The Study of Innovation Management Model:
Trust, Mutual Assist, Thanksgiving
- An Example of a Healthy Chain Retail Stores
Student: Li-Siang Lin
Advisor: Jing-Er Chiu, Ph.D.
Contents
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Abstract
Introduction
References
Research method
Expected results
2
Abstract(1/3)
• Consumers gradually accept organic crops, and this
causes the booming of chain retail health food stores.
• The concept of "trust" in the supply chain of
suppliers or partners is the object of study.
• The impact of core values - "trust", "mutual
assistance" and "thanksgiving" on innovation
management model and the supply chain
performance.
3
Abstract(2/3)
• Identify the key performance indicators of the
supply chain through literature review and expert
questionnaires and compare with the performance
of CPFR.
• Finally, analyze the results of this study, and find
their innovation management model for this
health retail chain store.
4
Abstract(3/3)
• Part of the expected results, make use of a
healthy retail chain stores based on "trust" the
dimensions of the four major competitive
advantage: speed, quality, cost and flexibility
and find out the key of dimensions, to
strengthen and improve the supply chain
processes.
• Make some conclusions to the healthy retail
chain stores as a practical reference.
5
Introduction
• Research Background and Motivation
• Research purposes
• Research framework and processes
• Limitations of the research
6
Research Background and Motivation
(1/4)
Mechanistic
Organic
7
Research Background and Motivation
(2/4)
• Mechanistic organization: Fewer span of control,
vertical communication, decision-making slowed,
employees lack of the autonomy, flexibility weak,
higher management costs.
• Organic organization: the group is a kind of flat
that include cross-functional, cross-level and
cross-department, reduce level, enhance
employees autonomy, no excessive
standardization work or regulations, the
organization has a more flexible, comprehensive
communication network.
8
Research Background and Motivation
(3/4)
• The object of this study is a healthy supply
chain stores, that branch in Taiwan has already
reach as high as eighty-eight, the overall
business organizations through “Trust" and "
Mutually Assist " and “Thanksgiving" for the
core values​​, and establish a system of trust
between consumers and producers.
9
Research Background and Motivation
(4/4)
• CPFR:A collaborative process whereby
supply chain trading partners can jointly plan
key supply chain acidities from production and
delivery of raw materials to production and
delivery of final products to end customers.
Collaboration encompasses business planning,
sales forecasting, and all operations required to
replenish raw materials and finished goods.
10
Research purposes(1/2)
• Analysis of the concept of "trust " for a
healthy retail chain in the supply chain
between suppliers or partners.
• The impact of core values - "trust", "mutually
assist" and "thanksgiving" on innovation
management model and the supply chain
performance.
11
Research purposes(2/2)
• Compared the performance of CPFR between
the object and suppliers.
• The literature review and expert questionnaire
to identify the key performance indicators of
the supply chain, with CPFR there the
similarities and differences, and define
innovation management model belonging to
the shop.
12
Research framework and processes
Identify research problems
• Ch1: Introduction.
• Ch2: References.
Search for relevant research
literature
Analyze the trust of supplier and
find the difference with CPFR
• Ch3: Research method.
Definition of innovation
management model
• Ch4: Expected result.
Results and future research
13
Limitations of the research
• Across a wide range of healthy organic retail
chain.
• For familiar with the study of the organizational
structure, the path of the supply chain and
operational procedures.
• The research will be focus on the healthy retail
chain Douliu stores, the Taiwan branch has been
up to eighty-eight stores since 1998 as the
research object.
14
References
• Organic agriculture
• Collaborative Planning Forecasting and
Replenishment
• The concept of trust
• Innovation management model
15
Organic agriculture(1/2)
• In 1924 Dr. Rudolf Steiner took the lead
advocate of organic crops cultivation method.
Until the 1970s, the oil and energy crisis,
organic agriculture was gradually by the
national attention to force governments to reexamine the agricultural policies and norms.
