Perspectives on Various Issues of Interest

The Shark Attack

Reverse logistics service arrangement between UPS and Toshiba

Reverse logistics is fast becoming an important area for manufacturing companies. This is leading to some interesting relationships between manufacturers are forming innovative arrangements with third party logistics service providers. To take care of the laptops made by Toshiba that are under warranty, UPS has created a tailor made reverse logistics system. The parts warehouse of Toshiba is located next door to the technical repair-center of UPS hub in Louisville, KY.

In fact, the repair technicians are also provided by UPS. Toshiba has been able to dramatically improve the customer service level by leveraging the UPS stores and transportation services across the country. Customers can use the airport hubs of UPS that are open for 19- to 20-hours. Under the express model, the total shipping and repair times have been reduced from seven to eight days to three days. The repair facilities and technicians that UPS offers is quite unique among third party service providers. Other service providers, such as FedEx and DHL, have preferred to focus on shipping and transportation, which is their core area of business.

It would be insightful to understand the costs associated with maintaining a repair center by the third party logistics provider. The revenue justification for maintaining these repair centers would also be worthy of further investigation. Which strategy should a third party service provider choose?

A) Maintain its own repair center to provide value-added services or,

B) Focus on the core competencies of shipping and transportation and let the repairs be handled by contract manufacturers

RFID Adoption

 

1. In the summer of 2003, Wal-Mart first made public its decision to require its suppliers to deliver cases and pallets equipped with RFID tags by January 2006.
2. In 2003 EPCglobal, the not-for-profit standards organization dedicated to driving global adoption of the electronic product code (EPC) for supply chain excellence, assumed responsibility to lead efforts to commercialize RFID globally and thereby reduce the risks and costs of implementation.
3. In recent times, the momentum towards RFID’s widespread adoption has however stalled. Firms are adopting RFID in areas where individual companies can gain its benefits without relying on industrywide adoption.
4. ABI research recently reduced its 2007 market forecast for RFID software and service revenue to $3.1 billion, a downward adjustment of approximately 15% for ABI’s previous estimates. The revised estimate is driven by factors such as: market consolidation, collaborative solutions, the growing availability of off-the-shelf commercial RFID software packages, and greater knowledge in RFID project planning.
5. Firms are also moving away from considering RFID as a replacement for bar code. It appears that for structured processes, bar code is a better alternative than RFID.
6. The recent years have also seen some favorable developments in the RFID arena. EPCglobal has achieved remarkable progress in the area of RFID standard development by ensuring that the UHF Generation 2 (Gen 2) air interface protocol be incorporated into the ISO/IEC 18000-6.
7. EPCglobal has declared 2007 as the year of “Seamless Commerce” during which, EPCglobal leaders plan to address the technical and process opportunities and challenges of multiple companies collaborating through RFID.

 Source: “A necessary foundation: Company leaders search for their own RFID benefits,” by Marty Weil, APICS Magazine, February 2007, 34-37

The antecedent role of quality, information sharing and supply chain proximity on strategic alliance formation and performance

In this paper, my co-author and I present the notion of buyer-supplier "relationship architecture" and examine the role of quality, information sharing and supply chain proximity on strategic alliance formation and performance.

Buyer-supplier "relationship architecture" refers to the mechanisms for building relationship, the role of the buyer and the supplier, and the relationship protocol between a buyer and supplier. It is composed of quality expectations in a buyer–supplier relationship, information sharing and trust between buyer and supplier, and "supply chain proximity". The following five hypotheses are tested:

H1. Quality expectations from supplier exert a direct positive effect on supply chain proximity.
H2. Information sharing and trust with suppliers exert a direct positive effect on supply chain
proximity.
H3. Supply chain proximity exerts a direct positive effect on supply chain performance.
H4. Supply chain proximity exerts a direct positive effect on strategic alliance formation.
H5. Strategic alliances exert a direct positive effect on the supply chain performance.

A test of the hypotheses using 228 survey responses find suppport for all five hypotheses.

Implications:

JIT considerations, specifically buyer–supplier relationship architecture, can improve the capability to form strategic alliances and thereby improve key performance measures of a supply chain. Strategic alliance formation is typically viewed in terms of financial and marketing perspectives but we find that the impetus for strategic alliance formation can arise from operational aspects of supply chain relationships.

The citation for the paper is as follows:

Narasimhan, Ram and Nair, Anand. 2005. The antecedent role of quality, information sharing and supply chain proximity on strategic alliance formation and performance. International Journal of Production Economics, 96(3): pp. 301-313.