Christopher D. Norek and Terrance L. Pohlen
Imagine the reaction of your company's sales force when you tell them they are losing money selling to Wal‐Mart. To counter their objections, you explain the final delivered…
Abstract
Imagine the reaction of your company's sales force when you tell them they are losing money selling to Wal‐Mart. To counter their objections, you explain the final delivered product cost exceeds the revenue generated by Wal‐Mart sales. The scenario may seem unrealistic based on the sales volume of mass merchant discounters such as Wal‐Mart, Kmart, and Target; however, manufacturers frequently do not know the cost to serve these merchants or the cost of the functions being shifted backwards in the supply chain. Additional services increase the cost of serving the big retail accounts and jeopardize supplier profitability. While it is understandable that retailers want to lower their costs by eliminating tasks they perform, retailers also need their suppliers to obtain a reasonable margin to ensure the availability of product from a high quality supplier. It is necessary to ensure that selling to these large retail accounts is profitable by determining the costs of serving them.
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Klas Hjort, Björn Lantz, Dag Ericsson and John Gattorna
The purpose of this paper is twofold: first, to empirically test whether a “one size fits all” strategy fits the fashion e-commerce business and second, to evaluate whether…
Abstract
Purpose
The purpose of this paper is twofold: first, to empirically test whether a “one size fits all” strategy fits the fashion e-commerce business and second, to evaluate whether consumer returns are a central aspect of the creation of profitability and, if so, to discuss the role of returns management (RM) in the supply chain strategy.
Design/methodology/approach
Transactional sales and return data were analysed and used to categorise customers based on their buying and returning behaviours, measuring each customer's net contribution margins.
Findings
The e-commerce business collects a vast quantity of data, but these data are seldom used for the development of service differentiation. This study analysed behaviour patterns and determined that the segmentation of customers on the basis of both sales and return patterns can facilitate a differentiated service delivery approach.
Research limitations/implications
This research empirically supports the theory that customer buying and returning behaviours can be used to appropriately categorise customers and thereby guide the development of a more differentiated service approach.
Practical implications
The findings support a differentiated service delivery system that utilises a more dynamic approach, conserving resources and linking the supply chain and/or organisational strategies with customers' buying and returning behaviours to avoid over and underservicing customers.
Originality/value
Consumer returns are often viewed as a negative aspect of doing business; interestingly, however, the authors revealed that the most profitable customer is a repeat customer who frequently returns goods.
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Marko Bastl, Tonci Grubic, Simon Templar, Alan Harrison and Ip‐Shing Fan
The purpose of this paper is to highlight the limitations of current accounting practices in an inter‐organisational context; introduce contemporary costing approaches used in…
Abstract
Purpose
The purpose of this paper is to highlight the limitations of current accounting practices in an inter‐organisational context; introduce contemporary costing approaches used in inter‐organisational costing (IOC) programmes; and identify the inhibitors of successful implementation of IOC programmes.
Design/methodology/approach
The paper uses a structured review of empirical and theoretical literature.
Findings
Traditional accounting practices do not adequately fulfil their role in the inter‐organisational context. Contemporary accounting practices overcome only some limitations of traditional accounting practices. The paper uncovers part of the complexity surrounding the implementation of IOC programmes and suggests that we are dealing with a broad inter‐disciplinary phenomenon.
Research limitations/implications
Conclusions are drawn on a conceptual level and further empirical investigation is encouraged.
Practical implications
The paper raises the awareness of the complexity surrounding the implementation of IOC programmes. The broad set of inhibiting factors could be effectively used by managers to assess the readiness of organisations involved in implementation of IOC programmes.
Originality/value
This research is the first that systematically addresses the problem of inhibitors in the implementation of IOC programmes. The broad scope of the paper sets the foundations for more focused research into specific inhibiting factors.
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Mark Johnson and Simon Templar
Supply chains directly influence the differentiation and cost of a firm's products and services and its exposure to risk. The purpose of this paper is to use secondary financial…
Abstract
Purpose
Supply chains directly influence the differentiation and cost of a firm's products and services and its exposure to risk. The purpose of this paper is to use secondary financial data to explore the relationship between supply chain and firm performance by developing a unified proxy for supply chain performance.
Design/methodology/approach
Established econometric techniques were used to validate the proxy using a sample frame comprising the annual reports of 117 publicly traded UK manufacturing firms from the period 1995 to 2004.
