Supply Chain Champions

Thonemann, Ulrich W.; Behrenbeck, Klaus; Diederichs, Raimund; Großpietsch, Jochen; Küpper, Jörn; Leopoldseder, Markus

doi:10.1007/978-3-322-84533-7

Cited by 15 publications

(3 citation statements)

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“…In the consumer goods industry, measuring supplier service levels and enforcing penalty payments are important factors for ensuring high supply chain performance. Behrenbeck et al (2007), for instance, analyze the supply chain performance of 33 of the largest European retailers and cluster the companies into two groups: a group that achieves high supply chain performance ("champions") and a group that does not achieve high supply chain performance ("followers"). They report that 83% of the champions measure their suppliers' service levels and 40% of the champions enforce financial penalties if a pre-specified target is not met.…”

Section: Introductionmentioning

confidence: 99%

Designing Service Level Contracts for Supply Chain Coordination

Sieke

Seifert

Thonemann

2012

Production and Operations Management

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Supply contracts are used to coordinate the activities of the supply chain partners. In many industries, service level‐based supply contracts are commonly used. Under such a contract, a company agrees to achieve a certain service level and to pay a financial penalty if it misses it. The service level used in our study refers to the fraction of a manufacturer's demand filled by the supplier. We analyze two types of service level‐based supply contracts that are designed by a manufacturer and offered to a supplier. The first type of contract is a flat penalty contract, under which the supplier pays a fixed penalty to the manufacturer in each period in which the contract service level is not achieved. The second type of contract is a unit penalty contract, under which a penalty is due for each unit delivered fewer than specified by the parameters of the contract. We show how the supplier responds to the contracts and how the contract parameters can be chosen, such that the supply chain is coordinated. We also derive structural results about optimal values of the contract parameters, provide numerical results, and connect our service level measures to traditional service level measures. The results of our analyses can be used by decision makers to design optimal service level contracts and to provide them with a solid foundation for contract negotiations.

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Section: Introductionmentioning

confidence: 99%

Designing Service Level Contracts for Supply Chain Coordination

Sieke

Seifert

Thonemann

2012

Production and Operations Management

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“…Thonemann et al. (2003) found that SLAs are used by 70% of retailers in Germany to monitor the performance of suppliers. There are several measures used to quantify the supplier's performance (Hefley & Loesche, 2010; Sieke et al., 2012).…”

Section: Introductionmentioning

confidence: 99%

“…A survey conducted across a broad range of industries and companies in 2007 by Oblicore Inc. (Oblicore Inc, 2007) found that 91% of organizations use SLAs to manage their suppliers. Thonemann et al (2003) found that SLAs are used by 70% of retailers in Germany to monitor the performance of suppliers. There are several measures used to quantify the supplier's performance (Hefley & Loesche, 2010;Sieke et al, 2012).…”

Section: Introductionmentioning

confidence: 99%

Service‐Level Agreement with Dynamic Inventory Policy: The Effect of the Performance Review Period and the Incentive Structure

2021

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Performance measures are often outlined in the section of the service-level agreement (SLA) of the contract between a supplier and a retailer. They are monitored periodically, and penalty and/or bonus payments are imposed in each performance review period, according to the SLA clauses. Previous studies have mostly considered a static inventory policy in analyzing SLAs. However, in practice, the supplier may have an opportunity to adjust the stock level in each inventory review period, according to the observed performance. This study analyzes the dynamic stocking decision for a supplier facing an SLA where the supplier sells a single product to the retailer. The ready rate is used to measure the performance in an SLA. To this end, models for both lump-sum and linear penalty/bonus structures are developed, and the optimal stocking decisions for a strategic supplier are calculated using the stochastic dynamic programming approach. The results are then compared with the optimal static inventory policy, and new insights are derived to efficiently design an inventory system for the suppliers that are subject to service-level incentives. In addition, we investigate the impact of SLA parameterssuch as the length of the performance review period and incentive structures-on a supplier's performance, with the probability of meeting or exceeding the target service levels and the supplier's cost. We also consider the impact of demand distribution and inventory holding costs. Results show that under lump-sum incentives, a longer performance review period benefits both the supplier and the buyer, given that the average ready rate increases with less variability as the length of the performance review period increases, leading to decrements in the supplier's total costs. In this scenario, there is a higher chance of gaining bonuses/avoiding penalties for a strategic supplier who adopts a dynamic inventory policy. On the other hand, under linear incentives, the impact of the performance review period on the supplier's cost and the performance measure (i.e., ready rate) is complicated and depends on the magnitude of the holding cost and the bonus and/or penalty structure of the contract. Under this scheme, the performance of a static inventory policy is highly dependent on the holding cost because a high holding cost may lead to failure to meet the contract requirements in terms of the service level.

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Maintaining Logistics Quality in Supply Chains to Developing Countries: The Case of Automotive Parts Supplies to Egypt

Kühn

2015

Supply Chain Design and Management for Emerging Markets

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Supply Chain Champions

Cited by 15 publications

References 0 publications

Designing Service Level Contracts for Supply Chain Coordination

Designing Service Level Contracts for Supply Chain Coordination

Service‐Level Agreement with Dynamic Inventory Policy: The Effect of the Performance Review Period and the Incentive Structure

Maintaining Logistics Quality in Supply Chains to Developing Countries: The Case of Automotive Parts Supplies to Egypt

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