Operations: Supply Chain

26 Results

 

Eyes Shut: The Consequences of Not Noticing

In his new book The Power of Noticing: What the Best Leaders See, Max Bazerman explains how and why many executives fail to notice critical information in their midst. Open for comment; 6 Comments posted.

Decommoditizing the Canned Tomato

Most commodity producers look to cut costs aggressively. So why is Mutti S.p.a, an Italian producer of tomato products, paying farmers more than competitors? Mary Shelman discusses her case study. Open for comment; 6 Comments posted.

What Shapes the Gatekeepers? Evidence from Global Supply Chain Auditors

Private gatekeepers, from credit rating agencies to supply-chain auditors, are supposed to provide unbiased, objective assessments of companies' internal operations, and such private assessments play a central role in contemporary regulatory regimes. While the impartiality of gatekeeping organizations has come into question over the past decade, little is known about what drives the decisions of the individual accountants, auditors, analysts, and attorneys who work at these organizations. Using data from a private, third-party social auditing firm that assesses global supply chain factories' adherence to corporate codes of conduct governing workplace conditions, this study reveals that external auditors' findings are shaped by a combination of economic incentives and social factors. The study highlights opportunities to design and staff audits to maximize their impartiality and credibility. Read More

Reinforcing Regulatory Regimes: How States, Civil Society, and Codes of Conduct Promote Adherence to Global Labor Standards

Multinational corporations are under increasing pressure to manage their global supply chains in ways that are environmentally sustainable and socially responsible. Many companies have responded to this pressure by asking their suppliers to adhere to codes of conduct governing labor conditions and environmental management. This paper examines the conditions under which tens of thousands of suppliers across many countries are more likely to adhere to the labor practices these codes of conduct call for. Findings indicate that suppliers are more likely to adhere to codes of conduct in countries that not only have made binding domestic and international legal commitments to protect workers' rights, but that also have high levels of press freedom and nongovernmental organization activity. Greater code of conduct adherence is also found among suppliers that serve buyers located in countries where child labor is a more salient issue. This research reveals the critical importance of maintaining multiple, overlapping, and reinforcing governance systems, and urges caution to those hoping that private regulatory regimes can substitute for effective government regulation. Overall, this paper points the way toward building more effective private regulatory regimes. Read More

When Supply-Chain Disruptions Matter

Disruptions to a firm's operations and supply chain can be costly to the firm and its investors. Many companies have been subjected to such disruptions, and the impact on company value varies widely. Do disruption and firm characteristics systematically influence the impact? In this paper, the authors identify factors that cause some disruptions to be more damaging to firm value than others. Insight into this issue can help managers identify exposures and target risk-mitigation efforts. Such insights will also help investors determine whether a company is exposed to more damaging disruptions. Read More

Learning by Supplying

Offshore outsourcing of manufacturing and related activities to China and other emerging economies is changing the competitive landscape in many industries. Some predict that lessons learned by emerging market firms in their role as suppliers to major branded producers will allow them to develop the capabilities necessary to become viable world-class competitors, possibly at the expense of current market leaders. In this paper Juan Alcacer and Joanne Oxley subject this "learning by supplying" hypothesis to the test, analyzing data on evolving technological and marketing capabilities of suppliers in the mobile handset industry. Contrary to some of the more alarmist commentary in the popular press, the researchers' observations suggest that the progression from trusted supplier to threatening competitor among electronics manufacturing firms is far from inevitable. Findings also point to the existence of quite distinct pathways to technological and market learning for suppliers. The divergent learning outcomes for suppliers serving operators and branded producers reinforce the idea that, while operators involve suppliers in all aspects of production, branded producers strictly limit access to customer-facing activities, thus reducing suppliers' opportunities for learning in this domain. Read More

Got Local Food?