Findings
Increases in change in the proxy lead to an increase in change in the rate of return on capital employed and a change in the rate of cash‐to‐cash cycle length, both of which are traditional measures of improved supply chain management. Moreover, as the rate of change of the proxy increases, so does enterprise value at a level that is statistically significant, indicating that improving supply chain management practices has a positive impact upon improved firm performance.
Research limitations/implications
As annual financial results were used the analysis is at a high level so there is a lack of resolution in identifying discrete causes. The use of annual financial results also means that the research can only take yearly snapshots of firm performance.
Practical implications
The paper indicates that the supply chain is an enabler, not an impediment, to superior organisational performance.
Originality/value
The originality and value of this paper is that it develops a proxy to explain the relationships between supply chain and an organisation's financial performance taking into account the three imperatives of profitability, liquidity, and productivity.
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R. Glenn Richey, Stefan E. Genchev and Patricia J. Daugherty
Aims to provide empirical evidence of the relationships between and among reverse logistics, resource commitment, and innovation.
Abstract
Purpose
Aims to provide empirical evidence of the relationships between and among reverse logistics, resource commitment, and innovation.
Design/methodology/approach
Mail surveys were sent to members of the Automobile Aftermarket Industry Association, a large trade association. Factor level results followed by between‐item results, as typically reported in general linear modeling and mediated regression, are developed using a split sample methodology. Ultimately, Resource‐Advantage Theory provided the framework for examining the impact of developing innovative reverse logistics‐related dynamic capabilities.
Findings
Resource commitment makes reverse logistics programs more efficient and more effective. However, the resources must be used in such a manner as to develop innovative capabilities/approaches to handling returns. Resource commitment was not found to be significantly related to innovation in reverse logistics at smaller firms. This is likely to be related to the level of resources available. Larger firms can commit greater resources and, thus, enjoy superior performance compared with smaller firms in the survey group.
Research limitations/implications
The focus is somewhat narrow. New research should extend beyond the one industry examined. Future research should also expand to include more members of the supply chain and employ methods that allow examination of network relationships.
Practical implications
Reverse logistics deserves special attention in terms of resource commitment. Resources related to labor, i.e. allocating sufficient personnel to reverse logistics programs, are especially critical. Innovation in reverse logistics programs was found to be related to operational service quality at both small and large firms.
Originality/value
The research provides empirical evidence of the relationships between resource commitment and innovation – and how reverse logistics program performance is influenced. This has important implications with respect to customer relations. It can also be used to provide rationale for securing adequate resource commitment for reverse logistics programs.
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Timo Ala‐Risku, Jari Collin, Jan Holmström and Juha‐Pekka Vuorinen
This paper aims to describe how performance in the project supply chain can be improved by implementing information technology solutions that track site installation and inventory.
Abstract
Purpose
This paper aims to describe how performance in the project supply chain can be improved by implementing information technology solutions that track site installation and inventory.
Design/methodology/approach
The case study was initiated after observing unexpected problems and subsequent performance improvement in a very large project delivery. Personnel involved in the project were interviewed and project documentation was analyzed to identify the reasons for initial poor performance and the changes that lead to the observed improvement.
Findings
As the scale and complexity of a delivery project increases the role of accurate and robust tracking of installation work and inventory increases. Alignment between participants breaks down in the absence of reliable inventory tracking with potentially very adverse effects on project delivery operations. Introducing reliable inventory tracking can very quickly re‐align participants and improve overall performance in a telecom delivery project.
Research limitations/implications
The findings are based on a case study, with particular characteristics: large number of dispersed installation sites, modular product, remote sensing. Topics for further research are suggested to assess the relevance of inventory tracking in different contexts.
Practical implications
The case shows how an original equipment manufacturer (OEM) can improve project delivery performance by investing in inventory tracking between inventory drop‐off and installation on the site.
Originality/value
Project delivery has received scarce attention in a supply chain management context. This paper contributes to the body of knowledge by showing how site inventory tracking affects performance and alignment of the whole project supply chain.
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Reinaldo Guerreiro, Sérgio Rodrigues Bio and Elvira Vazquez Villamor Merschmann
This paper aims to assess the usefulness of cost‐to‐serve for customer profitability management through literature review and a case study in a food‐industry company.
Abstract
Purpose
This paper aims to assess the usefulness of cost‐to‐serve for customer profitability management through literature review and a case study in a food‐industry company.
