Our broad objective is to focus on the process of integrating global transportation service sector and the disaggregated, geographically dispersed supply chains of U.S. multinational firms so that each network, through its design, can be developed into and managed as distinctive competencies that support one another. To demonstrate the long term performance consequences of integrating these two networks, this projects draws on dynamic capability (Eisenhardt & Martin, 2000) and network structure (Burt, 1992) strategies to place the integration process into a strategic context. While this is a long term research project, we propose within the allotted two year time frame to develop and estimate theoretical and empirical models for this integration process. The resulting model of integration mechanisms and relative path optimization is designed to aid planners and managers within both networks.
The key research issues to be addressed are:
(1) how to evaluate the role of integration mechanisms in enhancing the relative competitive performance within and between the two networks;
(2) how to better mange the performance of each network and develop new formulas for the assessing the effectiveness of the design of each network and cooperative strategies that connect the activities of the two network;
(3) how to investigate the possible impact of expected changes in supply chain and transportation processes on each other and on local and regional business activities across these networks so that the relative performance of these changes can be predicted.
Resolution of these issues will help identify points of strength and vulnerability in the interface between networks so that problem areas can be predicted prior to their occurrence and the solution can be designed into the network connectivity. This can facilitate a better fit between the supply of and demand for each activity along the supply chain, the integration of containers from multiple sources and users, and the development of optimal and alternative paths should threats to security disrupt existing trade paths.
Intermodal
This proposal seeks funding to integrate studies on the supply chains of multinational corporations and those of the global transport network. Currently, the two areas are investigated in relative isolation by two distinct groups of scholars. Supply chain analysts internalize transport factors; and transport analysts internalize the demands of MNCs.
Encompassing the two intellectual arenas within a single conceptual framework to highlight their global interdependence generates key issues requiring further investigation: (1) how do MNCs derive strategic value from changes in the configuration of the global transportation network underpinning their disaggregated supply chain activities; (2) how does the global transportation network generate an operational capability to provide services across industries to meet the needs of MNCs; and (3) how can the interconnections between the supply chains of MNCs and the global transportation network be better managed to improve overall global supply chain performance to the mutual benefit of multinational corporations and transportation service providers in the United States.
An international team of supply chain and global transportation network analysts based in North America, Europe and Asia will undertake the development and operationalization of the conceptual framework to address these issues. Team members drawn from the Global U8 Consortium of Universities will undertake fieldwork surveys of MNCs and global transport network operators based in the United States, France, and Korea and leverage this knowledge to develop an integrative global framework. Members will be engaged in the development and refinement of the conceptual framework and optimization models and in the iterative empirical testing of these models so that this interdependence can be better understood on a global scale.
Four methodological strategies will be employed to accomplish project objectives. The first strategy is intended to develop an understanding of the interdependencies between the two networks and the impact of their interdependencies on the competitive position of organizations affiliated with either of the two networks. This will be accomplished through qualitative methods using a three phase of interview process that involves:
(1) the development and refinement of theoretical models of the integration process;
(2) the identification of location and connectivity interdependence constructs for the integration process, and
(3) the operationalization of these construct and relationships factors.
In taking a grounded theory approach involving the continual cycling between theory and data, extant literature serves not only to inform but to be formed by analysis. Case studies will be used to investigate the location and connectivity factors as integration mechanisms. Rather than randomly selecting the sample cases, those representing the phenomenon of interest will be selected based on their likelihood of building emerging theory and defining theoretical constructs. Interview protocol, considered to be essential with case study designs in increasing the reliability of the research, will be developed for recording data from the interviews. Content analysis of interview data will involve breaking down the observations data into “thought units” such as gesture, phrase, a complete sentence, and a series of sentences. Each thought unit will be coded in line with the protocol through iteratively cycling the data first through major model components and then to model constructs. A more inductive approach will be used for units that do not fit the model to allow for new constructs to emerge.
The second strategy is intended to capture the relationship of the interdependence between the two networks on the performance of each network in a relatively stable environment. Mathematical modeling and linear programming will be used to investigate the optimal path for each of the three conditions:
(1) the location of processes that transform raw materials into finished goods;
(2) the location of processes that transport these materials throughout the supply; and
(3) the connectivity between the two sets of processes.
Theoretical and mathematical models will be developed for both the current design of supply chain activities and new designs that arises from the three specified conditions. They will be assessed based on factors associated with: (a) node location constructs such as factor conditions, demand conditions, related and supporting conditions, and current business environment (Porter, 1985); and (b) network linkage constructs, notably connectivity structure, connectivity strength, network centrality, and network strategy. From these measures it will be possible to obtain a location, linkage and combined score for each of the three conditions. The current supply chain design will be combined with industry benchmark and average financial indicators such as relative volume and return on investment so that the relationship between location and linkage factors and competitive performance measures can be captured. These results will be compared to that of each of the three the optimal supply chain configurations. Using the scores obtained from the control model, the competitive performance of integrated global supply chain and transportation network designs can be compared to the actual and optimal network designs under relatively stable conditions.
