Problem definition: The COVID-19 pandemic imposed unprecedented stresses on global supply chains (GSCs), compelling companies to reassess their supply chain structures and strategies. This crisis has also heightened awareness among businesses, consumers, and policymakers about the critical importance and far-reaching implications of GSC design and management. This unique moment presents a generational opportunity for Operations Management (OM) researchers to document and understand the ongoing restructuring of GSCs. Methodology/results: By analyzing microlevel data on U.S. customs import shipments (2019–2021), we uncover shifts in GSC strategies during the COVID-19 pandemic. Firms diversified suppliers within existing sourcing locations and reallocated volumes among them. Whereas dependence on China decreased, imports from other Asian nations like India and Vietnam, as well as North American countries like Canada and Mexico, increased. Industry-specific differences were pronounced, and a notable shift toward lower-frequency, higher-quantity shipments was also observed. Managerial implications: Beyond the challenges of COVID-19, recent years have witnessed other major supply chain disruptions, due to causes such as geopolitical tensions, natural disasters, and port worker strikes. We offer actionable insights for executives designing supply chain strategies to prepare for similar disruptions as they increase in frequency and severity. We identify future research avenues aimed at enhancing the resilience and adaptability of GSCs in a continuously evolving environment. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2024.0879 .

This chapter summarizes the last 8 years of collaborative research of a global group of scholars on supply chain management and especially on how companies are dealing with uncertainties and disruptions. Starting with analyzing the factors that drive changes in global supply chain designs, this chapter describes how companies are coping with new types of disruptions such as trade conflicts, natural disasters, and pandemics. Commonly suggested resilience strategies like reshoring or regionalization are de-mystified and discussed based on first-level insights from interviews and survey data. Moreover, we analyzed how companies have handled different types of disruption and the underlying efficiency-resilience trade-offs. The chapter then outlines the different types of complexity and obstacles to supply chain resilience that companies have to overcome based on their individual product characteristics, market environment, and supply chain setup. Finally, the need for measuring resilience is outlined and proposed resilience metrics are discussed.

Recent research has documented that companies are pursuing a variety of strategies to enhance supply-chain resilience. This paper examines how managers actually think about resilience strategies, and then analyzes the relationship between operations, supply-chain characteristics, and the implemented strategies. We define a "Triple-P" framework that matches resilience strategies to supply-chain archetypes by examining Product, Partnership, and Process complexity based on interviews of senior supply-chain executives. These interviews revealed two major influencers of resilience strategy, that is, Homogeneity of internal supply-chain processes and Integration with other actors in their end-to-end supply chains. We found that the supply chains have different resilience requirements, have different ways to achieve resilience (which we conceptualize as "bespoke supply-chain resilience"), and face different obstacles to resilience. This study aims at initiating a dialogue between supply-chain scholars and practitioners to support more research for developing an effective supply-chain resilience strategy.

Morris Cohen et al. find that while managers generally understand the basics of supply chain resilience, putting them to work remains challenging. Drawing on interviews with executives, they describe these challenges and share their recommendations for how to overcome them.

Problem definition: Manufacturing firms are undergoing restructuring defined by a collection of adjustments and decisions, which affect the source and destination of manufactured products throughout the firm's global supply chain network. We report on a comprehensive picture of manufacturing sourcing on a global basis. Academic/practical relevance: With dynamic changes in global economic, political, and technological conditions, the design of global supply chain strategies has become critically important for executives and has great potential for operations management research. Methodology: Our work is based on a global field study conducted in 2014 and 2015 among leading manufacturers from a wide range of industries. The data set has the distinguishing feature of reflecting actual decisions that the firms made recently (during the last three years). Results: Companies are currently restructuring their global production footprints. The majority of firms engage in offshoring. Reshoring does occur but seldom for corrective reasons. China remains the most attractive site for production sourcing, followed by Eastern Europe and Southern Asia. Manufacturing continues to decline in the developed economies of Japan and Western Europe. We observe that while North America may be at the cusp of a manufacturing renaissance, such a change is not just because of reshoring by domestic firms. Labor cost no longer dominates manufacturing location decisions; rather, firms decide based on complex trade-offs among a variety of factors. Finally, firms localize production in developed economies and use developing economies as production hubs. Managerial implications: Our goal in this paper is to inform both managerial policy decisions and the academic research agenda by developing insights on managerial practices that concern production sourcing and on the factors that drive such decisions. We develop hypotheses concerning how firms make these strategy decisions, and we discuss implications for analytical and empirical research.

