conceptual model for overcoming information asymmetry in supply chains between different market participants, which will improve the transparency and reliability of their supply chains. When modeling the processes of overcoming information asymmetry in supply chains, it is possible both to increase and reduce the number of signs affecting the manageability of supply chains, depending on the complexity of the logistics systems. Due to this, this model can be adapted to a variety of forms of interaction between logistics and trade organizations, regardless of their size and scope of activity. Thus, this model allows to establish the degree of reliability, transparency and manageability of supply chains between their different participants and to find: ■ the best ratio of qualitative and quantitative features characterizing certain supply chains between different organizations ■ ways to reduce information asymmetry and increase information transparency depending on the values of the indicators that characterize the supply chain and choose the best one
In the theory and practice of logistics and supply chain management, more and more attention is paid to return flows management.There are a sufficiently large number of research works that has been devoted to the reverse logistics of goods: there are many technologies and best practices that have been successfully implemented.
As for the tasks of managing returns of transport items and packaging, they have been left outside the scope of experts' attention for a long time. Recently, the activity of advertising campaigns for pulling and pallets rental has increased in Russia. Some companies (mainly in manufacturing and trading sectors of FMCG) are going to implement, are already implementing or reporting substantial savings from projects for organizing container return management. Nevertheless, there are still many gaps for researchers and business community.
The article provides an overview of recent publications on the returnable containers management, analyzes terminology in this area, identifies and analyzes the main strategies for managing return flows of containers.The study shows that the issues of transport items return management have not received adequate coverage in Russian scientific and business literature. Moreover, despite the variety of foreign studies there is no basic terminology in this field and systematization of supplychain configuration alternatives. In addition, fragmentation of information in open sources about the practice of implementing / operating transport items management systems in Russian bussiness makes it relevant to conduct research on this topic.