RESPONSIVSUPPLYCHAIN

"Product Design, Quick Response and Competition in Retail Supply Chains"

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 Obiettivo del progetto (Objective)

'The objective of the project is to understand the impact of supply chain capabilities such as responsiveness, short lead times of procurement, production, and design on competitiveness of retailers and manufacturers. This will be achieved by building mathematical models of supply chains and characterizing their optimal and equilibrium decisions using inventory theory, consumer choice models, and game theoretical analysis. The project also includes a data collection stage and empirical analysis to test the theoretical findings. This topic is of immediate importance to manufacturers and retailers in Turkey and Europe in today’s globalized competition. European firms can gain sustainable competitive advantages by developing responsive and agile supply chains to take advantage of their location being close to markets in Europe, Middle East and Africa. The first part studies how a firm should choose its initial position in a product line and possibly revise its product position after observing demand signals. The objective is to investigate how a firm should react in a competitive environment where other firms may or may not have similar capabilities. This will be achieved by characterizing the equilibrium inventory levels and properties of the product assortment offered to customers for all firms in the industry. The second part studies responsive supply chain strategies in the presence of strategic (forward-looking) customers, who may choose to wait for a product that will better match their preferences in the future rather than buying the product currently offered. The results would suggest how a firm should manage its new product introduction frequency and inventory levels as the fraction of customers that are strategic increases. The third part aims to collect firm-level data on supply chain and market characteristics and conduct an empirical study of key drivers of when and how responsive supply chain strategies work.'

Introduzione (Teaser)

Supply chain challenges in responsiveness, procurement, production and product design lead times impact the competitiveness of retailers and manufacturers. European and Turkish firms gain sustainable competitive advantages relative to their worldwide competitors with their proximity to Europe, Middle East and Africa.

Descrizione progetto (Article)

A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers and customers themselves.

This project, RESPONSIVSUPPLYCHAIN, developed a model and studied how a firm should choose its initial position in a product line. The model suggests revising product positioning after monitoring demand. The project investigated how a firm should react in a competitive environment while monitoring changes in the market. The model includes balancing inventory levels and product assortment by gauging comparable selections in similar industries.

Customers place a high value on responsive supply chain strategies. The primary study goal focused on the monopoly case only and included strategic customers. A strategic customer is one who may choose to wait for a product that will better match their preferences. Researchers investigated whether the existence of strategic customers will make the firm more or less likely to introduce new products and lead to design changes.

Turkish companies were studied to understand the challenges they face in building a responsive and competitive supply chain with sound operational strategies.

The researchers collaborated closely with many retailers. Two research projects were successfully completed. The companies in the research projects were transformed and resulted in improved supply chain decision-making processes. The projects serve as successful case studies of how Turkish (and European) manufacturing bases can be utilised to create competitive advantages. This work has been presented at two large industry conferences and drawn significant attention from Turkish retailers.

Other project activities included industry conferences for three consecutive years, attended by over 200 people each year. Attendees were retail executives, academics and graduate students from Turkey. The speakers each year were renowned academics from major research institutions in Europe and the United States who showcased applied retail research in marketing and operations.