Perspectives on Various Issues of Interest

Supply chain integration for improving performance of not-for-profit organizations

Food banks are not-for-profit organizations that aim to alleviate the hunger problem in the society by working with donors on the upstream and member agencies on the downstream of their supply chains. These organizations operate in highly complex environments due to the uncertainties associated with supply and demand. In order to cope with the uncertainty and to be able to deliver food to the underserved communities, food banks need to utilize information and coordinate well with their partners so that the donations can be matched with demand in a timely manner.Therefore, effective and efficient supply chain management approaches become critical in this resource-constrained setting, where it is unknown which resources are available. Based on what we know from the previous research on for-profit firms, and given the complexity of food bank supply chains along with the necessity of food banks to work with partner firms, it is natural to contend that supply chain integration is a key determinant of performance. Exactly how the constituent parts of supply chain integration relate to each other in humanitarian organizations, however, is an open research question. Three common integration dimensions that have been investigated in the supply chain management literature include internal integration, demand integration and supply integration. Demand integration and supply integration are also referred to as external integration in some studies. Collaboration between functions and information sharing processes within an organization determines the internal integration. Some indicators of internal integration in the literature include intra-firm functional team activities between functions, such as operations, marketing and logistics, to achieve the goals of the supply chain. Moreover, demand integration relates to the collaboration activities and information sharing with key customers to meet their expectations and improve supply chain performance. Similarly, supply integration involves coordination activities as well as information sharing with key suppliers to achieve supply chain performance by enabling better planning, forecasting and process design. We study the three key dimensions of supply chain integration – supply integration, demand integration and internal integration and empirically examine how each is related to the others and how they impact food banks’ ability to create basic programs that help in delivering food to the underserved communities.

 

 

Identifying Holistic Patterns for Operations and Supply Chain Management

Identification of holistic patterns is crucial when studying several pertinent Operations and Supply Chain Management (O&SCM) issues. If we view each business practice as a single node, then a firm’s overall operation can be conceived as a system of interconnected nodes. The abundance of business practices and the complex interactions among them present challenges in detecting ways by which firms can attain competitive advantage. This challenge is further accentuated by the fact that it may not be a single business practice, but the configuration of a set of practices that drives firm performance. Firms grapple with ways to transform themselves into high-performing organizations. How do high-performing firms differ from low-performing firms? Specifically, how do these firms differ in the amount of connectivity among practices? Which practices are central to a high performing firm? What configurations of practices are salient in high-performing firms but not in low-performing firms? Answers to these questions pinpoint the core strengths of a high-performing firm and provide guidelines to align a firm’s investment with the target areas for improvement. Finding empirical answers to the above questions is a challenging task. One difficulty is caused by the lack of observations to properly model the complex interactions among a large list of variables. Because firms operate as complex systems made up of copious interconnected business practices, to properly model these business practices we need to analyze datasets that have high dimensions (i.e., containing a large number of variables). However, in order to analyze a high-dimensional dataset, the conventional data analysis methods require a large sample size. Ironically, O&SCM research has historically faced the issue of low response rate, leading to low number of empirical observations. This lack of sufficient sample size is especially problematic when examining complex relationships among a wide range of variables in searching for the right configurations of capabilities. Thus, it is critical to find a technique that can work with a relatively small sample size and still be able to derive meaningful business insights from a high-dimensional dataset. Another problem with small sample size is that it is often sensitive to violations of the normal distribution assumption. This violation of normality assumption is common in empirical datasets and is more problematic in small samples. Therefore, it is important to find a tool that is robust against violation of normality, or to provide a remedy that overcomes this challenge. In a study we use the Sparse Inverse Covariance Estimation (SICE) method, in conjunction with bootstrapping technique, to address the above problems.

