Antecedents and Outcomes of Supplier Innovativeness in International Customer–Supplier Relationships: The Role of Knowledge Distance

The increasing competitive pressures and speed of R&D and product innovation is prompting many multinational enterprise customers to outsource their core activities to suppliers. Despite organizational challenges due to cultural and physical separation from their partners, these are now charged with supplier-driven innovation. This study looks at key drivers of supplier innovativeness, examines the role of cross-national differences in shaping supplier innovativeness and examines the impact of this dimension on relationship performance in international customer–supplier relationships. Our findings from a large-scale survey of Taiwanese electronics suppliers provide evidence of the contribution of antecedents such as customer orientation, customer control and technological uncertainty to the enhancement of supplier innovativeness. Innovativeness contributes to increased customer dependence and improves relationship performance. Differences in knowledge bases stemming from different institutions are also tested in this study; we find that knowledge distance may be detrimental to the innovativeness-performance link in international exchange relationships.     

Impact of Intellectual Property Rights on the Governance Mode Decisions of Engineering Managers During the Establishment of Research Alliances With Publicly Funded Entities

Strengthening intellectual property rights for publicly financed research and development (R&D) ensures that research organizations maximize the full national value of the intellectual property that they generate, but potential negative spillover effects on the perceived value of a research alliance might deter an existing alliance partner from continued collaboration or a potential alliance partner from future collaboration. This study, performed in 2010 within the context of the Council for Scientific and Industrial Research in South Africa, aimed to develop a structural equation modeling-based value-mediation governance decision-making model that will enable engineering managers at publicly financed R&D organizations to select optimal governance modes for the research alliances they are establishing to grow their organizations’ R&D capabilities.     

Employing dynamic fuzzy membership functions to assess environmental performance in the supplier selection process

The proposed system illustrates that logic fuzzy can be used to aid management in assessing a supplier's environmental performance in the supplier selection process. A user-centred hierarchical system employing scalable fuzzy membership functions implement human priorities in the supplier selection process, with particular focus on a supplier's environmental performance. Traditionally, when evaluating supplier performance, companies have considered criteria such as price, quality, flexibility, etc. These criteria are of varying importance to individual companies pertaining to their own specific objectives. However, with environmental pressures increasing, many companies have begun to give more attention to environmental issues and, in particular, to their suppliers’ environmental performance. The framework presented here was developed to introduce efficiently environmental criteria into the existing supplier selection process and to reflect on its relevant importance to individual companies. The system presented attempts to simulate the human preference given to particular supplier selection criteria with particular focus on environmental issues when considering supplier selection. The system considers environmental data from multiple aspects of a suppliers business, and based on the relevant impact this will have on a Buying Organization, a decision is reached on the suitability of the supplier. This enables a particular supplier's strengths and weaknesses to be considered as well as considering their significance and relevance to the Buying Organization.     

Implementing of a three-phase integrated decision support model for parts machining outsourcing

Parts machining outsourcing (PMO) can be regarded as a strategic weapon to increase product quality and productivity as well as cost cutting in many manufacturing enterprises. However, making an outsourcing decision based on accumulated experience is neither effective nor scientific due to subjective judgement and lack of systematic analysis. Therefore, to systematically help the decision-maker survey and select suppliers to outsource and also to timely achieve the most beneficial portfolio among suppliers in a non-cooperative game structure, this paper proposes an integrated decision support model for PMO using ontology, constraint-based reasoning, fuzzy VIKOR and game theory in three phases, namely supplier prequalification, ultimate selection and order coordination. In the decision-making process, decision factors such as quality, cost and production capability are categorised and put into different phases, respectively, by their characteristics for being measured at a more reasonable method. Finally, a case from a leading printing machinery enterprise is analysed to validate the proposed model. This research is expected to improve the quality and effectiveness of decision-making in PMO.     

Strategic outsourcing for competing OEMs that face cost reduction opportunities

This paper explores production and outsourcing decisions for two Original Equipment Manufacturers (OEMs) who produce partially substitutable products and have opportunities to invest in reducing the manufacturing cost. In such an environment, competition drives both OEMs to set lower prices and invest more than would maximize their combined profits, particularly when product substitutability is high. However, outsourcing provides a mechanism by which the two OEMs can credibly signal that they will not overinvest in cost reduction, mitigating a mutually destructive cost competition. Our paper explores the role that an external supplier(s) can play in dampening competition between the OEMs when there are opportunities to invest in cost reduction. In particular, we characterize the conditions under which a supplier can profitably enter the market by inducing the OEMs to outsource production. We first examine a basic model of two identical OEMs in which there is a single common supplier and a single component that is a candidate for outsourcing. Later, we extend the basic model to allow for market asymmetry, two suppliers, and more than one component that might be outsourced.     

