INTEGRATED COMPONENT AND SUPPLIER SELECTION FOR A PRODUCT FAMILY

This paper examines the reduction in complexity of a product family through product design. By leveraging the commonalities among products in a family, the decision support methodology presented in the paper helps choose components and suppliers that minimize the sum of design, procurement, and usage costs. The problem of integrated component and supplier selection is conceptualized and formulated as an integer-programming model. Analysis of the model yields two properties, complete and continuous replacement, which form the basis of a heuristic procedure. Computational tests show that the heuristic provides results close to the optimal solution and can be used for selecting components and suppliers. Application of the model to an industrial problem is discussed.     

Competing on Time: An Integrated Framework to Optimize Dynamic Time‐to‐Market and Production Decisions

This study develops a comprehensive framework to optimize new product introduction timing and subsequent production decisions faced by a component supplier. Prior to market entry, the supplier performs process design activities, which improve manufacturing yield and the chances of getting qualified for the customer's product. However, a long delay in market entry allows competitors to enter the market and pass the customer's qualification process before the supplier, reducing the supplier's share of the customer's business. After entering the market and if qualified, the supplier also needs to decide how much to produce for a finite planning horizon by considering several factors such as manufacturing yield and stochastic demand, both of which depend on the earlier time‐to‐market decision. To capture this dependency, we develop a sequential, nested, two‐stage decision framework to optimize the time‐to‐market and production decisions in relation to each other. We show that the supplier's optimal market entry and qualification timing decision need to be revised in real time based on the number of qualified competitors at the time of market‐entry decision. We establish the optimality of a threshold policy. Following this policy, at the beginning of each decision epoch, the supplier should optimally stop preparing for qualification and decide whether to enter the market if her order among qualified competitors exceeds a predetermined threshold. We also prove that the supplier's optimal production policy is a state‐dependent, base‐stock policy, which depends on the time‐to‐market and qualification decisions. The proposed framework also enables a firm to quantify how market conditions (such as price and competitor entry behavior) and operating conditions (such as the rate of learning and inventory/production‐related costs) affect time‐to‐market strategy and post‐entry production decisions.     

A Decisional Framework of Offshoring: Integrating Insights from 25 Years of Research to Provide Direction for Future*

Mirroring the growing trend for firms to support their operations by locating activities abroad, research on the practice of offshoring has increased considerably in recent years. However, despite the mounting research, understanding of the key factors influencing decision‐making for offshoring remains surprisingly limited due to fragmentation. In this study, we synthesize and integrate insights from different research domains in order to develop a comprehensive decisional framework for key offshoring decisions. The integrative decisional framework is based on a systematic review of offshoring research published in the most influential management and business journals in the past 25 years. In addition to providing a snapshot of the state of research on decision‐making for offshoring, this study aims to stimulate future research by identifying promising research opportunities. In particular, we propose that future research should use alternative theories to incorporate overlooked aspects of decision‐making, integrate different theories to account for the interdependencies between decisions, and adopt a portfolio perspective that considers each decision as part of an overall offshoring strategy.     

THE VALUE OF SKU RATIONALIZATION IN PRACTICE (THE POOLING EFFECT UNDER SUBOPTIMAL INVENTORY POLICIES AND NONNORMAL DEMAND)

