Dynamic Quality Models and Games in Digital Supply Chains
How Digital Transformation Impacts Supply Chain Quality Management
- 2021
- Book
- Author
- Prof. Pietro De Giovanni
- Publisher
- Springer International Publishing
About this book
This book bridges the fields of Supply Chain Management, Digital Transformation, and Dynamic Quality models in order to illustrate how digital transformation affects the work of researchers and managers in Supply Chain Quality problems. It aims to address the gap in scholarship regarding new technologies, updating the established literature to reimagine theoretical models, dynamic games, knowledge management, supply chain coordination solutions, interfaces in circular economies, and other functional spaces for a digital era. Written for researchers, managers, and practitioners, this book offers an accessible approach to the topics through clear, management-oriented chapters, reserving mathematical background for the Appendices. It discusses an array of modern challenges in digitization, including smart device installation, Cloud data accessibility, applications of AI systems, Supply Chain monitoring via Blockchains, using sensors in operations, and digital tool integration within traditional IS frameworks.
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Table of Contents
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Frontmatter
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Chapter 1. New Dynamic Models for Quality Management in Digital Supply Chains
Pietro De GiovanniThe chapter introduces new dynamic models for quality management in digital supply chains, addressing the outdated nature of current approaches. It highlights the need to integrate digital transformation tools like AI, IoT, and blockchain into traditional quality management strategies. The research focuses on developing new differential equations for design and conformance quality, considering the impact of digital technologies. By bridging the gap between traditional quality management and digital transformation, the chapter offers a comprehensive framework for enhancing quality strategies in the era of Industry 4.0. The integration of digital tools into quality management is shown to increase firms' economic performance and competitive advantage, providing a roadmap for future research and practical applications in dynamic supply chain studies.AI Generated
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AbstractThis chapter reviews the differential equations used most frequently in the literature to investigate dynamic quality models. Two major quality dimensions have been studied: design and conformance quality. Although these two quality dimensions have received extensive attention in the past, we have identified some serious limitations with them, most likely linked to the current digital transformation. We provide suggestions for how to enrich the current models with new ingredients linked to the digital transformation (e.g., Industry 4.0 technologies). Therefore, we provide new research avenues to further investigate quality in Digital Supply Chains. -
Chapter 2. Digitalization in Supply Chain Quality Management: The Power of Knowledge Creation
Pietro De GiovanniThe chapter delves into the significance of knowledge management in the digital transformation of supply chain quality management. It introduces a differential game between a manufacturer and a retailer, who invest in design quality to accumulate knowledge and improve efficiency. The static game serves as a benchmark, while the dynamic game incorporates knowledge dynamics, showcasing the benefits of digital tools. The chapter compares equilibria, presents a case study, and concludes with insights on the advantages of a cooperative strategy in a digital supply chain.AI Generated
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AbstractThis chapter demonstrates the benefits that supply chains and operations management acquire when quality management is investigated dynamically within the context of digital transformation. To do so, we link the benefits of investing in quality as a matter of decreasing the marginal production cost. For example, design quality allows firms to design more efficient products, translating into cheaper goods for consumers. We adopt a knowledge accumulation and management approach, which is typical of digital transformation. For example, artificial intelligence systems have the characteristic of learning. This process can be managed through a dynamic equation characterized by memory and depending on the quality investments. Therefore, the design quality dynamics play the role of knowledge accumulator. The results attained are of significance for both practitioners and theorists. The chapter shows the economic benefits obtainable when considering quality management as a digital supply chain issue and further reveals the effectiveness of investigating it by means of dynamic tools. -
Chapter 3. Digitalization, Quality, and Supply Chain Cooperation
Pietro De GiovanniThe chapter delves into the integration of marketing and operations management in digital supply chains, highlighting the strategic decisions that enhance players' understanding and optimize their payoffs. It introduces a digital supply chain game characterizing advertising, pricing, and design quality strategies in a dynamic setting where demand depends on both price and goodwill. The text confines its interest to a simple supply chain with one manufacturer and one retailer, exploring the trade-offs between strategies and the conditions under which a cooperative program is beneficial. The dynamic game model and steady-state analysis provide insights into the effectiveness of cooperative programs and the impact on players' strategies and outcomes. The chapter concludes with a case study on DHL's use of augmented reality, demonstrating the practical application of the model. The unique approach of the chapter lies in its comprehensive analysis of the trade-offs and the conditions for successful cooperation in digital supply chains.AI Generated
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AbstractThis chapter considers a Digital Supply Chain with a single manufacturer and a single retailer, where both advertising and quality contribute to the build-up of the consumers’ goodwill to purchase digital goods. Investments in quality allow the manufacturer to produce and sell smart, connected, and autonomous goods. In a non-cooperative scenario, the retailer controls the price and the advertising while the manufacturer controls the design quality efforts. Although improving quality contributes positively to goodwill, it also increases production costs, resulting in a reduction of the manufacturer’s profit. In a cooperative scenario, the manufacturer supports the retailer’s advertising while abandoning the design quality improvement strategy. Therefore, the manufacturer prefers to invest less in digital supply chain applications and move to traditional cooperation on advertising. We investigate the conditions under which a cooperative program is beneficial when such a trade-off occurs. Our results show that a cooperative program is always successful if operational inefficiency is high. When the operational inefficiency and the quality effectiveness are both low, a cooperative program only benefits the retailer. In the ideal situation of high quality effectiveness and low operational inefficiency, both players prefer to focus on digital transformation tools rather than investing in advertising strategies. -