The third strategy is intended to capture the relationship of the interdependence between the two networks on the flexibility of each network design in adapting to volatile and diverse operating conditions. Given that global supply chains could not exist without the presence of a network of corresponding transportation services, theoretical and mathematical models will be developed to assess the location and linkage connectivity between the networks. By including all three sets of conditions and measuring them against a control model, the optimal solution can be comparing models that develop new and stronger linkages between each of the existing nodes or developing new location nodes to improve the network connectivity. In doing so, strengths and vulnerabilities in network design can be assessed so that potential problems can be identified, their impact on a set of performance criteria can be measured, and contingent options can be developed that mitigate or solve the problem. This will enable MNCs and transportation service providers in the United States to measure the effectiveness of their trade channels across national and regional boundaries.
The fourth strategy is designed to measure the effects of expected changes in either or both networks at the regional level of the structure of the overall network so that relative changes in trade patterns can be predicted. This becomes critical when the connectivity between two complex networks is high because small changes in the nodes or connectivity can have significant impacts upon the design and performance of both networks. It can also impact patterns of regional business and economic development and the trade patterns that arise from this development. Predictive network will be developed and tested to identify the possible economic development and trade patterns so that investment in the transport infrastructure can be more closely matched to expected local, national, regional and worldwide patterns in business and economic development.
Jan. 2006: Commencement of Project, Literature survey
Mar. 2006: Presentation of Research Plan, At URITC
May 2006: Presentation of Theoretical Model, ACC Conference
May 2006: Design of Survey and interview
June 2006: Pilot test of survey and interview, In US, France and Korea
July 2006: Conducting Full-scale survey and interview, In US, France, Australia and Korea
Sep. 2006: Analyzing survey data
Oct. 2006: Presentation of intermediate results, GU8 Logistics conference at URI
Nov. 2006: Completing theory part
Jan. 2007: Presentation of intermediate results, TRB annual meeting, DC
Mar. 2007: Build up test model, Mathematical and financial model
June, July, 2007: Presentation of model results, Logistics seminar at Inha Academy of International Business
July 2007: Optimization of the system
Aug. 2007: Sensitivity analysis of model
Sep. 2007: Presentation of the results At URITC
Dec. 2007: Submission of report
$883,953.00
Given the multidisciplinary and complex nature of this project, student involvement will be heavy. One MBA, one undergraduate student, and high schools in the U.S. will be required to assist in report writing, coordination of research efforts among the teams, and the development of a conference for integrative work on supply chain and transport networks. The two URI graduate students assigned to the integration team will interface extensively with the regional project teams and assist PI in the development of comprehensive theoretical and mathematical models. The URI engineering graduate student will be assigned to the North American team to develop and test regional models. Labor contributions have been provided by LeHavre University (1 Ph.D Student) and Inha University (1 Ph.D. and 1 MA Students) to assist the European and Asian teams. The students assigned to these teams will be responsible for assisting co-investigators through literature reviews, case study data collection, modeling techniques, data handling and analysis, and report writing. It is expected that students on the research team will begin to develop a publication record by providing them with opportunities for conference presentations and publication outlets for their papers.
This project can enhance the efforts of two other projects of which the URITC has provided funding; the Global U7 Consortium and the College of Business Administration’s Supply Chain Master of Business Administration major. First, this research is in line with the mission of the Global U8 Consortium. The goal of cooperative and collaborative research efforts among the affiliated universities is build into this project. The cross disciplinary nature of the research team comprised of faculty and students from three of the eight affiliated universities (i.e. University of Rhode Island, Inha University and LeHavre University) can strengthen the base of knowledge across discipline and the cooperative relationships that have been developed among these Universities that can, in turn, enhance the research output and technology transfer of this project.
Second, this project can expand the efforts of the URI College of Business Administration in developing a supply chain management major for their MBA program. In response to the challenges arising from interdependent world economies, there is a greater need to integrate knowledge across disciplines and cultures to address global issues. This project provides the knowledge platform to further the efforts of the COB to develop multidisciplinary, cross-cultural programs such as global supply chain management. Further, the development of relationships among the research team can lead to student and faculty exchanges and shared cirricula in Engineering, Logistics, Business Administration, Marine Affairs, and Advanced Technologies for universities affiliated with the Global U8 Consortium.
The multidisciplinary nature of this project meets the goals of ADVANCE to have peer-reviewed dissemination of results by faculty diverse in their research focus. In addition to the Global U8 collaboration, one between the College of Business Administration and College of Engineering was established by the two investigators from URI. Their joint efforts led to the development of an innovation design studio funded by a Champlin Foundation Grant for integrative COE/COB student projects. The combined efforts of the project team can further the efforts to develop a common language across these disciplines for the purpose of providing additional avenues of STEM technology transfer.