Several approaches to the widely recognized challenge of managing product variety rely on the pooling effect. Pooling can be accomplished through the reduction of the number of products or stock‐keeping units (SKUs), through postponement of differentiation, or in other ways. These approaches are well known and becoming widely applied in practice. However, theoretical analyses of the pooling effect assume an optimal inventory policy before pooling and after pooling, and, in most cases, that demand is normally distributed. In this article, we address the effect of nonoptimal inventory policies and the effect of nonnormally distributed demand on the value of pooling. First, we show that there is always a range of current inventory levels within which pooling is better and beyond which optimizing inventory policy is better. We also find that the value of pooling may be negative when the inventory policy in use is suboptimal. Second, we use extensive Monte Carlo simulation to examine the value of pooling for nonnormal demand distributions. We find that the value of pooling varies relatively little across the distributions we used, but that it varies considerably with the concentration of uncertainty. We also find that the ranges within which pooling is preferred over optimizing inventory policy generally are quite wide but vary considerably across distributions. Together, this indicates that the value of pooling under an optimal inventory policy is robust across distributions, but that its sensitivity to suboptimal policies is not. Third, we use a set of real (and highly erratic) demand data to analyze the benefits of pooling under optimal and suboptimal policies and nonnormal demand with a high number of SKUs. With our specific but highly nonnormal demand data, we find that pooling is beneficial and robust to suboptimal policies. Altogether, this study provides deeper theoretical, numerical, and empirical understanding of the value of pooling.     

Closing the Loop: An Empirical Analysis of the Dynamic Decisions Affecting Product Variety

Product variety decisions have become a key issue in managing new product development and innovation. The marketing literature highlights how product variety influences consumer demand. The operations and supply chain management literature discusses the impact of product variety on production and operational costs. However, very little has been found about how these past performance outcomes may influence present variety decisions. We consider product variety and performance outcomes in a dynamic decision loop by testing the forward impacts of product variety on demand and cost, as well as the reverse influences of past performance on present product variety decisions. Using archival data from the distribution network of a U.S.‐based soft drink bottler, we develop a balanced panel dataset of 3,666 observations over three years containing product variety, cost, and demand data. Our results suggest that both past demand and past cost outcomes may influence present variety decisions, with the demand impact occurring more rapidly than the impact of cost. Moreover, we investigate curvilinear impacts of product variety on the performance measures and find that product variety influences both demand and cost performance at diminishing marginal rates. From a theoretical perspective, our study better models the interplay between product variety and performance outcomes, while from a professional perspective, we help supply chain managers to better plan for the outcomes of their product variety decisions.     

Conceptualizing the Development of Strategic Ideas: A Grounded Theory Analysis

This paper presents the findings of a grounded theory study on the development of strategic ideas in a multinational organization. By drawing on the rich data generated from this longitudinal in‐depth field study, this paper provides a theoretical framework for the development of strategic ideas. The theoretical framework developed offers an interesting and useful way of understanding and explaining the complex process of the early steps of the strategic decision process. This research illustrates the development of strategic ideas through strategic debate, the key theme that emerged from the study and the interaction of its four constituent themes: strategic warriors, patterns of interaction, strategic language and strategic syntheses. Drawing on the empirical findings, this study also discusses some implications for developing strategic ideas in managerial practice.     

Beyond Make‐Buy: Internalization and Integration of Design and Production

Much recent attention in industrial practice has been centered on the question of which activities a manufacturing firm should complete for itself and for which it should rely on outside suppliers. This issue, generally labeled the “make‐buy” decision, has received substantial theoretical and empirical attention. In this paper, we broaden the scope of the make‐buy decision to include product design decisions, as well as production decisions. First, we examine independently the decisions of whether to internalize design and production, and then we consider how design and production organizational decisions are interdependent. The specific research questions we address are: (1) How can design and production sourcing decisions be described in richer terms than “make” and “buy”? (2) Do existing theories of vertical integration apply to product design activities as well as production decisions? (3) What is the relationship between the organization of design and the organization of production? (4) What organizational forms for design and production are seen in practice? After developing theoretical arguments and a conceptual framework, we explore these ideas empirically through an analysis of design and production sourcing decisions for bicycle frames in the U. S. mountain bicycle industry.     

