Emerald | International Journal of Operations & Production Management

Buyer-supplier relationships in a servitized environment: An examination with Cannon and Perreault's framework

Marko Bastl, Mark Johnson, Howard Lightfoot, Steve Evans — 2012-05-18 00:00:00.0

Abstract

Purpose – The purpose of this study is to examine a buyer's adoption of servitization and the associated implications for the relationships with its suppliers. Design/methodology/approach – The authors use the case study approach to examine the tripartite relationship between a manufacturing company and two of its two suppliers. The paper explores the perspectives of employees on multiple organisational levels, and collects evidence on both sides of a relationship. The authors use template analysis utilising Cannon and Perreault's relationship connectors framework to analyse the data. Findings – There are overarching implications of servitization adoption for buyer-supplier relationships. The implications are notable in all five relationship connectors. Parties expected more open exchange of information, operational linkages were strengthened and changes in the structural arrangements of relationships were witnessed. Legal contracts are complemented by relational norms. The authors also observed a departure away from a win-lose mentality and increased levels of supplier adaptation to support the buyer's provision of integrated solutions. Research limitations/implications – The findings are confined to this tripartite relationship and to an extent are context specific. Practical implications – The study unveils buyer-supplier relationships in a servitized context and provides managers with a better understanding of some of the potential implications that the adoption of a servitization strategy may have for managing buyer-supplier relationships. Originality/value – This is the first empirical study that explores the implications of servitization on buyer-supplier relationships. It advances the understanding of the implications that the adoption of servitization has on the manner in which two parties interrelate and conduct commercial exchange.

Supply chain collaboration for improved forecast accuracy of promotional sales

Usha Ramanathan — 2012-05-18 00:00:00.0

Abstract

Purpose – In general, demand for functional products is dependent on a range of promotions offered in various retail outlets. To improve promotional sales many retailers collaborate with manufacturers for planning, forecasting and replenishment. The purpose of this paper is to hypothesize that collaborative forecasting will improve the forecast accuracy if all the partners can relate their demand forecast with underlying demand factors. Design/methodology/approach – In this paper, the author uses a case study approach to study various demand factors of soft drink products of the UK based company which offers frequent promotions in retail outlets. The paper represents the case study findings in a conceptual framework called Reference Demand Model (RDM). Further, the case study findings are validated empirically by means of multiple linear regression analysis using actual sales data of the case company. Findings – Surprisingly, some of the demand factors specified as very important by the case company are not found to be highly significant for actual sales. The paper uses the identified demand factors to suggest levels of collaboration. Practical implications – Understanding the importance of product specific demand factors through regression models and incorporating the same in managerial decision making will aid managers to identify the necessary information to make accurate demand forecasts. Originality/value – This approach unveils the presence of three levels of collaboration namely preparatory, progressive and futuristic levels among supply chain partners based on the information exchange. The proposed method will aid decision making on information sharing and collaborative planning among manufacturer and retailers for future promotional sales.

Trends in production relocation and backshoring activities: Changing patterns in the course of the global economic crisis

Steffen Kinkel — 2012-05-18 00:00:00.0

Abstract

Purpose – The purpose of this paper is to present an empirical investigation of recent trends and changes in companies' production relocation and backshoring behaviour against the background of the global economic crisis. Design/methodology/approach – The empirical research is based on a large data set of 1,484 German manufacturing companies as part of the European Manufacturing Survey (EMS). The paper employs a structured set of probit analyses to identify the differences of production relocation and backshoring determinants before and within the crisis. Findings – Against common belief the paper finds that not only the relocation of production to emerging countries, but also the backshoring of once offshored manufacturing capacities to the home base is a relevant phenomenon. Since the emergence of the global economic crisis, relocation activities declined significantly, whereas the level of backshoring activities has remained stable. Far-shore destinations in Asia gain in attractiveness over near-shore locations in Eastern Europe. Particularly export-intensive companies tended recently towards (re-)concentrating of their production capacities, trying to exploit the benefits of higher capacity utilisation and a superior relation of variable costs to fix costs at their existing locations. Research limitations/implications – Although covering a significant range of industrial sectors in Germany, more empirical evidence is needed from other branches and countries. Looking forward it is proposed to systemically integrate scenarios on the future development of the most influential environmental factors in future research frameworks for global production decisions and value chains. Practical implications – The findings strongly recommend a revision of established decision-making schemes for production relocations based on pure cost efficiency considerations. Decision-making should integrate qualitative environmental factors and dynamic considerations using scenario-based tools. Companies need to understand and prepare for dynamic developments at different locations which can strategically necessitate backshoring after a certain time. Originality/value – The research considerably widens the empirical knowledge on recent trends in relocation activities and their inherent risks, which in a dynamic perspective are sometimes forcing backshoring activities.

