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Evaluating theoretical conceptualisations for supply chain and finance integration: A Scottish focus group
Abstract
With supply chain finance gaining more prominence in practice and drawing increasing attention from researchers, the question arises how this emerging discipline can build on existing theoretical conceptualisations. However, few studies have incorporated theoretical frameworks and there remains therefore a gap in literature. To fill this gap, the study reviews five theories on their suitability for supply chain finance: transaction cost economics, agency theory, network theory, collaborative networks and social exchange theory. A Scottish focus group consisting of practitioners involved in supply chain finance provided empirical data for the evaluation. The findings suggest that there is supporting evidence for using agency theory, network theory, transaction cost economics and social exchange theory as theoretical frameworks for studying phenomena of supply chain finance. Furthermore, the results indicate that the conceptualisations based on agency theory should be extended with ‘reverse principal–agent theory’ to fit with the contingencies of supply chain finance. The frameworks of collaborative networks are found less suitable. In addition to these theoretical considerations, the focus group discussion also points out that the financial department's collaboration with other departments involved in the primary supply chain process in firms needs to be improved. To achieve this training and supplier development, particularly for smaller firms, is seen as key. These outcomes have informed a research agenda for research groups, early career researchers and doctoral students.
... Moreover, while SCC aims to achieve mutual benefits, the contributions and benefits of all parties in the supply chain are usually unbalanced (Duonga and Chong, 2020). The cost savings brought by SCC are mostly due to the core enterprise alone taking risks related to SCF (Dekkers et al., 2020). Because inter-organizational dependencies determine external control over a specific organization by other organizations and influence internal power structures (Caniato et al., 2016), the core enterprise's willingness to bear risks related to SCF may rely on its transaction dependence, which refers to the degree to which a company conducts transactions with particular suppliers/buyers (Carr et al., 2008). ...
... Considering that information transparency and transaction dependence are closely related to the two main processes (i.e. information sharing and cost savings) through which SCC influences SCF adoption (Wadhwa et al., 2010;Dekkers et al., 2020), our major research question is as follows: ...
... First, although SCC may help companies improve their information processing capability and reduce information asymmetry related to SCF adoption through information sharing (Jia et al., 2020), a company's willingness to share information is related to the quality and quantity of information available to itself (Granados et al., 2010). Second, while SCC may help companies reduce transaction costs when participating in SCF (Dekkers et al., 2020), such cost savings are mostly due to the core enterprise alone taking risks related to SCF. Past studies have shown that inter-organizational dependencies create external control over a given organization by other organizations and affect power arrangements within the organization (Caniato et al., 2016). ...
Purpose
Although supply chain collaboration (SCC) theoretically boosts the adoption of supply chain finance (SCF) through information sharing and cost savings, many companies with good supply chain partnerships still hesitate to engage in SCF. To disentangle this puzzle, this study aims to explore how two dimensions of information transparency (i.e. information quantity and information quality) and two types of transaction dependence (i.e. dependence on suppliers and dependence on customers) influence the relationship between SCC and SCF adoption.
Design/methodology/approach
This study uses secondary survey data from a Chinese bank, including 464 Chinese companies that have adopted SCF to varying degrees. This study then performs the logistic regression analysis to test the hypotheses.
Findings
This study empirically confirms that SCC shows a positive relationship with SCF adoption. More interestingly, information quantity negatively moderates this positive relationship, whereas information quality positively moderates this positive relationship. Most surprisingly, dependence on customers rather than dependence on suppliers strengthens this positive relationship.
Originality/value
This study makes theoretical contributions to the SCF literature by demonstrating the distinct moderating mechanisms regarding the relationship between SCC and SCF adoption. The findings also help companies reexamine their interactions with supply chain members.
... The results of the study showed that transaction costs from bounded rationality are mainly related to internal factors within the SME supplier organisation, and transaction costs from opportunism are mainly related to the supplier-buyer relation. Dekkers et al. (2020), while providing an overarching view of theoretical contribution to the field of SCF, identifies TCE as the one with the highest explanatory power. From a financial aspect's viewpoint, the concepts of bounded rationality, opportunism and assets specificity were highlighted in the findings of the study. ...
... It is interesting to notice how studies in general do not tend to agree on the exact structure of the principal-agent relationship within SCF. More recently, Martin and Hofmann (2019) highlight how the theory can have different levels of relevance and provide different insights based on the 'principal-agent constellation' taken as unit of analysis, while Dekkers et al. (2020) question whether the 'traditional' roles of buyer and supplier as principal and agent hold for every instance within the domain of SCF. In terms of the impact of innovative emerging technologies on supply chain transparency, Treiblmaier (2018) advocates for future research to investigate how increased transparency (specifically in the context of blockchain adoption) affects the typical constructs within the theory. ...
... On one hand, the selection of the three theories was intended to cover the most relevant aspects of socio-economic exchange in SCF, though this choice is by no means to be intended as exhaustive, nor should choosing those theories be intended as a value judgment on their relevance. On the other hand, this contribution is not setup to provide a systematic overview of theories covering SCF (which has been done, for example, by Dekkers et al. 2020and Jia et al. 2020or Huang, Chan, and Chung 2022. We leave it as a direction for future research to extend this approach to additional lenses. ...
In the wake of technological innovation, supply chain transparency has become a concrete avenue for long-awaited improvements to supply chain processes and practices. Transparency is of particular interest to Supply Chain Finance; however, it is yet empirically unknown whether and how benefits would materialise. Being at the interface of finance and operations, Supply Chain Finance aims at improving the inter-company management of financial flows. Nowadays, different financing schemes are offered foremost by cooperation between financial institutions and fintechs. Uncertainty remains on whether and how supply chain transparency would benefit these schemes to allow the adoption of more sophisticated, higher-value schemes. By applying the Gioia method, we analysed a series of interviews with experts from the Supply Chain Finance industry regarding transaction cost economics, agency theory, and dynamic capability. The resulting series of pragmatic, theory-grounded but practice-inspired propositions untangle the relationship and barriers between supply chain transparency and Supply Chain Finance. The propositions provide advances in the theoretical understanding of Supply Chain Finance and uncover relevant directions for future research. This poses the base for actionable results in future research and leads to an impact in research by addressing the concerns and tensions raised by Supply Chain Finance experts.
... However, the RF market is maturing, and RF is increasingly offered to the "long tail" of small and medium enterprise (SME) suppliers (Siemes et al., 2017), who are in greater need of financial support. RF is still relatively new for SMEs, which presents a lack of knowledge about its effects (De Goeij et al., 2016;Dekkers et al., 2020). In the literature, RF is usually portrayed as aiming at win-win situations (Hofmann and Belin, 2011). ...
... However, there might be value in doing so. Dekkers et al. (2020) mention that smaller suppliers are often unable to correctly assess SCF offers. Liebl et al. (2016) show that buyers sometimes use their bargaining power to pressure suppliers into accepting SCF offers. ...
... These factors might influence the strength of the relationship between financial costs and benefits and the outcome. Bounded rationality exists, for example, in the form of suppliers making incorrect financial assessments of RFOs (Dekkers et al., 2020). An incorrect assessment of an RFO's financial costs and benefits might influence the supplier's perception of the attractiveness of the offer, leading to acceptance of unattractive offers or rejection of attractive offers. ...
Purpose
Reverse factoring (RF) is one of the most prevalent supply chain finance (SCF) solutions. This study challenges the view that suppliers accept financially attractive reverse factoring offers (RFOs) and reject financially unattractive ones. Specifically, it focuses on small and medium enterprise (SME) suppliers and how transaction cost economics (TCE) factors affect their decision.
Design/methodology/approach
The authors study eight cases of RFOs, interviewing suppliers, buyers and financial service providers (FSPs) and using several sources of private and publicly available secondary data.
Findings
In five out of eight RFOs, suppliers either accepted unattractive offers or rejected attractive ones. Bounded rationality and opportunism seem to explain such misalignment, while asset specificity and frequency play a minor role in decisions.
Research limitations/implications
The study shows the need for further investigation linking analytical assessment of SCF benefits with qualitative factors.
Practical implications
SME suppliers cannot assume an RFO will benefit them. They must critically evaluate their buyers' offers, ideally with self-awareness towards how the abovementioned factors might affect their decisions. For buyers and banks, this study gives clear insights on how to approach SME suppliers to avoid rejection of financially attractive RFOs.
Originality/value
This contribution analyses financial attractiveness of RFOs in conjunction with qualitative factors, including rejected RFOs and without assuming that RFOs are financially attractive for suppliers. This is original and relevant for both research and practice, since it extends the understanding of the supplier response to RFOs, thanks to the consideration of TCE factors.
... Our study contributes to the SCF literature in the following two respects. First, although existing studies have used many theoretical perspectives, such as transaction cost economics (Dekkers et al., 2020), information processing theory (Jia et al., 2020) and institutional theory (Wuttke et al., 2019), to understand the phenomenon of SCF, the present understanding of the effectiveness of SCF solutions for supply chain cost reduction is underdeveloped. From the perspective of efficiency motives, we theoretically and empirically confirm that the effectiveness of SCF solutions for supply chain cost reduction is not only linked with specific SCF solutions but also connected to the focal company's use of traditional financing instruments, especially credit financing. ...
... First, compared with existing studies that use transaction cost economics (Dekkers et al., 2020), information processing theory (Jia et al., 2020) and institutional theory (Wuttke et al., 2019) to understand the phenomenon of SCF, from the perspective of efficiency motives, we provide a novel understanding for the role of SCF solutions in improving cost performance, especially for supply chain cost performance. In particular, although prior studies have analyzed the effectiveness of SCF in improving the cost performance of focal companies (Caniato et al., 2016;Moretto et al., 2019), they primarily focus on the overall evaluation of SCF rather than on a specific solution. ...
Purpose
Although supply chain finance (SCF) aims to optimize capital flows in the supply chain process, its effectiveness in improving cost performance remains controversial. From the perspective of efficiency motives, this study aims to explore how the combinations of SCF solutions and traditional financing instruments lead to supply chain cost reduction.
Design/methodology/approach
A mixed-method approach is used in this study. First, using the fuzzy-set qualitative comparative analysis (fsQCA), the authors analyze 405 survey data across four industries in China and identify the configurations of financing instruments for supply chain cost reduction. Second, to better understand the reasons behind each configuration, the authors conduct the content analysis on the interview data composed of 24 Chinese companies.
Findings
The authors find that the effectiveness of SCF solutions for supply chain cost reduction is related to the focal company's use of traditional financing instruments. Moreover, compared with guaranteed financing, companies that use credit financing are more likely to adopt SCF solutions to achieve supply chain cost reduction. Finally, the effectiveness of SCF solutions in reducing supply chain costs varies greatly across industries.
Practical implications
The study’s findings provide insights for policymakers and SCF practitioners in the aspects of simplifying the SCF application.
Originality/value
This study contributes to the current literature by addressing the theory–practice gap related to SCF. The study also provides new understandings of factors related to supply chain cost reduction, as well as factors that influence SCF adoption.
... One of the mechanisms highlighted in the extant literature for buying firms to deal with supply risk is the use of 'financial supply chain management' (FSCM) practices such as buyer credit, inventory financing, reverse factoring, and letters of credit (Dyckman, 2011;Wuttke, Blome, & Henke, 2013;Wuttke, Rosenzweig, & Heese, 2019). FSCM, which is fundamentally based on mechanisms offered for managing and controlling cash flows (Wuttke et al., 2013), has recently gained more attention from scholars (Dekkers et al., 2020;Song, Yang, & Yu, 2020;Tseng, Lim, & Wu, 2019). It is considered as key to firms' success if implemented properly and in the right form and format (Silvestro & Lustrato, 2014;Wuttke, Blome, Heese, & Protopappa-Sieke, 2016). ...
... The close collaboration with suppliers allows buying firms to help their suppliers to enhance their capacities and capabilities in order to better adjust to future demands, which consequently results in reducing supply risk (Chowdhury et al., 2019). An important complementary approach to managing supply risk, identified in the recent literature, has been to consider the potential roles of financially related activities in dyadic supply chain relationships (Dekkers et al., 2020;Silvestro & Lustrato, 2014). As a result, FSCM practices have been proposed as vital mechanisms in managing and mitigating supply risk in buyer-supplier relationships (e.g. ...
Despite increasing attention being paid to financial supply chain management (FSCM) practices as key factors that enable firms to gain competitive advantage, there is limited research on the consequences of such practices and their impact on buyer-supplier relationships. In particular, the existing literature lacks evidence of how FSCM practices can help buying firms to manage their supply-side risk. Using the two theoretical angles of relationship quality and buyer relative power, this study empirically examines the impact of FSCM practices on supply risk. Based on a cross-sectional survey of 244 manufacturers in Iran, the results show that depending on the quality of the buyer-supplier relationship and the level of buyer relative power, different FSCM practices should be implemented to mitigate supply risk. Our empirical findings present important implications for both theory and practice.
... On the basis of the interview steps of FGM [140], a panel of experts initially determined important SSCDRs. Then, these experts confirmed potential causes and effects and further designed an FMEA questionnaire. ...
