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IEEE Transactions on Engineering Management Editorial for May 2017

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  1. About This Issue

This issue of the IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT includes ten research articles. The relevance and usefulness of the articles are summarized below:

“Managing New Technology Using Malleable Profit Functions” (by Arend, Levesque, and Minniti): This research article’s contribution to practice consists in encouraging managers to build capabilities in lever-pulling––i.e., lowering or increasing entry or variable costs, or potential market penetration, especially if their firm is expected to pioneer often. Specifically, the authors’ argument provides a comprehensive and intuitive way to think about profits and their determinants not simply as an outcome but as a malleable strategic tool capable of influencing the potential entry of competitors. When research, development, and engineering (RD&E) functions are important, the strategic manipulation of entry cost, variable costs, and market size (the parameters of the profit function) may allow pioneers to maintain a leadership position. While the strategic manipulation of each of these strategic ‘levers’ has been discussed in previous work, this paper provides managers with a way to think holistically about the conditions under which each of the three options should be preferred and why. Further, the authors identify the range of each lever’s values that make welfare-improving transfer payments possible. That is, they provide managers with a way to think about how to create favorable conditions for potential lobbying efforts aimed at encouraging policy-makers to arrange for the support of pioneering RD&E activities.

“The Bullwhip Effect in an Online Retail Supply Chain: A Perspective of Price-Sensitive Demand Based on the Price Discount in E-Commerce” (by Gao, Wang, He, and Jia): This article offers a method of measuring the bullwhip effect in the online retail supply chain and analyzing the impact of frequent price discounts in ecommerce on the bullwhip effect. The authors’ findings could assist managers better understand the bullwhip effect in the online retail supply chain and its difference compared to that in the offline supply chain. Through comparison and analysis, they conclude several managerial insights. First, they deduce the condition when the bullwhip effect in the online retail supply chain is smaller than that in the offline supply chain, thus offering a reference for traditional companies to determine when they should develop new e-commerce initiatives or strengthen their current e-commerce presence in order to reduce the bullwhip effect and costs in supply chains. Second, contrary to previous research, they find that in the online retail supply chain, the larger lead time will cause a smaller bullwhip effect in certain conditions. Therefore, they argue that supply chain managers should determine the appropriate lead time with their cooperators for a lower bullwhip effect according to the actual online supply chain conditions rather than blindly pursuing a shorter lead time.

“Multi-Objective Discrete Artificial Bee Colony Algorithm for Multi-Objective Permutation Flow Shop Scheduling Problem with Sequence Dependent Setup Times” (by Li and Ma): This article proposes a novel multi-objective discrete artificial bee colony algorithm based decomposition (MODABC/D) to solve multi-objective permutation flowshop scheduling problem with the sequence dependent setup times. In order to make the standard artificial bee colony algorithm to solve the flowshop scheduling problem, a discrete artificial bee colony algorithm is proposed to solve the problem based on the perturbation operation. Then, a problem-specific solution builder heuristic is used to initialize the population to enhance the quality of the initial solution. Finally, a further local search method is comprised of a single local search procedures based on the insertion neighborhood structures to find the better solution for the non-improved individual. The performance of the proposed algorithms is tested on the well-known benchmark suite of Taillard.

“Heterogeneous Networked Cooperative Scheduling with Anarchic Particle Swarm Optimization” (by Behnamian): In today’s international market, no individual small factory can have a sustainable independent existence. Therefore, in the second type of parallel structure, a number of different individual companies join together to form a production network. In this case, the participated companies can operate more economically than operating individually. The recent remarkable attention in the distributed manufacturing management in both academia and industry has demonstrated the significance of such systems. A practical example of multi-factory production problems can be found in the multinational lingerie company in Hong Kong (Leung et al. 2003), food and chemical process industry (Timpe and Kallrath 2000) and steel corporation in USA with four factories (Sambasivan and Yahya 2005). For this complicated production network, proposing an efficient scheduling technique is critical to react quickly to market changes. The difficulties faced in this problem are not only scheduling the jobs in a most favorable way, but also assigning the best factory to the jobs. Therefore, to generate the schedule in the distributed manufacturing environment, these two sub-problems must be simultaneously considered. Due to these reasons, scheduling in a multi-factory environment has become much more complex than traditional one (Chen and Pundoor 2006).

“A Method of Improving Overlapping of Testing and Design” (by Tahera, Earl, and Eckert): Reducing the product development time is a critical issue in the top-performing companies. These companies also implement ‘get it right the first time’ strategy and start testing activities as early as possible in the product development process. In an iterative design process, overlapping testing and design are essential practices to reduce development time. However, there is little academic research that has investigated the reasons for overlapping of testing and design tasks, and how to manage this overlapping especially in the context of a complex product development process. In this paper, an extensive case study is performed, providing new insights from industrial practice and better understanding the issues that arise in overlapping design and testing activities. Overlap is not always planned and often companies have no choice but to overlap downstream (re)design activities with upstream testing. This article proposes a conceptual method for addressing such issues of overlapping based on assessing the degree of deviations between intermediate results from testing and those obtained from simulation.

