the relationships among supply chain characteristics logistics and manufacturing strategies and performance

UMI Number: 3093649 Copyright 2003 by Gillyard, Angelisa Elisabeth All rights reserved UMI Microform 3093649 Copyright 2003 ProQuest Information and Learning Company All rights reserved This microform edition is protected against unauthorized copying under Title 17, United States Code ProQuest Information and Learning Company 300 North Zeeb Road PO Box 1346 Ann Arbor, MI 48106-1346 Copyright by Angelisa Elisabeth Gillyard 2003 ABSTRACT Supply Chain Management (SCM) offers the possibility of increased customer service while minimizing costs Before choosing what type of supply chain strategy to pursue, a firm must first evaluate the type of supply chain(s) in which it participates The type of functional strategies chosen should complement the type of supply chain(s) in which the firm is a member Certain manufacturing and logistics strategies are more appropriate given the characteristics of the supply chain This thesis explores the relationships among supply chain characteristics, logistics and manufacturing strategies, and firm performance In addition, this study proposes an alternative logistics strategy framework using the competitive priorities of cost, quality, delivery and flexibility Multivariate analysis of variance (MANOVA) was used to test the hypotheses Results indicate limited support for the notion that successful firms participating in agile supply chains choose to emphasize different logistics and manufacturing strategies than less successful firms in agile supply chains The same holds true for firms participating in lean supply chains Results from the logistics strategy factor analysis demonstrated that the proposed framework is not only a feasible one, but one that is effective at describing the logistics strategy ii Dedicated to my Mother and Father iii ACKNOWLEDGMENTS First and foremost, I would like to thank God for giving me the strength and courage to pursue this degree and to see it to completion I thank my adviser, Martha Cooper, for her continued support and mentorship throughout my matriculation in the doctoral program Her encouragement has been invaluable throughout this entire process I am grateful to my committee, Glenn Milligan and John Current, for their continued support and cooperation Their comments and suggestions have contributed much to the improvement of this document I also wish to thank my family Without their constant and unconditional love, support and encouragement, I would not be who and where I am today Thanks are also extended to the other doctoral students who were by my side throughout this journey Their intellectual discussions and words of encouragement made the doctoral program more enjoyable This research was supported in part by a grant from The Ohio State University’s Alumni Grants for Graduate Research and Scholarship and the GE Faculty for the Future Fellowship iv VITA September 13, 1974 ………………………………Born - Atlanta, GA 1996 ………………………………………………B.S Mathematics, Spelman College 1998 ………………………………………………M.S Management, Georgia Institute of Technology 2002 ………………………………………………M.A Business Administration, The Ohio State University 1998-2002 ……………………………………… Graduate Teaching and Research Associate, The Ohio State University PUBLICATIONS "Career Patterns of Women in Logistics: Emphasis on Mentoring," Martha C Cooper, Cuneyt Eroglu, Angelisa Gillyard, Priyatabh P Sharma, Council of Logistics Management Conference Proceedings (CD-ROM), 2002 Cited in several trade publications, including Inventory Management Report, New York, New York: IOMA, December 1, 2002 "Career Patterns of Women in Logistics," Martha C Cooper, Angelisa Gillyard, and Antuza Sandu, Council of Logistics Management Conference Proceedings, 2001 Cited in several trade publications, including Inventory Reduction Report, New York, New York: IOMA, December 2001, p 10, and Managing Logistics, Issue 12-01, p.12 v "Career Patterns of Women in Logistics," Martha C Cooper and Angelisa Gillyard, Council of Logistics Management Conference Proceedings, 2000, pp.75-97 Cited in several trade publicatio ns, including Inventory Reduction Report, New York, New York: IOMA, December 2000, pp.3, FIELDS OF STUDY Major Field: Business Administration Studies in Supply Chain Management Minor: Logistics Management vi the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance TABLE OF CONTENTS Abstract ………………………………………………………………… Page ii Dedication ……………………………………………………………… iii Acknowledgments ……………………………………………………… iv Vita …………………………………………………………………… v List of Tables ………………………………………………………… ix List of Figures ………………………………………………………… xi Chapters: Introduction …………………………………… Literature Review …………………………… 10 Supply Chain Management …………………… Hypotheses – ……………………… Manufacturing Strategy ……………………… Hypotheses – ……………………… Logistics Strategy …………………….……… Hypotheses – 12 …………………… The Model …………………………………… Contributions ………………………………… 10 19 21 24 25 30 34 36 Methodology ………………………………… 38 Subjects ……………………………………… 38 Instrumentation ……………………….……… 39 Supply Chain Type…………………… 39 vii the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance D Please indicate the response that most closely applies to the product category listed in Part A (circle one for each) Marketplace Demand Stable Volatile Product Variety (# of distinct products in the product line) Low High Product Life Cycle Long Short Profit Margin High Low Information Sharing Obligatory Optional Strongly Disagree Disagree No Opinion Agree Strongly Agree This product line is a commodity good Price is an order winner for our product Availability is an order winner for our product Our dominant costs are production, distribution and storage costs Our dominant costs are obsolescence and stock out costs Our main purchasing policy from suppliers is to purchase capacity Our main purchasing policy from suppliers is to buy goods We rely primarily on mathematical models as our main forecasting mechanism We rely primarily on managerial experience as our main forecasting mechanism 123 the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance Strongly Disagree Disagree No Opinion Agree Strongly Agree Maintaining a level production schedule is critical to maintaining profitability for this product line Using end customer consumption data is critical to maintaining profitability for this product line When choosing suppliers, they must be able to rapidly adjust their capacity to meet our needs Approximately how long is the average product life