An audit of received international business corruption literature for logic,consistency, completeness of coverage

This analysis of International Business (IB) corruption literature identifies gaps and inconsistencies in how corruption is perceived or deliberated in top academic journals. The reviewed articles tend to focus on one of the three key themes of IB corruption (Contributing factors, Consequences, and Combating) and are categorised into the six sub-domains of the IB framework. The content of the articles is categorised into the respective themes and discussed in relation to underpinning theories and key constructs. The process is intended to be less a synthesis of the literature than an audit revealing that IB corruption research is weakened by tendencies to: 1) Be siloed within its subtheme and to not cross-tie to work in other key themes—this issue is very severe in the Combating theme; 2) Have a short-term focus that disregards the cumulative effects of total graft, and; 3) Asymmetrically focus (predominantly) on the supply side of corruption. These finding suggest several avenues for further research.     

PRODUCT OFFERING,PRICING, AND MAKE‐TO‐STOCK/MAKE‐TO‐ORDER DECISIONS WITH SHARED CAPACITY

In an era of mass customization, many firms continue to expand their product lines to remain competitive. These broader product lines may help to increase market share and may allow higher prices to be charged, but they also cause challenges associated with diseconomies of scope. To investigate this tradeoff, we considered a monopolist who faces demand curves, which for each of its potential products, decline with both price and response time (time to deliver the product). The firm must decide which products to offer, how to price them, whether each should be make‐to‐stock (mts) or make‐to‐order (mto), and how often to produce them. The offered products share a single manufacturing facility. Setup times introduce disceonomies of scope and setup costs introduce economies of scale. We provide motivating problem scenarios, model the monopolist's problem as a non‐linear, integer programming problem, characterize of the optimal policy, develop near‐optimal procedures, and discuss managerial insights.     

A NUMERICAL ANALYSIS OF CAPACITATED POSTPONEMENT

Customer satisfaction can be achieved by providing rapid delivery of a wide variety of products. High levels of product variety require correspondingly high levels of inventory of each item to quickly respond to customer demand. Delayed product differentiation has been identified as a strategy to reduce final product inventories while providing the required customer service levels. However, it is done so at the cost of devoting large production capacities to the differentiation stage. We study the impact of this postponement capacity on the ability to achieve the benefits of delayed product differentiation. We examine a single‐period capacitated inventory model and consider a manufacturing system that produces a single item that is finished into multiple products. After assembly, some amount of the common generic item is completed as non‐postponed products, whereas some of the common item is kept as in‐process inventory, thereby postponing the commitment to a specific product. The non‐postponed finished‐goods inventory is used first to meet demand. Demand in excess of this inventory is met, if possible, through the completion of the common items. Our results indicate that a relatively small amount of postponement capacity is needed to achieve all of the benefits of completely delaying product differentiation for all customer demand. This important result will permit many firms to adopt this delaying strategy who previously thought it to be either technologically impossible or prohibitively expensive to do so.     

FROM BUYER TO INTEGRATOR: THE TRANSFORMATION OF THE SUPPLY‐CHAIN MANAGER IN THE VERTICALLY DISINTEGRATING FIRM

Using case study data, we describe how a large personal computer manufacturer changed its supply‐chain management strategy after outsourcing the majority of its design and manufacturing activities to a network of focused suppliers. To cope with this new structure, the firm created highly skilled generalists, “supply‐chain integrators,” who coordinate product development, marketing, production, and logistics from product concept to delivery across firm boundaries. We particularly focus on the skill‐set that characterizes these integrators. Finally, we use the case evidence, combined with previous theory, to suggest a specific program of research into coordinating product development across disaggregated supply chains.     

Closed‐Loop Supply Chains: A Critical Review,and Future Research*

In this article, I present a review and tutorial of the literature on closed‐loop supply chains, which are supply chains where, in addition to typical forward flows, there are reverse flows of used products (postconsumer use) back to manufacturers. Examples include supply chains with consumer returns, leasing options, and end‐of‐use returns with remanufacturing. I classify the literature in terms of strategic, tactical, and operational issues, but I focus on strategic issues (such as when should an original equipment manufacturer (OEM) remanufacture, response to take‐back legislation, and network design, among others) and tactical issues (used product acquisition and disposition decisions). The article is written in the form of a tutorial, where for each topic I present a base model with underlying assumptions and results, comment on extensions, and conclude with my view on needed research areas.     