As consumers become more aware of the health and environmental implications of how food is grown and produced, demand for local food has increased considerably. This paper examines the operational tradeoffs in fresh produce supply to gain insights on what drives the structure of the supply chain and how "local food" can become a viable sourcing strategy for a large retailer. HBS professor Deishin Lee and coauthors show that there are complementary operational synergies when retailers and farmers increase scale and specialize. This implies that when small farmers are capacity constrained, they can be squeezed out of the supply chain. Technological advances in farming practices, efficiency gains in transportation, and space constraints in retail stores result in supply chain members mutually benefitting from their decision to increase scale, leading to specialization. The study characterizes the conditions under which vertical differentiation and operational scope can increase the viability of the small local farmer. This paper contributes to work on supply chain design and environmental sustainability. Read More

Engaging Supply Chains in Climate Change

Managing a company's risks and opportunities associated with climate change—including its physical and regulatory implications—requires focusing not only on internal operations, but also on supply chains, especially since greenhouse gas (GHG) emissions in supply chains typically exceed those from a company's own operations. But this requires obtaining climate change information from suppliers, which some are reluctant to share. In this paper, Chonnikarn (Fern) Jira and Michael W. Toffel examine proprietary data from the Carbon Disclosure Project's Supply Chain Project, a collaboration of multinational corporations asking their key suppliers to share information about their GHG emissions and their vulnerabilities and opportunities associated with climate change. Jira and Toffel find evidence that a supplier is more likely to share this information when it faces several buyers requesting the information, when its buyers appear committed to actually using this information, and when the supplier is in a relatively competitive industry and is thus particularly vulnerable to being replaced by its rivals. These findings can help managers better predict which suppliers will be more willing to share climate change information, and which might require more incentives or pressure to share this information. Read More

Japan Disaster Shakes Up Supply-Chain Strategies

The recent natural disaster in Japan brought to light the fragile nature of the global supply chain. Professor Willy Shih discusses how companies should be thinking about their supply-chain strategy now. Closed for comment; 16 Comments posted.

While Waiting for Japan’s Recovery, Let’s Enhance Supplier Competitiveness at Home

The Obama administration and US companies do not have to wait for Japanese suppliers to recover from earthquake damage, argues Harvard Business School professor Rosabeth Moss Kanter. Action can be taken now to ensure that America invests in growing our domestic stock of world-class suppliers. Open for comment; 3 Comments posted.

Harvard Business School Faculty Comment on Crisis in Japan

Harvard Business School faculty share their views and insights about the challenges that lie ahead for Japan's business leaders and for global companies operating there. Closed for comment; 11 Comments posted.

The Impact of Supply Learning on Customer Demand: Model and Estimation Methodology

"Supply learning" is the process by which customers predict a company's ability to fulfill product orders in the future using information about how well the company fulfilled orders in the past. A new paper investigates how and whether a customer's assumptions about future supplier performance will affect the likelihood that the customer will order from that supplier in the future. Research, based on data from apparel manufacturer Hugo Boss, was conducted by Nathan Craig and Ananth Raman of Harvard Business School, and Nicole DeHoratius of the University of Portland. Read More

Measuring and Understanding Hierarchy as an Architectural Element in Industry Sectors

In an industry setting, classic supply chains display strict hierarchy, whereas clusters of firms have linkages going in many different directions. Previous theory has often assumed the existence of the hierarchical relationships among firms, and empirical industry studies tend to focus on a single-layer industry, or a two-layer structure comprising buyers and suppliers. And yet, some industries have a multilayer structure with a multistep supply chain. Others comprise a cluster of complementary firms producing different parts of a large system. HBS professor Carliss Y. Baldwin and colleagues use network analysis to study multilayer industries both empirically (in the case of Japan) and theoretically and to explore how industries are organized at the sector level in an attempt to reveal the underlying rules that determine how industry architectures form and change. Read More

Thinking Twice About Supply-Chain Layoffs

Cutting the wrong employees can be counterproductive for retailers, new research from Harvard Business School professor Zeynep Ton concludes. One suggestion: Pay attention to staff who handle mundane tasks such as stocking and labeling. Your customers do. Read More

