Document Type

Article

Publication Title

Journal of Global Operations and Strategic Sourcing

Abstract

Purpose – Untimely delivery of goods and services, especially in a post-COVID landscape, is a critical harbinger of end-to-end fulfillment. Existing literature in supplier delivery modeling is focused on penalizing suppliers for late deliveries built into a contractual transaction, which eventually erodes trust. As such, a holistic modeling technique focused on long-term relationship building is missing. This study aims to design a supplier evaluation model that analytically equates supplier delivery performance to cost realization while replicating a core attribute of successful supply chains – alignment, leading to long-term supplier relationships. Design/methodology/approach – The supplier evaluation model designed in this paper uses delivery deviation as a unit of measure as opposed to delivery duration to enhance consistency with enterprise resource planning protocols. A one-sided modified Taguchi-type quality loss function (QLF) models delivery lateness to construct a multinomial probability penalty cost function for untimely delivery. Prescriptive analytics using simulation and optimization of the proposed mathematical model supports buyer–supplier alignment. Findings – The supplier evaluation model designed herein not only optimizes likelihood parameters for early and late deliveries for competing suppliers to enhance total landed cost comparisons for on-shore, near-shore and off-shore suppliers but also allows for the creation of an efficient frontier toward supply base optimization. Research limitations/implications – At a time of systemic disruptions such as the COVID pandemic, global supply chains are at risk of business continuity. Supplier evaluation models need to focus on long-term relationship modeling as opposed to short-term contractual penalty-based modeling to enhance business continuity. The model offered in this paper is grounded in alignment – a cornerstone of successful supply chain integration, and offers an interesting departure from traditional modeling techniques in this genre. Practical implications – The results from this analytical approach offer flexibility to a supply manager toward building redundancies in the supply chain using an efficient frontier within the supply landscape, which also helps to manage disruption and maintain end-to-end fulfillment. Originality/value – The model offered in this paper is grounded in alignment – a cornerstone of successful supply chain integration, and offers an interesting departure from traditional modeling techniques in this genre. The authors offer a rational solution by creating an evaluation model that uses penalty cost modeling A multinomial modeling approach Received 21 December 2022 Revised 19 July 2023 Accepted 12 September 2023 Journal of Global Operations and Strategic Sourcing © Emerald Publishing Limited 2398-5364 DOI 10.1108/JGOSS-12-2022-0122 The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/2398-5364.htm as an internal quality measure to rate suppliers and uses the outcome as a yardstick for negotiations instead of imposing penalties within contracts.

DOI

http://dx.doi.org/10.1108/JGOSS-12-2022-0122

Publication Date

Fall 9-12-2023

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