MIT Sloan Management Review

In the tug of war between manufacturers and retailers, retailers seem to be winning. Retailers control market access and influence consumer behavior. Their power has moved downstream. What can be done to improve the situation? While manufacturers are locked into fixed investments and products with long payback cycles, retailers have a variety of ways of making money. This article explores how manufacturers can benefit by tailoring their approaches to a retailer’s specific business model.

Although executives understand the difference between efficiency and responsiveness, many are confused about when to apply each strategy. In recent years, companies have been caught in the bind in which Dell Inc. found itself in 2008, when it needed to transform its supply chain to serve new customers in new channels. The question was: how to do that? Dell decided to create multiple supply chains, configured so that the company could reduce complexity and benefit from economies of scale.

Multinational corporations are under growing pressure to make sure their contractors and subcontractors in China meet environmental standards. Yet traditional approaches to ensuring environmental, health and safety compliance, such as checklist audits, have proved problematic. This article recommends that organizations work closely with suppliers, providing incentives for identifying, disclosing and addressing problems and establishing collaborative relationships with NGOs and industry groups.

Since the mid-1990s, many companies have outsourced or offshored their manufacturing operations. For most, one crucial enabling factor was cheap oil: Long supply lines were economically feasible because transportation costs were relatively low. Hence, companies emphasized reducing manufacturing costs through (1) offshoring or outsourcing; (2) plant rationalization; and (3) consolidating distribution centers and warehouses to reduce inventory levels and minimize fixed facility costs.

According to innovation expert Eric von Hippel, users are often the first source of new products — and that has important implications for businesses.

With complex products such as automobiles, integration is a key element of performance. That means managers must understand which activities and competencies they can safely outsource and which they need to keep.

Relationships with academic institution scan play an important role in continuing to generate new value for shareholders if you know how to approach those relationships.

As companies rely increasingly on external suppliers, there is an emerging and compelling need for “maestros”

A comparison of two Mexican factories suggests that global companies should go beyond monitoring codes of conduct and attack the problem of poor working conditions at its source by collaborating with their suppliers to implement new management systems.

Many manufacturers have established product development activities in different countries around the world. Yet their senior managers often struggle to tie those decentralized organizations into a cohesive, unified operation that can efficiently drive growth and innovation. New empirical frameworks may help unlock practices with which managers can deploy well-coordinated global product development strategies.

The burgeoning trend of sending manufacturing to cheaper offshore locales often conflicts with increasing demands for speed and customization.

Spreading foreign operations and outsourcing relationships over a broad, well-balanced mix of regions and countries reduces risk and increases potential reward.

Contrary to a widely held assumption, companies can integrate a variety of techniques to substantially reduce costs, not just in the design phase but throughout the product life cycle.

The information revolution is making consumer disaggregation vastly more efficient and profitable than aggregation, the traditional source of brand power. This raises a fundamental question:

Learning rarely follows a linear, upward progression. People forget what they once knew; institutional memory fades; obstacles of all kinds block individuals and groups from making progress. Sometimes an initially successful program or approach stops delivering results.

The authors examine the theoretical and practical problems associated with trade promotions, and they explain how the right kind of deal can be created — a transparent system that generates mutual trust and provides benefits to both manufacturers and retailers. The key is proper implementation of what is thus far a little understood tool: the pay-for-performance trade promotion, in which retailers get rewarded according to how much they sell, not how much they buy.

Firms gain competitive advantage by improving the performance of suppliers and by sidestepping the snares common to such efforts.

Trade promotions permit manufacturers to influence retail price, retail sales, and total channel profit by rewarding resellers for lower prices and subsidizing their selling effort.

How could a team of decent, hardworking, normally law-abiding managers find themselves facing fines, jail time, the loss of their jobs, and ultimately the loss of the company they managed? In making executive decisions, these managers were not deliberately trying to evade the intent of the law, defraud anyone, harm

In almost every business-to-business industry, companies are facing increasingly powerful intermediaries in their distribution channel. Industry consolidation is replacing a multitude of small “mom and pop” distributors with a handful of national, professionally managed, publicly traded corporations.