M. Johnny Rungtusanatham

Purpose
With asymmetric investments in exchange (i.e. sourcing) relationships, both sourcing firms and suppliers invest but one party invests more than the other. This paper aims to examine the associations between asymmetric (i.e. unequal) investments in exchange relationships and the tendency of the strategic supplier base to shirk as perceived by the sourcing firm, as well as the moderation effects of cross-functional information sharing within a sourcing firm on these associations.

Design/methodology/approach
The authors analyzed survey data from 500 US middle-market manufacturers via ordinary least squares (OLS) estimation. Besides appropriate controls, the authors also employed the heteroskedasticity-based instrumental variable approach to ensure that analytical inferences are not influenced by endogeneity.

Findings
On average, when a sourcing firm invests more than its strategic supplier base into their exchange relationships, the perceived tendency of the strategic supplier base to shirk decreases. This negative association is more pronounced when a sourcing firm facilitates cross-functional information sharing. Conversely, when the strategic supplier base invests more than the sourcing firm into their exchange relationships, the perceived tendency of the strategic supply base to shirk is not detected unless the sourcing firm facilitates cross-functional information sharing.

Originality/value
Prior research reveals that investments by a sourcing firm or by suppliers influence supplier shirking. This paper provides new evidence as to how and why asymmetric investments in exchange relationships relate to the perceived tendency of the strategic supplier base to shirk and new evidence as to how and why cross-functional information sharing safeguards against this tendency when investments in exchange relationships are unequal.

Despite the criticality and expense of spare parts, many firms lack a coherent strategy for ensuring needed supply of spare parts. Moreover, scientific research regarding a comprehensive spare parts strategy is sparse in comparison with direct material. Our research identifies and tests three literature‐based, theoretically anchored attributes that influence a buyer’s preference for inventory ownership and inventory placement when managing the stock of a critical spare part. Our findings indicate that item specificity and item supply uncertainty are useful in predicting a buyer’s preference for managing the inventory of a critical spare part. Furthermore, we find that buyers have (1) a strong preference for consignment‐based inventory management approaches, (2) a bias against inventory speculation despite its use in practice and analytical models, and (3) a strong preference for inventory postponement when the level of supply uncertainty is low.

How and why is the association between historical supplier performance and strategic relationship dissolution moderated by an unintentional but serious supplier error? Adopting Assimilation‐Contrast Theory, we propose that this moderation effect can be either negative or positive. As an empirical test, we collected and analyzed data from 256 sourcing professionals participating in a scenario‐based role‐playing experiment. After confirming experimental checks, we fitted a general linear mixed effects model to the data with appropriate controls. We find, ceteris paribus, that a critical‐component supplier with stellar historical performance is less likely to be terminated by the manufacturer than one with marginally‐acceptable historical performance. However, when a critical‐component supplier with stellar historical performance errs, its likelihood of being terminated by the manufacturer increases by a greater extent than when a supplier with marginally‐acceptable historical performance commits the same mistake. This positive supplier performance penalty effect contributes to the buyer‐supplier relationship dissolution literature by identifying how and why the deterrence to relationship dissolution typically engendered by stellar historical supplier performance does not hold. Our results have implications for how manufacturers should evaluate critical‐component suppliers and how critical‐component suppliers should manage ongoing strategic relationships with manufacturers.

Supply chains are large, complex, and often unpredictable. Purchasing and supply managers and supply chain risk managers need methods and tools to enable them to quickly understand how unexpected disruptions in the supply chain start and grow and to what extent will they negatively impact the flow of goods and services. This paper introduces a methodological approach that can be used by both researchers and managers to quickly visualize a supply chain, map out the propagation path of disruptive events from the supply side to the end customer and understand potential weaknesses in the supply chain design; taking into account the structure, connectivity, and dependence within the supply chain. The approach incorporates a Petri net and Triangularization Clustering Algorithm to offer insights into a supply chain network’s vulnerabilities and can be used to efficiently assess supply chain disruption mitigation strategies, especially in complex and difficulty to analyze supply chain systems.

