Supply Chain
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- 12 Apr 2018
- Op-Ed
Op-Ed: The Trouble with Tariffs
The world's economies are interconnected by globalization, which makes threats of tariff wars doubly dangerous, says Willy Shih. Open for comment; Comment(s) posted.
- 19 Feb 2018
- Working Paper Summaries
The Supply Chain Economy: A New Framework for Understanding Innovation and Services
This study shows that a large and dynamic supply chain economy plays a crucial role in innovation and in the creation of well-paid jobs. Traded service suppliers are particularly important. Policies that help suppliers access skilled labor, buyers, and capital could be beneficial for fostering innovation and economic growth.
- 16 Feb 2018
- Working Paper Summaries
A New Categorization of the US Economy: The Role of Supply Chain Industries in Innovation and Economic Performance
This paper provides a novel industry categorization that quantifies the supply chain economy in the United States. Suppliers of goods, and particularly services, to business and government are a distinct and large sector, and play an important role in national innovation and economic performance.
- 23 Jan 2018
- Working Paper Summaries
Transaction Costs and the Duration of Contracts
When buyers transact with sellers, they select not only whom to transact with but also for how long. This paper develops a model of optimal contract duration arising from underlying supply costs and transaction costs. The model allows for the quantification of transaction costs, which are often unobserved, and the impact of these costs on welfare.
- 21 Jul 2017
- Working Paper Summaries
Organizational Structures and the Improvement of Working Conditions in Global Supply Chains: Legalization, Participation, and Economic Incentives
Suppliers face increasing pressure from the institutional environment as well as demands from buyers to improve working conditions. This study analyzes the internal organizational dynamics of more than 3,000 supplier firms in 55 countries. Findings call for looking beyond the symbolism of organizational structures and attending to how they can be linked with real implementation and improvement.
- 26 Jun 2017
- Working Paper Summaries
Inventory Management for Mobile Money Agents in the Developing World
Mobile money agents in the developing world face a key inventory management challenge: How much cash and e-float should be held to minimize both stockouts and excess working capital? The authors develop two inventory models and show substantial inventory cost reduction with a large dataset of East African mobile money transactions.
- 17 Jun 2017
- Research & Ideas
Amazon, Whole Foods Deal a Big Win for Consumers
What does Amazon's $13.4 billion deal for Whole Foods say about the future of retail? Harvard Business School professors Jose Alvarez and Len Schlesinger see good times ahead for consumers as well as both companies. Open for comment; Comment(s) posted.
- 12 Sep 2016
- Research & Ideas
What Brands Can Do to Monitor Factory Conditions of Suppliers
For better or for worse, it’s fallen to multinational corporations to police the overseas factories of suppliers in their supply chains—and perhaps make them better. Michael W. Toffel examines how. Open for comment; Comment(s) posted.
- 18 Jul 2016
- Working Paper Summaries
Beyond Symbolic Responses to Private Politics: Examining Labor Standards Improvement in Global Supply Chains
Global supply chain factories improve their working conditions to a greater extent when their buyers take a cooperative approach to monitoring them, when the auditors are more highly trained, and when the factories face greater risk of poor conditions being exposed, according to findings in this research.
- 24 Aug 2015
- Working Paper Summaries
Multi-Product Duopoly with Cross-Product Cost Interdependencies
Multi-product firms in many industries lack the flexibility to choose different quality tiers for different product lines. Once committed to a certain quality tier, either high or low, in one product line, it is usually more costly to offer another product line in a different quality tier instead of offering it in the same tier. This paper probes the strategic implications of this combination of brand stickiness and operational complexity for duopoly competition.
- 28 Jul 2014
- Research & Ideas
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 Comment(s) posted.
- 03 Mar 2014
- HBS Case
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. Closed for comment; 6 Comment(s) posted.
- 14 Nov 2013
- Working Paper Summaries
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. Key concepts include: Gatekeepers, such as accountants, attorneys, auditors, and analysts, typically have substantial professional discretion to make vital gatekeeping decisions on the ground. In the supply-chain auditing context, gatekeepers are influenced by conflicts of interest and by social factors, including ongoing relationships with clients, on-the-job experience, professional training, and gender diversity. Companies using auditors and other gatekeepers should consider not only which organization to hire, but also the characteristics of the staff deployed on the gatekeeping teams. Auditing teams can benefit from gender diversity, professional training, and experience, although the marginal benefits of the latter attenuate over time. Regulatory systems reliant on private gatekeepers should be designed to mitigate the effects of conflict of interest and leverage social factors of team compositions to enhance the reliability and integrity of gatekeeping decisions. Closed for comment; 0 Comment(s) posted.