 

Technical issue resolution in open-source software development projects

Open source software (OSS) development platform is one of the most popular software development environments that organizations use to source high quality information system products. For example, the most popular open source product, the Linux kernel powers world’s largest stock exchanges; and Apache, the most popular web server was developed in open source platform, powers 52% of all websites globally. Projects are increasingly being conducted in OSS platform due to increased interest from the organizations. For example, major IT companies including Google, Microsoft and Facebook have increased their reliance on software development initiatives on OSS platforms . These developments have important implications for service operations management, particularly in terms of how projects should be managed within these contexts. OSS provides an Internet based virtual community-like software development venue where software developers collaborate voluntarily toward the goal of developing unique information system products. Such voluntary participation is important for sustainability of the OSS projects as inadequate participation has resulted in 80% of the OSS projects being canceled in the development phase. OSS developers stay motivated to participate in OSS because they enjoy the coding process and value the sense of unity with fellow developers while interacting in the software development project.

Traditional software development in firms differs from OSS development in three important ways: first, for OSS development volunteers the source of motivation is different than pay or career incentives; second, the lack of formal governance structure in a OSS development team excludes managers from exerting project control mechanisms; and third, in contrast to traditional software development, the ability of volunteers to coordinate work among OSS developers is contingent on effective information exchange over the Internet. To that extent, OSS platforms have been created that facilitate information exchanges among project members by means of mailing list or thread communications relating to a software code. However, the effect of increased interaction among members in unregulated virtual environment on project performance in terms of its quality and service delivery is unclear. A lack of synchronous interactions in virtual software development environment may weaken flow of information which may, in turn, impact project performance adversely. Higher interactions present teams with increased overhead which lowers team productivity. However, interactions among team members help members to self-regulate to distribute project activities and enhance productivity.

It seems that some form of interaction in self-regulated OSS teams is necessary for efficient information flow within team and to keep members motivated. On the other hand, beyond a certain threshold it may bring in overload to weigh down team performance. Communication frequency in a cross-functional team in traditional projects may have a curvilinear relationship with project goal achievement. Given the increasingly virtual nature of project management and its implications for operations management, it is important to understand how team member interactions related to performance in projects that are not governed within the traditional project context. To the best of our knowledge, no previous empirical work has considered how team member interactions influence project performance in alternative project context such as OSS development that are characterized by their virtual setting and voluntary participation by team members. The first research objective of this study is to address this gap.

Proactive planning for problem resolution in the traditional software development context is challenging. Given the additional complexities of self-regulated OSS teams including, but not limited to, absence of governance structure in a team, independence of members to contribute to projects, geographical and cultural dispersion of volunteers and keeping volunteers motivated in project activities without traditional incentive mechanisms, proactive project management is even more challenging for a project manager responsible for an OSS development initiative. Traditional project management process, which allows physical interaction among members and offers associated visual cues for managing projects, will fall short in the case of open-source projects. Virtual project venues and online knowledge communities, such as OSS platforms, further accentuate these challenges since team members do not interact in person with each other.

 
To enforce project control, managers of OSS projects often engage actively in discussion threads to remove information asymmetry involving team activities. Such participation helps project team members to access critical knowledge resources that generally much experienced managers bring along. Project managers exploit their connection to other projects to bring critical knowledge resources that enhance project performance. In the OSS development context, as managers are unable to pick up visual and verbal cues, active participation in project discussions becomes all the more important. However, we do not know how self-guided OSS development teams respond to such project control mechanism. Additionally, participation increases information processing overload for team members. Understanding the impact of project managers’ active participation in OSS projects on project performance is relatively understudied and forms the forms the basis for the second research objective of our study.

Project manager’s active participation may not only directly affect project performance but may also affect performance by influencing team member interactions. Effective and efficient ways of enabling information exchanges within team have been a cornerstone of project management research. With decreasing performance the motivation of project members, the glue that binds them to OSS platform, starts to wane and OSS projects may see higher dropouts. Inadequate participation has resulted in 80% of the OSS projects being canceled in the development phase. Project manager’s active participation may help with establishing formal structural coordination mechanisms in OSS development projects, thereby enabling participants and projects to reach their goals. Enforcement of process structure by means of effective project management in virtual software development context can alleviate conflict and enhance performance. The importance of project managers’ active participation in managing team interaction in a self-organizing OSS team structure is notably understudied and warrants research attention. Our third research objective aims at contributing to this need for further research.

