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PurposeIn the present study, the authors have explored the research questions, “How do companies in the engineering and automobile manufacturing sector in India determine the coordination strategy with their suppliers?” and “Can we develop a framework which helps the company adopt a particular coordination strategy?” The authors also aimed for developing a generalizable theory of supply chain coordination (SCC) strategy.Design/methodology/approachThe authors have studied upstream SCC practices at eight Original Equipment Manufacturers (OEMs) in the Indian engineering manufacturing and automobile sector and identified 11 types of SCC in three categories of suppliers, namely large, medium and small. Each SCC is characterized by the category of items as the authors found the OEMs follow different strategies for different types of items. Initially, the authors started the study with the objective of strategy discovery, and later on, they prescribed a strategic framework based on the consolidated knowledge that they gathered at the discovery phase. The authors propose a SCC strategy framework consisting of four dimensions, i.e. time horizon, the formality of engagement, price and volume for the upstream supply chain. With the framework, the authors have identified the driving factors for choosing a particular strategy. The authors have found both OEMs and suppliers in India prefer to have a long-term relationship for building trust, which helps both the OEMs and the suppliers to go the extra mile when needed. Apart from large suppliers supplying technology and proprietary items, OEMs prefer to have an informal relationship so that they enjoy flexibility and attain agility. The price and volume dimensions are dependent on who enjoys more bargaining power.FindingsThe authors propose a SCC strategy framework consisting of four dimensions, i.e. time horizon, formality of engagement, price and volume for the upstream supply chain. With the framework, the authors have identified the driving factors for choosing a particular strategy. The authors have found that both OEMs and suppliers in India prefer to have a long-term relationship for building trust, which helps both the OEMs and the suppliers to go the extra mile when needed. Apart from large suppliers supplying technology and proprietary items, OEMs prefer to have an informal relationship so that they enjoy flexibility and attain agility. The price and volume dimensions are dependent on who enjoys more bargaining power.Originality/valueThis study made a substantial contribution to the literature by presenting a SCC strategy framework, ISCM (Indian Supply Chain Coordination Model). To the best of the authors’ knowledge, in the literature, there was no concrete framework for analyzing the coordination strategy specific to the Indian situation. The framework proposed has been derived based on empirical findings; hence, it is not a conceptual one. The authors also developed a supply chain typology. This study made a substantial contribution to the literature by presenting a SCC strategy framework, ISCM. To the best of the authors’ knowledge, in the literature, there was no concrete framework for analyzing the coordination strategy specific to the Indian situation. The framework proposed has been derived based on empirical findings; hence, it is not a conceptual one. The authors also developed a supply chain typology.

This study investigates a supply chain of fresh produce with consideration of option contracts and where stochastic market demand depends on freshness-keeping effort. Firstly, we investigate a benchmark scenario of an integrated supply chain with freshness effort and consideration of decreases in both the quality and quantity of produce while in the supply chain. Secondly, we introduce call, put, and bidirectional option contracts to mitigate risks of the retailer. A call option contract can reduce the underage risk, while a put option contract can reduce the overage risk, and a bidirectional option contract can reduce bilateral risks. We derive the optimal ordering decisions and freshness-keeping effort for a retailer in a supply chain of fresh produce with option contracts, and the conditions for achieving coordination of the supply chain. We find that the bidirectional option results in the highest option price and lowest option order quantity, while the call option results in the lowest initial order quantity and the put option results in the highest initial order quantity. Finally, numerical examples are given to demonstrate the impacts of various parameters on optimal decision-making. This paper provides managerial insights for reducing risk in fresh produce supply chains.

