The role of control power allocation in service supply chains: Model analysis and empirical examination

Weihua Liu*, Shuqing Wang, Lujie Chen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

26 Citations (Scopus)

Abstract

In complex and competitive business environment, there have been many examples of supply chain members fighting for power. Therefore, researchers have begun focusing on the impact of control power allocation on the supply chain. This paper examines the allocation of power in different service supply chain relationships, analyzing the impact of service level on optimal control power allocation and comparing the differences between the optimal power distribution in service supply chains and that of manufacturing supply chains. We adopt a mathematical model building method to discuss this issue, verifying the theoretical perspectives through empirical studies of China's largest state-owned logistics company, the China Railway Company, and the private ownership enterprise, Tianjin SND Logistics Company. We also develop a conceptual model of the influence of control power on the performance of service supply chains, based on the modeling and case analysis. The conceptual model shows several results: the control power allocation determines the dominant structure of the supply chain; the service provider's wholesale pricing strategy and the service integrator's sales price strategy present different outcomes under various dominant structures of the supply chain, which will greatly affect the performance of the corresponding supply chain; and the relationship between the supply chain dominant structure and the price can be adjusted by the service level.

Original languageEnglish
Pages (from-to)176-190
Number of pages15
JournalJournal of Purchasing and Supply Management
Volume23
Issue number3
DOIs
Publication statusPublished - Jun 2017
Externally publishedYes

Keywords

  • Conceptual model
  • Control power;Service supply chain;Model analysis;Case study
  • Service level

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