We draw on social network theory and task familiarity literature to guide our research. Social network theory posits that ties among entities in a network generate social capital that translates to performance. We use this theoretical lens to understand the impact of team member interactions in a project network on project performance. To examine this relationship, we consider project team member interaction networks for 1842 open-source software development projects on the GitHub platform. For each of these projects we collect panel data that include evolving network measures and other project characteristics for two years (104 weeks) from the time of project initiation. Specifically, within each week we consider the project team member interaction network formed by actual comments and replies by software developers in response to an open issues and pull requests for these projects. Open issues refer to bugs reported in the software bugs management system of OSS platforms such as GitHub. Project members work toward resolution of these bugs by making necessary code changes. The changed codes are then merged in the source code by issuing pull requests.

We draw on task familiarity literature to explain how project manager’s active participation impacts project performance. Task familiarity literature suggests that familiarity with team member activities enables the manager to be aware of the flow of information in the project, which enables effective project management. We build on this reasoning to study the impact of manager participation in the OSS context. To study the relationship, we collect data on project manager’s participation in the network formed by team member interactions in response to the open issues and pull requests. In the GitHub platform closing an open issue is an indicator of completion of a specific project task. We consider the number of closed issues in a given week as our dependent variable and examine how this performance measure is impacted by the direct and interaction effects of network characteristics of team interaction and project manager’s active participation.
The results obtained from analyzing 133,023 observations of unbalanced dynamic panel show that as the density of the network formed by communication instances among project team members increase, the number of weekly closed issues in an OSS project initially increase but then decrease. We find that project manager’s degree centrality in the team interaction network has a direct effect of increasing the number of weekly closed issues as well as a moderating effect of flattening the curvilinear relationship between team interaction and weekly issue closure rate. In essence, project manager’s active participation alleviates the reduction in weekly issue closure rate once the density of team interaction goes beyond the inflection point.

Source: Pal, S., Nair, A., Zhou, Z. XXXX. Managing Projects in Virtual Settings: Information Exchange Networks and Project Performance. Journal of Operations Management.

COVID-19 Testing - Some reflections on assigning swabs to labs and segmenting patients

Testing is one of the most effective lever in managing pandemics. The recent experience of Coronavirus disease 2019 (COVID-19) is a case in point where the disease was  first reported in December 2019 in Wuhan, China and since then it had spread across the world. As a measure to address this pandemic, testing helped with keeping track of the status of the disease and in planning for other measures such as stay-at-home orders. The need for accelerated testing along with social distancing was soon felt to control the outbreak of infections. Americans need access to rapid diagnostic testing. The sooner clinicians, patients, and public health officials know whether someone is infected with the novel coronavirus, the sooner they can take action to mitigate the spread of COVID-19," said the Director of Biomedical Advanced Research and Development Authority, Department of Health and Human Services' Office. Hence, both building testing capacity via augmenting capacity at public and private laboratories (labs), and improving speed of obtaining test results are critical for early testing, diagnosis, and patient's path to recovery. In an ongoing research my co-authors and I aim to understand how to manage testing strategies by accounting both testing-site specific and human-behavior related factors. In particular, we consider testing site factors such as type of swab analysis site (public vs. private), relative analysis capacity, distance between collection and testing sites. Human-behavior related factors include social interactions vs isolation during the waiting times. Healthcare policy makers can leverage our research insights in developing testing guidelines, which would enable rapid response to swab processing. In addition, the results of this study are instrumental to control the spread of infections during pandemics.

