The global supply chain agenda
Capgemini has published the results of its annual international supply chain survey. The study is titled The 2012 global supply chain agenda. The authors find that the following topics are the key business drivers for 2012: (1) market/demand volatility, (2) economic downturn, (3) meeting (changing) customer, (4) develop emerging markets, and (5) increased material/service costs. The survey participants were asked about the measures taken to improve the flexibility of supply chains. Improved visibility and control, increased flexibility in operations, and reduced capital exposure are the measures mentioned most often. It also turns out that operational excellence, logistics contract renewal, and supply chain visibility are the top supply chain projects in 2012 and that business prioritization, IT capability, and financial/budget limitations are the main bottlenecks for supply chain strategy implementation. The survey findings mirror an observation by PRTM from 2011 that “[h]igh volatility, huge swings in customer demand, and uncertainty in supply have created a new reality for global supply chain executives”.
Resource-based theory vs. supply chain management
There is an ongoing debate in supply chain management research about whether or not resource-based theory suggests that supply chain management can be a source of sustained competitive advantage for a firm. Among those who have denied this suggestion is Ramsay (2001), whereas, in his recent essay, Barney (2012) has argued that SCM can, “at least in some settings”, be such a source. In his insightful article, The competitive advantage of interconnected firms: An extension of the resource-based view (AMR, Vol. 31, No. 3), Lavie (2006) follows the relational view, an extension of the resource-based view to networked environments (read my previous text about the relational view). He integrates and extends this view and social network theories, “contrasting the formulation of the traditional [resource-based view] with a reformulated version of the [resource-based view] that takes into account the impact of network resources”. Given the ongoing debate in our field, should SCM researchers adopt Lavie’s reformulation?
Lavie, D. (2006). The competitive advantage of interconnected firms: An extension of the resource-based view. Academy of Management Review, 31 (3), 638-658 DOI: 10.5465/AMR.2006.21318922
Supply chain management trends
Last week, I was invited to beautiful Switzerland, where I held a seminar for supply chain managers from 30 large logistics service providers and manufacturing firms. Initially, these managers were asked about SCM topics they are currently most interested in. Here are some insights gained from the answers: First, ecological sustainability has become a top-priority topic; several managers have mentioned that their SCM activities are concerned with both tackling climate change and reducing waste of resources. Second, international SCM activities are challenging for many participants, particularly in regions such as China, Russia, Brazil, Eastern and Southeast Europe (including Turkey), and the Arabian Peninsula. Third, market volatility seems to be a problem for many firms and many of them strive for improved visibility in their supply chains. Some other topics mentioned by the managers are: evaluation of and collaboration with LSPs, shortage of drivers, returns and repairs, security, and speed (including deliberate deceleration of supply chain processes).
Supply chain management definition
SCM definitions are a dime a dozen. An early definition comes from Cooper et al. (1997): “Supply chain management is the integration of business processes from end user through original suppliers that provides products, services and information that add value for customers.” However, this definition assumes that integration – the Emperor’s new suit? – is always good and that the unit of analysis is a customer-focused rather than a closed-loop system. Mentzer et al. (2001) argue that SCM has “the purposes of improving the long-term performance of the individual companies and the supply chain as a whole”. Here, it should be stated more explicitly that performance means “triple bottom line” performance. The CSCMP’s definition of SCM acknowledges that SCM is focused on interacting business entities. But, this definition violates some of Wacker’s (2004) eight rules for a “good” formal conceptual definition. Future SCM definitions should be focused on the coordination of business entities in closed-loop supply and demand networks.
Social science research: Principles, methods, and practices
I like open access. The USF Tampa Library hosts a collection of open access textbooks. One of them, which might be useful for many SCM researchers, has been published by Anol Bhattacherjee, a professor of information systems. It is titled Social Science Research: Principles, Methods, and Practices. The book, which is succinct and compact, is about the entire research process and it is designed “to introduce doctoral and graduate students to the process of scientific research”. The initial chapters 1 to 4 give an introduction to research. This includes topics such as “thinking like a researcher” and “theories in scientific research”. The chapters 5 to 8 are about the basics of empirical research (i.e, research design, construct measurement, scale reliability/validity, and sampling). The chapters 9 to 12 are concerned with data collection (i.e., survey research, experimental research, case research, and interpretive research). Both qualitative and quantitative data analysis is explained in the chapters 13 to 15. The last chapter is about research ethics.
The truth about electronic supply chains (part 2/2)
This video shows where the e-waste goes. (part 1/2)
The truth about electronic supply chains (part 1/2)
For a long time, SCM students were told that a supply chain “must ultimately be measured by its responsiveness to customers” and that a supply chain starts with raw materials and ends with a final product. But this is only half the truth. Indeed, a supply chain ends with waste and, thus, a supply chain must ultimately be understood as a closed-loop system. So far, the overemphasis on the customer has led to products that are fast-moving, barely repairable, and hardly recyclable. Computers are a typical example of planned obsolescence. So, what happens if the customer wants to get rid of his/her “old-fashioned” computer? It is complicated to recycle electronic waste properly. Therefore, e-waste, which contains valuable materials like gold, often ends up in incineration plants or, illegally, in Ghana, where it destroys both the people’s health and the environment. Producers are responsible for e-waste. Therefore, recycling needs to be considered when designing products and supply chains. What about cradle-to-cradle supply chains? (part 2/2)
The science of operations and supply chain management
The Journal of Operations Management has now published two interesting articles about the science of operations and supply chain management. These two articles are intertwined and they were written by Singhal and Singhal (2012). The first article is titled Imperatives of the science of operations and supply-chain management and discusses two opportunities for pursuing radical innovations. The first opportunity is the pursuit of all phases of science (including theory development and theory testing). The second opportunity is the pursuit of multiple perspectives (e.g., based on different methods and different parts of a system). The second article is titled Opportunities for developing the science of operations and supply-chain management and proposes and analyzes ways to seize these two opportunities. It is found that networks of research teams, outliers, and meta-analyses can help to obtain multiple perspectives and to discover radical innovation. In conclusion, both articles will help our community to further develop SCM research.
The network inertia perspective
In their insightful AMR article, Framing interorganizational network change: A network inertia perspective, Kim et al. (2006) argue that it is often unlikely that firms will replace their network partners based solely on economic motivations. The authors use the term “network inertia” for these constraints on network change and define it as “a persistent organizational resistance to changing interorganizational dyadic ties or difficulties that an organization faces when it attempts to dissolve old relationships and form new network ties”. In their theoretical framework, Kim et al. describe causal mechanisms for the action of constraints on network change and formulate twelve propositions. For instance, the likelihood of an organization to change its network ties is higher if its environment is competitive or its status is high, but this likelihood is lower if the organization is large or old. The framework can be applied to different units of analysis, particularly to supply and demand networks.
CDP supply chain report 2012
Supply chain thinking enables managers to understand that indirect greenhouse gas emissions (i.e., those from the supply chain) often represent the lion’s share of a company’s total emissions. The Carbon Disclosure Project (CDP) has now published its Supply Chain Report 2012. CDP Supply Chain members are about 50 companies who are requesting climate information from their suppliers. The report reveals that a majority of these companies reward “suppliers that employ good carbon-management practices” and that many of these companies will soon begin to deselect suppliers, if they don’t adopt such measures. Moreover, these companies increasingly factor climate change into the evaluation of suppliers. It has been found that many companies have benefited both from own emission reduction activities and from their supplier’s reduction activities. The report warns that suppliers will soon “see their business move to competitors that can provide better information and clearer evidence of change”, if they do not measure, quantify, and manage their greenhouse gas emissions.
Andreas Wieland
