Conference Agenda

Session
C - Financial, operational, and social performance
Time:
Tuesday, 04/June/2024:
12:30pm - 1:30pm

Session Chair: Patrik Jonsson
Location: Sala Guarana – Scuola Grande San Giovanni Evangelista

San Polo, 2454, 30125 Venezia VE

Presentations

Examining how supply network structure influences firms’ financial performance during COVID-19: a study of the auto industry

Orenstein, Penina1; Zhang, Rongrong2

1Seton Hall University, United States of America; 2Georgia Southern University, United States of America

In a post pandemic world, supply chain mapping has become a key concern for almost any supply chain operation. A single focal supply chain network might have hundreds of suppliers including those that supply both goods and services. These increase exponentially, as one traces the network downstream. One needs to narrow the focus to one which examines only the product value stream. Using a pair of networks from the auto industry (GM and Ford) as a basis for the analysis, we apply a data mining technique to filter for significant supply chain relationships in each of these networks over the period spanning 2018-2022. We then examine the structural metrics for each of these networks and compare these measures with applicable financial measures to elucidate the impact of supply chain network structure on financial performance.



A methodology to assess social sustainability of multi-tier supply chains in the textile industry

Olivero, Francesco1,2; Tuni, Andrea1; Priarone, Paolo Claudio1; Morandi, Fabiana2; Bassani, Giorgia2

1Politecnico di Torino, Italy; 2Benetton Group, Italy

Social sustainability is a crucial aspect of Sustainable Supply Chain Management (SSCM), particularly in the textile industry, due to numerous disasters that have occurred in garment factories, often in developing countries. Furthermore, the textile supply chain presents critical working conditions that demand attention. Thus, fashion and textile companies are urged to implement social risk management practices. This work develops a MCDM model for Sustainable Supplier Selection (SSS) and Sustainable Supplier Evaluation (SSE) using the Analytic Hierarchy Process (AHP) and the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS). The model presents a risk- based approach implementing both non-compensatory and compensatory techniques to assess the social sustainability of suppliers. The evaluation is based on the Higg Facility Social and Labor Module (Higg FSLM), which is the dominant social auditing program in the textile industry. Additionally, an Aggregation Methodology is developed to allocate the performance of sub-suppliers to higher-tier suppliers, from Tier-4 to Tier-1. The proposed method was applied to the case study of Benetton Group, an Italian fashion company. This method demonstrated its effectiveness in evaluating and ranking suppliers based on their social performance and it is expected to represent a useful tool for sustainability managers. A sensitivity analysis was performed to demonstrate the importance of choosing the appropriate weights and scores. Notably, this work develops the first methodology to quantitatively assess social sustainability in multi-tier supply chains in the textile industry. It also enables to combine a robust social sustainability assessment method based on the Higg FSLM with the internal sustainability risk strategies of focal companies.



A contingency approach to understanding how operational efficiency, service quality, and firm performance interact

Parast, Mahour1; Golgeci, Ismail2; Golmohammadi, Davood3

1Arizona State University, United States of America; 2Aarhus University, Herning, Denmark; 3University of Massachusetts, Boston, United States of America

Understanding the relationship between competitive priorities such as operational efficiency (OE) and service quality (SQ) and their impact on organizational performance is of great interest to scholars and management practitioners. We propose a new perspective on the link between operational efficiency (OE), service quality (SQ), and financial performance under the contingency of a firm’s business strategy; our perspective is grounded in the theory of performance frontiers. Using longitudinal data from the U.S. airline industry from 2003 to 2019, we show that the influence of OE (measured by labor productivity, passenger productivity, or equipment productivity) and SQ on profitability depends on the firm’s business strategy. While the effect of OE on profitability is stronger for airlines that pursue a non-focused strategy, SQ is an important predictor of profitability of the focused airlines. We also find that the interaction between OE and SQ varies based on the approach taken to measure OE. While labor productivity and passenger productivity show a trade-off with SQ, there is not a significant trade-off between equipment productivity and SQ. In addition, the complementary effect of two OE dimensions (labor and equipment) and SQ is more significant for airlines that follow a non-focused strategy. The findings reconcile the mixed results reported in the literature by showing how business strategy moderates the relationship between OE, SQ, and firm performance. Our study contributes to the literature in operations strategy by demonstrating the impact of business strategy on the link between competitive priorities such as OE and SQ and firm performance. We find that firms that pursue a non-focused strategy benefit more from the simultaneous improvement in OE and SQ along with their overall effect on profitability.