Typically, treatment for a pandemic is not immediately available to all patients; hence, early diagnosis and then quarantine is the best known strategy to control the spread of diseases. This approach was followed globally during the recent COVID-19 pandemic. Early diagnosis necessitates the e cient management of the limited testing availability. In an effort to address the testing requirements, the United States has authorized their public labs (operated by local government) and private labs (operated by private companies including pharmacies and medical practices or not-for-profit organizations) to undertake manual, semi-automated and automated testing for COVID-19. In addition, drive-through sampling facilities and mobile testing units are also put in place that prioritize sampling for symptomatic individuals that are part of the highest risk population, such as those who have been in close contact with a positive case, health care workers, nursing home employees, and  rst responders on the front lines. These drive-through testing sites help reduce density and the potential for spread by keeping people who are sick or at risk of having contracted Coronavirus out of healthcare facilities. This system of labs creates a diagnosis network that has similarities to early infant diagnosis (EID)/network (EIN) that has received some research attention. Considering the case of COVID-19, we note that the testing process forms an important part of pa- tient ow. A typical flow of patients that begins from the onset of COVID-19 symptoms until the post- hospitalization stage (in the event of getting infected) is shown in the following Figure.

In the event of suspicion of COVID-19, the patients consult with primary care physicians. Based on the patient symptoms and the Cen- ters for Disease Control and Prevention (CDC) guidelines, physicians recommend to perform a COVID-19 test on the patient. The physicians can also categorize the potential state of the disease (mild, moderate and severe) by combining the patient's symptoms and medical history. After the swabs from the patients are collected, the swabs become the ow unit through the remainder of the process. Depending on the stage of disease, the patients' swabs are directed to either public or private analysis sites for further investigation. The transit time involved in collecting the test swab, batch preparation, and transporting the swab varies depending on the type of lab. Typically, it may take more than 48 hours for the swab to reach the large private analysis sites. Depending on the backlogs and capacity at the swab analysis site (lab), the test batch samples may wait for analysis. Testing delays can be significantly high, especially when the pandemic is in the initial phase and testing capacities are low. For example, in Arizona, patients report a delay of 6-8 days to receive the test analysis results. The delays in testing could be attributed to several factors such as swab analyzer capacity constraints, shortage of supplies to perform the testing etc. Once the test results are obtained, the patients are recommended to either stay at home or undergo hospitalization.

One of the possible approaches to manage testing is the intelligent assignment of testing to the labs. Private labs typically possess greater testing capacity due to high degree of process automation. While private labs have more testing capacity, the transport delays and other congestion can take more than 5-6 days for the results to be known. If the patient tests positive, the disease may have progressed to the next stage. While local testing may be more responsive, it has its own capacity limitations. Hence, in this research, we attempt to estimate what percentage of the swab samples should be dispatched between private and public labs that can lead to effective management of testing capacity, speedy testing and contain the disease spread, thereby resulting in minimizing the number of secondary infections.

In addition to testing assignment to appropriate labs, the preferential testing policy can also be employed. The CDC in the US developed prioritization guidelines for testing, so that individuals likely of developing a quick infection receive early testing and diagnosis. According to Gandhi et al. (2020), about 20% cases of COVID-19 are severe or critical. This characteristic of COVID-19 underscores the need for a priority-based testing to diagnose infection in the early phase of progression. The priority-based testing enables early initiation of the treatment and lowering the spread of the disease. Hence, we analyze the effect of patient priority on the volume of secondary infections.

The need of effective testing policy is more profound for COVID-19 because undiagnosed patients could potentially infect others during the time elapsed due to delay. While it is known that an early diagnosis can help patients isolate and reduce secondary infections, how to manage segmented patients (high and low priority) to effectively control secondary infections is unclear. There are several operational strategies that control the spread of infections, such as assignment of the test swab to a public vs a private lab. Private testing labs that are typically larger may be located farther from the test swab collection site as compared to relatively smaller public labs. Further, CDC has mandated certain categories of patients be given a high priority for testing. High priority could be based on patient age, profession, or the degree of symptoms. While prioritizing certain high risk symptomatic patients seems natural, the effect of priority on the secondary infections induced by low risk symptomatic patients is unclear. We argue that delaying test results for low risk symptomatic patients (younger patients) can affect large masses through social interactions than high risk patients (older). Hence, developing an understanding of the testing priority dynamics on the overall infection volumes is crucial. This delay could be a result of prioritization policy as well as the site assignment decision.