... FGM has been a highly effective qualitative research tool; it makes it possible to gather detailed information regarding participant perceptions, opinions, beliefs, and attitudes regarding particular phenomena [144]. This method is well suited to explore and better understand the processes and intentions that drive supply chain members to determine SSCDRs, as interaction within the group helps participants better express and clarify their views [140]. The steps are described as follows [145]: ...
As the complexity of supply chains increases, the enhancement of resilience for mitigating sustainable disruption risks in supply chains is an important issue. Quality function deployment (QFD) has been successfully applied in many domains to solve multicriteria decision-making (MCDM) problems. However, research on developing two houses of quality to connect sustainable supply chain disruption risks, resilience capacities, and resilience-enhancing features in elevator manufacturing supply chains by using the MCDM approach is lacking. This study aims to develop a framework for exploring useful decision-making by integrating the MCDM approach and QFD. By applying the framework, supply chain resilience can be improved by identifying the major sustainable risks and the key resilience to mitigate these risks. Important managerial insights and practical implications are obtained from the framework implementation in a case study of the elevator manufacturing industry. To strengthen resilience and thus mitigate key risks, the most urgent tasks are to connect the working site and the backstage to enhance product development and design and to share real-time job information. When these features are strengthened, agility, capacity, and visibility can be improved. Finally, unexpected events lead to changes in supplier delivery dates, and factors such as typhoon and lack of critical capacities/skilled employees with the greatest impact can be alleviated. This framework will provide an effective and pragmatic approach for constructing sustainable supply chain risk resilience in the elevator manufacturing industry.
... Numerous prior studies have utilized SCM practices to improve organizational performance (Ali & Gossaye, 2023). However, further research is necessary to draw definitive conclusions on link among SCM practices and, organizational performance, as some studies have primarily focused on the financial impacts of these practices (Dekkers et al., 2020). ...
The study examines influence of SCMP on OP, while simultaneously evaluating the mediating function of job satisfaction (JS). Using data from health sector, the research utilizes quantitative approach, employing survey data from 240 employees, using SPSS (Version 25) and Amos (Version 23), and Hayes Process macro for mediating variables. Findings reveal that SCMP significantly and positively influenced OP, highlighting the importance of effective SCM strategies in enhancing operational efficiency and competitive advantage. Furthermore, the study confirms that JS directly improves OP, emphasizing the critical role of employee satisfaction in achieving organizational goals. Notably, JS found partially mediating association between SCMP and OP, suggesting that positive effects of SCMP on OP are amplified when employees are 1 satisfied. This mediation underscores the necessity for organizations to integrate HR initiatives that foster job satisfaction with their SCM strategies. Practical implications include the recommendation for firms to adopt comprehensive SCM practices and to invest in creating a supportive work environment that enhances employee satisfaction. Future research should expand to other sectors and regions for broader validation. The study further enriches existing literature by clarifying complex relationship among SCMP, OP, and JS. Also, provides valuable insights for both researchers and practitioners.
... Se, por um lado, a avaliação da capacidade de pagamento dos clientes antes de emprestálo é um dos desafios mais importantes para a melhoria do sistema bancário, por outro, há que considerar se, a avaliação de crédito for rigorosa e conservadora, privará empresas elegíveis de acessar seus recursos financeiros necessários (Dekkers et al., 2020). ...
Objetivo: Este estudo teve por objetivo verificar os procedimentos de avaliação de risco na concessão de crédito por uma pessoa jurídica, via financiamento, nas negociações com seus clientes. Metodologia: Empregou-se uma abordagem documental, com ênfase na análise qualitativa, durante o estudo experimental conduzido em uma entidade XYZ ligada à tecnologia de informação. Resultados: Apontam que o credit score e o rating score, constituídos por meio das etapas de avaliação, considerando o histórico da empresa, documentações, garantias, saúde financeira, fluxo de caixa, endividamento, governança corporativa e perspectivas de mercado, possibilitam a classificação de risco aos seus clientes analisados, variando de AAA para o cliente “alpha” e D para o “beta”. Tal resultado possibilitou deduzir que a avaliação creditícia, oportuna automatização nas decisões de financiamento das atividades comerciais, capaz de promover flexibilidade financeira e agilidade comercial. A classificação de risco dos clientes é vista, portanto, como uma ferramenta fundamental para aprimorar as decisões financeiras da empresa XYZ, minimizando riscos de inadimplência e garantindo a segurança financeira de suas operações comerciais, resultante do estabelecimento de pontuações de riscos, tanto de empresas adimplentes quanto das inadimplentes. Contribuições do Estudo: Este estudo traz uma contribuição teórica relevante para o campo de pesquisa ao destacar a importância de validar os critérios usados na concessão de financiamento, assim como os fatores contextuais que podem afetar as decisões. A contribuição prática ao analisar uma instituição não financeira, inclusive sob o contexto pandêmico, e a forma com que elas minimizam sua inadimplência ao estabelecer mecanismos de análise de crédito, proporciona melhorias e consequentemente maior segurança como entidades credoras.
... If, on the one hand, assessing customers' ability to pay before lending is one of the most critical challenges for improving the banking system, on the other hand, it has to be considered whether rigorous and conservative credit assessment will deprive eligible companies of access to their necessary financial resources (Dekkers et al., 2020). ...
Purpose: This study aimed to verify risk assessment procedures when granting credit by a legal entity via financing in negotiations with its customers. Methodology: A documentary approach was used, emphasizing qualitative analysis, during the experimental study conducted at an XYZ organization linked to information technology. Results: They point out that the credit score and rating score, established through the evaluation stages, taking into account the company's history, documentation, guarantees, financial health, cash flow, indebtedness, corporate governance, and market prospects, enable the risk classification of their analyzed clients, ranging from AAA for the "alpha" client to D for the "beta" client. This result made it possible to deduce that credit assessment is appropriate automation in financing decisions for commercial activities, capable of promoting financial flexibility and commercial agility. Customer risk classification is therefore seen as a fundamental tool for improving XYZ's financial decisions, minimizing default risks, and guaranteeing the financial security of its commercial operations, resulting from establishing risk scores for both defaulting and non-defaulting companies. Contributions of the Study: This study makes a relevant theoretical contribution to the field of research by highlighting the importance of validating the criteria used in granting financing, as well as the contextual factors that can affect decisions. The practical contribution of analyzing a non-financial institution under the pandemic context and how they minimize their default by establishing credit analysis mechanisms provides improvements and consequently greater security as lenders.
... Another foundational theory is the Principal-Agent Theory, which examines the relationships and conflicts of interest between different parties in SCF, such as suppliers, buyers, and financiers. This theory highlights the importance of information asymmetry and incentive mechanisms in managing risks associated with SCF transactions (De Boer et al., 2017;Dekkers et al., 2020). Credit risk models, such as the Altman Z-score and the Merton model, have also been adapted for SCF to assess supply chain partners' financial health and default risk. ...
This review paper delves into the transformative potential of advanced risk management models in enhancing the resilience and efficiency of supply chain finance (SCF). By examining the application and development of Artificial Intelligence (AI), Machine Learning (ML), Big Data analytics, and blockchain technology, the paper highlights their role in transitioning from traditional reactive strategies to proactive and predictive risk management approaches. Despite the promising advantages, the paper also addresses the significant implementation challenges, model limitations, and regulatory and ethical considerations accompanying these technological advancements. Recommendations for effective deployment and areas for future research, particularly in overcoming existing hurdles and exploring emerging technologies, are also discussed. This comprehensive analysis aims to guide academics, industry professionals, and policymakers in harnessing advanced risk management models for a more robust SCF ecosystem. Keywords: Supply Chain Finance, Risk Management, Artificial Intelligence, Blockchain Technology, Big Data Analytics, Predictive Models
... The literature places significant emphasis on this direction of interaction, both theoretically and empirically. The following findings are presented below and numbered for clarity, following the approach ofDekkers et al. (2020)). IIoT þ Simulation Data collection in real-time enabled by IoT devices can compensate for the static nature of VSM and turn it into a dynamic and flexible tool due to the highly synchronised flow of digital information(Davis et al., 2020;Ilangakoon et al., 2019;Rosin et al., 2020; 2020) JIT Simulation Process simulation is an important technique used for the optimisation of processes such as scheduling and layout planning (Ciano et al., 2020). ...
Purpose
Prior to managing a company’s processes in the presence of a combination of paradigms, there is a need to understand their underlying interaction. This paper systematically reviews the existing literature that discusses the interaction between lean production (LP) and the fourth industrial revolution (i.e. Industry 4.0). The study aims to understand how the interaction unfolds and whether it is synergistic.
Design/methodology/approach
The research relies on a systematic literature review of peer-reviewed articles from Scopus and Web of Science that discuss the interaction between the two paradigms. The final set of articles pertaining to the topic was analysed.
Findings
The article presents that the interaction between the two paradigms occurs through a representation of the pillars of the House of Lean (HoL) interacting with the nine technological pillars of Industry 4.0. There is a consensus on the synergistic nexus among the pillars and their positive impact on operational performance. We also demonstrate the weights of the interactions between the two paradigms and the areas of operations management where this interaction takes place through Sankey charts. Our research indicates that the largest synergistic interaction occurs between just-in-time and industrial Internet of Things (IIoT) and that companies should invest in IoT and cyber-physical systems as they have the greatest weight of interactions with the pillars of the HoL.
Research limitations/implications
This research facilitates a deeper insight into the interaction between LP and Industry 4.0 by organising and discussing existing research on the subject matter. It serves as a starting point for future researchers to formulate hypotheses about the interaction among the various pillars of LP and Industry 4.0, apply these interactions and test them through empirical research.
Practical implications
It could serve as a guide for managers to understand with which interactions they should start the digitalisation process.
Originality/value
With the rise in discussions on the interaction between the two paradigms, there is still an opportunity to understand the specificity of this interaction. Compared to the initial seminal works on the subject, such as Buer et al . (2018b), which investigated the direction of interaction between the two paradigms, this research contributes to further investigating this specificity and gaining a better understanding of the relationship governing the interaction between LP and Industry 4.0 by delineating the interaction state among the pillars of the two paradigms and its relevant importance.
... The distribution advantages of early payment of creditors/ suppliers using supply chain finance programs (such as reverse factoring and dynamic discounting) are not always very clear. From a theoretical point of view, this so-called split-up issue is not solved [15]. Depending on the purchase market situation of the focal company, rules of thumb are used in negotiations of the financial and nonfinancial advantages [16]. ...
This chapter briefly introduces supply chain finance (SCF) and its four building blocks: Supply chain management, Finance, IT & ERP, and SCF instruments. After introducing the four building blocks, each block will be discussed in detail. Finally, state-of-the-art issues in supply chain management and finance will be discussed to bridge the gap to the real (international) business world of volatility, uncertainty, complexity, and ambiguity. In order to provide an answer to issues like liquidity in the supply chain (deep tier financing), dealing with all sorts of risks in the supply chain (resilient supply chains), and being sustainable/circular in the supply chain and its finance.
... Suppliers and customers are essential carriers of industrial and technological innovation and requirement information, carrying the accumulation of innovative knowledge and technology (Peters, 2022). Supply chain finance focuses on suppliers, customers, and core enterprises in the industrial chain to rationally allocate and integrate internal capital, facilities, information, and other production factors (Dekkers et al., 2020), especially for knowledge, technology, talent, and aspects of ''business linkage'' (Kaewnaknaew et al., 2022). Supply chain finance enables the free flow of innovation elements and drives the spillover of technology and knowledge (Moon, 2022), as well as strengthens enterprises in each node of the industrial chain, thus effectively promoting the collaborative innovation of the industry. ...
Plain Language Summary
The purpose of this study aimed to explore the impact of supply chain finance on industrial efficiency. Authors conducted quantitative analysis based on the time series data of the ICT industry in Shenzhen from 2005 to 2020. In order to better investigate the impact of supply chain finance on industrial efficiency, this study categorized industrial efficiency into operational efficiency and innovation efficiency to reflect the durability and virtuousness of the industry development. Results indicate that supply chain finance can indeed greatly improve industrial efficiency. However, this improvement is more from the perspective of operational efficiency at the industrial operation level. In the long run, excessively developed supply chain finance will lead to excessive concentration on the supply side, and excessively powerful supply chain finance enterprises will also squeeze the survival space of small and medium-sized enterprises in the serviced industry, ultimately causing the entire industry to lose its innovative vitality due to the increased industrial concentration. Theoretically, this study sheds light on the intricate effects of supply chain finance at the industrial level, and also provides valuable insights into the potential inhibition mechanism, avoid the linear stereotypes of the existing theory consensus. Practically, it is conductive to an objective understanding for managers and policymakers to realize the effective integration of supply chain finance and industrial development. This study also encountered limitations from sample range and particularity, which make it faced the challenge of theoretical robustness when extending to traditional industries.
... Our paper is related to the research streams in operations-finance interface (Babich & Kouvelis, 2018;Wang et al., 2021a;Zhao & Huchzermeier, 2015 focusing on trade credit in supply chain finance (Dekkers et al., 2020;Seifert et al., 2013). ...