In the years following an initial public offering (IPO), firms have to manage portfolios of customers and suppliers in order to achieve growth goals during this particularly uncertain time in a firm’s lifecycle. The current research sheds light on three key questions: (1) Do firms benefit from conducting a large portion of business with a large customer or supplier? (2) Is it beneficial if the focal firm represents a large portion of business for customers and suppliers? And, (3) is balanced portfolio dependence helpful to a focal firm? The extant literature, drawing insights from the logics of power and embeddedness, is divided on these questions. We utilize a secondary data set of focal firms (post-IPO) and their portfolios of relationships with customers and suppliers to explain where each theoretical perspective applies to the management of supply chain portfolios.

We analyze the direct and indirect effects of two critical-component supply-disruption attributes (CONTROLLABILITY and RESPONSIBILITY) on supplier non-retention post disruption. Using a scenario-based role-playing experiment with 253 purchasing professionals, we find that the likelihood that a recovery lead (i.e., the individual assigned to the disruption-recovery task) recommends non-retention of an incumbent critical-component supplier post disruption is higher when the recovery lead perceives that the supplier, rather than nature, had control over the supply disruption. Moreover, this direct effect is partially explained by the amount of ANGER that the recovery lead feels due to the supply disruption. Neither the direct nor the indirect effect of RESPONSIBILITY on supplier non-retention post disruption is, however, detected. This paper is among the first to offer theoretical and empirical evidence that supplier non-retention in a supply-disruption context is a function of who had control over the supply disruption. Furthermore, this paper considers the effects of emotions and illustrates that supply-management decisions are not based solely on rational (i.e., cognitive) processes but also on emotional processes. Finally, this paper challenges conceptual arguments about the association between supplier selection and retention, at least in the supply-disruption context and with regard to the individual participating in both tasks. Our findings also have several managerial implications for supplying and buying firms.

Accidents involving large commercial trucks kill over 3,000 motorists every year in the United States. A substantial number of these accidents stem from truck drivers operating their trucks while excessively fatigued. This concern has resulted in regulatory agencies establishing hours-of-service (HOS) rules that carriers must ensure their drivers abide by. In this study we examine the relationship between carriers’ capability at monitoring their truck drivers using electronic technologies and carrier-level compliance with HOS rules. Drawing on principles from deterrence theory, we explain why this relationship should be sigmoidal (S-shaped) in nature such that motor carriers receive the greatest gains from investing in electronic monitoring capability when they have a moderate level of this capability. We subject our theorized prediction to empirical testing using a longitudinal research design that combines primary data on motor carriers’ electronic monitoring capability and secondary data from regulators regarding carrier-level compliance with HOS rules. Results from our econometric analysis corroborate the hypothesized sigmoidal relationship, which stands up to stringent robustness testing. These results hold important implications for theory and practice.

Business function‐specific stand‐alone enterprise applications (SEAs) are displacing functionally integrated enterprise resource planning (ERP) systems, despite strong empirical support for the business benefits of the latter. This study explores the conditions under which it may be more effective to use a set of SEAs instead of a single‐suite ERP system, and vice versa. Based on Organizational Information Processing Theory, we expect differences in effectiveness to grow in prominence when the uncertainty of the operating environment increases, that is, when operational glitches in production processes become more frequent. Extending the existing literature, we postulate that high functional differentiation is a precondition for SEAs to be more effective than an ERP system, hypothesizing that the level of functional interdependence ultimately determines which type of software is superior for a given production process. We test our hypotheses using data collected from 163 make‐to‐order (MTO) production processes nested within 73 manufacturing plants and seven supply chains of complex, high‐tech machinery. Results show that when functional interdependence is low, the negative effect of operational glitches on delivery performance is effectively mitigated in MTO production processes wherein process‐related information is managed predominantly using SEAs; conversely, when functional interdependence is high, using an ERP system is more effective. Our findings offer practical guidelines as to when to use SEAs versus an ERP system while also integrating and updating the findings of earlier empirical research, in which each has been analyzed separately.

