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 ...
New: Understanding the Behavioral Drivers of Execution Failures in Retail Supply Chains: An Experimental Study Using Virtual Reality
We conduct a real-effort experiment in an immersive virtual environment in order to quantify the role of product similarity in execution failures in a retail setting. In our experiments, subjects must identify and sort two types of products based on their observable characteristics. When the two products are very similar, performance is substantially lower (with both more sorting errors and more products left unsorted) than when the products are more dissimilar. Introducing a clear visual cue to distinguish the products improves execution when the products are dissimilar (by lowering sorting mistakes) and, even more so, when they are similar (both by reducing sorting mistakes and the number of products unsorted). In the latter case the average increase in overall performance is over 22 percentage points. Our results suggest that there may be important gains from taking ease of execution into account in the design of products, product packaging, and labeling.
New: In Search of Intra-Firm Bullwhips
Researchers exploring the bullwhip effect and its impact on supply chain performance utilize the conventional bullwhip measure, i.e., the ratio of variances in the stream of orders placed relative to orders received. Building upon this existing research, we decompose the conventional bullwhip measure into three intra-firm bullwhips, namely, the shipment, manufacturing, and order bullwhips. We define the shipment bullwhip as the variance in shipments relative to orders received, the manufacturing bullwhip as the variance in manufacturing output relative to shipments, and the order bullwhip as the variance in orders placed relative to manufacturing. We demonstrate that the conventional bullwhip is the product of each of these component bullwhips. Moreover, using monthly, industry-level U.S. Census Bureau data, we characterize the magnitude of each of these component bullwhips across industries, examine correlations between them, and identify factors that may be associated with industry ...
New: Inventory Management with Fulfillment Errors and Rework
Retailers replenish inventory by placing purchase orders (POs) with suppliers. POs stipulate terms for fulfillment beyond order quantity and delivery time, such as specifications for electronic data interchange, carton labeling, and retail tickets. These fulfillment terms are instrumental for optimized supply chains employing automation and techniques such as pack-by-store. When fulfilling an order, a supplier may commit a fulfillment error, i.e., the supplier may fail to adhere to the terms specified by the PO. Prior research has shown that the retailer can correct the majority of fulfillment errors through rework. In this article, we study how inventory policy and cost change in the presence of such correctable fulfillment errors. Further, we examine how retailers respond to fulfillment errors in practice by characterizing commonly used penalties, or chargebacks. Our research provides guidance to managers seeking to mitigate fulfillment errors and demonstrates that chargebacks ...
REVISION: Execution Quality: An Analysis of Fulfillment Errors at a Retail Distribution Center
Purchase orders specify many aspects of the fulfillment process, including item quantity, delivery time, carton labeling, bar coding, electronic data interchange, retail ticketing, and others. These fulfillment terms are instrumental for highly optimized supply chains employing automation and techniques such as pack-by-store. When fulfilling a purchase order, a supplier may commit a fulfillment error, i.e., the supplier may fail to adhere to the terms specified by the relevant contract. We present a study of the fulfillment errors that occur in practice using data collected from a major retailer's distribution center. While fulfillment errors involving incorrect product quantities and delivery times have received the most attention in the literature, we find that the majority of fulfillment errors in the context we study involve documentation, bar coding, and retail ticketing. We refer to these as correctable fulfillment errors, since they are amended at the retailer's distribution ...
REVISION: Modeling the Behavior of Patients Who Leave the ED Without Being Seen
Abandonment in queues has long been recognized as having a significant impact on system performance. Yet, our empirical understanding of the key drivers for abandonment, particularly in observable systems, is limited. Furthermore, most models of abandonment assume that it occurs after a length of time sampled from an exogenous distribution, with no dependence on the system. However, discrete-event simulation, a commonly used tool for decision making in service systems, permits much more complex (and hence accurate) models of abandonment than those simply based on time in system. This paper studies three key drivers of abandonment, namely, waiting time, queue-length, and service rate, which are also tractable for modeling. Using operational data from a hospital emergency department, we show that all three factors affect a patient’s propensity for leaving the waiting area without being seen by a physician (LWBS). Further, these factors interact with each other in a non-linear fashion. ...
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, we
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.