This paper examines a two-period dynamic contracting in a supply chain under information asymmetry, where a supplier sells a product to a retailer via a trade credit contract. It is found that the retailer always prefers to conceal her actual cost information thus signal as a higher-cost type in the first period to pursue a higher information rent, which would decrease the supplier’s profit and thereby the overall profit of the supply chain. To mitigate this ratchet effect, we introduce a reputation compensation mechanism in the two-period trade credit setting. This mechanism could alleviate the information asymmetry to a certain extent as there exists a threshold that incentivizes the retailer to share her true cost information in the earlier period. Moreover, the retailer might claim as a lower-cost type when the supplier offers a relatively higher reputation compensation to take full advantage of her information. Therefore, the supplier should provide trade credit with a reasonable reputation compensation in a two-period setting to enhance his expected profit.
... Secondly, this paper explores the internal mechanism of how supply chain network ties affect SCFP of SMEs through physical distribution and demand management flexibilities based on the ERBV. However, Dekkers et al. (2020) presented supporting evidence for the use of agency theory, network theory, transaction cost economics and social exchange theory as theoretical frameworks for studying SCFrelated phenomena. Therefore, future research should try to use the above theory to explore further internal mechanisms between supply chain network ties and financing performance of SMEs in SCF. ...
Purpose
As an effective mode to help small and medium enterprises (SMEs) raise working capital, supply chain finance has recently gained extensive attention. The purpose of this paper is to explore the intrinsic mechanism of how both weak and strong ties in the supply chain network impact the supply chain financing performance (SCFP) of SMEs from the perspective of the supply chain network.
Design/methodology/approach
Based on the extended resource-based perspective, this paper proposes a theoretical model to explain the mode in which strong ties and weak ties of SMEs in the supply chain network influence SCFP through both physical distribution flexibility and demand management flexibility. Based on data from 182 manufacturing firms in China, this paper uses multiple regression analysis to test hypotheses.
Findings
The results of this paper indicate that weak ties improve SCFP more effectively than strong ties. Furthermore, both physical distribution flexibility and demand management flexibility exert different mediating roles either between strong ties and SCFP or between weak ties and SCFP. Moreover, the effect of physical distribution flexibility and demand management flexibility on SCFP of SMEs is not reinforced.
Originality/value
This paper highlights the importance to expand supply chain finance research from the perspective of the supply chain network. In particular, this paper explores the poorly understood mediating effect both physical distribution flexibility and demand management flexibility exert on the relationship between network ties and the SCFP of SMEs.
... Supply-chain finance is becoming more prominent in practice, attracting more and more the attention of researchers. Dekkers et al. (2020) evaluated the supply chain and financial integration theory concepts of agency theory, network theory, transaction cost economics, and social exchange theory as the theoretical framework of the supply-chain financial phenomenon. Due to banks' strict risk controls and low credit ratings, small and medium enterprises often face challenges in obtaining bank financing. ...
This article studies a two-period, closed-loop supply chain (CLSC) with manufacturer or retailer recycling. It establishes a model analysis framework to analyze pricing optimization strategies and the channel-mode selection of electric vehicle batteries and considers manufacturer recycling and retailer recycling scenarios. When a retailer recycles, it needs to invest capital to build its recycling channel and so suffers from capital constraints. For this reason, retailers consider bank loans or trade-credit financing from manufacturers. This work explores a two-stage, CLSC pricing strategy that considers consumers’ preferences for remanufactured products and recycling rates, and it investigates financing channels for capital-constrained retailers. It analyzes optimal equilibrium strategies in three modes and compares the recycling and financing modes. Through numerical examples, it analyzes the effects of value preference rates and recycling rates of remanufactured products on supply chain profits, product demand, and model selection. The results show that the recycling rate can effectively incentivize the demand for new products in the first period. For any remanufactured product recycling cost, the manufacturer’s profit is most significant in the retailer-recycling bank financing model, and the retailer’s profit is largest in the manufacturer recycling model. As the consumer preference rate for remanufactured products increases, the demand for new products in the second stage decreases and the demand for remanufactured products increases. The retailer recycling trade-credit financing from the manufacturer model gives the largest profit to the retailer when the preference rate is significant or when the preference rate is low with a moderate recycling rate.
... In the transaction process, When the principal hands over the decision-making power to the agent with different interests, the principal-agent relationship occurs [17]. In the principal-agent relationship, the agent works for the principal and the two parties belong to the partnership [18]. When the agent mischaracterizes its capabilities, objective conflict and information asymmetry will stimulate the occurrence of opportunistic behavior, and can lead to moral hazard, agent lack of effort, and adverse selection [19]. ...
The research work on multi-task principal-agent in supply chain seldom considered other factors. In this paper, basing on accounts receivable mode of supply chain finance, we add the financing factor of bank in multi-task principal-agent to study the incentive mechanism between the manufacturer and the supplier. First we develop an incentive model under the condition of symmetric information and work out the optimal result. Next the circumstance with asymmetric information is also discussed. Last, the effort level of supplier is discussed when the receivables business ran normally.
... Traditional discussions of supply chain management (SCM) focus on optimizing logistics rather than financial processes. However, as the importance of financial management increases, financial supply chain management (FSCM) is being actively discussed (Dekkers et al., 2020). FSCM refers to the minimization of financial costs in a supply chain. ...
This study builds a theoretical model to examine how supply chain finance (SCF) services using fintech can ease e‐commerce suppliers' capital constraints. Despite the innovation in the logistics industry during the Fourth Industrial Revolution and the increasing online shopping in the post‐COVID era, small e‐commerce enterprises may fail to grow owing to their budget constraints. Reverse factoring is believed to ease such suppliers' capital constraints. We analyze the effect of reverse factoring using the capital‐constrained newsvendor model, and we consider the impacts of additional funding from SCF services. Our results show that SCF services reduce e‐commerce suppliers' initial orders and, thus, alleviate their budget constraints. This finding suggests that the discount factor of reverse factoring should be higher to ease small suppliers' budget constraints and allow the e‐commerce industry to grow sustainably.
... Transaction cost theory suggests that good cooperative relationships help reduce transaction costs. However, maintaining relationships costs money, and different relationships have different prices [10][11][12][13]. Social network theory posits that resources can be obtained not only through possession but also through network relationships, which can be divided into "strong relationships" and "weak relationships" [14]. ...
In the context of the digital economy, establishing close strategic partnerships to cope with market uncertainties is an important strategic choice for firms seeking to achieve sustainable development in developing countries, particularly in Eastern culture. However, research on how strategic partnerships affect enterprise performance remains controversial. To address this issue, based on the supply chain management practices of Chinese enterprises in the era of the digital economy, and according to resource dependence theory, social network theory, and transaction cost theory, a chain multiple intermediary model was constructed and 243 Chinese enterprises information was collected for an empirical test. The results show that strategic partnership has a significant direct positive impact on information sharing, supply chain flexibility, and enterprise performance. Information sharing has a significant direct positive impact on enterprise performance and plays a partial mediating role between strategic partnership and enterprise performance. Supply chain flexibility was also found to positively impact enterprise performance and plays a partial mediating role between strategic partnership and enterprise performance. The findings also showed that information sharing and supply chain flexibility play a chain mediating role between strategic partnership and enterprise performance. This study explores the effects of strategic partnership on enterprise performance, which provides an important supplement to theoretical studies of supply chain management. The results help provide targeted solutions on how to effectively implement supply chain management for enterprises in emerging and developing nations.
... Indeed, the network theory has been cited as a robust theoretical framework for the supply chain. This is because it can explain behaviour by agents from the perspective of their position in a network and, consequently, trust and power in buyer-supplier relationships in the context of OM (Dekkers et al., 2020). Network theory deals with dyadic relationships in which the networks are firmly embedded (Halldorsson et al., 2015). ...
Purpose
Digital transformation (DT) in the semiconductor industry goes beyond traditional business operations and supply chain management (OSCM) to the digital world. Despite significant developments in recent years, blockchain implementations for OSCM remain relatively underdeveloped in the semiconductor industry. Therefore, this research aims to examine the relationships between blockchain visibility, supply chain integration (SCI) and supply chain performance (SCP) in the era of DT in Malaysia's semiconductor industry to shed light on this emerging area.
Design/methodology/approach
A convenience sampling of 71 operations and supply chain managers attached to semiconductor manufacturing firms in Malaysia were invited to participate in a survey. In assessing blockchain visibility within the industry, key terms namely business intelligence gathering, information exchange, information technology (IT) and knowledge of asset status, were conceptualised from the literature review. The questionnaires developed to collect data were validated by industry and academic experts.
Findings
The results from the analysis confirmed that SCI mediates the link between blockchain visibility (information exchange, business intelligence gathering and knowledge asset status) and SCP. Likewise, the importance-performance matrix analysis (IPMA) outcomes revealed that IT played a minor role. The results suggested that semiconductor manufacturers should pay less attention to IT since this was identified as having the least priority towards improvement.
Practical implications
The outcomes from this research enable policymakers to strategise and integrate blockchain technology in the era of DT to ensure sustainable SCM in the semiconductor industry in Malaysia.
Originality/value
The research bridge the knowledge gap by revealing the value that blockchain visibility can facilitate SCP and explore SCI as the prevailing factor and demonstrates how Resource-Based Theory and Network Theory can be applied in this study.
... Apart from the quantitative methodologies seen to be adopted in the literature review, several conceptual studies are being undertaken. Dekkers et al. (2020) have highlighted the significance of the use of theoretical concepts in SCF including transaction cost economies, agency theory, network theory, collaborative networks and social exchange theory. Transaction cost economies theory has been studied in SCF literature by many researchers. ...
Over the last decade, supply chain finance (SCF) has gained popularity and increasing attention among academicians and stakeholders in the context of financial flows in the supply chain. However, some research gaps still exist that need to be explored to improve the sustainability of supply chains. Specifically, there is a critical research need to look at the conceptual background of SCF and its potential applicability in various phases of supply chains. Therefore, this article aims to bridge this gap by conducting a comprehensive State‐of‐the‐Art literature review based on 367 papers published from 2006 to 2020. Furthermore, this article is one of the first attempts to present current and past studies in the domain of SCF in a holistic manner. The analysis highlights the most influential authors, keywords, organisations, leading publications and clusters in existing research areas. This article also sets out a proposed research framework based on the triangulation approach perspective, that is, financial perspective, buyer perspective and supply chain‐oriented perspective. The most important and unique contribution of the article is the identification of new and emerging research areas where the application of SCF is still in the nascent stage. These findings can guide stakeholders at every stage of the value chain to appropriately use techniques that model policies to better inform investment and operational decisions in line with Sustainable Development Goals.
... Online finance is a low-cost, highly efficient means to provide services and attract consumers based on internet platforms, making the financial system in China much more inclusive. Online finance can operate in various modes, including online money management, online payment, and online consumer finance [1][2][3][4][5]. Among them, online finance credit provides underfunded individuals and small and medium enterprises (SMEs) with an indispensable credit channel [6][7][8][9]. ...
The low-cost, highly efficient online finance credit provides underfunded individuals and small and medium enterprises (SMEs) with an indispensable credit channel. Most of the previous studies focus on the client crediting and screening of online finance. Few have studied the risk rating under a complete credit risk management system. This paper introduces the improved neural network technology to the credit risk rating of online finance. Firstly, the study period was divided into the early phase and late phase after the launch of an online finance credit product. In the early phase, there are few manually labeled samples and many unlabeled samples. Therefore, a cold start method was designed for the credit risk rating of online finance, and the similarity and abnormality of credit default were calculated. In the late phase, there are few unlabeled samples. Hence, the backpropagation neural network (BPNN) was improved for online finance credit risk rating. Our strategy was proved valid through experiments.
... This approach helps in the generation of "deeper and richer data" than one-to-one interviews (Rabiee, 2007). As suggested by Dekkers et al. (2020), this method is a good fit for this phase of the study as face-to-face communications within the group encourage the participants to better clarify their own critical views. A list of sample questions asked to participant is provided in Table 4. Exploring vulnerability and resilience of shipping Following May et al. (2016), first, all discussed contributions are noted on paper without any critical evaluation. ...
Purpose
This study aims to improve understanding of how coastal maritime transport system of Vancouver Island would be disrupted in disaster events, and the strategies could be used to address such risks. Any transport disruption at the maritime leg of the supply chain can affect the needs of vulnerable residents and thus, the supply of many goods to coastal communities.
Design/methodology/approach
This case study focuses on the disruption that can be expected to occur for ferries that serves coastal communities of Vancouver Island in Canada. A landslide scenario in the Fraser River (which connects coastal communities) is developed, and interviews and focus groups are used to gain understanding of the vulnerability and resilience of shipping.
Findings
The findings show that the maritime leg of the supply chain for the coastal communities of Vancouver Island is resilient to a landslide disruption of ferries. Besides, there would be no impact on the operability of tugs and barges. This study also offers suggestions for creating the conditions for increasing resilience of maritime supply chains to any such disruption.
