Prof. Dr.
Kai Hoberg

Publications

Professor of Supply Chain and Operations Strategy

Publications

Journal Articles (Peer-Reviewed)

Copy reference link   DOI: 10.1016/j.ejor.2017.05.010

Abstract: Firms are increasingly interested in transport policies that enable a shift in cargo volumes from road (truck) transport to less expensive, more sustainable, but slower and less flexible transport modes like railway or inland waterway transport. The lack of flexibility in terms of shipment quantity and delivery frequency may cause unnecessary inventories and lost sales, which may outweigh the savings in transportation costs. To guide the strategic volume allocation, we examine a modal split transport (MST) policy of two modes that integrates inventory controls.We develop a single-product–single-corridor stochastic MST model with two transport modes considering a hybrid push–pull inventory control policy. The objective is to minimize the long-run expected total costs of transport, inventory holding, and backlogging. The MST model is a generalization of the classical tailored base-surge (TBS) policy known from the dual sourcing literature with non-identical delivery frequencies of the two transport modes. We analytically solve approximate problems and provide closed-form solutions of the modal split. The solution provides an easy-to-implement solution tool for practitioners. The results provide structural insights regarding the tradeoff between transport cost savings and holding cost spending and reveal a high utilization of the slow mode. A numerical performance study shows that our approximation is reasonably accurate, with an error of less than 3% compared to the optimal results. The results also indicate that as much as 85% of the expected volume should be split into the slow mode.

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Copy reference link   DOI: 10.1111/poms.12721

Abstract: To be efficient, logistics operations in e-commerce require warehousing and transportation resources to be aligned with sales. Customer orders must be fulfilled with short lead times to ensure high customer satisfaction, and the costly under-utilization of workers must be avoided. To approach this ideal, forecasting order quantities with high accuracy is essential. Many drivers of online sales, including seasonality, special promotions and public holidays, are well known, and they have been frequently incorporated into forecasting approaches. However, the impact of weather on e-commerce operations has not been rigorously analyzed. In this study, we integrate weather data into the sales forecasting of the largest European online fashion retailer. We find that sunshine, temperature, and rain have a significant impact on daily sales, particularly in the summer, on weekends, and on days with extreme weather. Using weather forecasts, we have significantly improved sales forecast accuracy. We find that including weather data in the sales forecast model can lead to fewer sales forecast errors, reducing them by, on average, 8.6% to 12.2% and up to 50.6% on summer weekends. In turn, the improvement in sales forecast accuracy has a measurable impact on logistics and warehousing operations. We quantify the value of incorporating weather forecasts in the planning process for the order fulfillment center workforce and show how their incorporation can be leveraged to reduce costs and increase performance. With a perfect information planning scenario, excess costs can be reduced by 11.6% compared with the cost reduction attainable with a baseline model that ignores weather information in workforce planning.

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Copy reference link   DOI: 10.1108/IJPDLM-05-2016-0142

Abstract: PurposeThe purpose of this paper is to identify the interplay between a firm’s financial situation and its inventory ownership in a single-firm and a two-firm perspective.Design/methodology/approachThe analysis uses different secondary data sources to quantify the effect of both financial constraints and cost of capital on inventory holdings of public US firms. The authors first adopt a single-firm perspective and analyze whether financial constraints and cost of capital do generally affect the amount of inventory held. Next, the authors adopt a two-firm perspective and analyze the inventory ownership in customer-supplier relationships.FindingsInventory levels are affected by financial constraints and cost of capital. Results indicate that higher costs of capital are weakly associated with lower inventories. However, contrary to the authors’ expectations, firms that are less financially constrained hold less inventories than firms that are more financially constrained. Finally, the authors find that customers hold the larger fraction of supply chain inventory in supplier-customer dyads.Practical implicationsThe authors’ results indicate that financial considerations generally play a role in inventory management. However, inventory holdings seem to be influenced only slightly by financing costs and inventory holdings between supplier and customer seem to be less than optimal from a financial perspective. Considering those financial aspects can lead to relevant financial advantages.Originality/valueIn contrast to other recent research, the authors study how the financial situation of a firm affects its inventory levels (not vice versa) and also consider inventories from a two-firm perspective.

