Korean firms have been vigorously searching and exploring overseas market opportunities through export and overseas investment. As of end of 2019, there were more than 80,000 Korean overseas subsidiaries all over the world. With Korean overseas direct investment increasing recently, it became one of the important issues for overseas investors to be successful in the global market. There are a lot of studies on factors influencing the performance of overseas subsidiaries such as ‘firm’ and ‘country’ factors. This study empirically examines subsidiary performance determinants with ‘industry architectures’ by using a sample of 292 overseas Korean firm subsidiaries. Industry architectures are the stable but evolving sets of rules and roles through which labor is divided within a sector. This article considers how industry architectures shape success in international expansion. Industry architectures differ between countries, are not necessarily technologically determined, shape firms’ capabilities and their competitive environment, and constitute a distinct level of analysis. We extract antecedents of related theory and empirically test its impact with a survey of Korean firms expanding in emerging economies. We would say this is the first study which tries to focus on industry architectures with the performance of Korean overseas subsidiaries. We find that separability and similarity of industry architectures across countries and localization of subsidiaries are robust and important predictors of success in international expansion. Our results suggest that industry architectures should be added to firm and country as an intermediate level of analysis that helps explain success in international expansion. While we established a pattern, much more remains to be done. We focus on the success of foreign operations, but we do not consider the broader benefits of going abroad, such as the learning or network effects that accrue at the level of the entire firm. The next obvious question is whether the results would differ in the developed market context. These we leave for future research to consider.
This research identifies the types of relationship asymmetry within sustainable fashion supply chains and the role of relationship asymmetry in sustainable product development in fashion supply chains in the UK. This research that is based on supply chain experiences of experts highlighted that how relational asymmetries hinder sustainable product development in fashion supply chains, but also how sustainable behaviours, values and policies help to overcome the influence of relational asymmetry in sustainable product development process.
With the increased globalization, selecting suppliers has become more challenging problem, especially because of increased risks among suppliers. This paper proposes a four-step supplier selection procedure in global supply chains under risk. In the first step, appropriate supplier selection solutions are determined by using a rule-based expert system. In the second one, these solutions are used to evaluate suppliers’ general performance. In the third one, suppliers’ risks are evaluated by using a risk evaluation algorithm. In the fourth one, Pareto optimal suppliers are selected based on their general performance and risk evaluation outputs. An example demonstrates the implementation of the proposed procedure.
Introduction This paper presents an exploratory investigation into the use of coopetition by fashion supply chains (FSCs) as a sustainable, risk-reduction strategy and enabler for competitive advantage. Bengtsson and Kock (2000) proposed coopetition as a state where two companies cooperate in some activities, such as a strategic alliance, while at the same time competing with each other in other activities. While coopetition is usually considered as a horizontal integration strategy (Hingly et al., 2011), it might also be used vertically in a supply chain and possibly including third-parties to alleviate issues of confidentiality (Dari, 2010). Such lose relationships and partnerships may also be undertaken between companies for joint product development, to share research and development (R&D) costs, to restore corporate image, to increase environmental responsiveness of suppliers, for differentiation, to reduce costs, to reduce supply chain waste, and to develop sustainable materials, alternative or substitutes (Caniato et al. 2012). In a dynamic business environment such as fashion the ability to integrate processes across the functional boundaries of a company is considered a key to competitive advantage (Sull and Turconi, 2008). It is also important for companies in FSCs to share a common goal and work in the same direction to achievement supply chain integration (Fernie and Grant 2015). De Brito et al. (2008) suggested that the best performing companies effectively manage internal and external relationships between functions and organizations through improved coordination and highlighted a need for partnering with supply chain partners and different stakeholders including working groups in the industry, relationships management, having highly skilled people, and resource sharing especially in transport equipment and warehousing and the use of coordination tools such as collaborative planning, forecasting and replenishment (CPFR). While such alliances build up relationships and partnerships for the betterment of all partners (Lacoste, 2014), many companies remain reluctant to share too much for fear of affecting their trade secrets or competitive advantage, and so maintain a corporate transactional mindset (Grant, 2005). Thus, there is a need to investigate whether FSC firms are aware of or using coopetition principles, and if not whether they have a propensity to do so. Research Design Our investigation was exploratory as it addresses the how and why questions consistent with criteria for qualitative research (Bryman and Bell, 2015). Our unit of analysis for conducting this study was seven UK FSC case companies (CCs). Our sample was selected based on criteria of having in the UK a manufacturing or sourcing base and a retail or wholesale presence and some major operations such as customer service, distribution and warehousing and a brief description of each CC is provided in Table 1 