Prof. Chen Xiangfeng: The cash flow advantages of 3PLs as supply chain orchestrators


Time: June 14, 2019 (Friday) 9:00

Venue: Room 220, Building No.2, Songjiang Campus

Speaker: Chen Xiangfeng, Professor, Ph.D. Surpervisor

Host: Professor Su Zongwei

Topic: The cash flow advantages of 3PLs as supply chain orchestrators


With an increasingly open global economy and advanced technologies, some third-party logistics providers (3PLs), such as Eternal Asia, have emerged as supply chain orchestrators, linking buyers with manufacturers worldwide. In addition to their traditional transportation services, these orchestrators provide procurement and financial assistance to buyers in the supply network, especially small- and medium-sized enterprises (SMEs) in developing countries. Oftentimes, the 3PLs can obtain payment delay arrangements from the financially stronger manufacturers, which in turn can be partially extended to the SME buyers, alleviating their high costs of capital. To illustrate the efficiency improvements of the aforementioned practice, we use a model to explicitly capture the cash-flow dynamics in a supply chain consisting of a manufacturer, a buyer, and a 3PLfirm and explore the conditions under which this innovation benefits all parties in the supply chain so that the business model is sustainable. We characterize these conditions and show that the supply chain profit can be higher under leadership by the 3PL than by the manufacturer. The intermediary role of the 3PL is crucial, in that its benefit may vanish if the manufacturer chooses to directly grant payment delay to the buyers. We demonstrate that the benefit is more likely to occur with more buyers. We further identify the unique Nash bargaining solution for the transportation time and the payment delay grace period.

Guest Speaker:

Chen Xiangfeng, professor/ Ph.D supervisor, is the deputy dean of the department of management science, school of management, as well as the director of the research center of international supply chain finance in fudan university. He was selected into the 2015 cheungkong scholars award program (the first young cheungkong scholars) by the MOE. He was postdoctoral fellow at the STERN business school of the University of New York  (2006-2007), visiting professor at Kansas state university  (2010,2011), visiting scholar at MIT Sloan school of business  (2012). In 2010, he was selected into new century excellent talents support plan of MOE, and in 2009, he was selected into Shanghai pujiang talent plan. He is the secretary general of the supply chain and operation research association (2019-) and rotating chairman (2019-2021). His research interests mainly focus on supply chain contract management, logistics and supply chain finance, financial services and financial markets in operation management, etc.

He has presided over 8 projects of the national natural science foundation of China, and 3 projects from MOE. He has won once the first prize of national business science and technology progress award, and once the third prize of Shanghai science and technology progress award. He has published papers on top International and authoritative journals, such as Manufacturing & Service Operations Management, Production and Operations Management, European Journal of Operational Research, and International Journal of Production Economics, as well as top domestic magazines, such as journal of management science, etc.

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