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Copy reference link   DOI: 10.1111/jbl.12150

Abstract: This exploratory study analyzes the careers of 307 supply chain executives (SCEs). Motivated by career theory, our findings create new knowledge about the educational backgrounds and career paths that lead to SCE positions. Based on an optimal matching analysis, we are able to distinguish among six career patterns for SCEs. They differ in terms of the individuals’ previous professional experience, educational background, and the time they needed to arrive in an executive position. By characterizing the backgrounds and career paths of SCEs, we show that supply chain management (SCM) is truly a cross-functional profession. Our findings suggest that previous staff responsibility appears to be a more important hiring criterion than extensive SCM experience. While 56% of the executives had prior staff responsibility, only 12% of the cumulated careers were actually spent inside the SCM function.

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Copy reference link   DOI: 10.1080/00207543.2016.1157273

Abstract: This study analyses inventory reductions as a means of short-term financing of firms under financial distress. We use quarterly panel data of U.S. manufacturing firms for the period from 1995 to 2007. We identify a sample of 198 distressed firms for which we analyse changes in relative inventory. Approximately 70% of distressed firms reduce their inventories until the end of their individual distress periods. This decrease corresponds to a mean reduction of 18.7 inventory days or 9.4%. Additional regression analyses show that differences in inventory adjustments depend on pre-distress inventory performance, firm size, and turnaround strategy. We also compile a sample of 142 firms that defaulted to analyse inventory actions of unsuccessful turnarounds. Our findings indicate that defaulting firms also reduce their inventories but that the reductions are lower than those of firms that resolve their financial distress. We conclude that distressed firms use short-term inventory adjustments to free up cash and to achieve long-term efficiency gains from inventory optimisation. Our findings suggest that inventory optimisation is an essential part of a complete and successful turnaround strategy and financially distressed firms should always consider this action as a means to prevent bankruptcy.

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Copy reference link   DOI: 10.1080/0740817X.2014.999897

Abstract: The effect of inventory policies on order variability has been analyzed extensively. Two popular means of reducing order variability are demand smoothing and order smoothing. If the objective is minimizing demand variability, demands and orders can be heavily smoothed, resulting in an inventory policy that orders equal amounts in each time period. Such a policy obviously minimizes order variability, but it leads to high cost and low responsiveness of the inventory system. To optimize the overall performance of an inventory system, the effect of the inventory policy on all relevant dimensions of operational performance must be analyzed. We address this issue and analyze the effect of the parameter values of an inventory policy on three main dimensions of operational performance: Order variability, expected cost, and responsiveness. The inventory policy we use is the partial correction policy, a policy that can be used to smooth demand and to smooth orders. To analyze this policy, we use linear control theory. We derive the transfer function of the policy and prove the stability of the inventory system under this policy. Then, we determine the effect of the policy parameters on order variability, cost, and responsiveness and discuss how good parameter values can be chosen.

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Copy reference link   DOI: 10.1016/j.ijpe.2014.05.019

Abstract: Advanced inventory policies require timely system-wide information on inventories and customer demand to accurately control the entire supply chain. However, the presence of unsynchronized processes, processing lags or inadequate communication structures hinder the widespread availability of real-time information. Therefore, inventory systems often have to deal with obsolete data which can seriously harm the overall supply chain performance. In this paper, we apply transfer function methods to analyze the effect of information delays on the performance of supply chains. We expose the common echelon-stock policy to information delays and determine to what extent a delay in inventory information and point-of-sale data deteriorates the inventory policies׳ performance. We compare the performance of this policy with the performance of an installation-stock policy that is independent of information delays since it only requires local information. We find that this simple policy should be preferred in certain settings compared to relying on a complex policy with outdated system-wide information. We derive an echelon-stock policy that compensates for information delays and show that its performance improves significantly in their presence. We note potential applications of the approach in service parts supply chains, the hardwood supply chain, and in fast moving consumer goods settings.