- 26 Dec 2012
- Working Paper Summaries
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. Key concepts include: Global labor standards were most successfully implemented in countries that made significant formal and binding connections to the international community through their labor treaty ratifications and reinforced these connections by enacting stringent domestic employment legislation. By maintaining a free press, national governments also play a key role in promoting adherence to global labor standards. National governments can influence labor practices in their country not only by enacting legislation and signing international treaties, but also by protecting press freedom and non-governmental organizations to enable civil society scrutiny and mobilization. Political and consumer pressure in multinational corporations' home markets can have a substantive impact on how these companies manage working conditions in their global supply chains, well beyond the mere symbolic act off deploying codes of conduct. Closed for comment; 0 Comment(s) posted.
- 07 Aug 2012
- Working Paper Summaries
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. Key concepts include: The type of disruption matters in identifying the magnitude of a disruption's impact on a firm's share price. Disruptions attributed to factors within the firm or its supply chain are far more damaging than disruptions attributed to external factors. A higher rate of improvement in operating performance aggravates the impact of internal disruptions but not external disruptions. Management should be prudent about decisions to streamline operations and to reduce buffers and excess capacity. Some efficiency improvements may be attractive during periods of relative operational stability, but firms with high rates of improvement in operational performance could face distressing reductions in market value if they subsequently experience an internal disruption. Closed for comment; 0 Comment(s) posted.
- 03 May 2012
- Working Paper Summaries
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. Key concepts include: This paper provides the first systematic firm-level evidence of learning by supplying. It also contributes to developing understanding of firm boundaries and capabilities, particularly in emerging industries. Counter to received wisdom, the accumulation of technological capabilities is not a necessary or sufficient condition for successful introduction of own-brand products. There are significant switching costs and inertia in customer-supplier matches. Suppliers' choices of branded producers and operators may have a strong influence on suppliers' long-term capability development and strategic alternatives. Both the means and the motives for knowledge sharing are important in inter-firm arrangements. Suppliers working with leading branded producers may find themselves effectively locked into a subordinate role, thwarting ambitions to move up the value chain and develop as viable independent participants in the industry. Closed for comment; 0 Comment(s) posted.
- 15 Nov 2011
- Working Paper Summaries
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. Key concepts include: The research identifies several factors that predict which of a company's suppliers will be more willing to share information about their vulnerabilities and opportunities associated with climate change, as well as their greenhouse gas (GHG) emissions levels and trends. Buyers are more likely to be successful in their efforts to obtain climate change information from their suppliers when this information is incorporated in supplier scorecards and other formal mechanisms, and when they collaborate with other buyers to convince suppliers that the request represents a trend rather than an idiosyncrasy. Suppliers receiving requests to share climate change information by several buyers are more likely to share it not just with their buyers but also to disclose it publicly. When buyers seek climate change information from suppliers to incorporate it in supplier scorecards, suppliers are more likely to share this information just with their buyers, but not disclose it publicly. To encourage suppliers in competitive industries to share greenhouse gas (GHG) emissions data, buyers may need to convince suppliers that the information requested would not be shared with their competitors. Closed for comment; 0 Comment(s) posted.
- 31 May 2011
- Research & Ideas
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 Comment(s) posted.
- 25 May 2011
- HBS Case
QuikTrip’s Investment in Retail Employees Pays Off
Instead of treating low-paid staffers as commodities, a new breed of retailers such as QuikTrip assigns them more responsibility and invests in their development, says professor Zeynep Ton. The result? Happy customers and even happier employees. Key concepts include: Unusual for a retailer, QuikTrip offers its operational employees above-average wages, job security, and significant benefits. By using operational efficiencies and standardization, QuikTrip reduces complexity to create higher employee productivity and fewer errors. By investing in employees and giving them more responsibility, QuikTrip enjoys a competitive advantage in service and benefits from continuous process improvement. Closed for comment; 9 Comment(s) posted.
The Better Way to Forecast the Future
We can forecast hurricane paths with great certainty, yet many businesses can't predict a supply chain snafu just around the corner. Yael Grushka-Cockayne says crowdsourcing can help. Open for comment; Comment(s) posted.