Small to medium-sized enterprises (SMEs) are moving their manufacturing operations from low-cost countries back to high-cost countries, reversing earlier offshoring decisions. These reshoring decisions cannot be completely explained by changing location-related costs. To better understand why SMEs are reshoring, we evaluate nine product-line decisions – six to reshore and three to remain offshore – and codify four empirical observations. We then integrate these observations with relevant literature to develop and analyze a system dynamics model of SMEs’ offshoring and reshoring decisions. Synthesizing the above, we articulate propositions regarding SMEs’ reshoring decisions. We conclude by discussing these decisions through the lens of the heuristic decision-making literature, providing managerial and policy implications.

The trucking industry is the lifeblood of supply chains. Truck driver turnover and motor carrier safety are two salient issues affecting this industry. While turnover by itself presents a challenge due to the cost of replacing drivers, it takes on additional urgency because turnover may affect motor carrier safety. However, driver turnover research has focused predominantly on identifying factors affecting turnover, thus resulting in limited understanding of how turnover affects motor carrier performance, particularly with regard to safety. This reduces our ability to provide guidance to managers who have to address driver turnover. In this article, we extend prior research by drawing from several theoretical lenses to develop and test theory of the turnover–safety relationship. Furthermore, we investigate whether carrier managers can mitigate the effect of turnover on safety by embedding knowledge in carriers’ routines using activity control, a formal management control mechanism. We employ a longitudinal data set composed of primary and secondary data sources to test our hypotheses. We find the turnover–safety relationship is best characterized by a monotonic negative attenuated pattern and that high levels of activity control mitigate the negative effect of driver turnover on motor carrier safety in domains more under drivers’ control.

The dissolution of a buyer-supplier relationship can have significant implications for both firms. This paper adopts a process-based research approach to examine the buyer-supplier relationship dissolution process. Using the exemplar case of the Ford-Firestone breakup, we cull from newspaper stories, congressional hearing documents, and press releases to code a historical sequence of events. We then use a mixed-method approach to process study, combining techniques of both qualitative and quantitative analyses to identify patterns within the event sequence. This approach provides researchers with a number of advantages over the traditional retrospective interview or observational and ethnographical material documentary. These include improved reliability by avoiding the problem of memory loss in retrospective interviews, reduced informant bias and/or loss of objectivity, increased single-case generality, and longitudinal design efficiency. Findings show that under the stress of a product failure, buyer-supplier dissolution is preceded by cycles of blame, market and government authority pressure, and organizational restructuring by the buyer. These findings suggest dissolution dynamically depends on both how the buyer and supplier interact with one another, and how they individually interact with external stakeholders.

That a manufacturer should align its implementation of Total Quality Management (TQM) to the external environment it faces has been indirectly argued for long. Theoretical and empirical evidence for this argument has, unfortunately, been lacking. Our research remedies this knowledge gap. Borrowing structural contingency theory and the concept of fit, we hypothesised and report three findings. First, we found contrasting normative TQM profiles between a high vs. a low level of environmental uncertainty. Second, we identified significant detrimental impact on firm performance when a firm deviates its TQM implementation from the normative TQM profile prescribed for a specific level of environmental uncertainty. Third, we also discovered discernible differences in the deterioration in firm performance between a positive vs. a negative deviation from the normative TQM profile. These robust findings were derived from analysing secondary survey data from 330 Chinese manufacturing firms via profile deviation analysis, MANOVA, MANCOVA and OLS regression. Contrary to the literature, manufacturers operating in a volatile external environment should pursue and benefit from TQM implementation. Manufacturers should, however, not seek to implement TQM to the fullest extent nor implement TQM half-heartedly. Instead, manufacturers should benchmark best performers as to what the normative TQM profile is and pursue their own TQM implementation to minimise deviations from the normative TQM profile.