below (Yin, 2014). Data were collected via semi-structured interviews with 68 people across the seven CCs. These were supported further supported by a number of means, for example, visits to the manufacturing sites, head offices and other important operational places, navigating around the working environment, specifically the factory or shop floor and distribution centers, making observations and chatting to workers in the factory cafes, car parks and surrounding areas. Both within-case and cross-case analysis analyses were conducted and three themes emerged: capacity sharing, cooperation for risk reduction or a response to an adverse event, and information sharing to build relationships. We now discuss details pertaining to each theme in detail. Findings Capacity sharing: Time-based competition, demand volatility, increased disruptions and retailer pressures are some of the reasons that stimulated fashion companies and supply chains to share capacity. However, the case companies also believed high supply chain cost led fashion supply chains to benefit from each other’s resources and leave competition for the shop floor or better customer service. CC1 respondents mentioned that at a particular time they had to replace their ‘plasticisers’ and during this replacement process CC1 used competitor ‘plasticisers’ and hides. CC1, CC2 and CC4 respondents mentioned that their companies also gets help from its competitors in the international market to source skilled labor force in case of full capacity. They further mentioned the use of machines, sharing raw materials, technology, warehouse, containers, testing facilities and other facilities at competitors’ plants in different countries: “We can’t do everything on our own, especially on a global basis, so we talk to our colleagues and if they have those facilities we will ask their help; we will pay less and they will get what they have invested for” (CC1 supply chain manager). CC2, CC3, CC4 and CC6 respondents further mentioned that departments which were formerly perceived as competing each other are now sharing workforce according to demand. Respondents also suggested that problems of quotas, price fluctuations, raw material shortages, customs and distribution could be overcome by sharing materials and capacity with competitors: “If China goes over their export quotas we could be left with fibers stuck in China indefinitely until the quotas have re-balanced so in the interim its managed by sharing materials with competitors here in the UK or in our suppliers’ markets” (CC2 sourcing manager). CC2 and CC4 respondents also mentioned how in the past their companies managed to retain a cluster by offering people a business space in their premises. CC4 also offers apprenticeships to other manufacturers and suppliers, reflecting the company’s belief that the industry needs to pool resources. CC3 and CC5 respondents mentioned that sometimes their companies derives benefits of economies of scale in terms of raw materials and some sub-processes by sharing capacity with competitors: “We buy in bulk to get economies of scale, sometimes just to make sure we don’t run out of supply but there are quite a lot of businesses in our product category so we always have someone to share to get rid of dead money” (CC3 sourcing manager). CC5 and CC7 also mentioned that their companies also use supply chain partners’ facilities such as quality checks, storing products at their sites and arranging capacity for CC5 and CC7. Cooperation for risk reduction: Respondents from CC6 described many instances where coopetition emerged when supply risk or disruptions occurred. One disruption shut down trading but CC6 was able to resume trading in just two days, partly due to the help from its competitors, customers and outside service providers. Respondents mentioned that a high street retailer offered space in its warehouse, another sent its workforce to help evacuate materials and another sent containers, while a service provider converted all standard orders into next day delivery. Within CC6 itself, drivers were willing to work extra hours, even at the weekends and some other departments also sent their workforce to help the logistics and distribution functions, which were affected most by this incident. Respondents also mentioned the frequent use of containers, materials, suppliers, factories and vehicles of competitors and some facilities at main sources: “If they’ve got a container let’s say 60% and we have got the other 40%, we don’t want another whole container; we will join the retailer, historically, you wouldn’t even talk to them because they are competitors, you know, compete on shop front” (supply chain manager). Information sharing to build relationships: Increasing sustainability risks and motives for costs savings, resource development, to avoid legal penalties, to be pro-active and to develop supply chain knowledge drove the case companies to information sharing, building relationships even with competitors and with organizations outside the industry. Case companies shared many practices and processes where they demonstrated an increased move to share information and relationship building with competitors. Respondents from CC1, CC2, CC3, CC4 and CC6 mentioned their companies have established close relationships and constantly share information with companies that were perceived as biased towards the industry or competitors in the past, such as NGOs, companies on CSR, external companies for testing and auditing, working groups in the industry and material and service providers. Respondents mentioned that this has helped them to manage issues such as legislation, working standards, ethics, national and international regulations, country laws and law on chemical use, testing and auditing, to develop supply chain knowledge, to identify sustainability risks and to design their mitigation strategies. Respondents further mentioned that, over the years, their companies have increased information sharing and relationship building with competitors who helped the company with market analysis and to re-shape its business strategies: “I think information sharing with some of those forces, where it was once perceived as a threat is now considered essential, you will manage most of your risks beforehand” (CC2 