Research limitations/implications
A research gap exists with respect to minimizing disruption in maritime supply chains, mainly in regard to lessening the impact on the vulnerable residents of coastal communities. This study contributes to filling this gap in the literature.
Practical implications
The findings have significant implications for maritime service providers and for people working on disaster preparedness, emergency response and recovery.
Originality/value
Studies which focus on alleviating the impact of disruptions in the maritime supply chains and the mitigation strategies for coastal communities are scarce in the literature.
... In previous research, the resource dependency theory (Steven, Rogers, and Sengun 2019), network theory (Li and Chen 2019), stakeholder theory (Antonella et al. 2019), and enterprise competence theory (Lu, Liu, and Song 2020) have been taken to understand SCF, but few studies were based on TCT. Dekkers et al. (2020) used TCT as theoretical frameworks for studying the phenomena of SCF, while further empirical tests are still needed. A recent literature review on SCF also calls for more empirical studies of the drivers on the effectiveness of SCF (Xu et al. 2018). ...
This study aims to explore the influence of supplier-buyer cooperation (contract governance and relationship governance) on supply chain financing availability from the bilateral perspective of small and medium-sized enterprises and their suppliers (or buyers) based on the transaction cost theory. A total of 248 valid paired questionnaires were received from small and medium enterprises and their suppliers (or buyers). Multiple regression analysis was used to test the hypotheses. The results show that: (1) contract governance is more effective than relationship governance on supply chain financing availability, and the two forms of governance have a positive interaction effect. (2) Opportunism plays a mediating role between supplier-buyer cooperation and supply chain financing availability. Contract governance improves supply chain financing availability more strongly than relationship governance, by reducing supply chain financing risks. (3) Financing alignment has a positive moderating effect on the relationship between opportunism and supply chain financing availability.
This study examines the transformative impact of digital supply chain finance (SCF) platforms on buyer–supplier relationships, specifically focusing on their role in enhancing supply chain certainty and resilience. Adopting a multiple‐case study design, the research investigates eight prominent digital SCF platforms through 34 in‐depth interviews with practitioners and managers. The findings reveal how digital platforms facilitate supplier and buyer empowerment by fostering transparency, mitigating risk, and recalibrating traditional principal‐agent dynamics. A systematic comparison between digital and conventional SCF platforms further underscores the distinctive capabilities of digital solutions in addressing contemporary supply chain vulnerabilities. The study advances the theoretical understanding of digital SCF by elucidating how technological affordances and innovative financing models contribute to the stability and adaptability of global supply chains. In doing so, it also provides practical implications for firms and policymakers seeking to leverage digital technologies to enhance supply chain robustness in an increasingly complex and uncertain trade environment.
This paper empirically explores the early development of insurance projects in the decentralised finance (DeFi) industry, which is based on disruptive technologies like blockchain and smart contracts. A brief history of DeFi is narrated, stressing four risks of DeFi (volatility risk, cyberattack risk, liquidity risk, and regulation risk) and its co‐evolution with traditional finance. Then, first‐hand evidence is collected from informed industrial practitioners by two semi‐structured focus group discussions. Consensuses are reached on why the DeFi insurance market is underdeveloped and incomplete (the liquidity conundrum, the actuarial conundrum, the verification conundrum, the scale conundrum, the yield conundrum, the exploitation conundrum, the cybersecurity conundrum, and the regulation conundrum) and how the next generation of DeFi insurance can address these conundrums. Further evidence is obtained to quantify the importance of conundrums using the Analytic Hierarchy Process (AHP). Building on the qualitative and quantitative findings, a prototypical model of DeFi insurance is proposed.
The significance of the supply chain finance (SCF) ecosystem has been acknowledged by both scholars and practitioners, with platforms playing a pivotal role in its development. However, the platform-centric SCF ecosystem formation process remains ambiguous. Adopting an inter-organizational network perspective, this study investigates how third-party SCF platforms leverage their capabilities to construct SCF networks, thereby nurturing the formation of the SCF ecosystem. To do this, we conduct an exploratory multiple case study of four SCF platforms, informed by 49 semi-structured interviews with key personnels in platforms and their partners, including banks and platform users. We identify four critical SCF platform capabilities: information processing, financial network structuring, stakeholder relationship management, and SCF process management, and SCF platforms deploy their capabilities to facilitate network development and eventually facilitate the SCF ecosystem formation. Specifically, we identify the tripartite evolutionary process of the platform-centric SCF ecosystem—supply chain (SC) service platformization, SCF platformization, and SCF platform ecosystem—in which the role of platforms evolves from basic SC service providers to resource integrators, eventually becoming resource orchestrators in SCF. During this process, each stage prioritizes a network characteristic for the SCF network to evolve (i.e., initial stage prioritizes reach, the intermediary emphasizes richness, and the final values receptivity). These findings have significant theoretical and practical relevance to SCF theory elaboration and practices.
Supply chain finance is a new topic in the field of Supply chain management / Logistics and Finance.
The first academic publications appeared about 10 to 20 years ago (Pfohl & Gomm, 2009), and one of the first academic textbooks about 6 years ago (Templar, et al., 2016). There is no study book available for HBO yet, which is why the author has written a study book in Dutch for bachelor's programs such as: Logistics Management, Finance & Control (Business Economics), Accountancy, Technical Business Administration, Commercial Economics, Facility Management, etc. based on his semester course Supply Chain Finance.
Supply chain finance is an integrative field, in which the following fields come together:
• Logistics & Supply Chain Management
• Purchasing Management and Marketing & Sales
• Financial Management
• Business Processes and IT
This study book tries to discuss these fields in various chapters for the reader, given his or her background a choice can be made (to study this in more depth).
In the integrated chapters on supply chain finance (including the serious game: The Cool Connection) an attempt is made to achieve this integration and to eliminate the well-known 'silo thinking' from business practice.
Each chapter has a similar structure:
1. Learning objectives
2. Theory
3. Questions and Assignments
Supply chain finance makes extensive use of English terms. This study book will avoid this as much as possible, but there will be a number of quotes and terms in English. Of course, the English terms will be explained in Dutch.
Enjoy your study!
Purpose
This study aims to determine the key indicators affecting the resilience of the construction supply chain to flooding and calculate the resilience of the urban construction supply chain in three cases city.
Design/methodology/approach
This study combines expert opinions and literature review to determine key indicators and establish a fuzzy EWM-GRA-TOPSIS evaluation model. The index weight was calculated using the entropy weight method, and GRA-TOPSIS was used for comprehensive evaluation.
Findings
The results of the study show that the three cities are ranked from the high to low in order of Hangzhou, Hefei and Zhengzhou.
Originality/value
The innovative method adopted in this study comprising EWM-GRA-TOPSIS reduced the influence of subjectivity, fully extracted and utilized data, in a way that respects objective reality. Further, this approach enabled the absolute and relative level of urban construction supply chain resilience to be identified, allowing improvements in the comprehensiveness of decision-making. The method is relatively simple, reasonable, understandable, and computationally efficient. Within the approach, the entropy weight method was used to assign different index weights, and the GRA-TOPSIS was used to rank the resilience of the construction supply chain in three urban cities. The development of resilience provides a robust decision-making basis and theoretical reference, further enriching research methods, and having strong practical value. The study serves to improve risk awareness and resilience, which in turn helps to reduce losses. It also provides enhanced awareness regarding the future enhancement of supply chain resilience for urban construction.
This paper adopts Ming and Shi (“名”与“实”, or naming/saying vs gaining/doing) as critical Chinese hermeneutics to understand stakeholder coopetition in destination development. Through an ethnographic case study in an ancient town in China, three internal coopetitions are identified: Ming overriding Shi (以名乱实), Shi overriding Ming (以实乱名), and one Ming overriding another Ming (以名乱名). Three external coopetitions are also discussed: legitimating Ming with external Shi (以实正名), enhancing Ming in compliance with external Shi (名副其实), and replacing old Ming with new Ming (以新名替旧名). These Chinese hermeneutic strategies are contrasted with Western interpretations to shed light on intercultural understandings of destination stakeholder coopetitions.
Digitally enabled supply chains, particularly operating in uncertain environments, have been offering emerging domains for research. The effects of Timely Information Sharing (TIS) on Financial Performance (FP) in the context of Supply Chain Finance (SCF) have been hitherto neglected, especially in the context of environments affected by uncertainty. The study contributes to the related literature by developing an integrated framework interlinked with Information Processing and Contingency theories and it facilitates the understanding of the relationships that exist among SCF, TIS using advanced technology, and FP in the context of the environments affected by uncertainty caused by unpredictable events like terrorist attacks and pandemics. To corroborate the relationships and validate the relative framework, we applied Structural Equation Modelling to the data collected from 261 firms. Our findings show that SCF significantly influences FP and that TIS plays a mediating role in enhancing FP interlinked with modern technology. The study also provides the implications of SCF and TIS in strengthening Supply Chain Management 4.0 operations affected by unprecedented circumstances that hinder FP and its viability within the supply chains’ context.
This study addresses the paradoxical tensions that arise during additive manufacturing (AM) implementation for circular economy goals in the healthcare sector. Using the lens of paradox theory, this study identifies four competing priorities that stakeholders may encounter while adopting AM. Focus group discussions among 12 industry experts from the healthcare supply chain were conducted to verify the paradoxes. Semi-structured interviews were then conducted with 10 industry experts to derive the solutions to manage these tensions from an Industry 5.0 perspective to achieve the full benefits of AM. This study expands paradox theory into the AM literature and provides a novel ‘both/and’ perspective (i.e. a pluralistic rather than a dualistic perspective) to look at emerging tensions encountered while implementing AM in the healthcare sector. This perspective will help decision-makers realise that these tensions can be managed over time to turn them into creative, rather than destructive, forces.
Universities became inevitable actors in regional innovation in the past almost half a century. On the one hand, they are an important source of knowledge that led to success stories both in technological and geographic sense. On the other hand, significant differences have been observed in the capacities and capabilities of universities to transfer their knowledge into wealth generating products and services, and to enhance the advancement of their region. One of the relatively recent policy concepts that strongly relies on universities’ contribution is the regional innovation strategy for smart specialization (RIS3) that aims to spur the development of regions from the highly lagging to the most advanced ones. One of the central elements of the concept is the entrepreneurial discovery process that immanently necessitates the presence of an entrepreneurial mindset and culture in the region. Consequently, in our view one of the most important of the many contributions of universities to the design and implementation of RIS3 is the creation of an entrepreneurial ecosystem that supports entrepreneurial thinking and acting within the region. In this chapter, we applied the university centered entrepreneurial ecosystem approach for a large, comprehensive university in a lagging region to analyze the role that the university can play in smart specialization by developing an entrepreneurial mindset and ecosystem. We found that the elements of the puzzle are on the table, but owing to the insufficient connection of the elements there is a suboptimal outcome of the ecosystem. Areas for improvement are also addressed.
This chapter briefly introduces supply chain finance (SCF) and its four building blocks: Supply chain management, Finance, IT & ERP, and SCF instruments. After introducing the four building blocks, each block will be discussed in detail. Finally, state-of-the-art issues in supply chain management and finance will be discussed to bridge the gap to the real (international) business world of volatility, uncertainty, complexity, and ambiguity. In order to provide an answer to issues like liquidity in the supply chain (deep tier financing), dealing with all sorts of risks in the supply chain (resilient supply chains), and being sustainable/circular in the supply chain and its finance.
Purpose
Supply chain finance is an emergent research area dealing with the financial performance of a firm throughout its supply chain. It has been drawing significant attention among industrial practitioners and researchers. However, there is need to identify improvements in supply chain finance (SCF) practices to ensure sustainable growth. In recent years, circular economy practices are being adopted worldwide with a motivation to achieve the 17 Sustainable Development Goals (SDGs). Moreover, integration of circular economy practices in the financial aspects of supply chain is still in infant age.
Design/methodology/approach
Adoption of circular SCF in firms enhances both restorative and regenerative capacities of the firm. In this regard, this study aims to review articles on circular practices in SCF. The study identified 329 articles related to circular practices and sustainable practices in SCF from the Scopus database. The shortlisted articles were reviewed and discussed.
Findings
The findings of the study help to recognize the most influential and productive research in circular SCF in terms of journals and trends. Further research is recommended to explore this area in depth to recognize potential integrating factors that help in smooth acceptance of circular finance in supply chains.
Originality/value
Bibliometric and network analyses were performed to identify research trends and networks in the field of circular SCF. In addition, emerging research themes in the field of circular SCF were identified and discussed, and research propositions are proposed to delineate future research directions.