16
Organic agriculture(2/2)
• The definition of organic agriculture from
Council of Agriculture for: Organic agriculture
is to comply with the principle of circulating
sustainable use of natural resources, does not
allow the use of synthetic chemicals, the
emphasis on the conservation of soil and water
resources and the ecological balance of the
management system, and to achieve the goal of
agricultural production of natural safety of
agricultural products.
17
Collaborative Planning Forecasting
and Replenishment
• CPFR: Introduction
• CPFR: Guiding principles
• CPFR: Mission and step
• CPFR: Model and process
18
CPFR: Introduction
• Use of Internet technology, the public share downstream
end of the supply chain inventory and sales information,
under the guidance of this group, retailers and
manufacturers within the supply chain collaborative
planning, forecasting and replenishment, and also jointly
bear the consequences and responsibility.
• VICS first pronounce CPFR in 1998.
• CPFR Guide lines(2004):The process flow between the two
corporate partners to the formal specification. Enterprises of
both sides must agree to collaborative planning and
forecasting, and monitoring the entire process until the
success of the operation between replenishment, and then
verify the occurrence of the abnormal condition, and finally
take feasible solution to solve.
19
CPFR: Guiding principles
Guiding principles
Emphasized consumer-focused and
successful pursuit of the value chain
The main purpose
CPFR scenario-based architecture, as
the goal to improve customer value
and identify each process core
competencies.
To share forecast demand planning in Repeated exchange of information
accordance with the needs of
among partners, to improve demand
consumers
planning capabilities, making the
supply chain predictability to
improve.
To cope with supply constraints, the
Enterprise risks should be shared in
order to eliminate supply constraints retailer can switch orders production
mode, in order to obtain a higher
interest.
Source: Chang, P. L. et al.(2006), Production management .
20
CPFR: Mission and step
• Strategy & Planning: Establish the ground rules for the
collaborative relationship. Determine product mix and
placement, and develop event plans for the period.
• Demand & Supply Management: Project consumer
(point-of-sale) demand, as well as order and shipment
requirements over the planning horizon.
• Execution: Place orders, prepare and deliver shipments,
receive and stock products on retail shelves, record sales
transactions and make payments.
• Analysis: Monitor planning and execution activities for
exception conditions. Aggregate results, and calculate key
performance metrics. Share insights and adjust plans for
continuously improved results.
21
CPFR: Model and process
Source: VICS website, http://www.vics.org/committees/cpfr/#f1
22
The concept of trust(1/7)
• Researchers have long maintained that trust is
essential for understanding generalized behavior
and economic exchanges(Benassi, 1999).
• Trust is taken for granted in business transactions
and is more conspicuous in its absence than in its
presence (Baier, 2004).
• On a national basis, trust has been shown to be an
integral component of a tight syndrome of social,
political and economic conditions(Delhey, 2002).
23
The concept of trust(2/7)
• Trust is also applied as a framework for
considering the dynamics of inter-group and intragroup interactions within and between social
contacts at all levels, including family, friends,
community, and nations (Hardin, 2002).
• The differences between these definitions
illustrate that trust can be viewed on many levels
(i.e., global, national, regional, organizational,
community-based, interest-based, and
interpersonal) with varying degrees in between. It
remains a difficult concept to describe due to its
dynamic, evolving and multi-faceted nature
(Lewicki & Bunker, 1996).
24
The concept of trust(3/7)
Author
Literature
Fukuyama (1995) ;
Knack and Keefer(1997)
There is a great deal of recent theoretical and
empirical evidence that trust between people
fosters cooperation and economic activity and
is hence crucial for economic and social
development.
R. M. Morgan and S. D.
Hunt(1994)
Commitment and trust lead directly to
cooperative behaviors that are conducive to
relationship marketing success.
25
The concept of trust(4/7)
Author
Literature
P. M. Doney and J. P. Cannon(1997)
This definition of trust is relevant in an
industrial buying context.