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Copy reference link   DOI: 10.1016/j.jom.2013.05.002

Abstract: This paper investigates the relationship between the inventory dynamics and long-term stock returns of a large panel of U.S. manufacturing firms over the time period from 1991 to 2010. We propose two measures of inventory dynamics: one metric to assess the fluctuations of quarterly inventories within the year and a second metric to quantify relative year-over-year inventory growth. Our results indicate that within-year inventory volatility (IV) and abnormal year-over-year inventory growth (ABI) are associated with abnormal stock returns. Both metrics cannot be entirely explained by common risk factors. We find that firms with high IV and low ABI have the best long-term stock returns, and that stock performance decreases monotonically with higher ABI values. Our results are robust to various control variables including size, book-to-market value, industry and prior performance. We therefore conclude that changes in inventory levels provide valuable insights into the risks and opportunities faced by a company.

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Copy reference link   DOI: 10.1080/07408170600967149

Abstract: In this paper we apply linear control theory to study the effect of various inventory policies on order and inventory variability, which are key drivers of supply chain performance. In particular, we study a two-echelon supply chain with a stationary demand pattern under the influence of three inventory policies: an inventory-on-hand policy that bases orders on the visible inventory at an installation, an installation-stock policy that bases orders on the inventory position (on-hand plus on-order inventory) at an installation, and an echelon-stock policy that bases orders on the inventory position at that installation and all downstream installations. We prove analytically that the inventory-on-hand policy is unstable in practical settings, confirming analytically what has been observed in experimental settings and in practice. We also prove that the installation-stock and echelon-stock policies are stable and analyze their effect on order and inventory fluctuation. Specifically, we show the general superiority of the echelon-stock in our setting and demonstrate analytically the effect of forecasting parameters on order and inventory fluctuations, confirming the results in other research.

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Copy reference link   DOI: 10.1016/j.ejor.2005.11.011

Abstract: In order to obtain a competitive level of productivity in a manufacturing system, efficient machine or department arrangements and appropriate transportation path structures are of considerable importance. By defining a production system’s basic structure and material flows, the layout determines its operational performance over the long term. However, most approaches proposed in the literature provide only a block layout, which neglects important operational details. By contrast, in this paper, we introduce approaches to planning layouts at a more detailed level. Hence, this present paper introduces an integrated approach which allows a more detailed layout planning by simultaneously determining machine arrangement and transportation paths. Facilities to be arranged as well as the entire layout may have irregular shapes and sizes. By assigning specific attributes to certain layout subareas, application-dependent barriers within the layout, like existing walls or columns, can be incorporated. We introduce a new mathematical layout model and develop several improvement procedures. An analysis of the computational experiments shows that more elaborate heuristics using variable neighborhoods can generate promising layout configurations.

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Copy reference link   DOI: 10.1016/j.ejor.2005.10.040

Abstract: In this paper we apply linear control theory to study the effect of various inventory policies on order and inventory variability, which are key drivers of supply chain performance. In particular, we study a two-echelon supply chain with a stationary demand pattern under the influence of three inventory policies: an inventory-on-hand policy that bases orders on the visible inventory at an installation, an installation-stock policy that bases orders on the inventory position (on-hand plus on-order inventory) at an installation, and an echelon-stock policy that bases orders on the inventory position at that installation and all downstream installations. We prove analytically that the inventory-on-hand policy is unstable in practical settings, confirming analytically what has been observed in experimental settings and in practice. We also prove that the installation-stock and echelon-stock policies are stable and analyze their effect on order and inventory fluctuation. Specifically, we show the general superiority of the echelon-stock in our setting and demonstrate analytically the effect of forecasting parameters on order and inventory fluctuations, confirming the results in other research.

