Center for Supply Chain Management

Research Updates

2014 AHRMM Survey Results

Dr. Mark Barratt, in collaboration with Jamie Kowalski of Jamie C. Kowalski Consulting, LLC., conducted the National Executive Healthcare Survey on Supply Chain Management for the Association for Healthcare Resource and Materials Management (AHRMM). This survey has been an annual project for the Center for Supply Chain Management and investigated the influence of supply chain management on nurse activities organizations as well as developing issues and trends in the industry.

The results cover a version of the findings and were presented at the AHRMM Annual Conference in Orlando on August 7.

Presenting Sponsor: Tecsys Supply Chain Technology Solutions
Contributing Sponsors:

  • Owens & Minor - Distribution
  • Amerinet – Group Purchasing
  • Aperek – PPI Management Technology
  • GlobalEDGE – Vendor & Fraud Management
  • The Bellwether League, Inc. – Hall of Fame for Healthcare Supply Chain Leaders

Dr. Marko Bastl

Reflecting back on what was a very enjoyable first academic year at Marquette University, it was a year of learning the intricacies of undergraduates, given my past executive and graduate teaching background. While my fall semester included teaching preparations and “settling-in,” I returned to my research in spring. I am currently working on several research projects, two of which have been topical recently: the impact of product recalls on shareholder wealth and management of powerful parties in buyer-supplier relationships.

Product recalls

Recently, the press has been flooded with product recall stories, ranging from Toyota’s $1.2 billion settlement related to the automaker’s handling of “sudden acceleration” complaints dating back to 2009, to GM’s recall of more than 2.1 million vehicles over faulty ignition switches

Product recalls can severely damage a company's image and – even worse – destroy investor confidence, driving down its stock price. While the long-term damage of product recalls to a company's brand and reputation is difficult if not impossible to quantify, short-term impact on shareholder wealth is possible to estimate. After conducting a cross-industrial study of 296 recall announcements in the past 10 years, we found that product recalls have a significant impact on abnormal stock return, resulting in cumulative stock decline of –1.87%. Also, the more severe the potential impact of a recalled product on consumers (ranging from no harm to serious health risks, as well as death), the greater the decline in stock price. Moreover, the stock market punishes companies’ passivity to recalls (i.e., waiting for consumers to complain and then reacting) more than if companies approach product recalls proactively.

Buyer-supplier relationship management

One of the defining characteristics of any supply chain is a power imbalance between its supply chain members.

For example, in the fast-moving consumer goods sector, large retailers are perceived as “power players” that dictate terms of business to many suppliers. As researchers, we’re interested in what options a weaker supplier or buyer has when the strong player starts misusing and/or exploiting its power position, going against the weaker player’s business objectives. In other words, what can a weaker buyer do when a strong supplier dictates unreasonable customer service levels and controls pricing policies? We begin to see that the weaker player does not necessarily need to despair. Actually, it has several options, which fall in two broad categories: relationship continuation strategies and relationship termination strategies. Relationship continuation strategies comprise collaboration, compromise, diversification and coalition building. Relationship termination strategies comprise several relationship exits, namely communicated, negotiated, silent and disguised. This is an important step in further enhancing our understanding of managing buyer-supplier relationships, both from the academic and managerial perspective, given that, to date, most of the research has focused on powerful parties.