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Article

Petri Kärki, A.H.M. Shamsuzzoha and Petri T. Helo

The purpose of this paper is to examine the relationship between customer order lead time (COLT) and the price sensitivity of an electrical equipment manufacturer company…

Abstract

Purpose

The purpose of this paper is to examine the relationship between customer order lead time (COLT) and the price sensitivity of an electrical equipment manufacturer company. In consequence, it examines two research questions in terms of COLT, price and profitability level and to ensure the validity and practical justification of these research questions.

Design/methodology/approach

In this research the authors have used a case study approach where three business measures, namely COLT, price and the profitability level of a case company were investigated and analyzed critically. These measures were implemented through four different customer segments with two production lines of the case company. Data were collected from the company's order delivery database from the period 2006 to 2008. In addition, different experimental data were collected through interviewing and reviewing the results of the data analysis with the unit managers.

Findings

In this paper the authors have observed the correlation between the price, profit and COLT with all four customer segments in both the production lines of the case company. From the case data, the authors concluded that the customer did not pay more when the COLT is shorter than with the average time. It is also noticeable that the profit margin is higher for the case company to handle COLT with shorter lead time than the average order delivery lead time.

Research limitations/implications

More case examples might be helpful to motivate the managers to accept the research outcomes.

Practical implications

The concept of the company's COLT in relation to the price and profitability level supports organizational managers in their decision‐making process in terms of productivity level and the company's growth. It will motivate the managers to make tradeoffs among various developmental measures.

Originality/value

This paper implemented a unique approach for measuring the significant level of price and profitability level over COLT. From the outcomes of this study, it is observed that the price correlated positively with the COLT and has a direct and significant impact on it. When the price is increased the COLT is also increased. It is also noticed that the products of the case company which offered shorter lead times were on average also more profitable, even though there were no significant differences in average pricing between the customer segments.

Details

Business Process Management Journal, vol. 18 no. 5
Type: Research Article
ISSN: 1463-7154

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Article

S.T. Enns and Pattita Suwanruji

Mechanisms to adjust planned lead times based on current work loads are desirable for time‐phased planning systems. This paper investigates the use of exponentially…

Abstract

Mechanisms to adjust planned lead times based on current work loads are desirable for time‐phased planning systems. This paper investigates the use of exponentially smoothed order flow time feedback in setting planned lead times dynamically. The system studied is a supply chain with capacity‐constrained processing stations and transit times between stations. Lot sizes are based on the minimization of flow times using queuing approximations. Both seasonal and level demand patterns with uncertainty are considered. Since both dependent and independent demands are assumed at each station, customer delivery performance depends on the distribution of inventory along the supply chain. Results show that dynamic planned lead time setting can be used effectively to control delivery performance along the supply chain. Performance is also influenced significantly by appropriate lot size selection.

Details

Journal of Manufacturing Technology Management, vol. 15 no. 1
Type: Research Article
ISSN: 1741-038X

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Article

Steven A. Melnyk and Chris J. Piper

This article presents the results of a simulation study of implementation practices for material requirements planning systems. In particular, the role of safety lead times

Abstract

This article presents the results of a simulation study of implementation practices for material requirements planning systems. In particular, the role of safety lead times in ensuring effective delivery performance is analysed and some general guidelines are suggested.

Details

International Journal of Operations & Production Management, vol. 2 no. 1
Type: Research Article
ISSN: 0144-3577

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Article

Richard J. Tersine and Edward A. Hummingbird

Generic product offerings in a boundaryless competitive environmentdo not support economic viability. Time‐based dimensions of a productare becoming an increasingly…

Abstract

Generic product offerings in a boundaryless competitive environment do not support economic viability. Time‐based dimensions of a product are becoming an increasingly important component in assessing strategic advantage. A generalized framework is provided for analyzing product environments based on production/consumption gaps that can lead to an augmented product. Traditional long lead times and high inventory levels are less appropriate and more costly endeavours that may not even achieve product parity.

Details

International Journal of Operations & Production Management, vol. 15 no. 2
Type: Research Article
ISSN: 0144-3577

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Article

Stig‐Arne Mattsson

The objective of this study is to revise and enhance existing inventory control models in a way that allows them to be used more efficiently in environments with short lead times.

Abstract

Purpose

The objective of this study is to revise and enhance existing inventory control models in a way that allows them to be used more efficiently in environments with short lead times.

Design/methodology/approach

A simulation approach has been chosen to assess the efficiency of the developed model. This simulation is based on randomly generated demand data with a compound Poisson type of distribution.

Findings

Results from the simulation show that traditionally used inventory control methods fail to ensure that desired service levels are attained in environments with short lead times. The simulation also shows that, by using the developed model, the differences between desired and attained service levels can be reduced to fall within limits acceptable in practice.

Originality/value

The study provides an enhanced inventory control model that can be used in environments with short lead time to increase service level performance.

Details

International Journal of Physical Distribution & Logistics Management, vol. 37 no. 2
Type: Research Article
ISSN: 0960-0035

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Article

William J. Christensen, Richard N. Germain and Laura Birou

The purpose of this paper is to examine the impact of supply chain leadtime averages and variability on an organization's financial performance.

Abstract

Purpose

The purpose of this paper is to examine the impact of supply chain leadtime averages and variability on an organization's financial performance.