Purpose Agriculture and cultivation firms are facing severe competition in the saturated market. Due to the characteristics of heavy assets, low investment return, long cycle and high price fluctuation, agri-food firms require innovations for capital support. The purpose of this paper is to provide valuable insights on how firms in the food/agricultural industry approach innovations and reinforce their advantages through functional and structural innovations by adopting supply chain finance (SCF). Design/methodology/approach This research adopts a single-case study methodology to investigate the innovations and mechanisms taking place at H Corp Agriculture Group (H Corp hereafter), a Chinese egg company. Findings The findings of this paper indicate that SCF could have a great impact on supply chain management through functional and structural innovations throughout the supply chain and solve the capital constraint problems in the agricultural development process, promoting the implementation of the integration strategy as well as innovation in the agricultural industry chain. The research also shows that supply chain structural and functional innovations could promote corporate social responsibility (CSR) and creating shared value (CSV). Research limitations/implications The research contributes to the application of SCF mechanisms and the realization of CSV and CSR jointly – both in the literature and in firms’ practices. It also contributes to the extension of structural and functional innovations and vertical integration of the supply chain. However, generalizability and universality are insufficient for a single case study in the specified industry. Data collection and quantitative analysis could be extended for further research. Originality/value The study addresses the need for comprehensive research on SCF and its applications. It proposes effective and efficient strategies for agri-food firms applying SCF to overcome industry capital constraints and develop competitiveness. It also provides a balanced and positive circulation between economic value and social value, realizing CSR and CSV.

In reverse supply chain (RSC) systems, disruptions in the collection process of used items may negatively influence the efficiency of RSC participators. Inspired by a real case study, this paper contributes to the RSC systems coordination literature by analyzing the effect of collection disruptions on the efficiency of an RSC system with dual collection channels using a coordination contract approach. Moreover, this study explores the effect of collection competition between two collection channels (collector channel and remanufacturer channel) on the acquisition prices offered to consumers as incentive schemes for returning the used items. This study determines the equilibrium solutions for selling prices of remanufactured products, acquisition prices, and transfer price under decentralization, centralization, and coordination settings. Additionally, this study incorporates the impact of collection disruptions into the remanufacturer’s and collector’s problem considering four scenarios. Furthermore, this study proposes a disruption-based two-part tariff contract to accomplish channel coordination in the RSC system with dual-collection channel under collection disruptions. Our finding reveals that the suggested coordinated scheme efficiently coordinates the disrupted RSC with dual collection channels even when under high possibility of collection disruptions. Moreover, our coordination plan is of environmental and economic benefits, as it can boost the return quantities and can increase RSC participators’ profits.

This paper studies government subsidies for green technology adoption while considering the manufacturing industry’s response. Government subsidies offered directly to consumers impact the supplier’s production and pricing decisions. Our analysis expands the current understanding of the price-setting newsvendor model, incorporating the external influence from the government, who is now an additional player in the system. We quantify how demand uncertainty impacts the various players (government, industry, and consumers) when designing policies. We further show that, for convex demand functions, an increase in demand uncertainty leads to higher production quantities and lower prices, resulting in lower profits for the supplier. With this in mind, one could expect consumer surplus to increase with uncertainty. In fact, we show that this is not always the case and that the uncertainty impact on consumer surplus depends on the trade-off between lower prices and the possibility of underserving customers with high valuations. We also show that when policy makers such as governments ignore demand uncertainty when designing consumer subsidies, they can significantly miss the desired adoption target level. From a coordination perspective, we demonstrate that the decentralized decisions are also optimal for a central planner managing jointly the supplier and the government. As a result, subsidies provide a coordination mechanism. This paper was accepted by Yossi Aviv, operations management .

Environmental consciousness has become increasingly important in everyday life and business practice. The effort to reduce the impact of business activities on the environment has been labelled as green supply chain management. Any major greening project would require efforts on the part of the entire supply chain. However, very few studies have addressed the issue of coordinating the green supply chain. We consider the problem of coordination of a manufacturer and a retailer in a vertical supply chain, who put in efforts for 'greening' their operations. We address some pertinent questions in this regard such as extent of effort in greening of operations by manufacturer or retailer, level of cooperation between the two parties, and how to coordinate their operations in a supply chain. The greening efforts by the manufacturer and retailer result in demand expansion at the retail end. The decision variables of the manufacturer are wholesale price and greening effort, while those of the retailer are retail price and its greening effort. We find that the ratio of the optimal greening efforts put in by the manufacturer and retailer is equal to the ratio of their green sensitivity ratios and greening cost ratios. Further, profits and efforts are higher in the integrated channel as compared to the case of the decentralized channel. Finally, a two-part tariff contract is found to produce channel coordination in this problem. A numerical example illustrates the results.

