International Journal of Physical Distribution & Logistics Management

Göran Svensson

2004 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030410515664

The competitive business environment in the automotive industry has forced vehicle manufacturers (VMs) to improve their relationship strategies towards their suppliers. VMs have implemented supplier segmentation in order to optimise current business activities and existing resource allocations. Supplier selection criteria have also become crucial in order to achieve an appropriate evaluation of suppliers. Models of supplier segmentation and supplier selection criteria underpin theoretically this research. Empirical illustrations of supplier segmentation based on the perspectives of a VM and its suppliers are presented. The principal contributions of this study are the various models therein. One of the models consists of two dimensions: the supplier's commitment to a VM; and the commodity's importance to a VM. In extension, another model of dynamic relationship strategies is introduced. It consists of four relationship strategies towards suppliers in the automotive industry, such as family, business partner, friendly, and transactional. Furthermore, a four‐phase process for the analysis, selection, and managerial decision of a dynamic relationship strategy towards suppliers in the automotive industry is outlined.

Mary Margaret Weber; William L. Weber

2004 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030410515673

Develops and estimates efficiency and productivity measures in the US trucking and warehousing industry in the 48 contiguous states during the years 1994‐2000. The model, estimated via data envelopment analysis, accounts for both desirable outputs and undesirable outputs produced by a given vector of inputs. The model establishes an efficient frontier of operation for each year studied and can be used to determine, on an annual basis, which of the 48 states operate on the frontier. The findings indicate that the trucking and warehousing industry does not operate efficiently in all 48 states during the period studied. If the industry were to operate on the frontier of the feasible output set by using inputs to produce outputs efficiently, it could eliminate three to four fatal traffic accidents per state per year, while simultaneously increasing industry income by between $38 to $47 million per state per year. In addition, finds that traditional techniques of estimating efficiency that ignore traffic fatalities bias estimates of efficiency and total factor productivity growth.

Srinivas Talluri; Kemal Cetin; A.J. Gardner

2004 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030410515682

Managing inventories efficiently is a key factor for effective supply chain management. The area of inventory management has received significant attention in both academic and practitioner fields. Several tools and techniques have been developed and applied for managing inventories across the entire supply chain in order to reduce costs and improve efficiency. This paper presents the application of a well‐established model for managing the made‐to‐stock inventories at a large multinational pharmaceutical company. The model effectively incorporates both demand and supply variability into the safety stock evaluations. A comparative analysis between the proposed and existing models is performed by utilizing data from four production plants and the resulting cost benefits are presented. The paper concludes with recommendations for managing the safety stocks of the company by discussing various strategic and operational policies.

Samar K. Mukhopadhyay; Robert Setoputro

2004 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/09600030410515691

In an Internet direct sales supply chain, the customers buy direct from the manufacturer sacrificing the benefit of physical inspection of the product. This increases the likelihood that customers will have some dissatisfaction with the product and would like to return it. A clearly explained and generous return policy, then, will be welcome by the customers and therefore will enhance demand. From the manufacturer's point of view, this will increase revenue, but will also increase cost due to increased likelihood of return. This paper develops a profit‐maximization model to obtain optimal policies for price and the return policy in terms of certain market reaction parameters. It obtains jointly a number of managerial guidelines for using marketing and operational strategy variables to influence the reaction parameters so as to obtain the maximum benefit from the market. The paper mentions several future research possibilities.