Prior research has investigated the appropriate ordering policy for an inventory system.Two key factors to are daily demand and lead time. Many studies assume lead time and dailydemand are independent. In this study, we relax this assumption for a continuous reviewinventory system and analyze the characteristics of the optimal ordering policy. We presentthe difference between the uncorrelated and correlated cases. We show that consideringcorrelated demand and lead time complicates matters considerably but leads to moregeneralized and robust recommendations. More specifically, we demonstrate how thecorrelation between demand and lead time impacts the relationship between total inventorycost, and demand and lead time uncertainties. Contrary to some of what the former literaturesuggests, a higher demand uncertainty can generate a lower total cost for an inventory systemwhen demand and lead time are correlated.

This note corrects several typos in expressions and a sensitivity statement in Proposition 3 in Shunko et al. ( 2017 ).

Previous literature suggests that without regulations firms have incentives to collude by fixing price or reducing quantity. This paper sets up an infinitely repeated game to examine the interplay between the manufacturer’s channel strategy and the downstream retailers’ collusive behavior. The results show that the manufacturer can deter retailer collusion by strategically changing its channel strategy. This effect occurs when the discount rate (used to calculate the present value of future profits) is relatively large and the manufacturer’s direct selling efficiency is relatively high (i.e., the variable cost of direct selling is relatively low). With the deterrence of direct selling, retailers abandon collusion and “no collusion” is a win-win strategy for both levels in the supply chain. However, when the manufacturer is not efficient in direct selling or the discount rate is small, direct selling is not effective in deterring retailer collusion and the manufacturer is worse off. These findings provide insights into channel strategies and supply chain management.

This paper reviews the state of the art in Productions and Operations Management (POM) academic research regarding outsourcing in supply chain contexts. We first acknowledge the “Theory of the Firm” (ToF), the venerable and vast body of thought regarding where the firm draws the boundary between what it performs in‐house and what it outsources. Despite the clear linkage between outsourcing and POM, the ToF literature is most closely associated with the fields of strategy and economics. This disconnect might in part be due to a difference in theoretical lenses and terminology, which we address for the POM audience by providing a ToF tutorial. Our review of publications by the POM community from 2000 to 2016 includes a framework that organizes the in‐scope papers and a structured summary of each work. We partition the research into empirical/conceptual and analytical sub‐literatures, each of which gets its own critical assessment and discussion of open opportunities. Along the way, we articulate the features of the POM lens that distinctively position POM researchers to contribute further to the ToF, a convergence which we hope to encourage through this study. A deeper conversation among strategy, economics, and POM would enrichen the rigor and the relevance of each field.

What motivates the geographic footprint of the supply chains that multinational firms (MNFs) deploy? Traditional research in the operations and supply chain management literature tends to recommend locations primarily based on differentials in production costs and the ramifications of physical distance ignoring the role of taxation. MNFs that strategically position parts of their supply chains in low‐tax locations can allocate the profits across the divisions to improve post‐tax profits. For the profit allocation to be defensible to tax authorities, the divisional operations must possess real decision authority and bear meaningful risks. Generally speaking, the greater the transfer of risk and control, the larger the allowable allocation of profit. These transfers may also create inefficiencies due to misalignment of business goals and attitudes toward risk. We model these trade‐offs in the context of placing in a low‐tax region a subsidiary that oversees product distribution (as a limited risk distributor commissionnaire, limited risk distributor, or fully fledged distributor). Our analysis demonstrates that the MNF's preferences regarding the operating structures are not necessarily an obvious ordering based on the amount of risk and decision authority transferred to the division in the low‐tax jurisdiction. We derive and analyze threshold values of the performance parameters that describe the main trade‐offs involved in selecting an operating structure. We find some of the optimal decisions to exhibit interesting non‐monotone behavior. For instance, profits can increase when the tax rate in the low‐tax jurisdiction increases. Numerical analysis shows that the Limited‐Risk Distributor structure is rarely optimal and quantifies when each alternative dominates it.