Carbon emission abatement is a hot topic in environmental sustainability and cap-and-trade regulation is regarded as an effective way to reduce the carbon emission. According to the real industrial practices, sustainable product implies that its production processes facilitate to reduce the carbon emission and has a positive response in market demand. In this paper, we study the sustainability investment on sustainable product with emission regulation consideration for decentralized and centralized supply chains. We first examine the order quantity of the retailer and sustainability investment of the manufacturer for the decentralized supply chain with one retailer and one manufacturer. After that, we extend our study to the centralized case where we determine the production quantity and sustainability investment for the whole supply chain. We derive the optimal order quantity (or production quantity) and sustainability investment, and find that the sustainability investment efficiency has a significant impact on the optimal solutions. Further, we conduct numerical studies and find surprisingly that the order quantity may be increasing in the wholesale price due to the effects of the sustainability and emission consideration. Moreover, we investigate the achievability of supply chain coordination by various contracts, and find that only revenue sharing contract can coordinate the supply chain whereas the buyback contract and two-part tariff contract cannot. Important insights and managerial implications are discussed.

We study contract design and coordination of a supply chain with one supplier and one retailer, both of which are capital constrained and in need of short-term financing for their operations. Competitively priced bank loans are available, and the failure of loan repayment leads to bankruptcy, where default costs may include variable (proportional to the firm’s sales) and fixed costs. Without default costs, it is known that simple contracts (e.g., revenue-sharing, buyback, and quantity discount) can coordinate and allocate profits arbitrarily in the chain. With only variable default costs, buyback contracts remain coordinating and equivalent to revenue-sharing contracts but are Pareto dominated by revenue-sharing contracts when fixed default costs are present. Thus, for general bankruptcy costs, contracts without buyback terms are of most interest. Quantity discount contracts fail to coordinate the supply chain, since a necessary condition for coordination is to proportionally reallocate debt obligations within the channel. With only variable default costs and with high fixed default costs exhibiting substantial economies-of-scale, revenue-sharing contracts with working capital coordination continue to coordinate the chain. Unexpectedly, for fixed default costs with small economies-of-scale effects, the two-firm system under a revenue-sharing contract with working capital coordination might have higher expected profit than the one-firm system. Our results provide support for the use of revenue-sharing contracts with working capital coordination for decentralized management of supply chains when there are bankruptcy risks and default costs. This paper was accepted by Serguei Netessine, operations management.

Purpose The recent surge in behavioral studies on the coordination mechanisms in supply chains (SCs) and advanced methods highlights the role of SC coordination (SCC) and behavioral issues associated with improving the performance of the operations. This study aims to critically review the behavioral aspect of channel coordination mechanisms. Design/methodology/approach Following a systematic literature review methodology, the authors adopt a combination of bibliometric (to reflect the current state of the field), content (using Leximancer data mining software to develop thematic maps) and theory-oriented qualitative analyzes that provide a holistic conceptual framework to unify the literature’s critical concepts. Findings The analysis confirms the plethora of risk-oriented publications, demonstrating that the second largest category of studies is concerned with social preferences theory. Most studies were based on experiments, followed by analytical modeling, revealing the impact of heuristics and individual preferences in SC decisions and suggesting promising managerial and theoretical avenues for future research. Originality/value The study sheds light on behavioral decision theories applied to SC coordination by categorizing the literature based on the adopted theories. The methodological contributions include using automated content analysis and validating the outcome by interviewing leading scholars conducting active research on “behavioral operations management and SC contracts.” The authors also propose several directions for future research based on the research gaps.

Against the backdrop of cap-and-trade regulations, we construct a low-carbon supply chain in which a seller holds the manufacturer’s equity. We investigate the impact of the seller’s equity holding and the cap-and-trade regulations on the supply chain members’ optimal decisions, profits and coordination in the cases of information symmetry and asymmetry. We find that, regardless of whether there is information asymmetry or symmetry, the manufacturer always benefits from an equity holding, while the seller can only earn higher profits through equity holding if the percentage of equity holding and the level of consumer low-carbon awareness are both sufficiently high. Both the seller and the manufacturer prefer the information asymmetry scenario when the manufacturer’s efficiency in emission reduction is below a particular threshold. In addition, equity holding can incentivize the manufacturer to share its information with the seller. Equity holding is beneficial for emission reduction and market demand but is not always beneficial for improving the supply chain’s total profit and reducing the supply chain’s total carbon emissions. Finally, with a transfer payment contract, a decentralized supply chain can obtain the same optimal profits as in the centralized supply chain scenario, and both the manufacturer and seller can earn higher profits than before.