cycle for this product line? What is your contribution margin for this product line? (check one) When choosing suppliers, rank in order from most important (1) to least important (5) the following characteristics: _ _ _ _ _ _ months years less than 5% greater than 5% and less than or equal to 10% greater than 10% and less than or equal to 20% greater than 20% and less than or equal to 40% greater than 40% and less than or equal to 60% greater than 60% Cost of materials or services Delivery speed Delivery reliability Flexibility of supplier to adjust rapidly to significant changes in our orders Quality of materials Our average stock-out rate is approximately _ % for this product line Our average forecast error at the time production is committed is approximately _ % for this product line The lead-time required for a made-to-order product is _ days for this product line _ N/A The product variety for this product line is approximately _ variants The average forced end-of-season or end-of-life markdown, as a percentage of full price is approximately % for this product line N/A 124 the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance E The following questions are intended to assess your LOGISTICS competitive priorities Please indicate the degree of emphasis that your company/division currently places on the following activities to remain competitive in the product category listed in Part A (circle one for each) No Emphasis Very Little Emphasis Moderate Emphasis Strong Emphasis Extreme emphasis Achieve maximum efficiency from distribution Gain control over activities that result in purchasing and distribution costs Improve competitiveness of price Minimize transportation cost Increase labor productivity Increase capacity utilization Reduce inventory Improve accuracy of filling orders We absorb the cost of freight and handling on returns due to shipping damages or products shipped in error We give adequate advance notice of price changes to our customers Quality/durability of packaging Adherence to our customers’ specific shipping instructions Achieve coordinated physical distribution to customers served by several business units Reduce length of promised lead times on emergency/ASAP orders for our customers 125 the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance No Emphasis Very Little Emphasis Moderate Emphasis Strong Emphasis Extreme emphasis Ability to expedite emergency/ASAP orders for our customers High fill rate on ad/promotional orders for our customers High fill rate on normal reorders Reduce length of promised lead times on normal orders Reduce length of promised lead times on ad/promotional orders to our customers Short delivery/transportation time to our customers Delivery on due date to our customers Wide geographic range of delivery for our customers Logistics system responsiveness Quick and effective response to changing customer needs Quick and effective response to changing supplier needs Accommodating customers’ special requests Developing or maintaining specific logistics strategies to deal with distinct customers High fill rate on emergency/ASAP orders Our ability to handle defective product returns Our ability to rapidly adjust capacity _ None _ Some _ All Are any of your logistics activities outsourced? 126 the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance F The following questions explore the PERFORMANCE of your firm Indicate your business’s position on the following dimensions over the past three years compared to your key competitors with respect to the product line identified in Part A (circle one for each) Significantly Lower Approximately Equal Significantly Higher Return on investment (ROI) Growth in ROI Return on sales (ROS) Growth in ROS Return on Assets Profits as a percent of sales Sales growth Market share growth Market share Net income before taxes Product performance Product features Product conformance to specifications Product durability Product serviceability Product attractiveness as perceived by the customer Overall product quality as perceived by the customer 127 the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance G This section is designed to collect demographic information about your company Please answer the following questions with your best estimate if exact data are not available In what industry does your company participate? (Check all that apply) _ Appliance _ Electronics _ Automotive _ Food Related _ Building Materials _ Metals/Metal Working _ Chemicals/Plastics _ Office Equipment _ Computer Hardware _ Paper & Packaging _ Other (Please specify): _ What is the nature of your company’s primary business? _ Manufacturing _ Merchandising _ Other (Please specify): What is the total number of employees in your company/division? _ Less than 100 Employees _ 101-500 Employees _ 501-2,500 Employees _ 2,501-10,000 Employees _ 10,001-30,000 Employees _ 30,001-50,000 Employees _ Over 50,001 Employees How old is your company? _ Less than years old _ 5-15 years old _ 16-35 years old _ 36-70 years old _ over 70 years old 128 _ Petroleum _ Pharmaceuticals _ Textiles/Clothing _ Wholesale/Retail the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance _ Leanness (cost efficiency) _ Mostly leanness _ Equally leanness and agility _ Agility (flexibility and responsiveness) _ Mostly agility _ Don’t Know Our supply chain for this product line primarily emphasizes: (choose one) What is your company’s annual gross sales dollars? (check one) _ less than $1 Million (M) _ greater than $1M and less than or equal to $5M _ greater than $5M and less than or equal to $10M _ greater than $10M and less than or equal $50M _ greater than $50M and less than or equal to $100M _ greater than $100M and less than or equal to $500M _ greater than $500M and less than or equal to $1 Billion _ greater than $1 Billion and less than or equal to $5 Billion _ greater than $5 Billion and less than or equal to $10 Billion _ Over $10 Billion What is your company’s overall position in the primary market targeted by the product line listed in Part A? _ Market Leader _ Dominant Player (Top 5) _ Other How many major competitors are there in the primary market targeted by the product line listed in Part A? _ _ _ _ _ _ One Two to five Six to ten Eleven to twenty More than twenty No opinion 129 the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance the.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performancethe.relationships.among.supply.chain.characteristics.logistics.and.manufacturing.strategies.and.performance