Source: Roy, D., Gupta, A., Nair, A., van Ommeren, J.C.W. 2021. Managing Testing during Pandemics: Considerations of Site-specific and Human-behavior Related Factors.Working Paper.

Implementing emerging technologies in Sourcing

In a recently concluded project my collaborators and I draw from previous studies conducted by Center for Applied Purchasing Studies (CAPS), relevant academic and trade journals, as well as case interview data from relevant organizations to investigate use cases and practical applications of implementation of emerging technologies in supply management. Emerging technologies such as Artificial Intelligence (AI), Robotic Process Automation (RPA), Internet of Things (IoT) and Blockchain are increasingly being deployed in organizations to execute and facilitate supply chain and procurement activities. Yet knowledge is still lacking with respect to the effectiveness of these technologies.  Our study provides insights into the justification, use cases, implementation process, barriers to implementation, critical success factors for implementation, and overall assessment of the effectiveness of Blockchain, Internet of things, Descriptive, Predictive and Prescriptive Analytics, Robotic Process Automation, Contract Analytics, Procure-to-Pay, Spend Analytics, Optical Character Recognition and Radio Frequency Identification technology.

As new technologies continue to emerge in supply chains and in procurement in particular, the adoption and implementation of such technologies will continue to evolve. Our conversations with several procurement leaders help in shaping our perspectives on the future of supply technologies. Overall, we believe that procurement professionals will need to have a clear business case preceding an organization’s technology choice. Niche technologies ranging from spend visibility, track and trace and spend analytics are more likely to solve many of the problems in sourcing as compared to an end-to-end solution. Technology can act as enablers but it is important to first identify the problem, identify potential solutions and upgrade the skill set needed to onboard a specific technological solution.  

Companies are leveraging emergent technology very cautiously. There are a few companies that have clients who embrace the technologies significantly but a large majority are just sort of dipping their toes in the water.The primary reason is that many organizations have been burned by these technology implementations. Oftentimes a technology which looks great on PowerPoint does not turn out to be as promising when delivered. After a lot of expenditure, business cases were made to realize the true value of the technology. Given the budget constraints, many companies are now implementing technologies more cleverly by working around some of the limitations.

There is a lack of clarity as to which technologies should be classified as ‘emerging technologies’ in procurement. One way to think about a technology as ‘emerging’ is to consider the founding or relaunching year of a technology. Around 2014 there were some structural changes to older technologies in terms of API driven methodologies and analytics based tools. Big data was 2014 technology. However, over time, technologies have gotten smarter due to some industry influence and disruptors.  These emerging technologies are in their evolutionary phase and are becoming more prescriptive with a specific focus on a particular sourcing problem. Technologies delivering true value to an organization are typically aimed at doing a particular set of activities and not at doing everything. Managers want very deep solutions in areas such as spend analysis, risk, sustainability supplier relationship, and, hence, technology needs to be best suited to deal with certain situations and has to bring precision to the required solutions.  For example, a sourcing tool that is right for a high volume low complexity environment may not be appropriate for a low volume high complexity environment. A completely different tool might be needed. Similarly, sourcing tools in the manufacturing context could differ substantially from technologies used in the services context.

Emerging technologies in the risk management domain will need to consider lessons learned in the COVID-19 pandemic.  Technologies will need to account for event based risk, cyber risk, financial risk, sustainability risk, etc. The emerging technologies should bring in better insights for risk management. Similarly, technologies dealing with sustainability or relationship management will need to cover additional nuances that organizations will be facing in the sourcing domain. Notwithstanding the need for new models for risk management, sustainability, relationship management etc., before implementation it is still important that organizations have a goal of how to fix the most basic things. The emerging technologies must help organizations in spend visibility, payment centralization, governance mechanisms, and contract analytics and tied to these are some good supplier information management systems. This should get the company doing a basic level of sourcing. Implementation of any emerging technology has to happen in parallel to the basic buildup of functions because if the organization waits to build on the stages they may fall behind exponentially and lose the competitive edge. An organization should find the top three critical points and go ahead using emergent technology to fix them in parallel. The business case for implementing technologies needs to be precise and should unravel the critical need of increasing sourcing velocity. Then the organization should use technology to address the need. The savings the company incurs should be used to fund the next steps.

