Northwestern Institute on Complex Systems
Supply Chain Broker Operations: A Network Perspective
Wednesdays@NICO Seminar, Noon, May 20 2009, Chambers Hall, Lower Level
Prof. Karen Smilowitz, Northwestern University
Recent work in social network analysis has examined performance of various organizations from a network perspective. This paper presents a network analysis of spot-market broker operations in supply chain management, based on findings from our empirical study of a specific brokerage firm in the industry. By modeling the connections between brokers and the vendors they contact, we define metrics that correlate the strategies for selecting the vendors with profitability, which allows for the identification of new operating policies. We find that it is not just the number of interactions between brokers and vendors that impact profitability, but also the quality of those interactions. We develop an approach to quantify the quality of interactions and demonstrate the extent to which this approach can not only yield operating policy guidelines but also serve as a tool to evaluate the performance of individual brokers. *Co-authored with Michael Huang and Tito Homem-de-Mello ( Industrial Engineering and Management Sciences, McCormick School of Engineering); and Bill Diegert (Coyote Logistics).