Chapter 4. Digital Supply Chain Through IoT, Design Quality, and Circular Economy
Pietro De GiovanniThis chapter delves into the innovative use of IoT technologies in digital supply chains, focusing on the circular economy and design quality. It explores how IoT can optimize the management of forward and reverse supply chain activities, enabling companies to maximize value creation and sustainability. By examining real-world examples like Bosch and Xerox, the chapter highlights the strategic importance of adopting IoT-driven circular economy programs. It also discusses the trade-offs and benefits of implementing value-stream and waste-stream approaches in CLSCs, providing actionable insights for professionals seeking to enhance their supply chain operations and sustainability efforts.AI Generated
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AbstractWe consider a digital closed-loop supply chain (CLSC) single Original Equipment Manufacturer (OEM) and a single retailer. The OEM opts for the adoption of either a value or a waste-stream approach to closing the loop, while optimally deciding the wholesale price and the design quality strategies; the retailer focuses on marketing strategies and optimally controls her price. The quality expenditures contribute to knowledge created over the digital Supply Chain (SC) regarding the design quality performance, which plays a dual role leading to higher sales and returns’ residual value as well as to higher marginal production costs and lower return rate. The OEM solves this dual trade-off by evaluating the convenience of adopting either a waste-stream approach or a value-stream approach. In the former case, it makes no investments in any circular economy programs; in the latter case, he controls the return rate by investing in IoT technology within the context of circular economy programs. Our findings suggest that the shift from a waste to a value-stream approach leads to a payoff-Pareto-improving situation in a decentralized CLSC: Because the game is played á la Stackelberg, a separation occurs between operational strategies and the market size, which is determined by the pricing strategy. In contrast, this shift is not always convenient in a centralized CLSC, where the decision maker solves the trade-offs that quality entails only when the passive return rate and/or the remanufacturing efficiency are sufficiently high. -
Chapter 5. Smart Contracts and Blockchain for Supply Chain Quality Management
Pietro De GiovanniThis chapter delves into the application of smart contracts and blockchain technology in supply chain quality management, using the ham industry as a case study. It examines how quality and pricing strategies impact consumer behavior and goodwill, and how blockchain can improve transparency and coordination within the supply chain. The chapter also presents a dynamic game model that considers consumer willingness to purchase based on quality and price evaluations, and discusses the implications of using different contract schemes, such as wholesale price contracts and revenue sharing contracts. Additionally, it provides a real-world example of blockchain implementation in the wine industry, demonstrating the potential benefits and challenges of adopting this technology in the supply chain.AI Generated
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AbstractThis chapter proposes a digital transformation game of supply chain quality management being inspired by the food supply chain, with a focus on the ham industry. Consumers’ willingness to visit a retailer’s store and purchase ham of a certain brand (goodwill) depends on the difference between the product quality and the consumers’ reference quality as well as on price. In the ham industry, both quality and price determine consumers’ purchasing intentions while firms agree on the best contractual configuration to adopt by choosing between either a wholesale price contract (WPC) or a revenue sharing contract (RSC). The parameter contracts are defined through a blockchain technology, which finds the best way to coordinate a supply chain. Also, the blockchain ensures the product quality, visibility, and traceability. Our findings demonstrate that supply chain coordination depends on three major ingredients: the consumers’ quality evaluation, the price impact on the stock of goodwill, and the sharing agreement that firms negotiate. When the first two are inactive, firms coordinate through an RSC in most of the cases, whose parameters are defined by a blockchain, leading to the use of smart contracts. Instead, when consumers’ evaluation and/or the price impact on goodwill play a role, the RSC seldom leads to coordination and the firms’ preferences change completely. In fact, the firms’ strategies become more short-term oriented, focusing on sales rather than the accumulation of goodwill. Although the RSC leads to lower prices and larger sales, it considerably lowers the firms’ profits, highlighting serious doubts about its possible application in some supply chain contexts, although a blockchain technology is used. -
Chapter 6. Conclusions and Future Research Directions
Pietro De GiovanniThis chapter delves into the transformative effects of digital technologies on quality management in Supply Chains. It begins by reviewing dynamic approaches to quality management, emphasizing the shift from passive to active strategies driven by digital transformation. The chapter then explores how digital technologies enable the creation of knowledge, leading to operational and economic benefits. Subsequent chapters analyze the advantages of digital collaboration, the benefits of smart products, and the role of blockchain in enhancing quality transparency. The chapter concludes by outlining future research directions, encouraging further investigation into the integration of digital technologies and the risks they pose. By offering a detailed and vertical analysis, this chapter provides valuable insights into the evolving landscape of quality management in the digital age.AI Generated
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AbstractThis chapter briefly describes the path that reader made when reading this book. It leaves some additional reflections and inspirations on how to carry out modern research in quality management by capturing all advantages and drawbacks of digital transformation in Supply Chain management. -
Backmatter
- Title
- Dynamic Quality Models and Games in Digital Supply Chains
- Author
-
Prof. Pietro De Giovanni
- Copyright Year
- 2021
- Publisher
- Springer International Publishing
- Electronic ISBN
- 978-3-030-66537-1
- Print ISBN
- 978-3-030-66536-4
- DOI
- https://doi.org/10.1007/978-3-030-66537-1
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