A key attribute of a remanufacturing strategy is the division of labor in the reverse channel, especially whether remanufacturing is performed in‐house or outsourced. We investigate this decision for a retailer who accepts returns of a remanufacturable product. Our formulation considers the cost structures of the two strategies, uncertainty in the input quality of the collected/returned used products, consumer willingness‐to‐pay for remanufactured product, the extent to which the remanufactured product cannibalizes demand for a new product, and the power structure in the channel. For the profit‐maximizing retailer, the differentials in variable remanufacturing costs drive strategy choice, and higher fixed costs of in‐house remanufacturing favors outsourcing. The variable remanufacturing costs and the balance of power in the prospective outsourced reverse channel are the key drivers of environmental impact, as measured by the retailer's propensity to remanufacture. While profitability and environmental goals often conflict, they align under certain conditions. These include (a) the third party has less bargaining power; or (b) the fixed cost for in‐house remanufacturing is relatively high. All else equal, when remanufacturing is outsourced, the environment fares better if the third party has leadership power. We generalize to the cases when remanufacturing achieves a quality level less than “good‐as‐new" and when used items have non‐zero salvage value. Analysis of these extensions illuminates how relative power in the reverse channel drives the firms’ preferences, as well as the end customers’ consumption experience.

We consider the optimal pricing of a freemium product offered by a firm to consumers who are loss-averse with stochastic and endogenous reference points, and the role of the consumers' surprise on their purchase decision about the premium version, after experiencing the free version. We formulate the problem as a multistage Stackelberg game and investigate its equilibrium by determining the consumers' optimal purchase plan, the firm's optimal price to charge for the premium version, and the optimal quality level that the firm sets for the premium version. We show that a consumer becomes more willing to buy the premium version if he becomes somewhat dissatisfied to realize that the free version's value is lower than his expectation. This result goes against the common advice by practitioners that the firms must under-promise and over-deliver to ensure higher profitability. We show that the somewhat-dissatisfied consumer is not only more willing to buy the premium version, but he also could pay a price higher than its realized value. This is a result that does not occur when the consumer is satisfied or entirely dissatisfied with the free version. It also explains the real phenomenon in which many consumers run up massive bills in using freemium products. We show that, increasing the premium version's quality could cause the firm to optimally reduce its price, which is in contrast to our common quality-price intuition: a higher quality product should be sold more expensively. When the quality, price and the consumer's purchase plan are jointly optimized, we show that, the optimal price can increase in the order quantity. This behavior counters the common expectation that when the firm has more available units it should sell them cheaper to avoid the risk of unsold inventory.

This paper develops an integrated model for analyzing and designing structured supply contracts from the perspectives of the buyer, the supplier, and the entire supply chain in an open supply chain. We first present a flexible framework that encapsulates a wide range of contracting types that have been studied previously. We then introduce the concept of relative contract value vis-a-vis a reference alternative, which facilitates addressing explicitly both the demand uncertainty and the price uncertainty within which real supply relationships operate. To guide practitioners in designing optimal supply contracts, we derive closed-form expressions for optimal contract structure, quantity commitment and flexibility, pricing, and sharing policy as well as the conditions to maximize total supply chain profitability associated with a contract. Our research demonstrates that structured contracts consisting of several fixed and/or flexible components are capable of maximizing total supply chain profit and allocating profit between contracting parties arbitrarily.

Management of a portfolio of strategic supplier relationships is complicated by their dynamism, uncertainty, information vagueness, significant profit impact, long–term orientation, substantial switching cost, and the interdependency among alternatives. To address this challenge, this paper first suggests a three–layer framework for strategic supplier relationship portfolio management. It then proposes a fuzzy binomial tree approximation–based stochastic model to analyse relationship dynamics and the value of a supplier relationship portfolio, taking into account both randomness and fuzziness uncertainty. Furthermore, it develops a decision model for supplier relationship portfolio configuration and adaptive development planning. Numerical examples are provided and some managerial implications are discussed.