project manager). CC3 and CC5 respondents maintained that fashion in general and fast fashion in particular requires having as many sources of information as possible, as this will help businesses to increase the number of options. This will further help their companies to explore alternatives and substitutes, ultimately minimizing risks such as dependency and improving customer service: “You need to talk to your partners, talk to your competitors, talk to those who have the slightest relevance to what you do; you need to be open minded; this will increase your options and then you can say yes, I can sustain, I can continue” (CC3 ethical compliance manager). CC2 and CC4 respondents mentioned building relationships with some European premium quality manufacturers who were perceived as competitors in the past. Respondents mentioned that the company is also trying to build strong relationships with small and medium companies of its type in the UK so that a common strategy can be developed for the government to help revive the UK textile and garment industry: “As an industry we’re joining together, whether we are joining together with our competitors or what could be perceived to be a competitor or not, it doesn’t really matter, the fact is we are joining together to pool our resources in terms of trying to attract new people into the industry and get some help from the government”(CC4 supply chain manager). However, CC5 respondents expressed concern about sharing trends or design related information to some competitors of its size but admitted that CC5 also gets help from its competitors: “He (supply chain manager) will pick up the phone and let them know which trend is in demand, which colour customers like; in the beginning I found it unusual but then I saw some of them coming to us and asking for some units to try” (CC5 design manager). CC6 respondents mentioned that a recent disruption has demonstrated how important it is to have relationships, even with competitors. Respondents reported that their service providers converted standard deliveries into next day just because they perceived CC6 as a family and it was good relationships with them that enabled CC6 to provide good customer service and maintain its image as a responsible online fashion retailer: “We had relationships with them so they were willing to go to the extra mile; we see them as a family organization although some might say competitors” (CC6 supply chain manager). Conclusions The literature asserted the need for coopetition in order to survive and compete in a demand driven and volatile market place however issues of maintaining confidentiality and competitive advantage may inhibit companies in FSCs from adopting coopetition principles. However, our study found that due to increased uncertainties, disruptions and risk the seven CCs we investigated have embraced coopetition in some way as a strategy mechanism to manage their supply chains. Thus, we conclude that coopetition appears to be a driver to stimulate organizational capacity sharing, risk reduction and information sharing to build relationships with multiple stakeholders even if they are competitors. However, we note that this study was exploratory and only investigated seven FSC companies in the UK and hence the findings may not be generalized across all companies. Further research should expand this line of enquiry to do so.
The paper supports the idea that competition is nowadays played among supply chains rather than among companies.
The competitive action has been mainly analyzed as a single actor' strategy, looking for gaining a competitive advantage over competitors (Porter, 2008). The competitive advantage is connected to distinctive resources and capabilities owned and/or controlled by the single actor and, especially, to how a company is capable to combine and connect such resources and capabilities reaching a distinctive positioning (Grant, 1991). By re-defining the most traditional view, Porter underlines how strategy has to look for uniqueness rather than to the search for being better than others in the market (Porter, 1996). Following such a view, scholars have addressed their attention to identify new sources of differential advantage, based on a at least temporary uniqueness. Such new sources mostly rely on intangible issues and on the capability to perform more efficiently and effectively market-driven processes (Day, 1994).
By shifting his view from tangible to intangible issues, from products to processes, literature has focalized on the company's network relationships as fundamental sources of differential advantage (Hakansson, Snehota, 1989; Dyer, Singh, 1998). The structure and dynamics of a company's business relationships, as well as the company's relational capabilities can sensibly make the difference between one company's performance and another's in the eye of the customer. Processes of value creation and delivery capable to meet customer expectations are only in part referred to activities performed by a single supplier company. Rather, they are connected to a number of companies that interact and connect their resources and capabilities in supply chains' contexts (Christopher, 2012; Cox, Lamming 1995).
The customer satisfaction (or dissatisfaction) can be addressed to a single supplier, notably the branded company that directly interfaces with the customer but it is strongly connected to how the branded company's supply chain has been able to mobilize resources, connect activities and exchange information. (Dyer, 1996; Gadde et al., 2010). In confronting and evaluating its perceptions in respect to two different brands a customer expresses his satisfaction (or not) towards the performance of two different supply chains (Hines, 2004). Taking a branded company, driving a supply chain (it is also known as strategic center or leader company), structuring, mobilizing and enabling effective and efficient business relationships with effective and efficient suppliers becomes the most important tool to gain market shares and keep customers satisfied. As network literature well explains, even if a company is a leader in a supply chain, business relationships with supplier companies can only be partially addressed and oriented, mobilized. (Ford, Hakansson, 2002).