Once bitten,less shy? The influence of prior misappropriation experience on R&D collaboration

Firms often face the challenge of collaborating for innovation and protecting themselves from misappropriation. Given this tension, we investigate the relationship between prior misappropriation of protected and unprotected intellectual property (IP) and R&D collaboration. We combine more than 600 firm observations from the German Community Innovation Survey with patent data and qualitative interview data. Our results consistently point to (1) less subsequent R&D collaboration after being copied (misappropriation of unprotected IP) and (2) more subsequent R&D collaboration after being infringed (misappropriation of protected IP) in the following three years. Moreover, we find indication that firms that are copied start to collaborate more during the subsequent period (four to six years later). Our study adds to a better understanding of the tension between appropriating innovation rents and remaining open to R&D collaboration. Further, we provide insights on how firms strategically leverage previous misappropriation experience to create value.     

The Impact of Open Source Software Commercialization on Firm Value

Vendors of proprietary software products are increasingly moving to business models inspired by open source software (OSS). This study investigates sources of heterogeneity in value appropriation associated with commercializing OSS. Specifically, I suggest that the relationship between a firm's OSS releases and its value depends critically on its stocks of protection mechanisms for intellectual property rights, such as software patents and software trademarks. I find that while software patent stocks positively affect the relationship between a firm's OSS product portfolio and its value, software trademark stocks have a negative effect on this relationship.     

Bootstrap approach for supplier selection based on production yield

Current manufacturing industries have increased their level of out-sourcing and relied more heavily on their supply chain as a source of competitive advantage. Supplier selection decisions have become an important component of production management. Those decisions have a significant impact on a firm's marketing competition, and suppliers may account for a large portion of the production cost. Production quality is one of the key factors in supplier evaluation. The manual of supplier certification includes a discussion of process capability analysis, which recommends a procedure for evaluating the most prevalent process capability index C _pk. However, the recommended procedure is applicable only when evaluating an individual supplier's performance. In this paper, we apply the bootstrap method to the supplier selection problem. We construct lower confidence intervals for the capability difference and ratio between two given suppliers. Performance comparisons are made among various bootstrap methods in terms of error probability and selection power. For convenience of applications, the sample sizes required for various designated selection power are also tabulated.     

Modes of inbound knowledge flows: are cooperation and outsourcing really complementary?

This study examines the relationship between breadths of two different modes of external knowledge: R&D outsourcing and cooperation. Building upon transaction costs literature and literature on research partner breadth and R&D outsourcing, we hypothesise an U-inverted relationship between outsourcing breadth and innovation performance and a complementary relationship between R&D outsourcing and R&D cooperation. The model is tested on a large sample based on CIS survey for Spain. The empirical analysis confirms the U-inverted relationship between outsourcing breadth and innovation and also reveals an interesting result: the complementary effect of R&D cooperation varies with the level of R&D outsourcing breadth and it is not confirmed for low and medium levels of R&D outsourcing breadth. The results have important implications for theory on the selection of different modes of inbound open innovation and for managers and their cooperation and outsourcing strategies.     

Modelling of outsourcing decisions in global supply chains. An empirical study on supplier management performance with different outsourcing strategies

Outsourcing decisions in global supply chains are critical to a business’ competitiveness. This study investigates and compares the supplier management in Taiwanese enterprises under different outsourcing strategies. Base on an empirical study through questionnaires, we investigate the supplier management and critical success factors of the Taiwanese enterprises. It is shown that different outsourcing strategies should be deployed by different types of industries, and a good working relationship with suppliers and customers are paramount to success. The important issues related to supplier management include supplier capability to deliver on time, long term contract strategy with suppliers, supplier evaluation, and quality of material from suppliers.     

Implications of product upgrading confronting supplier remanufacturing

It is generally believed that new products upgrading is an effective strategy to deal with the cannibalisation problem from remanufacturing, however, it is not clear how the new product upgrading strategy affect the decision-making of the downstream manufacturer and the upstream supplier. By examining the relationship between supplier remanufacturing profits and product cannibalisation, we develop two models to investigate the implications of the manufacturer's product upgrading confronting supplier remanufacturing. The results show that an product upgrading strategy can effectively enhance the manufacturer's profits if the investment cost is relatively low. Although the product upgrading strategy may hinder the remanufacturing operations, it will always be beneficial for the wholesaling of the supplier's new products. Therefore, the upgrading strategy can mitigate cannibalisation problems and create an optimal pareto improvement for both parties. Finally, we conduct a data analysis to provide additional managerial insights regarding the supply chain.     