“A Novel Two-Phase Approach for Process Optimization of Customer Collaborative Design Based on Fuzzy-QFD and DSM” (by Liu, Hu, Zhang, and Lei): Owing to its practical importance, the optimization of customer collaborative design has attracted much attention, and various resolution methods have been proposed by both researchers and practitioners. The recent advance is to deal with customer demand recognition and conversion within a product design project. Nevertheless, existing approaches are lacking in the systematic research perspective of integrating requirements mapping optimization with the scheduling of coupled design activities. As a result, this failure impedes their implementation in practice. Hence, finding the optimum ways by which to fulfill CRs and map CRs onto the relevant ECs and PCs is the first key issue. Also, finding a reasonable approach to recognizing decoupling is another important issue to be considered. This paper presents a novel two-phase approach to the process optimization of customer collaborative design based on fuzzy QFD and DSM. The results show that this approach can efficiently solve customer collaborative design problems.

“How Do Informal Ties Drive Open Innovation? The Contingency Role of Market Dynamism” (by Zhu, Dong, Gu, and Dou): By addressing the question of how companies can embrace open innovation, this research article offers several practical implications to managers. First, the authors encourage managers to exert efforts on establishing and maintaining informal ties with peers in market, officials in government, and partners in the university. Specifically, inbound open innovation requires various informal ties with business, government, and university partners; while outbound open innovation primarily rely on business partners. Second, managers should be aware of the different mechanisms between two dimensions of open innovation. For inbound open innovation, firms are willing to involve various partners with different backgrounds in the innovation process through informal connections. For outbound open innovation, firms are relatively cautious in choosing partners and tend to adopt formal instruments such as contractual licensing. Third, in inbound open innovation, searching for external knowledge and information, managers should pursue environmental contexts. Changing conditions in market enable the leveraging of university ties but dampen business ties during open processes. Overall, the findings help clarify the role of informal ties in innovation openness and warn managers about the limited influence of business ties under specific market conditions.

“Design Structure Matrix Modeling of Supply Chain Management System Using Bi-Perspective Group Decision” (by Son, Kim, and Ahn): The “bi-perspective group decision” procedure, introduced in this article, can create the design structure matrix (DSM) of an organization in a systematic way while considering the gaps in the assessment of the degree of interactions coming from different perspectives of the influencing and the influenced parties. The procedure and created organizational DSM is helpful for top management, in particular to understand an organization’s characteristics of dependency/interaction among its elements/units, which can be used for the organizational improvement (e.g., redesign of the information flow structure among units). The discussion on perception gaps between self-assessment and peer-assessment of influence (or dependency) and associated categorization of elements based on their assessment behaviors are presented. This approach can be used as a means of diagnosis for each unit by analyzing its functionality/capability perceived by itself versus others and identifying the gaps.

“Supply Chain Security: A Classification of Practices and an Empirical Study of Differential Effects and Complementarity” (by Lu, Koufteros, and Lucianetti): This article offers several practical insights in the area of supply chain security (SCS). First, it proposes a classification that can be utilized to diagnose a firm’s status. Based on the level of implementation of practices for each class, managers can benchmark their firm against their peers. The results would allow them to identify specific gaps and undertake a more targeted approach to fill those gaps. Second, practices have differential effects on SCS, and thus managers should carefully select and implement practices that are apposite to the specific needs of their firm. For instance, detection practices appear to make the biggest difference for SCS. Third, there is evidence to suggest that those firms that deploy practices in a more systemic approach can attain better SCS performance. Thus, firms are advised to implement the practices as a system because the practices reinforce each other. Fourth, there are some sceptics that question whether investments in supply chain security practices are warranted given the “high” costs and limited data to justify them from a financial perspective. This paper provides empirical evidence that concerns regarding costs are not justified. In fact, correlations between cost (measured as reduction in costs over the last three years) and all four practices are positive and highly significant. This indicates that investments in SCS are conducive to cost reduction.

“Interlocking Patent Rights and Value Appropriation: Insights from the Razor Industry” (by Sternitzke): Managers strive to develop superior products and apply for intellectual property rights in order to protect these products from imitation. Only few managers are aware of advanced intellectual property (IP) strategies that help them achieve better protection than is possible with filing a few patent rights. This article studies Gillette, a company known for its superior IP strategies, and reveals how so-called interlocking patents were filed that successfully kept competitors at bay. In order to file such patents, engineering and marketing staff would benefit from closely working together during product development, defining clearly which technical features deliver value for a customer. Independently, engineers might conduct function analysis to identify basic functions and their underlying components, which qualify as interlocking elements for a patent filing as well. These features might then be taken as a basis for creating interlocking patents that establish better imitation barriers. In this context, engineers and patent attorneys may pay attention to additional features that vary from patent to patent, as their selection is pivotal to prevent imitation.

About the author

Rajiv Sabherwal

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