Supply Chain

In the national debate over how to make U.S. health care more efficient, one promising area for reform is often overlooked: supplies. Whether the products are knee implants, pacemakers or expensive medications, hospitals have long purchased whatever doctors desired with little discussion among the parties involved about cost. Researchers at the W. P. Carey School Business are trying to unravel the tangled supply relationships that drive up the cost of health care, burdening hospitals and frustrating efforts to expand coverage among the uninsured.

The 2007-2009 recession brought about shifting consumer demand that left wholesalers and manufacturers grappling with how best to change inventory and production strategies. These changing demand patterns wreak havoc up and down the supply chain, challenging manufacturers, wholesalers and retailers to match supply with demand. The challenge is greatest for manufacturers and wholesalers, however, because they are furthest away from the customer and therefore are often the slowest to react to changing demand signals — a phenomenon known as the bullwhip effect.

A case study on the green redesign of the U.S. Postal Service's expedited shipping products shows the importance of supplier collaboration in meeting sustainability requirements and keeping cost increases at bay. "One of the big issues with sustainability initiatives is cost, but the Postal Service was able to complete this green project and remain cost-neutral," says Phil Carter, a professor of supply chain management at the W. P. Carey School and executive director of CAPS Research. Private businesses can learn a lot from the Postal Service's example.

Achieving environmental sustainability for supply management is a goal which may also help boost firms' overall competitiveness in these fretful economic times. But despite the hype surrounding everything "green" these days, many companies wishing to embark on environmental sustainability programs do not know where to begin. Before you set up strategies and tactics and develop metrics for supply management environmental sustainability, define what environmental sustainability means to your organization, says management Professor James Hershauer. A new report from the W. P. Carey School's CAPS Research helps companies learn to define, understand, create, measure, and test their supply management environmental sustainability plans.

When executed correctly, strategic sourcing — a multi-faceted approach to purchasing contingent on types of goods and services — yields many benefits for both buying companies and their suppliers. But, by ignoring the complexity of strategic sourcing and focusing only on cost reductions, some aerospace buying companies have unintentionally turned their suppliers into competitors, according to new research by W. P. Carey professor of supply chain management Thomas Choi and his former doctoral student, Christian Rossetti.