Although technology implementation needs to be planned by considering specific technologies, it is important to note that as technology usage evolves in an organization these technologies start to get highly coupled with each other. A forward looking implementation plan that considers the coupling and integration between technologies would serve organizations well when decision makers may want to change course. While a long term technology roadmap is effective in planning for technology implementation, such roadmaps should have a certain degree of flexibility to incorporate changing business conditions and requirements.

Source: Goke, A., Nair, A. 2021. Compelling Applications of Emerging Technologies in Supply Management. CAPS Report. (Research assistants: Sukrit Pal, Ashok Gopalakrishnan)

COVID-19 costs could push hospitals to rethink billions of dollars in wasted supplies

COVID-19 costs could push hospitals to rethink billions of dollars in wasted supplies

With hospitals under financial pressure from COVID-19 and medical waste volumes even higher, the pandemic could finally trigger a much-needed reset in how health care organizations and hospitals think about supply-related waste. That includes how they reuse supplies, how they plan for surgeries and what they look for in prepackaged surgical supplies. Click the above link to read the entire article that I have published in The Conversation.

 

The Effects of External Auditors and Certification Bodies on the Operational and Market-Oriented Outcomes of ISO 9001 Implementation

There are a number of practical implications drawn from the findings of our study. First, our study confirms once again that quality implementation is the key determinant of the operational outcomes of ISO 9001 adoption. At the same time, however, the findings also confirm the important role of external auditors in enhancing the effect of implementation on the operational outcome from ISO 9001 standard. This result is instructive in that it is the quality of auditors rather than the reputation of certification bodies that help firms in gaining the operational outcomes. For many firms, however, this finding could raise a practical problem: how to find good auditors? The answer to this question is not straightforward because, unlike certification bodies who have certain brand equity, auditors are employed by certification bodies and their quality is somewhat hidden from the customers and is only revealed after they are engaged after the ISO 9001 certification is over. Indeed, this problem is exacerbated by the fact that firms cannot simply resort to reputable certification bodies in order to find good auditors. The positive correlations between quality of auditors and reputable certification bodies only show a medium strength and, hence, this does not provide a strong assurance that reputable certification bodies will always send quality auditors. Therefore, while engaging reputable certification bodies is recommended, firms should request that they are served by experienced and quality external auditors whose characteristics are partly captured in this study. At the same time, however, the findings also infer that high quality auditors are not necessarily always employed by reputable certification bodies; they could also be part of less reputable certification bodies. In this regard, our findings also provide a ray of hope for firms who cannot afford to engage reputable certification bodies that normally charge higher costs than their counterparts. In particular, smaller firms with limited resources still have a chance to engage high quality auditors and to benefit from their services.

Our findings show that the reputation of certification bodies (rather than the quality of external auditors) helps firms improve their market-oriented outcome, including broadening their market scope and winning more customers. This finding suggests that customers still rely on “brand image” of reputable certification bodies. Customers perceive ISO 9001 certifications issued by reputable certification bodies to be of higher value than others. While this may be true to a certain extent, it is important to balance this notion with our finding, which shows that certification bodies do not have a direct positive effect on operational outcomes. Instead, firms ought to seek high quality ISO 9001 implementations that are then vetted by high quality auditors so as to obtain operational outcomes. The operational outcomes in turn exert a positive effect on market performance. This result therefore sends a strong message to firms that are trying to attain market-oriented outcomes solely from compliance to the standard’s requirements without internalizing the implementation process. More importantly, since it is operational outcomes that are mainly desired by customers (rather than the certification), simply signaling high quality ISO 9001 implementation by tapping into the reputation of certification bodies could be a misleading strategy to gain market-oriented outcome.

