International Journal of Value Chain Management (15 papers in press)
Application of Fuzzy technique to make closed loop decision in clothing value chain
by MANOJ KUMAR PARAS, Antonela Curteza
Abstract: Increasing concern over the environment has encouraged consumer and industry to think about the huge amount of discarded clothes. This study has considered four methods: direct reuse, up-cycling, down-cycling and incineration to close the loop of clothing value chain. Three factors (material, economy and technology) affecting closed loop decision have been identified. These factors have a different degree of influences on the decision making the process of closed loop clothing value chain. Research data has been collected from the reverse logistic experts from clothing industry. The fuzzy technique has been used to quantify the response of experts. Findings have been analysed with the help of analytic hierarchy process technique. The material factor is found to dominating factor in the closed loop decisions over economy and technology. Up-cycling and direct reuse emerged to be the best alternatives in the current scenario. The clothing companies may replicate this approach of developing hierarchy model to choose best alternatives for the closed loop value chain.
Keywords: Closed loop chain; Clothing value chain; Reuse; Fuzzy technique; AHP.
Integration with Transport Suppliers and Efficiency of Travel Agencies
by Dejan Dragan, Abolfazl Keshavarzsaleh, Borut Jereb, Darja Topolšek
Abstract: The performance of Tourism Supply Chain (TSC) is robustly tied to efficiency of all entities involved, including the travel agencies. Concomitantly, the efficiency of TSC itself can be obtained through Tourism Supply Chain Management (TSCM). This paper goes far beyond the borders of TSC and TSCM concepts and carries out the analysis of relationships between External Integration (EI) with transport suppliers and the efficiency of travel agencies. To do so, Data Envelopment Analysis (DEA) and Structural Equation Modelling (SEM) are used. The obtained results showed a noticeable influence of External Integration (EI) with water and air suppliers on the efficiency.
Keywords: tourism supply chain; external integration; transport suppliers; efficiency of travel agencies.
THE DYNAMICS IN CUSTOMER-SUPPLIER RELATIONSHIPS IN SOUTH AFRICAN AUTOMOTIVE SUPPLY CHAINS
by Aletta Tolmay, Johanna Badenhorst-Weiss
Abstract: Although the automotive industry is of utmost importance to the South African economy, the industry is faced by numerous challenges brought about by increased globalisation pressures including strained customer-supplier relationships resulting in increased supply chain risks. Literature suggests automotive component suppliers have limited scope for differentiation, and are left with only the relationship to add value, which promises to mitigate risk. The study reported on in this paper asked the following question: What is the nature of customer-supplier relationships in automotive supply chains in South Africa with regard to the dynamics between the elements of relationship value, trust and commitment? Through hierarchical regression, trust revealed a direct and strong correlation with relationship value, whilst commitment acted as a partial mediator. An important risk mitigation strategy might be the investment in close customer-supplier relationships. This paper makes a valuable contribution towards the theoretical conceptualisation of relational governance within automotive supply chains.
Keywords: Trust; commitment; relationship value; relational governance; automotive industry.
Bargaining power, market risk, and coordination costs in the cassava starch marketing channel in Thailand: A three stage principal-agent model and application
by John K. M. Kuwornu, Shahab E. Saqib, Marife L. Moreno
Abstract: This study examined bargaining power, market risk and coordination costs in the Thailand cassava starch marketing channel using a three-stage principal-agent marketing channel model using annual data over the period 1980-2015. The empirical results revealed that the fixed compensations for producers decreased over the period of study and reached neagtive levels in 1999 and 2008-2015. These results indicates that the producers had to make specific investments to enhance the performance of the marketing channel in these years. The fixed compensations for the wholesalers were positive and increased over the period of study. This indicates that in the market relationship between the producers and the wholesalers, the wholesalers possess higher bargaining power than producers. In general, the producers were risk seeking whereas the wholesalers risk were averse over the study period. The processors being risk neutral bear more risk in the marketing channel than producers and wholesalers, while the producers bear more risk than the wholesalers confirming the finding that the producers were risk seeking while the wholesalers were risk averse. The coordination cost of the marketing channel showed negative trending pattern over the period of study. This result implies that information flow in the marketing channel has improved over the years and this would be realized in the improved performance of the cassava starch marketing channel in Thailand. The findings have implications for the development of the cassava sector in Thailand.