A buying firm facing some degree of
risk in a purchase situation trust to a
supplier or salesperson that the buyer
believes is able to perform effectively
and reliably (credible) and is interested in
the customer's best interests(benevolent).
Gambetta and Diego(2000)
When we say we trust someone or that
someone is trustworthy, we implicitly
mean that the probability that he will
perform an action that is beneficial or at
least not detrimental to us is high enough
for us to consider engaging in some form
of cooperation with him.
26
The concept of trust(5/7)
Author
Literature
Putnam(1993)
Trust is a habit formed during a centurieslong history of "horizontal
networks of association" between people,
covering both commercial and civic
activities.
Morgan and Hunt(1994)
Trust as the perception of "confidence in the
exchange partner's reliability and integrity."
Both definitions highlight the importance of
confidence and reliability in the conception
of trust.
27
The concept of trust(6/7)
Author
Literature
Arrow(1974)
Trust is an important lubricant of a social
system. It is extremely efficient; it saves
people a lot of trouble to have a fair degree
of reliance on other people's word.
Inglehart and Baker(2000)
Trust is a social construct that is based on
generalized relationships.
Nakata and Sivakumar(2001))
The willingness of a party to be vulnerable
to the actions of another party based on the
expectation that the other will perform a
particular action important to the trustor,
irrespective of the ability to monitor or
control the other party.
28
The concept of trust(7/7)
Source: D. H．McKnight, L．L. Cummings and N．L. Chervany (1998)
29
Innovation management model(1/3)
• The impact of innovativeness on firm
performance and economic growth has been of
interest to economists for decades
(e.g., Mansfield et al., 1971).
• Innovativenessis defined as the adoption of an
idea or behaviour—whether pertaining to adevice,
system, process, policy, programme, product or
service—that is new to the adopting organisation
(Zaltman et al.,1973).
• One person or group’s propensity to adopt a new
idea or technology early, relative to others,
innovativeness. (Rogers and Shoemaker, 1971)
30
Innovation management model(2/3)
• Innovation refers to any incremental or radical
change embodied in product and process and
includes change in value activities such as service
and administration (Sher and Yang, 2005).
• Innovativeness has been consistently linked to
higher firm performance (Calantoneetal.,2002;
Deshpande andFarley,2004)
31
Innovation management model(3/3)
Source: http://amaanali.wordpress.com/tag/organic-structure/
32
Research Methods
• Research Process
• The frame of questionnaire
• Expert questionnaire process
33
Research Process
(Conceptual framework)
innovation
management
Core value
Mutual
Assist
Supply chain
performance
Trust
Thanksgiving
Cost
Supplier
Trust
analyze
Retail
Flexibility
Quality
Speed
The performance of CPFR
34
The frame of Questionnaire
Competitive priorities
Definition
Quality strategies
Organizations can create customer value by either
reducing costs or increasing benefits in the production
equation
(i.e., value = benefits / costs).
Cost strategies
Focus on continually improving manufacturing
processes to increase product reliability and customer
satisfaction.
Flexibility strategies
In general terms, flexibility refers to a firm's agility,
adaptability, and responsiveness.
Speed strategies
Consideration of nothing more than time.
For example: time-to-market, lead time and
communication response time.
Source : M. A. Youndt, S. A. Snell, J. W. Dean, Jr., D. P. Lepak(1996)
35
Expert questionnaire process
Literature collection
Draft questionnaire production
The opinions of experts and scholars
Questionnaire correction
Sent out questionnaires
36
Expected results
• "Trust" structure of the object and its suppliers, as
an important basis of the core values​​.
• Find the impact level of the core values - "trust",
"mutually assist" and "thanksgiving" on
innovation management model and the supply
chain performance, and gives the results as a
reference to this store.
• Compared the performance of CPFR between the
object and suppliers.
• Define innovation management model belonging
to the shop, and gives the results as a reference to
this store.
37
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