Valerie Maier-Speredelozzi’s involvement on another URITC grant can facilitate the development of mathematical models for the integration of the two networks. This grant involved the development of simulation models of the receiving docks to study CVS/pharmacy’s reaction to changes in the Hours-of-Service regulations for commercial truck drivers. By following recommendations of the research team, CVS/pharmacy would be able to reduce the time required to unload tractor trailer trucks, which in turn reduces time constraint pressure on the drivers, and ultimately improves highway safety.
In addition to the two presentations at URITC in Spring, 2006 and Fall 2007, the research team plans to present their results at several transportation and business conferences that provide avenues for publication. Transportation conferences include: (1) Global U8’s Logistics Conference at URI in Oct., 2006; (2) annual conference of Transportation Research Board in Washington D.C in Jan., 2007; and (3) international seminar of Jungseok Research Institute of International Logistics and Trade in May, 2007. The first conference is organized as a part of the Global U8 Consortium’s Third Presidential Meeting at URI where selected papers will be published in a special issue of Maritime Economics and Logistics Journal. The second conference is annual meeting of TRB where the research team plans to present paper(s) for publication in TRB journal. The third seminar is annual seminar of the institute and the research team will publish paper(s) in Journal of International Logistics and Trade. Target journals include: Transportation Journal; Transportation Research: Part A, B, C, E; Maritime Policy and Management. If time permits, the research team will present their results in annual conference of International Association of Maritime Economists and triennial conference of World Transportation Research Society.
Business conferences include (1) the Annual Conference on Corporate Strategy sponsored by the Academy of International Business in May, 2006, (2) Academy of International Business annual meeting in July, 2006 and 2007, (3) the Academy of Management annual meetings in August, 2006 and 2007. The first conference is organized as a review vehicle for a special edition of the Journal of International Business Studies on position, paths and processes where the theoretical framework for integrating these two networks will been submitted. The other two are annual conference meetings where results are planned to be presented and submitted for publication in one of the following journals: Journal of International Business Studies, Academy of Management Journal, McKinsey Review, Journal of Operations Management, Production and Inventory Management Journal, and IIE Transactions.
This project includes another dimension of technology transfer; the development and scheduling of a conference focusing on the integration process between the global transport and supply chain networks. The conference will be held at URI in late summer/early fall of 2007 will invite scholars to a one/two day seminar to present their working papers on the study the integrative aspects of these two networks. The academic community across disciplines and geographic regions will be encouraged to investigate integration across functional, geographical and system boundaries. In doing so, the scientific boundaries of fields of knowledge can be expanded and, thus, provide other avenues to disseminate the research results.
Value based management has been identified by John S. Shiely, President of Briggs and Stratton, as an important tool for measuring competitive performance of value creation along supply chains. It provides a framework for considering the short and long term impact that the connection of each supply chain activity can have on the value drivers of the business. From this perspective the identification and quantification of sources of value creation within both networks is more important than merely managing supply chains for cost or efficiency. Further, understanding the allocation of value up and down the entire chain requires the selection of a method and metric that is flexible enough to model a plethora of initiatives at the value points and is accurate enough to ensure that the connections between the value points are effective. This study, by focusing on the transportation connectivity can provide MNCs with methods and metrics to identify the value points within and between these networks and measure the effectiveness of their connectivity on the ability to deliver value to the end consumer.
The design and delivery of large interconnected systems, therefore, can become key drivers of and business. Beyond the large distribution (e.g. Leclerc, Auchan), transportation (e.g. CMA-CGM, CPships) and industrial (e.g. Exxon, Total, Renault, PSA) MNCs, making for the strong socio-economic environment of port cities such as Le Havre, it is the whole state of Northern Normandy that may derive profit from the project. This state’s Regional Council has strived to enhance the competitiveness of its territory as a comprehensive logistics gate to Europe for world-wide inbound and outbound physical and informational flows, through renewed and large investments in multi-modal and logistics parks infrastructures, as well as in logistics-based R&D and educational projects. Similarly, port cities in the U.S. can benefit from the connectivity infrastructure between both networks.As the head of the state Research and Technology Department, Mr. Vincent Rochelle is one of the most deeeply involved top executives of this public organization in the design and implementation of its economic development policy. Therefore, his letter of endorsement will be much appreciated.
One of notable beneficiaries are the port authorities and municipal governments having ports in their territory. As such, the City of Incheon, Korea has strived to develop its port to enhance their competitiveness in accommodating state-of-the-art technology and cutting-edge knowledge, which is one of our projects’ principal objectives. To this end, they sent the highest government official in charge of transportation, Director-General of Port, Airport and Logistics Bureau, Mr. Joon-Ho Hong to the Hawaii workshop of the Global U8 Consortium, which provided the base of developing this project. Therefore, his letter of endorsement as a possible beneficiary will be much appreciated.
Transportation Services, Transportation Infrastructure, Supply Chain Management, Value Creation, Network Analysis