Does process management encompass both process exploitation and exploration? Conventional thought long has suggested that exploitation is the very nature of process management, but recent literature suggests a perspective broader in scope. Our review highlights three problems that plague process management research based on conventional thought, which also has suffered from insufficient theory building and empirical validation. Here, we emphasize the duality of change and re-conceptualize process management to provide a comprehensive definition via capability lens. Our view of process management illuminates that the two routes organizations can take to a glean process knowledge: process exploitation and process exploration, both of which are not only essential but complementary. Basing upon scale development using 330 responses from Chinese manufacturers in the Pearl River Delta, this hypothesis is supported. We find that the inclusion of process exploration provides process management a better prediction of different business performances. Our study also reveals that prevailing theories predicting the relationship between process exploitation and exploration find little support from the results.

Research suggests that flexible manufacturing resources, customer involvement, and product management tools contribute to a high level of mass customization capability. Conceptualizing these antecedents as resource types, we examine hypotheses about their direct and complementary effects on mass customization capability. Analyzing secondary survey data from 238 plants in eight countries and three industries via hierarchical linear regression, we find that each individual resource type has a positive direct effect on mass customization capability, as long as the levels of the other two resources are at their sample mean value. Probing these results via conditional effects and marginal effects plots provides partial support for the complementarity argument, and unveil complex nonlinear interactions among the three resource types. When the level of one resource type is low, the two remaining resource types exhibit a strong bivariate complementary effect on mass customization capability. Conversely, when one resource type is at a high level, the complementary effect on mass customization capability of the two remaining resource types disappears and is replaced by a cancellation effect. The detection of complementary effects and of cancellation effects are two specific theoretical contributions to the literature on how manufacturers can enhance their capability to mass customize.

To gain competitive advantage, original brand manufacturers (OBMs) need to understand how operations and marketing cooperate to achieve performance. Doing so can guide OBMs to make appropriate actions to develop their operational and marketing capability, and foster collaboration between the two functions. Using data collected from 560 Chinese OBMs, the authors investigated the joint impact of total quality management (TQM) initiated by operations and brand-building undertaken by marketing on product quality, brand performance and customer satisfaction and loyalty. The results revealed that the two efforts interact and generate gains that individual efforts cannot realize. Not only their interaction generates additional value to product quality, the results also broadly substantiated the authors’ hypothesis that TQM and brand-building take different paths to affect customer satisfaction and loyalty. In total, although brand-building, as matter of inputs, may impose stronger influences on the performances, OBMs should not neglect TQM, as investing in both is critical to the firm’s long-term success.

Operations Management and Supply Chain Management (OM/SCM), as a discipline, can benefit from proper theorizing to address persistent urgings for better and new theories. This paper hopes to inspire more theorizing engagements through the formal process of metaphorical transfer. Metaphorical transfer transforms casually-invoked metaphors in everyday language into theory-constitutive metaphors. This transformation process first mandates theorizing to ensure equivalence between the domain of the metaphor and that of a target phenomenon or research problem of interest. Second, theorizing during metaphorical transfer occurs when abstracted insights intended to govern both the metaphor and target phenomenon materialize. Finally, metaphorical transfer supports borrowing of theories from outside of OM/SCM for testing within OM/SCM by safeguarding against common mistakes. This paper demonstrates metaphorical transfer via the example of divorce and strategic buyer–supplier relationship dissolution and concludes by highlighting other metaphors that may be invoked for a number of exemplary supply chain relationship phenomena.

The popular press has begun to pay attention to the phenomenon of “reshoring”. The task of supply chain management researchers with regard to this phenomenon should be to clarify what it is; to explore whether it is really a new phenomenon; and, paraphrasing (Simon, 1967; p. 1), to conduct research into the reshoring phenomenon so as to contribute not only to the science but also to the practice of reshoring. This essay is a starting point for our efforts in that direction. We make a number of informed assertions about reshoring—assertions that are juxtaposed in relevant literature and that aim to (a) define what reshoring is and is not; (b) explain why the reshoring phenomenon should not be examined in isolation but rather as a reversion of a prior offshoring decision; (c) describe how the reshoring phenomenon might evolve as societies, worldwide, place increasing emphasis on the environmental impact of business decisions; and (d) articulate a plausible scenario in which reshoring eventually hampers employment in Western nations. We hope these assertions will, in turn, jumpstart an intellectual discourse, through scientific research, into the what, how, when, where, and why of the reshoring phenomenon.