Alignment in Cross-Functional and Cross-Firm Supply Chain Planning

Organizational behavior has become an increasingly important aspect of operations management. In this paper, alignment refers to an organization's sales and manufacturing groups working toward the same target for the sales of a particular product. What are the best conditions in supply chain planning for alignment across functions and across the firm? Kraiselburd and Watson push the frontier of theory with their use of mathematical modeling and game theory. They show that seemingly behavioral and psychological effects may still occur if both parties are rational profit maximizers in an economic sense. Read More

Industry Self-Regulation: What’s Working (and What’s Not)?

Self-regulation has been all over the news, but are firms that adopt such programs already better on important measures like labor and quality practices? Does adopting a program help companies improve faster? In this Q&A, HBS professor Michael Toffel gives a reality check and discusses the trends for managers. Read More

A Perceptions Framework for Categorizing Inventory Policies in Single-stage Inventory Systems

In research surrounding inventory policies, there is a prevailing assumption of completely rational agents. In practice, however, deviations from the optimal policy abound, and analytical models to understand the effects of inventory dynamics on practice may require ways to model these deviations. Modeling deviations from the optimal policy is also important for better understanding inventory systems and supply chains. The term "perceptions" in Watson's research is not meant in its conventional sense, as in the perceptions of individual managers, but rather forms the basis for a framework for modeling and categorizing a range of inventory policies, including optimal inventory policy. This paper, which is a technical article meant more for an academic audience, explores the usefulness of his framework for categorizing the range of inventory policies that can be employed in a single-stage supply chain. Read More

Managing Functional Biases in Organizational Forecasts: A Case Study of Consensus Forecasting in Supply Chain Planning

By their very nature, consensus forecasts contain subjective elements that can compromise forecast accuracy. In this case study of the implementation of a sales and operations planning process in a consumer electronics company, Oliva and Watson studied the organizational and political dimensions of forecast generation and improvement. Ultimately, consensus forecasting constructively managed the influence of biases (such as overconfidence) on forecasts. Read More

Cross Functional Alignment in Supply Chain Planning: A Case Study of Sales & Operations Planning

Why do companies have such a hard time getting various functions to coordinate? Leitax, the pseudonym for a consumer electronics company studied by the authors, was suffering major supply-chain planning problems in 2002. The chief reason was typical to organizations: poor integration among the various functions. In response, the company introduced a system (rather than just a set of mechanisms) to better coordinate all processes and functions. The new system led to better collaboration from all participants, improved information-sharing, accurate and validated plans, and alignment in the execution of those plans. Read More

The Strategic Way to Go to Market

Too often channel strategies develop at the last minute--when a product is ready to go to market. But this haphazard approach leaves a lot of efficiencies and synergies by the wayside, says V. Kasturi Rangan. Enter the concept of the "channel steward." Read More

What Drives Supply Chain Behavior?

Surprise: Managers are not always rational decision makers. In this interview, professors Rogelio Oliva and Noel Watson discuss how human behavior affects supply chain coordination. Read More

Building a Better Buyer-Seller Relationship

How do you turn short-term transactions into long-term relationships? Harvard Business School professor Narakesari Narayandas finds answers in mature industrial markets. Read More

Incentives and Operational Excellence

Operational problems are a drag on business and often can be traced to poor controls in interorganizational settings, says HBS professor V.G. Narayanan. Here are his suggestions for tightening up those controls. Read More

Supply Chain Risk: Deal With It

Suddenly your supply chain is full of weak links, everything from terrorism to political instability to dock strikes. Could you and your customers withstand a disruption? Read More

Moving from Supply Chains to Supply Networks

Dramatic change is taking place in today's supply chain, say HBS professors Ananth Raman and Roy Shapiro, and it's up to the general manager to assemble a team that can implement the new principles and practices the change requires. Read More