The general aim of this paper is to discuss the impact of the processes of contractual formalization in business networks on the competitiveness of the supply chains. More precisely, the paper focalizes on a new tool introduced by Italian government, named "Contratto di Rete" (Network Contract - NC)1, that can be also useful to reinforce, orient and develop efficient and effective supply chains. The NC is not simply a type of strategic business alliance as a joint venture or a consortium can be (Guercini and Woodside 2012). It is a flexible tool that companies may use and it is a legal framework within which a network of companies can experiment various opportunities to innovate and to be more competitive. The NC sustains SMEs' development and competitiveness, especially in an international context. The NC also represents a new way of response for Italian SMEs to the current economic crisis, and to the challenges posed by an increasingly globalized and competitive market.
Small and medium enterprises represent a significant portion of the industry in most countries. This share is particularly relevant in the Italian reality. In Italy the weight very strong of the small business and the relative weakness of big business has recently been the focus of debate on the loss of competitiveness of the country's industrial system (Coltorti et al., 2013). Empirically, the paper studies the case of Gucci and its supply chains that have used the NC to reinforce and promote their positioning and their performance. In particular, sponsored by the Florentine brand of luxury and with the support of Confindustria Florence, three NC have been developed - P.re.Gi. , Almax and Fair – among the companies of three supply chains of small leather goods , bags and luggage . Each of the three networks includes companies that provide the complete production cycle, from cutting the skin and in one case even tanning to the final packaging of the object . The idea behind the signing of the “Contratto di rete” is come together to promote the transfer of innovation, knowledge transfer, know -how and training, but also to make economies of scale, improve access to credit, streamline costs and streamlining the supply chain, to ensure improved transparency in the flow of marginalization by the leader until the last sub-contractor. In each of the three networks, the parent company is different from Gucci that is left out of the contract. But, most interesting, Gucci will play the role of facilitator, subject to address and exchange of best practices, support and advice in the organizational, technological, financial and training issues.
By studying the three NC, the paper wants to emphasize the most important issues both supporting and limiting the action of supply chains as competitive sets. Based on our preliminary study of these Network Contracts, made possible by the availability of a large secondary material and by the research conducted by the authors both on the new legislative tool leading to formalized networks and on the business networks spread since long-term in the leather industry, we formulate some propositions which can be tested as hypothesis or considered as alternatives explanations of the possible role played by the NC to support the competitiveness of companies and supply chains.
The study of the Network Contract must take into account with attention to different layers it may impact and influence the competitiveness of the supply chains. At a first layer, it can be a tool of survival of present existing competitive ability and/or supporting the development of new capabilities. One aspect not mutually exclusive but complement the other. It can, however, be interesting to see logic sub-standing the formalization of existing networks and which are the objectives present in the declared intentions as well as those emerging from the observation of the behavior of the actors involved. You may recognize different levels of goal through the process of formalization. A first objective is linked to the fact that the importance of business networks makes them subject to specific policy of public policy makers. This makes the process of formalization important and useful for access policies to support networks. In this sense, a first proposition can be the following:
P1. The network contract represents a tool of formalization of existing business networks that allows first to make visible, perceptible such structures and enabling policy makers to support them through appropriate policies to support their growth or survival.
At a second layer, the formalization of existing networks can have organizational impacts. The recognition of a strategic center within the network, the formal creation of central coordination unit, or at least the existence of roles and shared resources can also substantially initiating organizational changes that make the network an entity able to access to larger economies and critical mass in respect to individual companies. The contractual formalization can produce effects on the roles of the individual actors involved and determine a different conduct of trials. This can allow the achievement of economies, the achievement of critical mass to trigger new initiatives, to realize innovations. Where networks emerge from declining districts the depletion of external economies can be a way to internalizing in formalized networks a part of the resources as an answer to the crisis of the external district. NC can thus support companies to benefit from the shift from external economies to internal “networks” economies In this sense, a second proposition can be the following:
P2. The formalization through contracts in business networks has organizational effects that result in new processes and methods of use of the resources that can affect the operation of the business network and generate economies.