Supplier development: communication approaches,activities and goals

Operations managers rely on the purchasing function to obtain production inputs from suppliers and to ensure supplier performance. The link between supplier development activities performed by buying firms with their suppliers, in terms of operational outcomes and impact on competitive advantage for the buying firm has been well documented. However, a buying firm should, prior to setting up a supplier development program and investing in supplier development activities, establish goals it wants to achieve and determine how to achieve these goals. Until now, supplier development goals in general and their relationship with supplier development activities have received little research attention. The results from this empirical study suggest that the relationship between the goal to improve a supplier's capabilities and knowledge transfer from the buyer to the supplier firm is moderated by the degree of human interaction. Buying firms pursuing the strategy to improve supplier capabilities rely more intensively on training and co-location of buyer and supplier employees to leverage the knowledge transfer to the supplier firm.     

Study on suppliers’ flexibility in supply chains: is real-time control necessary?

In a supply chain, the suppliers’ flexibility is considered as a tool to cope with the environmental uncertainties. Flexible suppliers are capable of supplying/processing other jobs in addition to the one for which they are the original supplier. In a cluster of flexible suppliers, it is expected that flexibility of suppliers be utilized more expressively through better control of the supply chain. The online real-time information system is considered as one of the tools for effective control of the supply chain. However, in a cluster of flexible suppliers, the physical and operating characteristics of alternative suppliers (available by virtue of suppliers’ flexibility) may vary from each other for doing the same operation, which may result in a different lead-time to process the same job. This paper presents a simulation study on suppliers’ flexibility level (SFL) in relation to information system automation level of the supply chain and physical characteristics of the flexible suppliers. This paper contributes an approach for decision-makers to identify the information system automation level and variations in physical characteristics of the alternative suppliers with respect to suppliers’ flexibility level that can help in improving the overall delivery lead-time. A decision-maker can reach a trade-off between benefits obtained from supplier's flexibility and the investment required to have a suitable information system automation level and physical characteristics of suppliers. Results of simulation study show that if automation level of information system is not matching to the suppliers’ flexibility level then supplier's flexibility may become counterproductive. Further, a relative change in physical characteristics of the alternative flexible suppliers as compared to the original supplier is more than a certain limit then suppliers’ flexibility may again be counterproductive. However, a cost intensive real-time information system may not be needed when suppliers’ flexibility levels are lower. Study identifies the productive and counterproductive performance regions for suppliers’ delivery lead-time.     

Service Innovativeness and Innovation Success in Technology-based Knowledge-Intensive Business Services: An Intellectual Capital Approach

This paper analyzes the influence of the three components of intellectual capital (human, social and organizational) and intensity in collaboration with clients on service innovativeness in knowledge-intensive business services (KIBS). It also includes a discussion on the impact of both service innovativeness and intensity in collaboration with clients on innovation success. An empirical study is conducted on a sample of companies belonging to two technology-based KIBS industries: software and R&D services. The results suggest that the positive effect of human capital on service innovativeness is moderated by intensity in collaboration with clients, being human capital enhanced by organizational and social capital. The effect of social capital on service innovativeness is partially mediated by human capital and also moderated by intensity in collaboration with clients. Finally, service innovativeness positively affects innovation success, while intensity in collaboration with clients has a higher effect.     

Effect of R&D product and process expenditures on new product introductions

This study examines the relationship between the introduction of new products and R&D process and product expenditures of 15 industries. The objective is to determine the degree to which product and process R&D expenditures, uniquely or jointly, contribute to the development of new products. The findings suggest that concurrent R&D expenditures on products and processes lead to higher R&D output, as measured by new product announcements, than R&D expenditures on products or processes alone. As a by-product, the analysis clearly shows that the relationship between the number of new products introduced and product and process R&D expenditures can be represented by a function resembling the Cobb-Douglas production function     

R&;D market value under weak intellectual property rights protection: the case of India

The relationship between R&D and market value has attracted the interest of many scholars within different fields, but scant attention has been paid to the countries with weak protection of intellectual property rights (IPR). This is unfortunate, since this problem is potentially highly relevant for IPR policy in developing countries. In particular, several questions arise when the problem of R&D market value is analyzed in a country where IPR protection is weak. First, there are concerns regarding incentives (i.e., private returns) for firms to invest in R&D when IPR is only weakly protected. Second, significant differences could emerge in the market valuation of R&D investments of domestic and foreign firms, above all in those industries where spillovers are more likely. To examine these issues, this paper investigates the market valuation of R&D investments of a panel of 219 R&D-reporting domestic and foreign firms publicly traded in India with an empirical analysis. First, the market valuation of the R&D capital for the whole sample is positive and higher than those obtained in U.S. or European countries from similar analyses. Second, in the sub-samples of the domestic and foreign firms, the market value of R&D investments of foreign firms is not significantly different from zero, while the valuation coefficient of domestic firms is four times higher than that obtained on the whole sample. Third, in science-based industries the difference between domestic and foreign firms is smaller than in the other industries. The policy implications of these findings are discussed.     

