A professor in the academic department closely affiliated with the Center for Operational Excellence is part of a team that took home a top research award for a recent paper on the retail industry.
Fisher Assistant Prof. Nathan Craig traveled to Washington, D.C., last month to accept the Ralph Gomory Best Industry Studies Paper Award, given annually by the Industry Studies Association. Craig and co-authors Nicole DeHoratius (University of Chicago) and Ananth Raman (Harvard Business School) clinched the honor for their paper “The Impact of Supplier Inventory Service Level on Retailer Demand,” published last year in Manufacturing and Service Operations Management.
The journal where Craig’s work was published was one of seven in a pool of contenders for the prize, which was judged by top researchers at universities in North America and Europe.
The winning paper breaks new ground in the field of retail research, which largely has examined business-to-consumer relationships in the past. Craig and his co-authors moved upstream in the supply chain to focus exclusively on the relationship between supplier service levels and retailer demand. By conducting a field experiment at Hugo Boss, Craig and his team were able to quantify the impact of a supplier boosting its fill rate, or the percentage of a customer order satisfied by a shipment. Specifically, an increase of only 1% in supplier fill rate lead to an 11% increase in retailer demand.
What does this mean for suppliers to retailers? Even the best ones, Craig and his team found, can fuel substantial increases in retailer demand by working toward incremental service-level gains. And those who ignore this link are missing out on a prime opportunity to boost profit and grow market share.
Check out the Management Sciences research portal for more on the latest work from Fisher’s top-ranked operations faculty.