Keywords: Cassava starch; market risk; coordination costs; three stage principal-agent marketing channel model; Thailand.
Supply chain improvement and product diversification through integrated zoning of Bangladesh rice milling industry
by MOAZZEM HOSSAIN, Rawnak Jahan
Abstract: The purpose of this paper is to assess the integration status and associated weaknesses of informal rice milling industry in Bangladesh and explore the achievable benefits through reorientation of the informal rice industry into integrated and specialized rice industry zone(s) (SRIZ). The study investigates the feasible integrated development of rice and paddy/rice oriented supplementary industries through clustering and grouping into SRIZ. Furthermore, it identifies new opportunities in terms of business, technology up gradation, product diversification, industry sustainability, standardization and food security in an otherwise traditional rice supply chain of Bangladesh and similar other rice producing developing countries Both structured and semi-structured questionnaire survey have been conducted to know the detail characteristics of sporadically developed rice manufacturing industry in various parts of Bangladesh. Using a proposed integration evaluation criteria rice supply chain integration status is evaluated along with identification of associated problems due to current poor integration situation. Analysis of endogenous and exogenous shortcomings of informal rice mills system in Bangladesh engenders solution mechanisms through promotion of integration, clustering and specialized zoning of rice mills. The findings of this research will be useful both for policy makers and agribusiness researchers in rice-producing countries, especially, which have informal setup of rapidly growing rice mills.
Keywords: Rice Supply Chain; Chain Integration; Clustering; Specialized zone; Business with rice by-products; Bangladesh and Rice producing countries.
Supply Chain Performance Management A Structured Literature Review
by Nilesh Wankhade, Goutam Kumar Kundu
Abstract: From supporting function to business enabler, the role of supply chain (SC) is evolving significantly. Well managed SC brings cost benefits, agility and flexibility in the businesses and provides competitive advantage and differentiation strategy. Changing trends, roles and business environments also brings the complexity in the way SC is coordinated, controlled and managed. To address this complexity and manage the supply chain, effective SC performance management is must. The concept of managing the performance of entire chain is evolving rapidly and attracting the attention of academicians, consultants and researchers. Using a structured approach, this research reviews the literature on SC performance measures, metrics and management and also focuses on the various theoretical frameworks, approaches and their classifications based on content, context and process. Further this article also provides the taxonomy in the field of SC Performance, its definitions and interpretation to derive various metrics in various frameworks used for SC performance measurement. In addition, potential future directions and a commentary on SC performance management, managing strategic fit, contextual traits, trends in SC and its impact on SC performance management, SC visibility, collaboration, trust and performance followed by SC performance management & risk management are provided to conclude the review.
Keywords: Supply chain management; Supply chain performance management; SCPM; Supply chain metrics; Supply chain performance frameworks.
Price risk management using forward contracts: the case of farmers in Pakistan
by Shahab E. Saqib, John K. M. Kuwornu, Ubaid Ali, Sanaullah Panezai, Irfan Ahmad Rana
Abstract: Farmers have limited control over the market and commodity prices that cause price risks and uncertainties. To manage these risks, farmers adopt several risk management tools, and forward contract is one of them. The aim of this study is to find out the important factors that influence the adoption of forward contract and the problems associated with it. The selected study area is Mardan District in Pakistan. Primary data was collected from 168 farmers through survey and in-depth interviews. Probit model was used to determine the factors influencing farmers adoption of forward contracting as a risk management strategy. The empirical results showed that age, education, landholding size, risk perception of price, risk attitude and access to formal sources were significant factors influencing the adoption of forward contracting. The results also revealed that medium and large subsistence farmers adopted forward contracting more than small subsistence farmers.
Keywords: agriculture risk; Price risk management; forward contract; farmers; agriculture.