Protecting Brand Value through Anticounterfeiting Supply Chain Strategies

Combating counterfeits is not a matter of developing software or systems or markings. Our research suggests that a multi-layered approach that adopts multiple strategies and engages the entire organization is needed. Initially, the size of the problem must be defined and the return on investment approximated. This can help define the need for a team of experts to work in this area, leading to a set of performance metrics that are aligned with business objectives and outcomes. Next, the key focal product seg­ ments should be targeted, and a system for identifying products through product trade­ mark registration with customs authorities should be completed.

We discuss the roles of Drug Serialization and the Drug Quality and Security Act, Pharmaceutical Security Institute Database, and technologies such as Blockchain for combating the counterfeiting problem.

Withstanding the economic recession: Examining the efficacy of manufacturing strategy alignment and process integration

In this paper, we examine how manufacturing strategic alignment and process integration affect manufacturing plant performance under two distinct environmental contexts presented by long-term macroeconomic instability. A large-scale dataset was specifically assembled for the purpose of this research investigation by combining plant-level survey data on practices and performance with secondary macroeconomic data for 14 countries from multiple sources. The results from multi-level regression analyses indicate that while manufacturing strategy alignment and process integration are beneficial for plant performance, they have distinct effects when the contingency factor, macroeconomic instability, is taken in consideration. Notably, when plants face high macroeconomic instability, process integration has a stronger effect on performance whereas in low instability environment manufacturing strategy alignment provides higher performance benefits. 

The findings have implications for managers in pointing out ways in which firms can successfully compete during times of recession. In particular, the study found that overly emphasizing the internal manufacturing alignment during recession could lead to opposite result than expected. Although, it could be a common policy to strengthen the internal alignment during recession, too much internal focus could lead firms to go far away from the requirements of the market. The study also offers practical insight regarding the lack of cost implication of manufacturing alignment during recession. The study finds no costs, delivery and flexibility benefit of alignment but negative impact of the same on quality performance. Hence, it would be important for the managers to re-consider the justification of investigating in alignment, especially during recessions. Recessions do not have a set start and conclusion time; hence, decisions about any questionable investment during recession can be detrimental to the future survivability of the firms.

On the other hand, the findings validate the need for process integration during economic instability. Supply and operation managers might hesitate to support processes integration due to initial negative impact on costs and popular negative news such as the cost overruns at Boeing and Airbus due to poor suppliers’ integration. However, the findings of this study highlight that process integration exerts a positive effect on all dimensions of performance when there is no recession, and provides higher quality, delivery and flexibility performance in the presence of economic recession (although cost performance does suffer). Hence, during recession, process integration efforts by firms present a trade-off between costs and other three operational performance factors. Moving the focus from internal alignment to external integration through improving real time information sharing with suppliers and customers will help firms identify the problems quickly and respond accordingly, especially during recession. It is also suggested by several studies that during recession, firms’ sole focus on cost cutting could be detrimental for brand image, future recovery and overall performance. Nonetheless, considering the range of practices required for supplier integration, such as, product/process integration, supplier involvement with new product development, joint decision making, and information sharing, the focal firms need to identify the priority areas for integration rather than integrating all aspects between the parties. To summarize, managers should not expect universal impact of recession on the manufacturing performance but should carefully consider the wide-ranging impact of the recession on the firm’s performance. This is in line with other contingency theory studies that found that contingency factors could have varied influence on manufacturing performance.

Internationalization of manufacturing is a growing trend necessitating a joint examination of international business and operations management issues. Our study aimed at finding the role played by organization-level and supply chain-level factors that impact perfor- mance under different environmental conditions, particularly as pre- sented by the severity of the recent Great Recession. The conceptual framework and the results of this study allow us to integrate these issues and show that careful attention to these factors is needed for manufacturing competitiveness. The organizational and supply chain factors have distinct performance implications. 