In as early as the 1980s, air traffic flow management actions (ATFM), as supplementary strategies to match the demand for air travel with the available resource capacities, have been widely discussed and evaluated based on its implementation and probable trade-offs between conflicting and diverse interests of stakeholders in the commercial aviation industry. Among the ATFM actions—ground holding, airborne holding, speed controlling, and rerouting—rerouting is found to be a viable recourse particularly when flights are already at its en-route phase, where the presumed and more favored based on safety considerations, holding of flights on the ground, becomes completely infeasible. Some research works put forward relevant solution approaches including deterministic and stochastic mathematical programming models, machine learning algorithms, and simulation models. Despite the relevance and validity demonstrated by such models in testbed environments, even on a large-scale basis, these models failed to sufficiently capture the individual and collective interests of stakeholders altogether. Considering that the decision process in the air transportation system is taken part by stakeholders (i.e., airlines, air traffic control), previous research works tend to satisfy only one stakeholder by incorporating one or more of its interests (e.g., cost minimization, reduction of distance traveled). Such a case does not take full regard to how a stakeholder-specific solution might affect another stakeholder’s preference. Therefore, this paper aims to address the post-departure aircraft rerouting problem by proposing a multiple stakeholder-based target-oriented robust-optimization (MS-TORO) approach that incorporates the individual interests of stakeholders. A hypothetical case study is conducted to illustrate the proposed model. It can be noted that a significant shift of route preference occurs as goals are aligned in terms of the individual interests of the stakeholders and that of their collective goal. The results of this work can provide practical insights to stakeholders in the course of decision-making in a particular area of the air transportation domain.
This article investigates theory of agency as a theoretical underpinning in the field of supply chain finance. Specifically, through a hermeneutic approach, the authors examine the development of the theory, its postulations and assumptions, and its use in the field of supply chain finance. This leads to three conclusions: the theory is currently adopted rather superficially; there is potential for further developments by investigating non-standard configurations; and there is an increasingly relevant set of articles in supply chain finance that seems to be positioned within the boundaries of the theory of agency but makes no mention of it.
Purpose
This exploratory study aims to explore the operational and financial constraints faced by small and medium enterprises (SMEs) in India during the COVID-19 pandemic. The paper highlights the role of supply chain finance (SCF) in the uncertain business environment caused by the pandemic.
Design/methodology/approach
The study adopts an inductive approach and conducts convergent interviews with 32 SME owners and bank officials who are associated with SME-related financial transactions. The analysis of the interview data has been done through a grounded theory approach.
Findings
The findings portray four key themes representing the operational and financial constraints faced by SMEs during the pandemic. Further, the study identifies four drivers of SCF adoption among SMEs, including capital constraints, high inventory turnover cycle time, high order fulfilment cycle time and long debtors’ collection period.
Practical implications
The study provides various insights to the managers and owners of SMEs to deal with the economic crisis and eliminate the financial pressure created by the pandemic. The study enlightens the policymakers about the struggles of the SMEs during the economic turmoil created by the pandemic and guides them to introduce the relevant policies to resolve their problems.
Originality/value
To the best of the authors’ knowledge, this is the first study to identify the factors driving the SMEs to adopt SCF due to the economic chaos created by the pandemic. Also, the study theoretically contributes to the literature by developing a theoretical framework for SCF adoption based on grounded theory.
Although previous studies have explored the financial benefits of improved supply chain transparency, in practice, firms extensively conceal their information. The existing literature pays very limited attention to how a firm’s supply chain transparency affects the financial support from suppliers. Grounded on social exchange theory, this study explores the reciprocal relationship between a firm’s supply chain transparency and its suppliers’ provision of trade credit in the context of supplier list disclosures. Based on tests of Chinese listed firms, we find that a firm with lower supply chain transparency can enjoy more trade credit. We further observe that this negative relationship is attenuated by a firm’s market share but strengthened by a firm’s corporate social responsibility (CSR) performance. These findings contribute to an improved understanding of the combined effects of reciprocity and bargaining power on trade credit. Our results also provide a new rationale for a firm to conceal supplier identities.
The point of a literature review as presented in Chapter 2 is to find out more about what is written about a specific topic, particularly to inform further study and to synthesise evidence across studies, but this generic aim needs more refinement. To reflect on what needs to be searched for will support the retrieval of sources and lead to more direction in the stage of analysis and synthesis. Therefore, an essential step for a critical analysis of sources is the development of appropriate questions for a literature review, which is the topic of this chapter.
Supply chain finance (SCF) is a collaborative financing approach that strives to reduce the transaction cost and strengthen inter-firm connections, maximizing the mutual benefits. Many studies have discussed the influencing factor of SCF adoption from the unilateral party. However, little attempt has tried to understand it from the nature of SCF. Based on the social capital theory and transaction cost economics, we develop a dual-theory framework to explain SCF adoption. Large-scale survey data from 430 companies in mainland China revealed that from a social capital perspective, structural capital and cognitive capital are two precursors of relational capital in the unique context of SCF, whereas relational capital is a factor that directly affects the focal company to adopt SCF. From a transaction cost perspective, uncertainty, frequency and asset specificity are associated with SCF adoption, respectively. We make theoretical contributions to SCF literature by revealing the roles of different efficient and social factors influencing SCF adoption. Our findings also help companies re-examine their decision to adopt SCF.
Purpose-The purpose of the article is to demonstrate how agency theory has been used to address the dynamics involved in supply chain management. It is also dedicated to suggesting an agenda for future research.
Design/methodology/approach-We performed an integrative literature review, based on the process detailed by Botelho et al. (2011), with search filters. The articles were obtained from the Scopus and Web of Science databases using the keywords "supply chain" and "agency theory", with a subsequent analytical filter for "management". The search initially identified 205 articles. After two screenings, 56 articles were selected for analysis.
Findings-Despite attempts to infer the importance of research on agency theory in supply chain management, its application to the discipline is scarce. Clearly, agency theory provides valuable insights into the relationships in the supply chain. In the studies analyzed, the dynamics of performance, risk, sustainability, dyadic and inter-firm relationships, and supplier management are predominant.
Originality/value-When considering unwanted behaviors throughout the supply chain, agency theory fills the explanatory gaps for these facts. It also proves to be a useful tool to answer mainly the dilemmas of underlying theories, such as transaction cost theory, resource-based view and network theory. Rare are the studies that examine the current state of the application of agency theory in the supply chain literature in the management field.
Supply chain finance (SCF) is an innovative solution dedicated to optimising financial flows in supply chains, and has drawn tremendous attention from academia and industry. Considering the ever-evolving nature of SCF, the existing literature reviews in this field are limited due to a lack of integration of recent findings. Motivated by the limitation, we attempt to fill this gap by investigating the novel achievements that have been reported in the current literature. By conducting a systematic literature review, we selected 99 qualified papers published between 2010 and the first quarter of 2021, and then used descriptive analysis to identify the literature characteristics, followed by in-depth content analysis. We synthesised nine research dimensions in the selected SCF literature. By virtue of comprehensive analysis, we illustrated the embedded mechanisms among all participants in SCF practices, updated the SCF research framework, summarised the most dominant methods applied in current research, made two classifications of the financial service providers (FSPs) and SCF instruments, and provided five future research directions. The significance of this paper lies in providing both a novel theoretical foundation for academic researchers and a practical guide for industrial practitioners.
The Covid-19 pandemic created a financial disruption within supply chains, which is destabilizing especially small and medium enterprises (SMEs) and could be devastating for the global economy. Supply chain finance (SCF) was an answer to the 2008 financial crisis and could help facing the new challenge, but new paradigms are necessary, to become an effective mitigation strategy. Through the support of empirical data collected through a focus group with industry experts, this note presents new research directions in the SCF domain, based on Contingency Theory and Resource Orchestration Theory, including new solutions, actors, collaborations, technologies, regulations, and performance.
Purpose
Sustainable supply chain finance (SSCF) is a fascinated consideration for both academics and practitioners because the indicators are still underdeveloped in achieving SSCF. This study proposes a bibliometric data-driven analysis from the literature to illustrate a clear overall concept of SSCF that reveals hidden indicators for further improvement.
Design/methodology/approach
A hybrid quantitative and qualitative approach combining data-driven analysis, fuzzy Delphi method (FDM), entropy weight method (EWM) and fuzzy decision-making trial and evaluation laboratory (FDEMATEL) is employed to address the uncertainty in the context.
Findings
The results show that blockchain, cash flow shortage, reverse factoring, risk assessment and triple bottom line (TBL) play significant roles in SSCF. A comparison of the challenges and gaps among different geographic regions is provided in both advanced local perspective and a global state-of-the-art assessment. There are 35 countries/territories being categorized into five geographic regions. Of the five regions, two, Latin America and the Caribbean and Africa, show the needs for more improvement, exclusively in collaboration strategies and financial crisis. Exogenous impacts of wars, natural disasters and disease epidemics are implied as inevitable attributes for enhancing the sustainability.
Originality/value
This study contributes to (1) boundary SSCF foundations by data driven, (2) identifying the critical SSCF indicators and providing the knowledge gaps and directions as references for further examination and (3) addressing the gaps and challenges in different geographic regions to provide advanced assessment from local viewpoint and to diagnose the comprehensive global state of the art of SSCF.
Credit risk evaluation is always the most important factor in determining Customers' credit status in financial institutions. Multi-Attribute Decision-Making (MADM) methods have been widely used in this field. But most of the studies neglect the undeniable impact of time and changes of the credit assessment criteria, their importance and evaluation data over time. On the other hand, developed Dynamic MADM (DMADM) methods often used subjective weighting methods and then applied some aggregation operators to rank alternatives. This paper proposes a new combination of Data Envelopment Analysis (DEA) as a powerful objective weighting method with DMADM as a novel dynamic decision-making method for credit performance evaluation. For this aim, the credit performance criteria were extracted using literature review and experts’ views. Criteria weights were calculated with dynamic DEA common set of weights approach. Then, the applicants are prioritized using five Grey MADM methods (including SAW-G, VIKOR-G, TOPSIS-G, ARAS-G and COPRAS-G). Finally, a new method called Correlation Coefficient and Standard Deviation (CCSD) was used to determine the final aggregated rank. This novel method is applied in order to credit ratings of the clients in the Beekeeping Industry Development Funding Institute IRAN The results indicate that the proposed MADM method, while eliminating the limitations of previous methods, has been able to maintain robustness. Also, the results are highly correlated with the results of previous methods.
The possibilities of applying Operations Research (O.R.) techniques in the design of real-world systems are vast. The optimization and design of the supply chain network (SCN) is one of the relevant topics that has directed the attention of many scholars. Sound decisions in this regard, including the proper selection of the facility’s location, transportation modes and routes and inventory management policies, can noticeably improve the systems performance. Over 380 articles published between 2005 and 2016 in the ISI/Web of Science database have applied advanced O.R. techniques in SCN optimization studies. This paper offers a systematic review of these published contributions by focusing on two categories of O.R. approaches most recently applied for the design of SC systems: integrated mathematical modeling and simulation-optimization (S-O) frameworks. A taxonomy analysis of the mentioned approaches is presented based on the supply chain elements. A bibliometric analysis is also conducted to provide technical insights into the possible gaps in the field. Moreover, the relevant studies on SC sustainability are highlighted. The research results are supportive of the S-O frameworks as either an alternative approach or an effective solution method for the integrated problems. The research outcomes can provide researchers in the field with useful details of the integrated problems and S-O frameworks as the most recent O.R. methodologies in the field of SC optimization.
Purpose
This paper aims to examine how lack of financial cooperation damages the operational efficiency of supply chains. The thesis is that economic and technological forces are provoking increasing financial tensions that push companies to transfer their credit needs and inventory requirements to their weakest suppliers. Thus, what might initially seem positive from an individual perspective can in fact generate losses in production efficiency for the supply chain as a whole.
Design/Methodology/approach
This paper uses official data collected from 116 first- and second-tier suppliers in the Spanish automotive components sector, covering nine years (2001-2009). The relationships between the key variables are analysed using panel data estimations.
Findings
Significant differences were found between the working capital (WC) of first- and second-tier companies, proving additionally that although this approach may temporarily improve the results of first-tier suppliers, it leads to lower production efficiency in plants throughout the value chain.
Practical implications
Practitioners should avoid short-sighted attitudes when organizing the supply chain on a cooperative basis, going beyond the conventional wisdom on physical and information flows between original equipment manufacturers and their suppliers to reach upstream stages and embracing financial considerations.
Originality/value
The paper takes a novel approach to the issue of inter-organizational collaboration in the supply chain, aiming to go beyond conventional Lean Supply practices. From an empirical point of view, while much of the research on the topic utilizes key informant insights collected using psychometric data collection techniques, this study uses different financial proxies collected from secondary panel data.
Purpose – The paper aims to explain how agency theory can be used to inform our understanding of the dynamics surrounding supply chain behaviours and relationships.
Design/methodology/approach – A structured review of the literature using a three-stage refinement process is used. The articles were sourced through online databases and keyword classifications, such as “agency theory”, “principal-agent relationships” and “supply chain management”. The search initially identified over 86 articles. After further screening these were reduced to 19 for final assessment and comparison.
Findings – Despite agency theory's prevailing descriptive and predictive qualities there is scarcity in its application to the SCM discipline. The authors posit that agency theory provides valuable insights for relationship engineering within supply chains where social, political, legal and behavioural dynamics dominate.
Practical implications – It is a critical task for managers to understand and mitigate abnormal behaviours across the supply chain. Agency theory serves this need by providing them with a useful tool to respond to transaction cost dilemmas through contractual and non-contractual remedies.
Originality/value – This is one of the first studies that examines the current state of agency theory application in the SCM literature and suggests potential avenues for future research.
