The Original Equipment Manufacturer’s Sourcing Strategy And Supply Reliability Improvement In A Co-opetition Supply Chain

With the deepening of specialization and cooperation among enterprises under the economic globalization,more and more original equipment manufacturers(OEMs)in the supply chain outsource their manufacturing and sourcing businesses to contract manufacturers(CMs).In addition,the technical accumulation of CMs makes it possible for them to produce their own brand products,which forms a co-opetition relationship between the CM and the OEM.To better understand the interactions between the choice of sourcing strategy and the improvement of supply reliability,using of the theories and methods from the production operation management,contract theory,game theory,and other related fields,this dissertation carries on a deep discussion on the sourcing strategy choice and the supply reliability improvement of supply chain members under the research background of co-opetition supply chain.The research results of this dissertation mainly include the following aspects:First,this dissertation studies the OEM’s contract menu design and sourcing strategy choice under asymmetric cost information.In consideration of the economies of scale,the sourcing cost function uses a quantity discount form and the discount type is the CM’s private information.And the principal agent model of the OEM and the CM is modeled.Moreover,the OEM designs a contract menu that includes sourcing quantities and transfer payments to identify the CM’s true types,and the CM can encroach the market and decide the ordering quantities of its own brand product.Given that the OEM can choose to control the components sourcing business or delegate it to the CM,this dissertation analyzes the OEM’s choice of sourcing strategy and discusses the impact of CM’s market encroachment on the choice of strategy.Results show that,when there is no market encroachment,the control strategy is the OEM’s optimal choice.With the CM’s market encroachment,the OEM turns to choose the delegation strategy.Although the OEM is required to pay the CM an information rent under this strategy,it still chooses the delegation strategy because of the discount sharing effect generated by centralized procurement.Under the control strategy,when market competition is relatively fierce,the OEM is squeezed out of the market.In addition,when the market competition level is extremely low or high,supply chain members share the same preference in the control strategy and the delegation strategy,respectively.Second,the dissertation studies the CM’s supply reliability improvement decision and the OEM’s sourcing strategy choice with the existence of the yield uncertainty.Specifically,the dissertation considers a two-tier supply chain that consists of one OEM and two CMs,one of which can produce its own brand products to encroach the market,and the OEM can choose single sourcing or dual sourcing.This dissertation constructs a reliability improvement cost function with convex properties and formulates a Stackelberg game model.By comparing members’ optimal order quantity and the strategic response of reliability improvement investment under four behavioral combination cases,this dissertation analyzes the impacts of yield uncertainty and market encroachment on the OEM’s sourcing strategy choice in the competitive environment between contract manufacturing business.Results indicate that,in the case of noncompetitive CM,when the fixed cost of component sourcing is high and the profit margin of sales is relatively low,the OEM prefers to adopt single sourcing.Under this case,yield uncertainty in this case does not affect the OEM’s strategy choice.In the case of competitive CM,with the increase of competition level and yield improvement cost,the OEM’s sourcing strategy will shift from single sourcing to dual sourcing.In addition,when the reliability improvement cost is low or the initial yield rate is high,the OEM and competitive CM have a consistent preference for a single sourcing,otherwise,they will jointly switch to dual sourcing.Third,this dissertation investigates the OEM’s willingness of assisting capacity investment and sourcing strategy choice under capacity constraints.This dissertation considers a supply chain consisting of one dominant OEM and two heterogeneous CMs.Moreover,the heterogeneity of contract manufacturers is reflected in the capacity constraint level and market encroachment ability.By introducing the sharing mechanism of investment cost of capacity expansion,this dissertation constructs the OEM’s sourcing order allocation model,analyzes the OEM’s order quantities from noncompetitive CM and competitive CM or dual sourcing,respectively,and analyzes the influence of capacity expansion investment and market encroachment behavior on sourcing strategy preference.Results show that,without capacity constraints,the OEM prefers to source components only from noncompetitive CM.With the capacity constraints,the OEM prefers to allocate all orders to noncompetitive CM and help it expand capacity in the face of fierce competition from competitive CM.However,as the cost-sharing proportion of capacity expansion increases,the OEM will source components from competitive CM.In addition,the OEM and the competitive CM are more likely to collaborate on components sourcing business when market competition is moderate.However,when the initial capacity level or the cost-sharing proportion of capacity expansion is high,they are more willing to compete against each other on the product market.