Sachin Modi accepted for publication in Journal of Operations Management
Mike Ilitch School of Business Professor of Global Supply Chain Management Sachin Modi had a recent article accepted for publication in the Journal of Operations Management (JOM).
JOM's mission is to publish original, empirical, operations management research that demonstrates both academic and practical relevance.
The article, “Product Personalization and Firm Performance: An Empirical Analysis of the Pharmaceutical Industry,” discusses the relationship between product personalization and financial performance for pharmaceutical firms.
The article was co-authored by Marouen Ben-Jebara from the University of South Carolina - Aiken.
Recent advances in manufacturing and communication technology have made it possible for firms to offer products that are personalized to individual customers’ specifications. While personalizing products leads to benefits for firms, it also requires significant resources, calling into question the financial efficacy of this practice. This situation is especially salient in the pharmaceutical industry, where drugs are personalized to individuals. This type of medicine is expected to account for approximately 50% of drug spending in the U.S. market by 2022; however, the rising costs of producing and delivering such medications make their viability uncertain. In this study, we present a framework that conceptualizes a nonlinear inverted U‐shaped relationship between product personalization and financial performance. We further investigate the role of supply‐chain disintermediation in enhancing the benefits of personalization. Analysis of data from the pharmaceutical industry confirms that product personalization improves financial performance only up to a point, beyond which firms experience negative performance effects. Furthermore, supply‐chain disintermediation moderates this relationship such that the inverted U‐shape is steeper with increasing disintermediation levels. Together, these findings provide important guidelines for managers formulating their firms’ product personalization strategies.