MANAGING PRODUCT RETURNS FOR REMANUFACTURING

Firms are often encouraged to offer environmentally friendly products as a demonstration of corporate citizenship. However, this may prove to be an unrealistic expectation since a rational firm will only engage in profitable ventures; those that increase shareholder wealth. We develop a framework for analyzing the profitability of reuse activities and show how the management of product returns influences operational requirements. We show that the acquisition of used products may be used as the control lever for the management and profitability of reuse activities. These activities, termed product acquisition management, affect several important business decisions. First, if a firm is to pursue reuse activities, these reuse activities must be value‐creating. Second, if a firm is to compete by offering remanufactured products, then we show how product returns management influences the overall profitability of such activities via a trial and error EVA approach. Third, we show how operational issues are strongly affected by the approach used to manage product returns. There is a need for future research specifying the mathematical relationship between acquisition price and the nominal quality of the returned product.     

Understanding and Reducing Inconsistency in Seatbelt‐Use Decisions: Findings from a Cardinal Decision Issue Perspective

This article has two aims. The first is to present results that partly explain why some automobile drivers choose to use their seatbelts only part time, thereby exposing themselves to unnecessary risk. The second is to offer and illustrate the “cardinal decision issue perspective”⁽¹⁾ as a tool for guiding research and development efforts that focus on complex real‐life decision behaviors that can entail wide varieties of risk, including but not limited to inconsistent seatbelt use. Each of 24 young male participants drove an instrumented vehicle equipped to record continuously seatbelt use as well as other driving data. After all trips were finished, each participant completed an interview designed to reconstruct how he made randomly selected seatbelt‐use decisions under specified conditions. The interview also examined whether and how drivers established “decision policies” regarding seatbelt use. Such policies were good predictors of inconsistent seatbelt use. Drivers who had previously adopted policies calling for consistent seatbelt use were significantly more likely than others to actually drive belted. Meta‐decisions about seatbelt policy adoption appeared to rest on factors such as whether the driver had ever been asked to consider selecting a policy. Whether a driver made an ad hoc, on‐the‐spot seatbelt‐use decision was associated with a perceived need to make such a decision. Finally, participants with full‐time policies were especially likely to deploy their seatbelts by default, without recognizing the need to decide about belt use on a trip‐by‐trip basis. We end with recommendations for reducing inconsistencies in seatbelt use in actual practice.     

The Influence of Context on the Strategic Decision‐Making Process: A Review of the Literature

This paper critically reviews the strategic decision‐making process literature, with a specific focus on the effects of context. Context refers to the top management team, strategic decision‐specific characteristics, the external environment and firm characteristics. This literature review also develops an illustrative framework that incorporates these four different categories of contextual variables that influence the strategic decision‐making process. As a result of the variety and pervasiveness of contextual variables featured within the literature, a comprehensive and up‐to‐date review is essential for organizing and synthesizing the extant literature to explicate an agenda for future research. The purpose of this literature review is threefold: first, to critically review the strategic decision‐making process literature to highlight the underlying themes, issues, tensions and debates in the field; second, to identify the opportunities for future theory development; and third, to state the methodological implications arising from this review.     

Strategic Renewal: Past Research,Theoretical Tensions and Future Challenges

Strategic renewal has become a prominent theme in a variety of organization and management research domains in recent years. It refers to the process that allows organizations to alter their path dependence by transforming their strategic intent and capabilities. With contributions from an increasing range of theoretical perspectives and research contexts, the strategic renewal literature has become fragmented and lacks common definitions and conceptual clarity, which prevent cross‐fertilization and harm further development. This study systematically reviews the various literature streams on strategic renewal to provide a more integrative perspective. The authors identify three key theoretical tensions at the heart of strategic renewal research, namely learning vs. resource, induced vs. autonomous, and co‐alignment vs. co‐creation. By exploring these key tensions, the authors define strategic renewal's conceptual core, identify gaps in the past literature, and provide guidance for future research.     

