Aligning Incentives in Supply Chains  

Oleh:

Raman, Ananth ; Narayanan, V. G.

Jenis: Article from Bulletin/Magazine - ilmiah internasional
Dalam koleksi: Harvard Business Review bisa di lihat di link (http://web.b.ebscohost.com/ehost/command/detail?sid=f227f0b4-7315-44a4-a7f7-a7cd8cbad80b%40sessionmgr114&vid=12&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&jid=HBR) vol. 82 no. 11 (Nov. 2004), page 94-103.
Topik: SUPPLY CHAINS; activity based accounting; activity based budgeting; activity - based costing; inventory; supply & demand; globalization; incentives; partnerships; competitive advantage; outsourcing; suppliers; network hubs; networks; supply chain management; supply chains

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Perpustakaan Pusat (Semanggi) Nomor Panggil: HH10.26 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Most companies don't worry about the behavior of their supply chain partners. Instead, they expect the supply chain to work efficiently without interference, as if guided by Adam Smith's famed invisible hand. In their study of more than 50 supply networks, V. G. Narayanan and Ananth Raman found that companies often looked out for their own interests and ignored those of their network partners. Consequently, supply chains performed poorly. Those results aren't shocking when you consider that supply chains extend across several functions and many companies, each with its own priorities and goals. Yet, all those functions and firms must pull in the same direction for a chain to deliver goods and services to consumers quickly and cost effectively. According to the authors, a supply chain works well only if the risks, costs, and rewards of doing business are distributed fairly across the network. In fact, misaligned incentives are often the cause of excess inventory, stock - outs, incorrect forecasts, inadequate sales efforts, and even poor customer service. The fates of all supply chain partners are interlinked : If the firms work together to serve consumers, they will all win. However, they can do that only if incentives are aligned. Companies must acknowledge that the problem of incentive misalignment exists and then determine its root cause and align or redesign incentives. They can improve alignment by, for instance, adopting revenue - sharing contracts, using technology to track previously hidden information, or working with intermediaries to build trust among network partners. It's also important to reassess incentives periodically, because even top - performing networks find that changes in technology or business conditions alter the alignment of incentives.

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