The impact of external institutional drivers and internal strategy on environmental performance

Suhaiza Hanim Mohamad Zailani, Tarig K. Eltayeb, Chin-Chun Hsu, Keah Choon Tan — 2012-05-18 00:00:00.0

Abstract

Purpose – Environmental sustainability literature provides extensive evidence that business organizations, societies, and governments all have a stake in green operations management. Despite the importance of a firm's effort to alleviate environmental damages and provide economic benefits to organizations, little is known about the external institutional drivers that enable firms to adopt internal proactive environmental strategies. This purpose of this study is to examine the extent to which an internal proactive environmental strategy (eco-design) and external institutional drivers (government regulations and incentives, customer pressures) motivate firms to adopt eco-deigns that influence environmental performance. Design/methodology/approach – Hypotheses are tested using data from a sample of 132 EMS ISO 14001 – certified manufacturing firms in Malaysia. Specifically, this study uses survey data to validate the major premises in our proposed model. Findings – Empirical tests of the hypotheses with structural equation modeling (SEM) support the posited explanation that external institutional drivers influence a firm's environmental performance both directly and indirectly through its internal proactive environmental strategy. These findings extend prior research by establishing the importance of the relationships among regulations/incentives, customer pressures, eco-designs, and environmental performance. Research limitations/implications – Although the research design incorporates extensive literature reviews, it does not capture every aspect of underlying constructs characteristics. Future efforts should establish a valid, reliable instrument for these constructs. Practical implications – This research provides rigorous empirical support of the contribution of eco-design to environmental performance. This finding helps managers recognize how to leverage their internally developed eco-designs capabilities by responding to external pressures and institutional concerns. The response to external institutional pressures provides a basis for creating an inimitable eco-design resource base, which is critical to environmental sustainability. Originality/value – This study examines a key factor, eco-design, that may transmit the influence of regulations/incentives and customer pressures to firm's environmental performance. The findings provide strong support for the main thesis, as well as valuable insights about predictors of firm environmental performance.

Product platform replacements: challenges to managers

Martin Sköld, Christer Karlsson — 2012-05-18 00:00:00.0

Abstract

Purpose – It is argued in this article that too little is known about product platforms and how to deal with them from a manager's point of view. Specifically, little information exists regarding when old established platforms are replaced by new generations in R&D and production environments. To shed light on this unexplored and growing managerial concern, the purpose of this explorative study is to identify operational challenges to management when product platforms are replaced. Design/methodology/approach – The study uses a longitudinal field-study approach. Two companies, Gamma and Omega, fulfilled important sampling criteria and were selected as strategic samples for the study. The two companies were studied for 42 and eight months, respectively, and were chosen for their long and rigorous experiences of platform development. Together with managers from Gamma and Omega, one major platform replacement was chosen in each company. Findings – The study shows that platform replacements primarily challenge managers' existing knowledge about platform architectures. A distinction can be made between “width” and “height” in platform replacements, and it is crucial that managers observe this in order to challenge their existing knowledge about platform architectures. Issues on technologies, architectures, components and processes as well as on segments, applications and functions are identified. Practical implications – Practical implications are summarized and discussed in relation to a framework distinguishing between platform replacement “height” and “width”. Seven groups of managerial measures for dealing with the issues are recommended. Originality/value – The study aims to contribute to the existing literature by taking a managers' perspective of product platform development. Its specific originality and value is achieved by focusing on product platform replacements believed to represent a growing management challenge.