Purpose – The purpose of this paper is to define and explore the concept of financial supply chain strategy in a global business environment. The paper
aims to illustrate the concepts with a detailed case study of Motorola’s global financial supply chain.
Design/methodology/approach – This is a detailed, longitudinal case study analysis of a focal organisation and its economic partners in a financial
supply chain. The case study combines qualitative analysis of the strategy evolution with extensive time-series data and quantitative analyses of the
performance of the financial supply chain.
Findings – The financial supply chain is an integral component of Motorola’s overall supply chain management strategy. Physical product, information
systems and financial flows are closely aligned with each other throughout the supply chain incorporating Motorola, its customers, suppliers and banks.
The overall trend is towards the development of an integrated global financial supply chain in which cash flows mirror product flows. Motorola shares
financial data with its suppliers as part of a cooperative strategy that generates cost savings for Motorola and its suppliers in areas such as foreign
exchange and cash balances. The cooperative strategy also improves the quality of the payments process measured by six sigma techniques and
produces strategic benefits such as risk reduction for the supply chain as a whole in areas such as foreign exchange and payments. A strategy of this
type is only possible by taking a global perspective of the financial supply chain.
Research limitations/implications – The development of financial supply chains has not been fully addressed in the supply chain management
literature. This paper defines this relatively new topic area and explains its significance in its own right, and also in terms of the inter-relationships
between finance and manufacturing supply chains. A research agenda for financial supply chains is proposed that describes a range of new research
opportunities in this area.
Practical implications – The development of integrated financial supply chains will lead to significant savings in terms of funding, banking and
administrative costs associated with treasury and payment activities. The implementation and nature of the strategic change also highlight important
strategic planning and implementation issues associated with financial supply chains.
Originality/value – The strategic importance of financial supply chains for business and academic researchers is demonstrated through the definition
of this topic and the application of a research framework to a detailed study of Motorola’s global financial supply chain using time-series data of
strategy evolution and financial supply chain performance. The research findings and comparison with theory support the assertion that this is a
relatively new and unexplored problem area that is of direct relevance and interest to researchers in supply chain management.
Purpose
The paper aims to employ transaction cost theory and social exchange theory to compare how buyers and suppliers perceive relationship mechanisms. The paper also explains the antecedents and dynamics of relationship performance by comparing buyer and supplier perceptions of the same relationships. The paper specifically focuses on the issue of relationship success and test the hypothesis that the antecedents of perceived relationship success for buyers differ from those of suppliers within supply chain relationships.
Design/methodology/approach
The paper is based on a study of the supply chain relationships of a major ICT company where matched pairs of buyers and suppliers were surveyed on the nature of their relationships. The survey instrument drew from previously published constructs on key relationship dimensions such as trust, commitment, power, communication, uncertainty and performance. A series of nested measurement models were then developed and tested for the two groups – buyers and suppliers.
Findings
The study found that buyers and suppliers have significantly different perceptions of their relationships across a range of dimensions. In addition, the antecedents of relationship success for both groups bear little similarity, thus supporting our hypotheses.
Originality/value
The paper directly compares transaction cost theory and social exchange theory and finds that both are useful in explaining success in buyer‐supplier relationships. Methodologically, the paper is unique due to the combination of over 100 matched buyer‐supplier dyads with a comprehensive survey of relationship constructs. Given the use of both transaction cost and social exchange theory, the breadth of the dimensions studied, the unique access to practitioners gained and the nature of the matched‐pair data, this paper is an important contribution to the literature on relationship management. Furthermore, the findings indicate a rich seam of potential future research topics.
Multiparadigm approaches aid exploration of particularly complex and paradoxical phenomena: by helping theorists employ disparate theoretical perspectives, In this article we provide an extensive guide to multiparadigm exemplars and then link their varied approaches within a metatriangulation theory-building strategy. Our process addresses the challenges theorists face as they select a research topic, collect and analyze data, theorize, and evaluate resulting theory using multiple paradigms. a concluding discussion of the advantages, limitations, and potential applications of metatriangulation positions it within the wider realm of organization theory.
This research aims to investigate the contributions of interorganisational relationships and knowledge-management practices as predictors of collaborative commerce (c-commerce) adoption. A non-compensatory adoption decision process was modelled using a neural network approach to examine the predictors of c-commerce adoption. A survey was undertaken in 136 firms for this research. The results showed that both interorganisational relationships and knowledge-management processes played an important role in predicting the adoption of c-commerce. In particular, variables from interorganisational relationships such as trust, communication, collaboration, and information sharing are found to contribute strongly to the predictive power of the model when compared with knowledge-management processes. This study provides insights for firms that would like to improve their supply-chain collaboration through the implementation of c-commerce. The findings lead to an understanding of what attributes of interorganisational relationships and knowledge-management processes can contribute to the improved adoption of c-commerce in the supply chain. Unlike past adoption studies which have tended to focus on technology, and organisational and environmental factors, this research examined interorganisational relationships and knowledge-management processes which are increasingly gaining the attention of researchers and practitioners. This study has also extended the existing literature by examining a non-compensatory model for technology adoption.
Purpose
Theory is needed for a discipline to mature. This research aims to provide a summary analysis of the theories being used in contemporary logistics and supply chain management (SCM) studies.
Design/methodology/approach
A comprehensive literature review of articles appearing in five top tier logistics and SCM journals is conducted in order to identify how often theory is used and to classify the specific theories used. An analysis of the theoretical categories is presented to explain the type and frequency of theory usage.
Findings
Over 180 specific theories were found within the sampled articles. Theories grouped under the competitive and microeconomics categories made up over 40 per cent of the theoretical incidences. This does not imply all articles utilize theory. The research found that theory was explicitly used in approximately 53 per cent of the sampled articles.
Practical implications
Two implications are central. First, in the minds of editors, reviewers and authors is approximately 53 per cent theory use enough? Literature suggests there continues to be a need for theory‐based research in the discipline. A first step may be to increase our theory use, and to clearly describe the theory being used. Second, the vast majority of theories used in recent logistics and SCM research originated in other disciplines. Growth in the discipline dictates the need for greater internal theory development.
Originality/value
Despite multiple calls for the use of theory in logistics and SCM, little formal research has been produced examining the actual theories being used. This research provides an in‐depth review and analysis of the use of theory in logistics and SCM research during the period 2004‐2009.
Purpose
The purpose of this paper is to show how firm financial management techniques may be used to improve over all supply chain profitability and performance.
Design/methodology/approach
This paper uses a case‐based approach to demonstrate how supply chain financial management techniques, such as cash‐to‐cash and shared weighted average cost of capital (WACC), can reduce the financial costs experience by a supply chain.
Findings
This paper provides a methodology to identify and quantify the potential opportunities to increase profitability throughout the supply. Scenarios are offered that illuminate potential supply chain improvements gained by collaborative management of cash‐to‐cash cycles and sharing WACC with trading partners.
Research limitations/implications
These financial techniques are readily available for use in collaborative supply chain structures.
Practical implications
Coordinating financial management across the supply chain is a potential tool to align and improve the financial performance of collaborating firms. This method extends to the supply chain those historically firm‐centric financial management concepts such as return on capital and cash flow. The impact is reduced overall cost generated by leveraging the financial strength of the entire supply chain. During economic downturns and times of tight credit proactively managing financials across the supply chain may be the only way some suppliers remain afloat.
Originality/value
Two firm level financial management approaches are extended and they are adopted for use across the supply chain: cash‐to‐cash management; and leveraging a shared supply chain financing rate. This paper builds on the increasing body of research and practice that suggests trading firm‐optimized for supply chain optimized performance reduces overall cost and improves customer value.
Purpose
The paper seeks to discuss and develop SCM as a scientific discipline using different theories from non‐logistics areas to explain inter‐organizational phenomena. It also attempts to establish a frame of reference that allows us to mitigate the gap between the current SCM research and practice and the theoretical explanations of how to structure and manage supply chains.
Design/methodology/approach
The paper introduces three different perspectives that together will contribute to a broader understanding of SCM in practice: an economic perspective; a socio‐economic perspective; and a strategic perspective. The theoretical framework is applied to two important research topics within SCM: third party logistics (TPL); and new product development (NPD).
Findings
There is no such thing as “a unified theory of SCM”. Depending on the concrete situation, one can choose one theory as the dominant explanatory theory, and then complement it with one or several of the other theoretical perspectives.
Research limitations/implications
The way the four theories complement one another is explored on a conceptual basis, but further research into this direction may explore more deeply how these alleged complementarities occur in practice, and how managers mould their decisions by these ideas.
Practical implications
The four theories can provide normative support to important management decisions in supply chains, such as outsourcing, safeguards against opportunism, and alignment of incentives.
Originality/value
The main contribution is that one cannot rely on one theoretical explanation when analyzing phenomena in SCM. It is neccessary to consider several theories and how they may complement one another in order to provide a more comprehensive view of SCM.
Purpose
The primary purpose of this study is to examine the relationships between the level of trust and several relevant constructs drawn from transaction cost analysis (such as asset specificity, behavioral uncertainty, and partner's opportunism) and social exchange theory (informational sharing).
Design/methodology/approach
A comprehensive questionnaire based on various theories on trust and commitment was mailed in 2001 to supply chain practitioners in the Midwest region. A total of 171 valid returns were received out of 1,800 mailings (9.5 percent). A path analysis was used to estimate parameters or relationship between relevant constructs and trust, and trust with the level of commitment.
Findings
A firm's trust in their supply chain partner is highly associated with both parties’ specific asset investments and social exchange theory. Information sharing has a primary impact on reducing (improving a partner's uncertainty behavior which, in turn, would improve the level of trust. Finally, the level of commitment is strongly related to the level of trust, supporting Morgan and Hunt's hypothesis.
Research limitations/implications
This research used supply chain practitioners in one region as a target population. It is highly recommended to duplicate this study in other regions to verify the findings.
Originality/value
This is the first research paper linking various variables to trust and trust to commitment in supply chain management using path model.
This is a theoretical paper that examines the interplay between individual and collective capabilities and competencies and value transactions in collaborative environments. The theory behind value creation is examined and two types of value are identified, internal value (shareholder value) and external value (value proposition). The literature on collaborative enterprises/network is also examined with particular emphasis on supply chains, extended/virtual enterprises and clusters as representatives of different forms and maturities of collaboration. The interplay of value transactions and competencies and capabilities are examined and discussed in detail. Finally, a model is presented which consists of value transactions and a table that compares the characteristics of different types of collaborative enterprises/networks. It is proposed that this model presents a platform for further research to develop an in-depth understanding into how value may be created and managed in collaborative enterprises/networks.
Purpose – The purpose of this paper is to propose using agency theory for assessing the likelihood of quality fade in buyer-supplier relationships and prescribing contractual mechanisms for reducing quality fade. In this paper, quality fade, an element of supply chain vulnerability, is defined as the unforeseen deterioration of agreed to or expected quality levels with respect to product and/or service requirements. The use of outcome-based, behavior-based, or mix contracts can be used to reduce the likelihood of quality fade and illustrate preferred scenarios for buyer and suppliers. Design/methodology/approach – This paper proposes a conceptual model for using agency theory to explain and address a type of supply chain vulnerability called quality fade. A 2×2 matrix is proposed that contrasts outcome measurability with outcome uncertainty to illustrate buyer and supplier vulnerability and to suggest contractual mechanisms that can be used to mitigate vulnerability for both parties. Findings – A typology of governance mechanisms is presented and described with the use of a manufacturer third-party logistics provider example to illustrate the theoretical framework. Four different scenarios are discussed and described. Contractual mechanisms are provided to mitigate vulnerabilities and reduce quality fade. Originality/value – Quality fade is a term that has not been described extensively in academic literature but is a term that is relevant in the broader discussion of supply chain vulnerability. Given that quality fade is a behavioral, as opposed to process oriented, approach, it requires a theoretical framework rooted in behavioral considerations. Agency theory is an appropriate framework for studying governance options.
http://www.emeraldinsight.com/journals.htm?issn=0957-4093&volume=21&issue=3&articleid=1896066&show=html
A phenomenon of the last 20 years has been the rapid rise of the network form of governance. This governance form has received significant scholarly attention, but, to date, no comprehensive theory for it has been advanced, and no sufficiently detailed and theoretically consistent definition has appeared. Our objective in this article is to provide a theory that explains under what conditions network governance, rigorously defined, has comparative advantage and is therefore likely to emerge and thrive. Our theory integrates transaction cost economics and social network theories, and, in broad strokes, asserts that the network form of governance is a response to exchange conditions of asset specificity, demand uncertainty, task complexity, and frequency. These exchange conditions drive firms to use social mechanisms for coordinating and safeguarding exchanges. When all of these conditions are in place, the network governance form has advantages over both hierarchy and market solutions in simultaneously adapting, coordinating, and safeguarding exchanges.