Factors Leading to Supply Chain Inefficiency in Agribusiness: Evidence from Asia's Largest Wholesale Market
by Saurav Negi, Neeraj Anand
Abstract: This article examines the factors and most significant variable leading to Supply Chain Inefficiency with respect to high cost, high lead time and poor quality at the wholesale stage of tomato supply chain in India. The Primary data were collected through a survey using questionnaire with the total of 120 tomato wholesalers (commission agents) at the wholesale market. The study was conducted at Asia's largest wholesale Fruits and Vegetable market (Mandi) in Azadpur, Delhi. Factor analysis was carried out to identify the factors. Based on the analysis, 4 factors were identified for high cost, namely, Labour charges, Operational, Resources, and Infrastructure; 5 factors were identified for high lead time, namely, Operational, Labour, Resources, and Infrastructure; and 5 factors were identified for poor quality, namely, Operational, Infrastructure, Ambience, Labour, and Information. The findings show that Labour charges and Operational factors are the most significant factors leading to supply chain inefficiency.
Keywords: Supply Chain Inefficiency; Wholesale market; Food Supply Chain; Tomato Supply Chain; Food Losses and Wastages.
A New Framework for Value Chain Thinking
by Rizky Ginardy, Togar M. Simatupang, Yuanita Handayati
Abstract: The competitiveness of a commercial enterprise has long been defined as its ability to achieve cost or differentiation advantage. When companies possess the same capabilities, value creation is imperative as a new source of competitive advantage whose evolution relies on cycles of value creation, value delivery, and value capture. However, previous studies of the value chain concept differ in their definition of various types of chains. This paper proposes a new framework for value chain thinking (hereafter VCT) based on appreciative inquiry and service-dominant logic. The new framework is represented in four cells, or lenses, of VCT used to map and improve a companys value chain. The four lenses include: the traditional value chain, the innovation value chain, the shared value chain and the design-driven innovation value chain. Empirical evidence for the four lenses of VCT is provided by applying the framework to a quartet of companies that are known to implement value-innovation through their commercial practices. The results show that each of the four commercial enterprises matched VCT cells using value chain mapping, with its deficiencies being successfully diagnosed and its subsequent performance enhanced by means of its specific VCT cell.
Keywords: Value chain; value chain thinking; appreciative inquiry; service-dominant logic; value chain management.
The fuzzy multi-objective optimization model for a green supply chain under uncertainty
by M.B. Fakhrzad, S. Bazeli
Abstract: Manufacturers need to satisfy consumer demands in order to compete in the real world. This requires the efficient operation of a supply chain planning. In this work, we consider a supply chain including multiple suppliers, multiple manufacturers and multiple retailers, under uncertainty for perishable food products. These problems were formulated into a fuzzy multi-objective programing model (FMOPM) with an aim to minimize the total cost of transportation and labor, the amount of CO2 emissions in transportation and the distribution time of products from farms to factory and from factory to retailers, and minimize total food decay. To optimize the four objectives simultaneously LP-metrics method were investigated and used. A case study was examined based on the model that demonstrates its applicability in making an optimal product distribution plan in trade-offs among the four objectives.
Keywords: Distribution plan; Fuzzy multi-objective programming; Green supply chain.
Marketing Complex Product Designs in the Contemporary Value Chain
by Per Engelseth, Hamid Jafari
Abstract: Theory on supply postponement and speculation has gained widespread use in industry to mitigate risk and improve customer value. We suggest alternative conceptualization of product customization focusing in the emergent properties of production in a value chain context. Based on the transvection model, servitization theory, contingency theory focusing on interdependencies and complexity, we discuss how a variety of goods, information and service deliverables may be timed in relation to each other to customize in relation to customer value objectives. Through a single case study of retail distribution practices, an alternative modelling of supply timing empirically grounded. The Supply Palette Model is introduced based on a fundamental view on products as technically fragmented entities, as well as the fact that production includes product design as emergent through complex supplier-customer interaction. This model serves as a marketing tool founded in operations practices by exposing the complexity of deliverables provided to customers associated with operational decision-making events. This study also exposes how marketing and supply chain management necessarily are, when supplying postponed products, integrated business functions.
Keywords: Postponement; Customer value; Supply timing; Alderson; Transvection; Servitization.