Outsourcing practices in automotive supply networks: an exploratory study of full service vehicle suppliers

Most automotive companies outsource the design, manufacturing and assembly of some complete cars to independent suppliers or full service vehicle companies (FSVs). FSVs represent a relatively unexplored form of outsourcing which combines joint efforts in developing a modular product with the externalisation of specific niche manufacturing processes. On the basis of comparative cases and of qualitative information collected within three FSVs and three OEMs, this study aims to investigate the associated advantages and risks for FSVs, commonalities/differences from the practices of outsourcing to component/module specialists that can be found in other industries and why and for what kind of products FSVs can be appropriate in automotive supply networks. The study contributes to the debate on outsourcing in the automotive industry by providing an original interpretation on why FSVs have recently seen a shakeout with some growing whilst others have faltered.     

Foreign Subsidiaries and Technology Sourcing in Spain

Firms acquire external technological knowledge via different channels. In this paper, we compare the technology sourcing of foreign subsidiaries and domestic firms looking at domestic R&D outsourcing, international R&D outsourcing, domestic cooperation for innovation and international cooperation for innovation. We use data from the Spanish Technological Innovation Panel for the years 2005–2009 for 10,206 innovative firms operating in Spain. We apply a multivariate probit specification which allows for systematic correlations among the different choices. The results show that the different technology sourcing choices are interdependent and that foreign subsidiaries show a different pattern of external technology sourcing. Compared to affiliated domestic companies, foreign subsidiaries show a smaller propensity for external technology sourcing via R&D outsourcing from independent firms in the host country, for international R&D outsourcing and for international cooperation for innovation. In contrast, foreign subsidiaries show a greater propensity for domestic cooperation for innovation. However, foreign subsidiaries are not a homogenous group in this respect.     

基于FMEA的军队第三方物流供应商选择

目的 针对军队第三方物流供应商的选择问题,从风险视角对供应商完成军事保障任务过程中可能存在的风险进行识别和评估,以降低军事物流外包风险,为军队第三方物流供应商决策提供方法和思路。方法 提出可将FMEA技术运用于军队第三方供应商选择中的操作性框架,按照框架流程确定评价标准、识别潜在失效模式、决策分析,可更加全面、科学地对军队第三方供应商做出选择。结果 在不考虑风险的情况下,5家候选供应商中E的原始评分最高,D排名居中,但经过FMEA分析后,由于E在单项评价指标上的风险比例太大,而D的各项指标风险比原始排名靠前的供应商小很多,因此D成为军队最终选择的供应商。结论 利用FMEA分析军队第三方物流供应商选择问题,可以起到事先识别可能出现的失效模式,分析产生原因和可能导致的后果以及现有措施的可控程度,从而评估每位候选供应商在确定的评价标准中的风险大小,最后综合原始评分得出了供应商选择的结果。该方法操作简单、计算方便,能比较全面衡量军队第三方物流供应商的综合水平,有助于提高军队物资保障效率,降低物资保障风险。     

The optimal sales format for green products considering downstream investment

With the increasing public awareness of environmental protection and the popularisation of suppliers' green production, a growing number of e-tailers are also investing in green products or services. The greenization of an e-tailer brings additional sales to the online channel but weakens the bargaining power of the supplier and further complicates the supplier's online channel format choice. This study focuses on the interaction between the e-tailer's green investment strategy and the supplier's choice of online channel format. First, we find that the e-tailer's investment forces the supplier to consider a new factor, the supplier's investment efficiency, which the supplier does not consider when the e-tailer does not invest and completely changes the e-tailer's own preferences. Second, we obtain the counterintuitive result that the supplier does not always benefit from the e-tailer's greenization; in the reseller channel, a supplier with a high investment efficiency is made worse off due to the increased retail price resulting from the e-tailer's investment. Additionally, the e-tailer will go green only when the upstream investment efficiency is high, regardless of the online channel format. The intuition behind this result hinges on each player wanting to free ride but worrying that the other has the same idea.