Design/methodology/approach

The “executive” list for manufacturers, consisting of 1,264 individuals of the Institute of Supply Management provided the study's sampling frame, with surveys sent to 402 firms and responses obtained from 210 firms. The empirical model is tested using LISREL.

Findings

The results show that as variance in supply chain leadtimes increases, the financial performance of the organization decreases. Of equal significance, the results show that average supply chain leadtimes have no direct impact on financial performance. The results also indicate that demand uncertainty associates with greater supply chain leadtime variance and that production technology routineness associates with lower supply chain leadtime variance. Product complexity and organizational size have no impact on supply chain leadtime variance or supply chain leadtime average.

Research limitations/implications

The research is an initial effort to understand variance in supply chain systems. An ongoing challenge in this area is operationalization of measures and data collection techniques that go beyond a single firm and examine a network of organizations cooperating in a value‐added supply chain.

Practical implications

The results suggest that managing the variance in a supply chain system may be more important to an organization's financial performance than managing averages.

Originality/value

This is particularly significant since organizations often act contrary to these findings, focusing scarce resources on reducing average leadtimes rather than on reducing variability in supply chain leadtimes.

Details

Supply Chain Management: An International Journal, vol. 12 no. 5
Type: Research Article
ISSN: 1359-8546

Keywords

Content available
Article

Tobias Gawor and Kai Hoberg

The purpose of this paper is to derive monetary benchmarks and managerial implications for omni-channel retailers’ B2C e-fulfillment strategies by investigating the…

Abstract

Purpose

The purpose of this paper is to derive monetary benchmarks and managerial implications for omni-channel retailers’ B2C e-fulfillment strategies by investigating the trade-offs between lead time, delivery convenience and total price including shipment in the context of online electronics retailing.

Design/methodology/approach

Based on a choice-based conjoint analysis among 550 US online shoppers, the monetary values of lead time and convenience were calculated in a log-log regression model. In addition, latent class segmentation was applied to identify consumer segments according to their differing e-fulfillment preferences.

Findings

From a consumer perspective, the analysis suggests that price is the most important criteria in omni-channel retailer selection, followed by lead time and convenience. The value of time is, on average, $3.61 per day. Regarding convenience, the results indicate that delivery to the home is highly preferred over pick-up options. The value of the consumer’s travel time was estimated at $10.62 per hour. The latent class segmentation identified four segment groups with different preferences.

Research limitations/implications

To validate the findings, future research could analyze real data from omni-channel retailers’ customers’ buying behavior. It should also be interesting to extend the research to other price ranges, market segments and e-fulfillment factors, such as return options, shop ratings and membership programs aiming for further generalization.

Practical implications

The findings guide omni-channel retailers to focus on efficient B2C e-fulfillment strategies. Considerable competitive advantages may be gained by reducing lead times and offering convenient delivery in line with the lead time valuation of the identified customer segment.

Originality/value

This study fills gaps in the academic research of consumer behavior in retailer selection, which has primarily concentrated on the choice between “brick-and-mortar” and online sales channels. It paves the way for a more service-oriented perspective in omni-channel retailing research.

Details

International Journal of Physical Distribution & Logistics Management, vol. 49 no. 1
Type: Research Article
ISSN: 0960-0035

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Article

MARTIN CHRISTOPHER and ALAN BRAITHWAITE

Time is a business commodity which has an enormous opportunity cost. Yet normal business controls make no attempt to value or identify the scale or nature of this. In this…

Abstract

Time is a business commodity which has an enormous opportunity cost. Yet normal business controls make no attempt to value or identify the scale or nature of this. In this paper Professor Martin Christopher and Alan Braithwaite introduce the concept of Strategic Lead Time Management as a means of measuring and valuing the time efficiency of business.

Details

Logistics Information Management, vol. 2 no. 4
Type: Research Article
ISSN: 0957-6053

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Book part

Paul A. Pautler

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the…

Abstract

The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Details

Healthcare Antitrust, Settlements, and the Federal Trade Commission
Type: Book
ISBN: 978-1-78756-599-9

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Article

David A. Menachof, Michael A. Bourlakis and Thrasyvoulos Makios

The purpose of this paper is to report the results of a comparative study of order lead times for firms operating in the UK and Greek food retail markets with the UK one…

Abstract

Purpose

The purpose of this paper is to report the results of a comparative study of order lead times for firms operating in the UK and Greek food retail markets with the UK one being regarded at the forefront in terms of logistics efficiency.

Design/methodology/approach

The main research instrument is a survey of managers employed by the major food multiple retailers operating in the UK and Greece. Statistical analysis is employed to illustrate the variances and differences between these retailers.

Findings

The study illustrates that total leadtime is longer than the sum of the components. This implies that there are non‐value‐added time delays that are occurring between the components and there is still room for improvement. It is also shown that any differences in leadtime between Greek and UK grocery retailers have been effectively eliminated as the entrance of retail multinationals in Greece has forced domestic retailers to improve their logistics systems.

Originality/value

There is a scarcity of papers in the logistics field that cross‐examines the logistics performance of national grocery supply chains. This is addressed via the current paper that reports the results of a comparative study of order lead times for firms operating in two European food retail markets, the UK and Greece. The paper will be beneficial to the strategic thinking of retail logistics managers and will support further empirical research work in that academic field of study.

Details

Supply Chain Management: An International Journal, vol. 14 no. 5
Type: Research Article
ISSN: 1359-8546

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