Hugo DeCampos accepted for publication in International Journal of Production Economics

Share

Mike Ilitch School of Business Assistant Professor of Global Supply Chain Management Hugo DeCampos has had a paper accepted for publication in the International Journal of Production Economics, which focuses on the interface between engineering and management, production, and all aspects related to manufacturing and the process industries.

The article, “Supply Chain Horizontal Complexity and the Moderating Impact of Inventory Turns: A Study of the Automotive Component Industry,” was co-authored by Sriram Narayanan (Michigan State University) and Claudia Rosales (University of Arkansas).

Abstract

This study examines the impact that a focal firm’s number of products it produces, number of suppliers it sources from, and number of customers it sells to has on firm financial performance (ROA and ROS). Additionally, we test the moderating impact of inventory turns on these relationships. Using archival data compiled from different databases, we use multivariate regression and moderation analysis to test our hypotheses in the context of the automotive component industry. We find that increased number of products has a positive direct effect on financial performance with diminishing returns. Additionally, increased inventory turns has a positive interaction with both increased number of products and increased number of suppliers. This suggests that firms can leverage the competency needed to achieve improved inventory turns to better manage the horizontal complexity inherent with a broader supply base and product line. This is the first paper to our knowledge that simultaneously studies upstream, downstream and internal sources of supply chain horizontal complexity within a single industry, thus providing a supply chain view of the topic. Our findings have important implications for practitioners grappling with the tradeoffs inherent in managing supply chain horizontal structural complexity.

View all news stories