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Journal Articles (Professional)

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Abstract: Supply chain management has always been technology oriented and data intensive. But the ongoing explosion of big data and tools that make use of it promise a revolution for companies that can master them.

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Abstract: In the first part of this series, we described the many ways Big Data and Advanced Analytics can be used to improve supply chain performance. Now we look at an approach companies can use to make big supply chain analytics work for them.

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Abstract: Companies struggle to define the value proposition 3D printing brings: While the opportunities for improving products are obvious, how to generate value from it is not. Firms need to first examine its potential and risks along three dimensions: product innovation, customisation, and complexity. Then they need to set clear boundaries for permissible customisation, and decide where to situate 3D printing within their organisation.

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Abstract: The new technologies behind Supply Chain 4.0 not only increase efficiency, they may also deliver huge benefits to the customer. Here’s how supply chain managers can leverage SC 4.0 to create game-changing customer experiences—and benefit as well.

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Abstract: Supply chain leaders frequently deal with an executive team that lacks both knowledge and interest in supply chain management. Yet, the supply chain community all too often struggles to communicate the value it provides. To get the required executive support, SCM needs to be better positioned in the firm. Here is a framework that provides guidance on how to bring supply chain management to the Board agenda.

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Abstract: Who are the professionals who make supply chain management the engine of the firm? We find that many roads lead to Rome: The diversity of supply chain talent resembles the extraordinary, cross-functional nature of the supply chain profession. Here is an overview of the education, career paths, and success factors of supply chain executives.

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Abstract: Forscher haben die Ausbildung und Karrierepfade von Supply-Chain-Führungskräften untersucht. Die Ergebnisse lesen Sie in Teil eins der zweiteiligen Serie "Wer lenkt unsere Supply Chains?"

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Abstract: For many supply chain executives, the Financial Crisis has been one of the toughest challenges in their careers. Firms across industries were required to deal with huge demand-supply mismatches caused by collapsing demand. However, the supply chain community found innovative ways to deal with the challenges of these tough times. Here are five action areas supply chain managers should be aware of—before the next crisis.

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Books

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Abstract: Despite the spread of automation and new supply chain management paradigms, logistics remains dependent on a rather specific set of skills and competences, whether for managerial, administrative or blue collar jobs, such as trucking or warehousing. This implies that the logistical performance of businesses, industries and nation states is strongly influenced by the quantity and quality of the workforce. Insufficient resources of a competent and properly trained workforce in logistics adversely affect the quality of service, reduce productivity in sectors dependent on logistics and ultimately reduce trade competitiveness. While other interventions that affect logistics performance, such as international infrastructures, trade corridors, regulations and services have already been reviewed extensively, this report is the first to cover the contributions of human resources and how to develop skills and improve competences, especially in developing countries. The study proposes a framework for the skills needed according to the logistics activity (e.g. transportation or warehousing) or the type and level of responsibilities. Based on several sources, including recent surveys carried out by the World Bank and the Kuehne Logistics University, the report uncovers where the skills constraints are according to the type of job or countries. Findings include that logistics is an industry struggling to hire skilled workers, although with differences between rich countries (where trucker shortages are more acute) vs. developing economies (were managerial shortages are more widespread). Typically blue-collar logistics jobs have lower status and lower pay than blue-collar jobs in other industries, and are thus less attractive for skilled workers. In developing countries with a potentially available workforce, lack of vocational preparation for careers in logistics means that less skilled workers are not easily re-skilled. Logistics tasks at the upper end of the occupational hierarchy and those with high IT content often require an upskilling of employees to keep pace with new technology. Yet the problem is not confined to recruitment. The surveys points to limited resources, money and staff time allocated to training, especially in developing countries. Realizing the promise of quality jobs from the growth of logistics worldwide requires a coordinated effort by logistics companies, professional associations, training providers and policymakers. Through a combination of facilitation, regulation, advice, financial instruments and land use planning, governments can exert significant influence. © World Bank

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