The Essential Elements of a Risk Governance Framework for Current and Future Nanotechnologies

Societies worldwide are investing considerable resources into the safe development and use of nanomaterials. Although each of these protective efforts is crucial for governing the risks of nanomaterials, they are insufficient in isolation. What is missing is a more integrative governance approach that goes beyond legislation. Development of this approach must be evidence based and involve key stakeholders to ensure acceptance by end users. The challenge is to develop a framework that coordinates the variety of actors involved in nanotechnology and civil society to facilitate consideration of the complex issues that occur in this rapidly evolving research and development area. Here, we propose three sets of essential elements required to generate an effective risk governance framework for nanomaterials. (1) Advanced tools to facilitate risk‐based decision making, including an assessment of the needs of users regarding risk assessment, mitigation, and transfer. (2) An integrated model of predicted human behavior and decision making concerning nanomaterial risks. (3) Legal and other (nano‐specific and general) regulatory requirements to ensure compliance and to stimulate proactive approaches to safety. The implementation of such an approach should facilitate and motivate good practice for the various stakeholders to allow the safe and sustainable future development of nanotechnology.     

Discourses about Righting the Business ← → Society Relationship

This article engages the question—what is the right business‐society relationship? We consider three perspectives that seek to address the relationship: corporate social responsibility (CSR), social entrepreneurship (SE), and conscious capitalism (CC). We take a macroapproach considering how commentary about these approaches establishes a direction for corporate practice and its relationship to key stakeholder groups. We argue that these perspectives are ‘D'iscourses that provide arguments for and articulations about the direction of corporate practice and the business‐society relationship. To organize our review of each perspective, and focus our critique, for each we highlight (a) drivers and influencers, (b) core assumptions and defining features, and (c) approaches and exemplars. Although distinct, all emphasize effective business practices as key to meeting social needs. CSR suggests legitimizing business practice; SE relocates business practices; and CC seeks to reimagine/rehabilitate business for social good. Ultimately, we conclude that these Discourses lack a clear communicative focus in terms of decision making within these organizations. We attend to this and other implications, and offer avenues for further research.     

Leadership, affect and emotions: A state of the science review

This paper presents a selective, qualitative review of affect, emotions, and emotional competencies in leadership theory and research published in ten management and organizational psychology journals, book chapters and special issues of journals from 1990 to 2010. Three distinct themes emerged from this review: (1) leader affect, follower affect and outcomes, (2) discrete emotions and leadership, and (3) emotional competencies and leadership. Within each of these themes, we examine theory (construct definition and theoretical foundation) and methods (design, measurement and context) and summarize key findings. Our findings indicate that the study of affect and emotions in leadership fares well with regard to construct definitions across the first two themes, but not in the last theme above. Design and measurement issues across all three themes are a little less advanced. One serious gap is in a lack of focus on levels-of-analysis theoretically and methodologically. Our review concludes with recommendations for future theoretical and empirical work in this area.     

CAPACITATED REMANUFACTURING WITH SERVICE LEVEL CONSTRAINTS*

This research examines production planning and control for a remanufacturer that can sell returned items on a graded as‐is basis or remanufacture the returned items. Using a GI/G/1 queuing network, we model the firms decision to remanufacture an optimal product mix over the long run that maximizes profits while maintaining a desired service level. We further use simulation to explore dispatching heuristics that can be used at the shop‐floor level to achieve the desired optimal product mix, while meeting the service level constraint. Our research is grounded in actual practice and the results provide key insights into the decision‐making process required to maximize profits and minimize average flow times for remanufactured products.