Design/methodology/approach
The research is based on a case study. The study presents the state‐of‐the‐art of the literature review related to cost‐to‐serve measurement and customer profitability analysis and a case study of a Brazilian food‐industry company with high operational complexity and an extensive customer product and commercial service line.
Findings
The literature review demonstrates that few empirical studies have actually addressed the problem of cost‐to‐serve measurement and customer profitability analysis. The findings of the study show that the measurement of cost‐to‐serve provides specific and detailed customer information that enables a more comprehensive customer profitability analysis than the classical paradigm.
Research limitations/implications
A single case study does not allow the results to be generalized to other organizations.
Originality/value
The paper includes a comprehensive review of literature and the empirical case study in a Brazilian food company offers additional insights in cost‐to‐serve measurement and customer profitability analysis.
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Explores and describes the close interrelationship between marketing and logistics, i.e. the marketing activities and the logistics activities in a marketing channel. The author…
Abstract
Explores and describes the close interrelationship between marketing and logistics, i.e. the marketing activities and the logistics activities in a marketing channel. The author acknowledges that marketing and logistics were united in the beginning of the twentieth century, but that the two disciplines were in part separated from each other during the evolution of the last century. The topic is a business philosophy that may contribute to the re‐integration of the research disciplines. Usually, from a logistics perspective, the disciplines are treated as separate from each other, while from a marketing perspective the opposite is often acknowledged. In the 1980s, the potential re‐integration between the disciplines from a logistics perspective emerged through the business philosophy labeled as supply chain management (SCM). Both scholars and practitioners in the field of logistics have popularized this business philosophy in recent years. Argues that SCM contributes to the re‐integration of marketing issues in the field of logistics theory and practice.
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Mikko Kärkkäinen, Sanna Laukkanen, Sami Sarpola and Katariina Kemppainen
The purpose of this study is to investigate how and for what purposes companies use interfirm information systems (IS) in supply chain management (SCM). Further, the drivers for…
Abstract
Purpose
The purpose of this study is to investigate how and for what purposes companies use interfirm information systems (IS) in supply chain management (SCM). Further, the drivers for the different uses of interfirm IS are investigated.
Design/methodology/approach
Two a priori constructs – the roles of interfirm IS in SCM and the drivers for interfirm IS use in SCM – are derived from the prior research. The case study approach is applied to analyze empirical data collected from 16 Finnish companies in order to assess the validity of the constructs.
Findings
The findings suggest that the proposed three categories – transaction processing, supply chain planning and collaboration, and order tracking and delivery coordination – represent well the different types of interfirm IS uses in SCM. Further, the findings suggest that the drivers behind these different categories of interfirm IS use differ.
Practical implications
The different purposes for which interfirm IS can be used in the management of supply chains are demonstrated. Further, the reasons for adopting interfirm IS for the different purposes are shown to vary and not to be as self‐evident as anticipated in the prior research.
Originality/value
The study addresses the lack of empirical research on how companies actually use IS in managing supply chain activities. It also contributes to the extant knowledge on the factors that drive companies to use IS in specific ways in their SCM efforts.
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Mikko Kärkkäinen, Timo Ala‐Risku, Kary Främling, Jari Collin and Jan Holmström
The purpose of the paper is to evaluate the feasibility of implementing a tracking based inventory management system in temporary storage locations of a project delivery chain. To…
Abstract
Purpose
The purpose of the paper is to evaluate the feasibility of implementing a tracking based inventory management system in temporary storage locations of a project delivery chain. To describe the use of tracking based inventory information for improved logistics control in equipment delivery and installation.
Design/methodology/approach
A solution design experiment was carried out in 16 temporary storage locations with one original equipment manufacturer and four installation partners.
Findings
It is feasible to implement tracking based inventory management in temporary storage locations. The challenge is to ensure that installation partners adopt the system. The benefit is improved logistics control of equipment delivery and installation for the original equipment manufacturer.
Research limitations/implications
Tracking information is more useful than conventional stock keeping in project delivery. By monitoring the dwell time of delivery items it is possible to identify and resolve problems in project execution.
Practical implications
Inventory management in temporary storage locations help project management, project logistics, and central logistics organizations carry out their work more effectively. Implementation can be based on tracking.
Originality/value
The paper's value lies in empirical tests and evaluation of tracking based inventory management in temporary storage locations.