Price discrimination in value chains for Cola drinks in the Czech Republic
by Kateřina Kašparová, Karel Šrédl, Jindřich Ploch, Roman Svoboda
Abstract: The sale of beverages whose production has the character of a monopoly due to the original recipe used in their production has been chosen as the subject of this research. The purpose of this paper is to express the rate of exploitation of the consumer surplus in second-degree price discrimination in relation to selected drinks of monopolistic character. This concerns the advantage of consumers buying individual drinks compared with buying large (cumulative) packages of the product. The methodology of scientific research is based on monitoring the prices of selected beverages in international retail chains and a comparative analysis of collected data. The survey shows that, thanks to second-degree price discrimination, the seller receives a consumer surplus amounting to 1/3 for the sale of individual pieces of the product.
Keywords: beverage; beverage industry; Cola drink; consumer surplus; Czech Republic; firm; monopoly; price discrimination; profit; retail chain.
Determinants of informality in a group of microenterprises from Guayas-Ecuador
by Silvia Mariela Méndez Prado, Joel Alejandro Rosado Anastacio
Abstract: In this research, the determinants of informal practices of 41 family businesses was analyzed and identified via comparing the data obtained by the owners interviews and diagnoses of the students in a financial analyst role. A finance class was developed in which an attempt was made to propose an initiative in which students fulfill the function of financial analyst to finally collect information about why family businesses decide to operate in the informal sector. The findings are: (1) informal small family enterprises believe that the taxes are "too high" (2) entrepreneurs possess high margins of incomprehension of formal registration systems; (3) informal firms have disorganized balance sheets' structure and the control of their accounts, and (4) a large number of individuals considered to perform their activities with the objective of covering basic needs. In the context of informality, many business decisions are taken to carry out a subsistence activity, showing cases with low-margin of growth. This is an initial study that provides the insights which could spur future research across other countries by using multiple methods.
Keywords: Entrepreneurship; Informal sector; Micro-enterprise; South America; Ecuador.
A developed model of data envelopment analysis-discriminant analysis for predicting group membership of suppliers in green supply chain
by M.B. Fakhrzad, Saeid Nasrollahi
Abstract: This paper presents a developed model of data envelopment analysis-discriminant analysis (DEA-DA) for predicting group membership of green suppliers. This model accurately predicts group membership of the green suppliers in the presence of undesirable outputs. For demonstrating applicability of our proposed model, using a real-world dataset for evaluating green suppliers of the Hyundai Steel Company, the DEA-DA model developed by Boudaghi (2017) is analyzed and compared with the new model. The results show that our developed model has more precise prediction of green suppliers' group membership with respect to considering undesirable outputs.
Keywords: Data envelopment analysis-discriminant analysis (DEA-DA); Undesirable outputs; Efficiency; Prediction of suppliers' group membership; Green supply chain management (GSCM).
An Integrated Structural Modeling and MICMAC analysis for supply chain disruption risk classification and prioritization in India
by ASWIN A, Mukesh Kumar Barua
Abstract: Indian manufacturing industry is in a transformational journey because of the Make in India program of the government. However, supply chain disruptions, which are common in every business, are a matter of concern for the Indian manufacturing sector owing to the unpredictable nature and the grave impacts it can bring on the operations of the company. Realizing the importance of the matter, this study aims at identifying and prioritizing the risks associated with supply chain disruption as faced by Indian manufacturing sector. A two-phase methodology is used for achieving the objectivesthe first phase involves the identification and finalization of supply chain disruption risks through literature review and expert opinion using Delphi technique, and the second phase involves deriving the interrelationships between the risk factors and classification based on the influence and dependence power by using ISM and MICMAC methodology. ISM is proved to be a useful tool that helps in understanding the impact of risks at different stages of supply chain. Environmental risk factors and supplier risk factors have become the strong drivers of other supply chain uncertainties. Study is limited to the context of Indian manufacturing supply chains. For further validation of the model, tools such as structural equation modeling can be employed using secondary data from different countries. The outcomes of the study would help managers and governmental departments in analyzing and taking actions to cope with supply chain disruptions.
Keywords: supply chain risk management; supply chain disruption risk; risk prioritization; ISM; MICMAC method.