A negotiation-based algorithm to coordinate supplier development in decentralized supply chains

Actual state of knowledge in the field of Supply Chain Management

“…Dalvi and Kant (2015) analyses the crucial benefits of supplier development, such as effective supply chain management, efficient communication, strategic benefits, delivery performance, competitive advantages, cost reduction and supplier's performance. [15][16][17] Another research direction focuses on performance evaluation. Some studies focus on supplier performance evaluation and selection.…”

“…The second part of the report presents the bibliographic research from various nationally and internationally studies. Diverse bibliographical references have been consulted: [14,19,5,15,16,17,20,21].…”

Towards dynamic contract extension in supplier development

“…Clearly, a more elaborated model with less stringent assumptions like, e.g., a linear price distribution, should be studied in the future. Moreover, the combination of the proposed dynamic strategy with decentralized approaches is of great importance and deserved a detailed analysis, see, e.g., the negotiation-based coordination mechanism proposed in [36]. Another interesting direction for future research is to expand our study to a network perspective, in which the supply chain consists of more than a single manufacturer and a single supplier, see, e.g., [13], where two manufacturers are engaged in the development of a supplier.…”

“…Indeed, since the cost function is (strictly) convex and the system dynamics are governed by a linear ordinary differential equation, it can be shown that this condition is necessary and sufficient for the considered problem, see [36] for a detailed derivation. We emphasize that the switching time t H characterizes the optimal time of collaboration since every investment in supplier development up to t H results in an increased profit while expenditures spent after t H do not amortize during the contract period and are, thus, not economically reasonable within the considered setting.…”

“…The (optimal) switching time is given by t H ¼ 0 meaning that investments in supplier development do not pay off during the contract period. After determining the outcome of a potential collaboration over the interval [0, T], the overall market situation has to be taken into account, e.g., does it make (more) sense to cooperate with a different supplier instead of adhere to the already existing business relation, see, e.g., [12] and [36] for the considered setting with multiple suppliers. Here, however, it is supposed that continuation of the collaboration is preferable since our focus is on the arrangement of the manufacturer/supplier cooperation.…”