The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Dialysis Facilities

In a recently published article we find that the size of chain organizations has a nonlinear effect on performance of dialysis facilities. Medium-sized chain organizations have lower efficiency and higher quality than smaller and larger chain organizations. 

The results call attention to being cognizant of the advantages and disadvantages of their growing size. Our study indicates that as chain organizations grow from a small size to an intermediate size, their efficiency drops and quality improves. We find that the efficiency bottoms out when chain organizations grow to have about 882 dialysis facilities whereas quality reaches its peak when the number of dialysis facilities in a chain organization reaches to about 796. After reaching these inflection points associated with efficiency and quality, facilities within the chain organizations become more efficient, but their quality levels suffer. This presents implications for decision makers to carefully think about the underlying mechanisms. The initial drop in efficiency as chain organization size increases may reflect the investments facilities affiliated with medium-sized chain organizations make when adding dialysis stations and personnel to address the demand growth. We conjecture that facilities affiliated with medium-sized chain organizations do not fully utilize their stations, thereby bringing down the efficiency. Their quality however increases, since staff in these medium-sized chain organizations has more time to give to each patient.

As chain organizations grow in size, it is likely that they see an increase in demand due to cross referrals among facilities within the chain. This increase in demand eventually provides the needed efficiency gains through economies of scale, but the associated deterioration in the quality of care raises concerns. It is possible that the approaches large chain organizations take to increase staff capacity, which differ from those taken by medium-sized chain organizations, could contribute towards deterioration in quality. Larger chain organizations tend to employ fewer registered nurses and licensed practical nurses as a percentage of their staff than medium-sized organizations. To offset the cost associated with staffing, large chain affiliated facilities employ higher levels of patient care technicians as compared to medium-sized chain organizations, which can lower their quality levels. As chain organizations grow, decision makers should appropriately manage the staffing patterns so as to avoid erosion of quality with a corresponding increase in efficiency.

To address both efficiency and quality performance, chain organizations should be strategic and develop appropriate coordination capabilities so that affiliated facilities can improve their quality while retaining efficiency gains through economies of scale. Technological innovations may make it easier to spread tacit knowledge pertaining to quality-oriented best practices. Opportunities for enabling interactions among people involved with clinical care, as well as nonclinical support services, can enhance learning and improve the quality of care. To facilitate quality improvement efforts, chain organizations can oversee the establishment of cross-disciplinary teams comprised of members from the affiliated dialysis facilities as well as the area manager from the chain organization. Organization-wide policies and procedures, including standards for clinical processes and quality improvement activities, should be widely communicated with affiliated dialysis facilities. Performance goals and objectives for dialysis facilities should be established and appropriate reporting structure of quality improvement initiatives and performance should be put in place. Chain organizations should provide feedback to affiliated facilities and, when needed, offer training and cross learning opportunities to the affiliated dialysis facilities.

For facilities within the chain organization, the results present implications for awareness of the influence of the contextual environment that chain organizations create. An independent facility has a better understanding and awareness of its resources and practices than facilities within chain organizations. Our results show that as these independent facilities join others to form a small- to medium-sized chain organization, they are able to improve quality but their efficiency suffers. The efficiency suffers, as these facilities have to coordinate efforts toward pooling their resources. As the size of chain organizations crosses a certain threshold level, the affiliated facilities gain economies of scale and increased demand, such that their efficiencies improve. However, they also witness growing heterogeneity and have difficulty managing the associated ambiguities, which have detrimental effects on their quality performance. An awareness of the changes in the environmental context and adoption of proactive adaptation measures, such as information exchange site visits to other affiliated facilities and training of staff members, can help manage efficiency and quality. Our results may be useful in other service settings beyond healthcare that have multiunit organizational forms, in that becoming part of a network, such as joining a chain organization, can have a positive or negative effect on efficiency and quality, depending on the size of the network.

Source: Dreyfus, D., Nair, A. and Talluri, S., 2020. The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Facilities—Implications for Multi‐Unit Organizational Forms. Production and Operations Management, 29(7), 1605-1623