In much of the current literature on supply chain management, supply networks are recognized as a system. In this paper, we take this observation to the next level by arguing the need to recognize supply networks as a complex adaptive system (CAS). We propose that many supply networks emerge rather than result from purposeful design by a singular entity. Most supply chain management literature emphasizes negative feedback for purposes of control; however, the emergent patterns in a supply network can much better be managed through positive feedback, which allows for autonomous action. Imposing too much control detracts from innovation and flexibility; conversely, allowing too much emergence can undermine managerial predictability and work routines. Therefore, when managing supply networks, managers must appropriately balance how much to control and how much to let emerge.
A new form of relational exchange, commonly referred to as the “just-in-time” (JIT) exchange relationship, has been adopted and implemented by many original equipment manufacturers (OEMs) and suppliers of component parts-materials during the past several years. Though the “exchange relationship” is at the core of the marketing discipline, JIT exchanges have received little attention in the marketing literature. The authors attempt to expand understanding of (1) how JIT exchanges compare with other forms of exchange between suppliers of component parts-materials and OEMs, (2) what conditions are most conducive to the initiation of JIT exchanges, and (3) what key factors are likely to influence the success or failure of initiated JIT exchanges.
The supply chain finance literature emphasises the integrated management of financial supply chains. In recent years, supply chain finance practices for the supply side gained increasing attention in research and practice. Previous studies mainly underline benefits for all involved actors including suppliers. Still, suppliers are often reluctant to commit to supply chain finance practices resulting in increased implementation costs and reduced overall application rates. Initial studies start to address this issue but comprise little supplier-oriented, empirical data. Therefore, this paper analyses predictors and outcomes - including possible disadvantages - of a supplier's participation in supply chain finance practices. A survey is conducted with 115 Swiss companies to identify relevant relationship-related and financial factors. The findings are applied to derive implications whether to offer SCF practices to specific suppliers and how to approach them. Thereby, the paper enhances previous supply chain finance literature with detailed insights into the supplier's perspective.
Firms are building collaborative relationships with their supply chain partners in order to achieve efficiencies, flexibility, and sustainable competitive advantage. However, it is unclear if collaborative relationships provide benefits that compensate for the additional expense associated with such relationships. Further, it is unclear what factors promote successful collaborations. This research examines collaborative relationships in two separate studies using structural equation modeling: one study examines buyers’ perceptions and the second study examines suppliers’ perceptions. The two studies are then compared using invariance testing in order to determine economic and relational factors that drive satisfaction and performance from each party’s perspective. Results show that collaborative activities, such as information sharing, joint relationship effort, and dedicated investments lead to trust and commitment. Trust and commitment, in turn, lead to improved satisfaction and performance. Results from the two independent studies exhibit similarities and differences; while the conceptual model is highly similar, certain paths vary in their significance and/or their importance across buyer and supplier firms such that buyers focus more on relationship outcomes while suppliers look to safeguard their transaction specific investments through information sharing and joint relationship effort. Managerial and theoretical implications of the findings are discussed.
We describe an actionable research approach for addressing current challenges to theoretical advancement labeled theory elaboration. Theory elaboration is the process of conceptualizing and executing empirical research using preexisting conceptual ideas or a preliminary model as a basis for developing new theoretical insights by contrasting, specifying, or structuring theoretical constructs and relations to account for and explain empirical observations. We identify and describe seven specific tactics for conducting a theory elaboration study: horizontal contrasting, vertical contrasting, new construct specification, construct splitting, structuring specific relations, structuring sequence relations, and structuring recursive relations. We also link each tactic with different types of theory advancements. In addition, we provide a sequential decision-making process for deciding whether to adopt a theory elaboration approach given a particular research domain and context. Finally, we identify research domains and specific topics in organizational behavior, human resource management, strategic management, and entrepreneurship for which theory elaboration is likely to be most effective as a means to make theoretical advancements.
Purpose
Recently, in response to the credit crunch and the increased costs of financing, new solutions for supporting the financial management of supply chains, known as supply chain finance (SCF), have been developed. They exploit the strengths of supply chain links to optimise working capital. The purpose of this paper is to provide a reference framework that links together the objectives leading to the adoption of SCF solutions and several moderating variables.
Design/methodology/approach
This paper adopts a multiple case study methodology, analysing 14 cases of the application of SCF solutions among Italian companies.
Findings
The main findings are the identification of the different objectives leading to the adoption of SCF; the analysis of the impact of moderating variables (the level of inter- and intra-firm collaboration, the level of the trade process digitalisation and the bargaining power and financial strength of the leading firm) on SCF adoption; and the formulation of a reference framework supporting the effective adoption of SCF solutions.
Research limitations/implications
This contribution is exploratory in nature; theory-testing contributions should be the focus of further research. Also, the sample is limited to Italian companies. Finally, the service provider’s point of view has been marginally taken into consideration in this study.
Originality/value
The article addresses the need for more empirical research on SCF. It provides a reference framework focused on the objectives and moderating variables leading to effective SCF adoption, providing a theory-building contribution on the general topic of SCF and on the specific topic of the adoption process of different SCF solutions.
Purpose
– The purpose of this paper is to examine the effect of small and medium enterprises (SMEs)’ supply chain network on influencing credit quality, or more specifically, whether bridging tie (structural network) or strong tie (relational network) of SMEs in the supply chain can improve the availability of equity and debt capital through information sharing.
Design/methodology/approach
– A survey was conducted in manufacturing industry in China and 208 valid questionnaires were used to test all the hypotheses. The data were then analyzed by employing partial least squares path modeling.
Findings
– The results suggest that both strong tie and bridging tie of SMEs can lead to a positive effect on information sharing in supply chain, which can further enhance the credit quality for SMEs. However, without information sharing, the strong tie has not significant influence on SMEs’ credit quality, while bridging tie can directly impact on credit quality.
Originality/value
– Despite their crucial role in sustaining national economies, SMEs are beset by the critical constraint of risk-free financing. Based on a survey, this research finds that the credit quality of SMEs is affected by two important factors: one concerns information sharing in supply chain and the other relates to the attributes of SMEs’ supply chain network. This study implies that a SME may have a financing advantage for better embedding in the supply chain network, but different effects will be experienced according to constraints associated with information asymmetry in the supply chain.
Purpose
The purpose of this paper is twofold: to classify the research to-date on Supply Chain Finance (SCF) according to the main themes and methods, and to propose directions for future research.
Design/methodology/approach
The review is based on 119 papers mainly published from 2000 to 2014 in international peer-reviewed journals and in the proceedings of international conferences.
Findings
The articles that provide a definition of SCF reflect two major perspectives: the ‘finance oriented’ perspective - focused on short-term solutions provided by financial institutions, addressing accounts payable and receivable - and the ‘supply chain oriented’ perspective - which might not involve a financial institution, and is focused on working capital optimisation in terms of accounts payable, receivable, inventories, and sometimes even on fixed asset financing.
Research limitations/implications
While efforts were made to be all-inclusive, significant research efforts may have been inadvertently omitted. However, the authors believe that this review is an accurate representation of the body of research on SCF published during the specified timeframe, and feel that confidence may be placed on the resulting assessments.
Originality/value
The paper presents a comprehensive summary of previous research on this topic and identifies the most important issues that need to be addressed in future research. On the basis of the identified gaps in the literature, four key issues have been highlighted which should be addressed in future research.
Offering an up-to-date account of systems theories and its applications, this book provides a different way of resolving problems and addressing challenges in a swift and practical way, without losing overview and not having a grip on the details. From this perspective, it offers a different way of thinking in order to incorporate different perspectives and to consider multiple aspects of any given problem. Drawing examples from a wide range of disciplines, it also presents worked cases to illustrate the principles. The multidisciplinary perspective and the formal approach to modelling of systems and processes of ‘Applied Systems Theory’ makes it suitable for managers, engineers, students, researchers, academics and professionals from a wide range of disciplines; they can use this ‘toolbox’ for describing, analysing and designing biological, engineering and organisational systems as well as getting a better understanding of societal problems.
Purpose
– This paper aims to conduct a systematic review of the literature on supply chain collaboration published over a 10-year period from 2005 to 2014. It explores the nature and extent of research undertaken to identify key themes emerging in the field and gaps that need to be addressed.
Design/methodology/approach
– The authors review a sample of 207 articles from 69 journals, after using an iterative cycle of defining appropriate search keywords, searching the literature and conducting the analysis.
Findings
– Key themes include the meaning of collaboration; considerations for supply chain collaboration theory; emerging areas in collaboration for sustainability, technology-enabled supply chains and humanitarian supply chains; and the need for a more holistic approach, multi-tier perspectives and research into B2C collaborations.
Research limitations/implications
– The paper provides discussion and scope for future research into the area which would contribute to the field tremendously.
Originality/value
– There have been very few reviews in the past on supply chain collaboration, and this is one of the first extensive reviews conducted to address how well the body of knowledge on supply chain collaboration corresponds with our contemporary society.
Awareness of capital commitment in the context of supply management has increased tremendously in recent years. However, researchers often only consider the intra-organisational perspective of financing. Consequently, a great optimisation potential, especially in globally dispersed supply chains, remains unlocked. To address this research gap, this paper presents a conceptual research model with hypotheses derived from principal–agent theory to explain the role of collaboration in the context of financing a buyer–supplier dyad and its effect on the resulting financing performance. A cross-industry survey yielding 145 responses was used to empirically test the hypotheses. The results indicate that both strategy alignment between purchasing and finance departments (intra-firm financial collaboration) as well as in the buyer–supplier dyad (inter-organisational financial collaboration) have a significant positive effect on the overall financing performance. These findings provide researchers and practitioners with a clearer understanding of upstream-oriented supply chain finance and the possibilities and constraints in its implementation.
We introduce a taxonomy that reflects the theoretical contribution of empirical articles along two dimensions: theory building and theory testing. We used that taxonomy to track trends in the theoretical contributions offered by articles over the past five decades. Results based on data from a sample of 74 issues of the Academy of Management Journal reveal upward trends in theory building and testing over time. In addition, the levels of theory building and testing within articles are significant predictors of citation rates. In particular, articles rated moderate to high on both dimensions enjoyed the highest levels of citations.
Although information integration is generally considered beneficial for supply chain management, the performance of supply chain information integration is found with mixed results in both practices and the extant literature. Based on the organizational information processing theory, this study aims to show how the contextual factors pertaining to product and market complexity moderate the relationship of supply chain information integration with financial and operational performance outcomes. Using survey data collected from 188 wholesale trading firms, we found that the extent to which supply chain information integration has a positive impact on business performance is contingent on the level of product and market complexity. Specifically, supply chain information integration facilitates greater performance improvements when it serves less complex products or is operated under a highly complex market environment. The study findings provide insights to managers and advance theoretical development by providing empirical evidence that supply chain information integration is helpful for mitigating uncertainties in supply chain management and the performance contingencies of such integration on the two contextual factors.
This essay describes differences between papers that contain some theory rather than no theory. There is little agreement about what constitutes strong versus weak theory in the social sciences, but there is more consensus that references, data, variables, diagrams, and hypotheses are not theory. Despite this consensus, however, authors routinely use these five elements in lieu of theory. We explain how each of these five elements can be confused with theory and how to avoid such confusion. By making this consensus explicit, we hope to help authors avoid some of the most common and easily averted problems that lead readers to view papers as having inadequate theory. We then discuss how journals might facilitate the publication of stronger theory. We suggest that if the field is serious about producing stronger theory, journals need to reconsider their empirical requirements. We argue that journals ought to be more receptive to papers that test part rather than all of a theory and use illustrative rather than definitive data.
The objective of this paper is to establish a theoretical foundation for financial supply chain management (FSCM) in order to strengthen managerial decisions concerning financial flows in supply chains. Although such decisions are made frequently and partial aspects of FSCM are already understood in business practice, empirical knowledge about FSCM is in its early stages. The study provides fundamental information derived from eight case studies based on 40 interviews. The analysis extends previous studies of the interface between operations management and finance by (i) contributing to a mid-range theory of FSCM by exploring two distinct but not exclusive FSCM categories, their antecedents, and performance effects, (ii) empirically deriving a testable framework for FSCM, (iii) relating FSCM to established theories in the field of SCM, and (iv) basing the analysis on transaction cost economics. Managerial insights reveal that weak working capital causes firms to focus on FSCM. More specifically, the study identifies two FSCM categories: pre-shipment FSCM (before invoice release) and post-shipment FSCM (after invoice release). Managers can improve upstream supply chain working capital with pre-shipment FSCM, whereas post-shipment FSCM strengthens the buying firm's working capital position. Based on transaction cost economics, we analyze how these improvements stem from risk reductions, which are more effective if firms are integrated internally and externally.
Reverse factoring—a financial arrangement where a corporation facilitates early payment of its trade credit obligations to suppliers—is increasingly popular in industry. Many firms use the scheme to induce their suppliers to grant them more lenient payment terms. By means of a periodic review base stock model that includes alternative sources of financing, we explore the following question: what extensions of payment terms allow the supplier to benefit from reverse factoring? We obtain solutions by means of simulation optimisation. We find that an extension of payment terms induces a non-linear financing cost for the supplier, beyond the opportunity cost of carrying additional receivables. Furthermore, we find that the size of the payment term extension that a supplier can accommodate depends on demand uncertainty and the cost structure of the supplier. Overall, our results show that the financial implications of an extension of payment terms need careful assessment in stochastic settings.