Designing and Controlling the Outsourced Supply Chain takes an in-depth look at the role of outsourcing in taking a product from concept to market and then operating the resulting supply chain. This means examining the outsourcing of manufacturing, product design, materials procurement, and logistics. By presenting, interpreting, and extending the current knowledge, the author's prevailing goal is to shed light on the underlying economic and behavioral drivers, implementation challenges, and potential remedies. The analysis is highly attentive to the details of operational execution, particularly regarding how human resources take part in these decision processes and are affected by the choices made. The effects of offshoring are also highlighted in the discussion. Designing and Controlling the Outsourced Supply Chain examines outsourcing from a lifecycle perspective by following the entire process, from development of the idea to outsource, all the way to end of a chosen strategy. This monograph is intended for both scholars and practitioners alike -- for scholars by structuring a vast body of information, analyzing it using theoretical frameworks, and providing directions for future research, and for practitioners by providing a basis for managerial action. Supporting evidence comes from diverse industries and countries.

All organizations outsource. They differ only in the scope and extent of what they procure as goods and services from outside entities. These choices drive an organization's financial performance and long-term competitive viability, and establish the tenor of day-to-day operations. Outsourcing can solve many problems, but is also fraught with hidden costs and risks. This monograph examines outsourcing from a lifecycle perspective. This means tracing the full arc from the germination of the idea to outsource, to the assessment of options, to the installation of control mechanisms, to grappling with conflicts that inevitably arise over time, all the way to the sunset of the chosen strategy. The analysis is highly attentive to the details of operational execution, especially regarding how human resources participate in these decision processes and are impacted by the choices made. The lifecycle discussion applies regardless of the type of business process considered for outsourcing. This has standalone value, but also serves as a preamble to the topic from which this monograph derives its title: outsourcing in the endeavor of stewarding a product from concept to market and then operating the resulting supply chain. Specifically, this monograph looks deeply at the outsourcing of manufacturing, product design, materials procurement, and logistics. This monograph also presents the phenomenon of offshoring in order to dispel the common confusion between outsourcing and offshoring. Both can be pursued simultaneously ("offshore outsourcing"), and this monograph makes clear which benefits and risks are due to offshoring and which are due to outsourcing. This monograph targets scholars and practitioners at once, guided by a belief that both communities will benefit from a treatment of outsourcing that ties together ideas from theory and extensive industrial evidence. Highlights include extended case studies featuring Amazon, Apple, Boeing, Cisco, Foxconn, Menu Foods, Nike, and Toysrus.com, with significant supporting appearances by more than fifty other firms from diverse industries and countries.

What motivates the geographic footprint of the supply chains that multinational firms (MNFs) deploy? Traditional prescriptive research in the operations and supply chain management literature tends to recommend locations primarily based on differentials in production costs and the ramifications of physical distance. The role of taxation has received much less attention.

Advertising is a crucial tool for demand creation and market expansion. When a manufacturer uses a retailer as a channel for reaching end customers, the advertising strategy takes on an additional dimension: which party will perform the advertising to end customers. Cost sharing (“co‐operative advertising”) arrangements proliferate the option by decoupling the execution of the advertising from its funding. We examine the efficacy of cost sharing in a model of two competing manufacturer–retailer supply chains who sell partially substitutable products that may differ in market size. Some counterintuitive findings suggest that the firms performing the advertising would rather bear the costs entirely if this protects their unit profit margin. We also evaluate the implications of advertising strategy for overall supply chain efficiency and consumer welfare.

Shoppers increasingly utilize multiple distribution channels. One variation of this behavior is hybrid shopping—jumping across channels in the path to a single purchase. Hybrid shopping can create coordination challenges for the distribution system. These include two types of free riding: using the presentation and services offered by a brick-and-mortar channel but maki ng the purchase in an online channel (recently termed “showrooming”) or, conversely, first obtaining information online before ultimately purchasing in a physical store. This article explores the implications of hybrid shopping for retailers and manufacturers, and their evolving responses to the prospective free riding. These include price matching, restrictions on product offerings that provide channels with some degree of exclusivity, service enhancements that leverage multichannel capabilities, and schemes that compensate channel members for contributing to the sale. For each of the developments considered, findings and responses provide implications for competition policy and antitrust.