REVISION: Execution Failures in Retail Supply Chains - A Virtual Reality Experiment
Problem definition: Increasingly, retail store employees find themselves being asked to pick orders from inventory. These tasks are performed under intense conditions and, in many cases, are made more difficult because of high product variety and high degrees of product similarity.
Academic/Practical relevance: It is important to provide quantifiable information about the impact of task complexity and task intensity on worker performance and understand how actions can boost productivity and reduce errors.
Methodology: We conduct a real-effort task in a virtual environment where subjects are to sort cubes into bins. We study task complexity by varying the degree of similarity between the cubes and task intensity by varying the arrival pace of the cube. Beyond traditional descriptive performance analysis we also analyze subjects' movements.
Results: Reducing task complexity by making the cubes more distinct increases productivity by as much as 38.2% and reduces the ...
REVISION: Evaluating Count Prioritization Procedures for Improving Inventory Accuracy in Retail Stores
We compare several approaches for generating a prioritized list of products to be counted in a retail store, with the objective of detecting inventory record inaccuracy and unknown out-of-stocks. We consider both "rule-based" approaches, which sort products based on heuristic indices, and "model-based" approaches, which maintain probability distributions for the true inventory levels updated based on sales and replenishment observations. Our study evaluates these approaches on multiple metrics using data from inventory audits we conducted at European home and personal care retailer dm-drogerie markt. Our results support arguments for both rule-based and model-based approaches. We find that model-based approaches provide versatile visibility into inventory states and are useful for a broad range of objectives, but that rule-based approaches are also effective as long as they are well-matched to the retailer's goal.
New: Customer Preferences for Delivery Service Attributes in Attended Home Delivery
Retailers face increasing competitive pressure to determine how best to deliver products purchased on-line to the end customer. As online retailing grows, so does the need for retailers to establish an appropriate fulfillment strategy. This is particularly true in grocery where the customer must be present to receive perishable goods from the retailer. Attended home delivery requires the retailer and the customer to agree upon a delivery time slot that works for both parties. Customers may exhibit different preferences for the selection of a delivery time slot. Using data from a grocery retailer that performs attended home deliveries, we evaluate customer responses to three delivery attributes, namely, speed, precision, and flexibility. We define speed as the expected time between the placement of an order and delivery, precision as the duration of the offered time slot, and flexibility as the availability of choices across times of the day and days of the week. Our results ...
REVISION: Execution Quality and Chargeback Penalties in Retail Supply Chains
Retailers procure inventory by placing purchase orders (POs) with suppliers. POs specify product price, quantity, quality, delivery times, and other aspects of the fulfillment process, such as carton labeling requirements and packaging formats. When servicing an order, a supplier may fail to meet the fulfillment terms, thus committing a fulfillment error and triggering a chargeback penalty. We collect supplier compliance manuals from 111 retailers to characterize fulfillment errors and chargebacks in practice. The majority of chargeback penalties listed by retailers pertain to execution quality: aspects of the fulfillment process beyond product price, quantity, quality, and delivery time. We use an empirically grounded analytical model in combination with game-theoretic analysis to demonstrate that the chargebacks most commonly used in practice do a poor job coordinating supply chains around execution quality. This result contradicts the recommendations in the trade literature.
REVISION: Modeling the Behavior of Patients Who Leave the Emergency Department Without Being Seen
Queue abandonment has a significant impact on system performance. However, the key drivers for abandonment, particularly in observable systems, are not well understood. To better inform our understanding of abandonment behavior, we study the effect of three operational drivers of abandonment from a hospital emergency department (ED), namely, waiting time, queue length, and observed service rate. We confirm that all three factors affect a patient's propensity for leaving the waiting area without being seen by a physician (LWBS), i.e., abandoning the queue. Further, these factors interact with each other in a non-linear fashion. Both ED crowding and observed service rate influence a patient's perception of waiting time. Moreover, patients are not homogenous in their abandonment response and we observe behavior that is distinct for patients with severe conditions. Specifically, patients who report to a congested ED with more severe conditions are more inclined to abandon the ED early in ...
Update: Execution Quality and Chargeback Penalties in Retail Supply Chains
Retailers procure inventory by placing purchase orders (POs) with suppliers. POs specify product price, quantity, quality, and delivery times as well as other aspects of the fulfillment process, such as bar code standards and placement, carton labeling requirements, and packaging format. Retailers expect suppliers to adhere to fulfillment terms to enable supply chain optimizations, e.g., automation and pack-by-store product flows. When servicing an order, a supplier may fail to adhere to the fulfillment terms, thus committing a fulfillment error and triggering a chargeback penalty. Chargebacks reduce supplier revenues, transferring billions of dollars from suppliers to retailers annually. We collect supplier compliance manuals from 111 retailers to characterize fulfillment errors and chargeback penalties in practice. We find that the majority of chargeback penalties listed by retailers pertain to execution quality: i.e., aspects of the fulfillment process beyond product price, ...
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REVISION: Consistency and Recovery in Retail Supply Chains
Practitioners and researchers describe inventory service level with metrics that communicate the likelihood of demand fulfillment without considering the on-going capabilities of the supplier, e.g., in-stock and _ll rate. We develop a method for measuring inventory service level that incorporates such supplier capabilities, namely consistency (the ability of a supplier to fulfill orders repeatedly) and recovery (the ability of a supplier to fulfill orders after a lapse in service). Using data from two retail supply chains, we illustrate our approach. To demonstrate the impact of consistency and recovery on supply chain performance, we model a retailer purchasing from competing suppliers with different levels of consistency and recovery. The model incorporates the retailer's uncertainty about demand and the retailer's uncertainty about its suppliers' service levels. We characterize how the retailer's orders and profitability change with a supplier's delivery performance through ...
REVISION: The Impact of Supplier Inventory Service Level on Retailer Demand
To set inventory service levels, suppliers must understand how changes in inventory service level affect demand. We build on prior research, which uses analytical models and laboratory experiments to study the impact of a supplier's service level on demand from retailers, by testing this relationship in the field. We analyze a field experiment at the supplier Hugo Boss to deter- mine how the supplier's inventory service level affects demand from its retailer customers. We find increases in historical fill rate to be associated with statistically significant and managerially substantial increases in current retailer orders (i.e., demand, not just sales). Specifically, a one percentage point increase in fill rate, measured over the prior year, is associated with a statistically significant 11% increase in current retailer demand, controlling for other factors that might affect retailer demand. We explore the drivers of this demand increase, including changes in retailer assortment and ...
REVISION: Point-of-Care Testing: Improving Emergency Department Performance through Process Redesign
Hospital emergency departments (EDs) typically rely on central laboratories to analyze patient samples for the purposes of diagnosing and treating patients. Point-of-care testing (POCT) is a process redesign that shifts the analysis of samples from the central lab to the ED. Using a queueing model, we generate hypotheses about how POCT impacts operational performance and then test those hypotheses empirically using data collected from a large, urban, tertiary, academic hospital. Specifically, ...
New: Supply Chain Optimization at Hugo Boss (B) - The M-Ratio
We evaluate the impact of a supply chain pilot implemented at Hugo Boss. This pilot entailed altering the way in which Hugo Boss orders from its suppliers. We explore the challenge of assessing the impact of supply chain change, the link between operational performance and firm performance, and the relationship between sales, inventory, and product availability.
New: Supply Chain Optimization at Hugo Boss (A)
Inventory, Order management cycle, Order processing, Order quantity, Lines of business, Product management, Consumer goods, Department stores, Retail stores, Retailers, Retailing, Supply chain management, Supply chains.