Purpose
The purpose of this paper is to examine the different challenges that confront supply chain finance (SCF) and to develop a hierarchical model that analyzes the complex relationship dynamics among them.
Design/methodology/approach
An extensive survey is carried out amongst Indian firms to ascertain the perceptions and experiences related to different SCF challenges. After obtaining an overview of the different SCF challenges, an Indian company with global operations was approached and after establishing relationships among the challenges, a hierarchical relationship structure was developed and MIMBI analysis (where MI=measure of influencing; MBI=measure of being influenced) was carried out that helped understand the relationship dynamics of SCF challenges and identify actions at both strategic and tactical levels.
Findings
The study reveals that lack of common vision among the supply chain (SC) partners is the most critical challenge confronting SCF. Unpredictable cash‐flows resulting from delays in financial transactions, due to lack of automation in the payment processes, along with lack of knowledge and training on SCF tools, also play significant roles. As organizations are tightly integrated through their SC, they should initiate collaborative approaches across the SC to reduce the total procure to payment cycle time and, in the process, improve overall financial stability of the SC.
Research limitations/implications
This study is based on the findings from the Indian industry; future research may include a large‐scale survey and case studies across organizations located in different countries and operating under different environments.
Practical implications
Based on the study, firms can evaluate the dynamics of SCF challenges and redefine SC relationships and strategies to achieve desired cash flow in the SC.
Originality/value
The academic literature on financial supply chains is very limited. This paper appears to be the first formal attempt at analyzing the various challenges confronting SCF.
The outsourcing discussion covers a well known area. The relevant literature refers to a situation which is traditionally well known in theory and practice as “make or buy” decision. But it is necessary to concentrate on the economic factors of outsourcing decision. This paper contains a real and detailed analysis of the outsourcing problem. Besides its generic base, we develop an outsourcing model with design alternatives based on institutional economic theory and work out an explanatory approach and concrete recommendations for outsourcing arrangements. Therefore, we combine transaction cost economics and core competencies approach. As a result, the managerial applications of both approaches are compatible.
Though advance payment is widely used in practice, its influences on buyer’s inventory policy are rarely discussed. This paper investigates the buyer’s inventory policy under advance payment, including all payment in advance, partial-advanced-partial-delayed payment. The buyer’s ordering policy is derived by minimizing his total inventory costs including inventory holding cost, ordering cost and interest cost caused by advance payment or delayed payment. The conclusions show that when all the payment is paid in advance, the buyer’s optimal replenishment cycle is influenced only by the price discount associated with advance payment and the length of advance payment has no effect. For the partial-advanced-partial-delayed payment case, the buyer’s replenishment cycle is also not influenced by the length of advance period. However, in this situation, the delayed period and the price discount may have impacts on the inventory policy. We also use discounted cash flow (DCF) model to derive the buyer’s replenishment cycle and show that the replenishment cycle is negatively related to the length of advance period. Numerical examples are presented to illustrate the results.
Logistics’ contribution to corporate performance has increased over recent years, particularly due to supply chain innovations. Opposed to common innovations focusing on the improvement of product or information flow, supply chain finance (SCF) targets the financial flow and allows buying firms and their suppliers to improve working capital and reduce costs. However, the adoption process of SCF is complex and rather unexplored in academia. This article provides an early step in building knowledge about SCF and in particular how firms adopt SCF, why they adopt differently, and what role suppliers play in the adoption process. The objective was therefore to close the gap between our knowledge on product and information flow oriented innovations and financial flow innovations along the supply chain, namely SCF. For this explorative research, we opted for an inductive multiple case study approach with six European firms. Based on our findings, four sets of propositions are posited and an extended SCF adoption framework is proposed revolving around the interrelated adoption processes of buying firms and their corresponding supplier bases.
Management is on the verge of a major breakthrough in understanding how industrial company success depends on the interactions between the flows of information, materi-als, money, manpower, and capital equipment. The way these five flow systems interlock to amplify one another and to cause change and fluctuation will form the basis for antici-pating the effects of decisions, policies, organizational forms, and investment choices." (For-rester 1958, p. 37) Forrester introduced a theory of distribution management that recognized the integrated nature of organizational relationships. Because organizations are so intertwined, he argued that system dynam-ics can influence the performance of functions such as research, engineering, sales, and promotion.
In modern business, competition is no longer between organizations, but among supply chains. Supply chain is complex in nature, involving various work flows across trading partners. Two major concerns arise in enabling supply chain performance, information sharing and collaborative effort. However, it is necessary to further identify the fundamentals for their implementation in terms of partners' exchange beliefs. Social exchange theory guides interactional behaviors for the expectation of a reward from partners. This study considers four key social exchange issues, trust, commitment, reciprocity, and power and to be antecedents of information sharing and collaboration. This study thus proposes a novel research model to examine the relationships among SET-based variables, information sharing and collaboration, and supply chain performance. Empirical findings show that SET-based issues are important to determine information sharing and collaboration and both information sharing and collaboration indicate partial mediation effect on supply chain performance.
The emergence of integrative trade and global value chains (GVCs) over the past 20 years has changed the competitive landscape in international goods and services markets. Competition in many lines of businesses, particularly in the manufacturing sector, is now taking place more at a value chain level than at a company level. This development has increased the focus of large corporations on the efficiency with which goods, information and money flow within GVCs. Factors that characterize GVCs, such as geographic dispersion and a high number of participants, make it challenging to manage these three types of flows in a coordinated fashion. Yet, if a GVC is to become or remain competitive, it is important to continuously seek opportunities to optimize all of these flows.GVC participants have placed a lot of emphasis over the past decade on improving the “physical supply chain”, that is the way goods are designed, procured, held in inventory and delivered. They have worked hard with their logistics partners to reduce costs, accelerate delivery times, better manage risk and automate information flows. As a result, the management of materials and final goods takes place very efficiently today, allowing GVC companies (and in particular large GVC buyers that occupy a central position within GVCs - which we will refer to in this paper as “GVC anchors”) to procure with relative ease from suppliers located in multiple and distant markets.
New product development (NPD) projects offer a unique opportunity to examine knowledge integration themes in a collaborative network. We propose a finer grained view of knowledge integration mechanisms in collaborative supply chains. Specifically, we propose two different types of mechanisms that are in play within a collaborative supply chain; short-term knowledge sharing and iterative knowledge enrichment. Using data from a large and diverse set of 432 NPD projects, we investigate the effects of knowledge sharing and enrichment between firms and their collaborative network partners, on product concept effectiveness and process performance. Our findings suggest that knowledge sharing and enrichment are significant mechanisms for enterprise-wide knowledge integration in collaborative networks. In addition, upstream knowledge sharing and enrichment has a significant influence on both product concept effectiveness and manufacturing process performance, over and above the effects of downstream knowledge sharing and enrichment. The relationship of upstream and downstream knowledge sharing and enrichment on product concept effectiveness and process performance had varying effects based on the contexts of product type, stage in the product life cycle and project size, indicating a context-specific influence of knowledge strategies. The implication of our results on academic theory and managerial practice is offered.
Purpose
The theories of transaction‐cost economics, the resource‐based view and the core competencies approach have been used extensively to justify the rationale behind strategic decisions on outsourcing, but their validity has not been investigated yet in comparative empirical research. Additionally, no study has examined the operational effects of these decisions in‐depth. The purpose of this paper is to fill these two gaps in the academic literature.
Design/methodology/approach
A literature review confirms the existence of these gaps and informs hypotheses based on the three theories. Additionally, the model for continuous decision making on outsourcing is used to systematically collect data from five cases studies. The cases – all make‐to‐order or engineering‐to‐order – have been analysed on effects for operational performance and control resulting from strategic decision making on outsourcing.
Findings
From this evaluation, it appears that these companies perform weakly on the control of the outsourced activities. Furthermore, it seems that the (manufacturing) strategy is disconnected from outsourcing practices and that outsourcing hardly contributes to competitive advantage. Moreover, from some of the case studies it appears that the decision for strategic outsourcing is irreversible. Finally, traditional criteria and behaviour during decision making prevail, i.e. a cost‐driven perspective, which does not address contemporary challenges.
Research limitations/implications
Despite being explorative and based on only five cases, these findings indicate that strategic decision making on outsourcing based on the three theories insufficiently accounts for operational issues that emerge later during manufacturing; it might be necessary to revise the theoretical base for outsourcing to include management of outsourced manufacturing activities.
Practical implications
The findings imply also that managers in companies, in any case those firms that operate on the basis of make‐to‐order or engineering‐to‐order, should be less “rushed” into strategic decision making on outsourcing that has adverse effects. Rather, outsourcing requires integral decision making in contrast to factual decision making that displayed signs of bounded rationality (particularly expressed through the focus on cost savings).
Social implications
The dominant, one‐sided view of the cost perspectives contributes to the notion that the shareholders' interests for short‐term profitability conflict with long‐term organisational health (apparent through the impact on operational management of outsourcing activities).
Originality/value
Stakeholders involved in strategic decision making might use this research to evaluate fundamentally decisions that cover outsourcing. At the same time, for consultants and practitioners it offers insight that is complementary to the often one‐sided strategic decision making with its focus on cost reductions. Furthermore, this paper demonstrates the limited validity of current theories that underpin strategic decision making on outsourcing and provides an impetus for academics to develop more appropriate theory.
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Observes that supply chain management is a rapidly-evolving subject which offers many insights into how industries are organized and into the efficiency gains which can be made under different organizational structures, pointing out that it is an interdisciplinary concept, drawing on aspects of marketing, economics, logistics, organizational behaviour, etc. Presents a framework from the economics literature which may be useful for those interested in understanding and exploring the concept of supply chain management. Describes the origins and development of transaction cost analysis and explains the key concepts of the framework. Discusses the potential effects of transaction costs on vertical co-ordination within an industry and, hence, on supply chain management. Finally, suggests methods for empiricizing transaction cost analysis, resulting in recommendations for closer co-operation between researchers and business managers.
It is now accepted that logistics and supply chain management (SCM) have great potential for improving bottom line results. This paper proposes a framework for investigating the financial issues in logistics and SCM and shows that taking a supply chain perspective on financial issues offers great opportunities for SCM professionals. SCM can not only contribute to improvements in sales, cost of sales, and the invested capital, but also has the potential to improve the capital cost rate as a long neglected supply chain driver of shareholder value.
Research into Distributed Manufacturing – originally focusing on control of autonomous production cells – has embraced over time the challenges of research into industrial networks and more and more identical issues are pursued in both of these fields. Existing strands of research in networks often explore social-dynamic relationships and contractual aspects, thereby ignoring the underlying dynamics based on characteristic issues: collaboration, decentralisation of decision-making and inter-organisational integration. Therefore, theories relating to the loosely connected regime of networks should account for both the instability caused by the autonomous behaviour of agents and the collaboration necessary for sustainability and inter-organisational integration (all pointing to mutual dependencies). Within evolutionary (biological) models, co-evolution has gained a prominent place in the description of mutual relationships for collaboration. Essential to the modelling of co-evolution is the combined development of agents involved, expressed by the factor for connected traits in the NK[C] model. However, in this model co-evolution happens in semi-static landscapes, which hardly exist in reality. Hence, more advanced game-theoretic applications might serve as a foundation for understanding the development of networks since these describe the interactions between agents. This paper expands on co-evolutionary models and it includes the autonomous development of agents in a network, the connectivity between agents and the dynamic forms of collaboration and communication to advance research in Distributed Manufacturing.
Enterprises need to adopt new business paradigms in order to make a rapid response to market changes and improve the competitiveness. The development of information and communication technology allows the support of new business paradigms such as extended enterprises, virtual organisations, regional clusters, etc. The research proposed concerns the study of a dynamic network in which the partners change in short term periods. The model proposed supports the enterprises in the decisions to participate or exit in a network of enterprises. The model is based on the definition of a set of rules that operate with local information to take the decisions. The local information is the output of the collaboration process; this means that the approach proposed integrates the collaboration methodology and the decision model. This environment is related to independent plants that cooperate with reduced information sharing. A simulation environment is developed to test the approach proposed. The simulation results show that the proposed approach is a very promising tool to support the enterprise's participation decisions.
Agency theory is an important, yet controversial, theory. This paper reviews agency theory, its contributions to organization theory, and the extant empirical work and develops testable propositions. The conclusions are that agency theory (a) offers unique insight into in- formation systems, outcome uncertainty, incentives, and risk and (b) is an empirically valid perspective, particularly when coupled with complementary perspectives. The principal recommendation is to in- corporate an agency perspective in studies of the many problems having a cooperative structure. One day Deng Xiaoping decided to take his grandson to visit Mao. "Call me granduncle," Mao offered warmly. "Oh, I certainly couldn't do that, Chairman Mao," the awe-struck child replied. "Why don't you give him an apple?" suggested Deng. No sooner had Mao done so than the boy happily chirped, "Oh thank you, Granduncle." "You see," said Deng, "what in- centives can achieve." ("Capitalism," 1984, p. 62)