At a third layer, in addition to affecting the relationship between the companies and the policy makers as well as the organizational processes in the business network, the formalization by NC can have effects on the contents of the strategy implemented by the firms involved and implemented by the whole chain. Particularly in the luxury sector competition among supply chains assumes importance in terms of exclusivity and the level of quality of the offered products. The contents of the strategy have systematically need to take account of the supply chains. This pushes systematically luxury brands (defined as actors) to search for forms of vertical control through ownership (acquisition of suppliers) and through contracts (contracts for exclusive supply). Consider the role of supply chain strategies related to issues such as: (1) ecological sustainability and social sustainability of productions from luxury brands; (2) country of origin and country of product design on which is affixed the company logo; (3) traceability and guarantees associated with the use of branded products etc. In this sense, a third proposition can be the following:
P3. The formalization of contracts in business networks has effect on the strategies declared and / or emerging from the behavior of the actors, both in terms of content and dynamics in the implementation.
The paper, through an in-depth analysis of the three networks connected to the Gucci’s supply chain, wants to test the hypotheses corresponding to the three propositions formulated above making a comparison between the supply networks before and after the formalization of the business relationships by the Network Contract.
The paper is structured as follows: in the first section the paper emphasizes the shift from a view of competition among companies to competition among supply chains and stresses major problems emerging in supply network dynamics. It then focalizes on the NC tool and its characteristics that can support supply network dynamics. The paper thus focuses on the three networks connected to the brand Gucci. In the final section, the paper summarizes the three mail levels of impact that the NC may have on the supply chains’ competitiveness: the supportive level, the organizational level and the strategic level. A comparison between the main issues affecting supply chains competitiveness in case of their formalized or not-formalized networks structure let draw final conclusions are on the role of Network contracts as positive and negative promoter on supply chains competitiveness.
Logistic support activities for weapon systems play an important role at maintenance activities in modern warfares. These activities are essential for keeping weapon systems ready at all time. However, maintenance supplies can be delayed without a proper
The bullwhip effect is known as the significant factor which causes unnecessary inventory, lost sales or cost increase in supply chains. Therefore, the causes of the bullwhip effect must be examined and removed. In this paper, we develop two analytical to
The aim of this study is to establish an efficient distribution planning for a capacitated multi-stage supply chain. We assume that the demand information during planning horizon is given a deterministic form using a certain forecasting method. Under such a condition, we present a cost effective heuristic method for minimizing chain-wide supply chain inventory cost that is the sum of holding and backorder costs by using look-ahead technique. We cope with the capacity restriction constraints through look-ahead technique that considers not only the current demand information but also future demand information. To evaluate performance of the proposed heuristic method, we compared it with the extant research that utilizes echelon stock concept, under various supply chain settings.
The main focus of this study is to investigate the performance of a clark-scarf type multi-echelon serial supply chain operating with a base-stock policy and to optimize the inventory levels in the supply chains so as to minimize the systemwide total inventory cost, comprising holding and backorder costs as all the nodes in the supply chain. The source of supply of raw materials to the most upstream node, namely supplier, is assumed to have an infinite raw material availability. Retailer faces random customer demand, which is assumed to be stationary and normally distributed. If the demand exceeds on-hand inventory, the excess demand is backlogged. Using the echelon stock and demand quantile concepts and an efficient simulation technique, we derive near optimal inventory policy. Additionally we discuss the derived results through the extensive experiments for different supply chain settings.
Supply chains for agricultural commodities with their various constraints such as production lead time, seasonal production, and methods of storage are limited in the extent to which techniques like Just-in-Time (JIT) inventory management can be applied. It is beyond the ability of producers to control harvest time and many agricultural products are perishable so that they can incur exceptional losses in storage if they are not handled correctly. This is a source of additional costs and inefficiency in supply chain management. The purpose of this study is to reduce or eliminate such sources of loss and inefficiency and to identify success factors for the JIT inventory management system where it can be applied for agricultural products. Where JIT techniques can be applied in supply chain management for agricultural products, costs such as transportation, inventory, and storage losses can be reduced with concurrent increases in efficiency. In the paper, some of the problems associated with applying JIT inventory control methods in supply chain management for agricultural commodities will be reported through a series of case studies.
Supply chains for agricultural commodities with their various constraints such as production lead time, seasonal production, and methods of storage are limited in the extent to which techniques like Just-in-Time (JIT) inventory management can be applied. It is beyond the ability of producers to control harvest time and many agricultural products are perishable so that they can incur exceptional losses in storage if they are not handled correctly. This is a source of additional costs and inefficiency in supply chain management. The purpose of this study is to reduce or eliminate such sources of loss and inefficiency and to identify success factors for the JIT inventory management system where it can be applied for agricultural products. Where ]IT techniques can be applied in supply chain management for agricultural products, costs such as transportation, inventory, and storage losses can be reduced with concurrent increases in efficiency. In the paper, some of the problems associated with applying ]IT inventory control methods in supply chain management for agricultural commodities will be reported through a series of case studies.