Global Manufacturing Outlook 2013
The Economist Intelligence Unit’s Global Manufacturing Outlook 2013, written on behalf of KPMG, is out now. It is based on an international survey of more than 300 senior executives from five industries. The report demonstrates that competitive advantage can be secured by enhancing supply chain networks for efficiency and innovation. Particularly, it is demonstrated that (1) many manufacturers are planning mergers or acquisitions to seize opportunities in global markets, and they plan to exit non-profitable, non-core business units and product lines; (2) many manufacturers are building network relationships with suppliers to become more responsive to market changes; (3) supply chain visibility beyond tier-1 partners can have a positive impact on agility, resilience, and performance; (4) supply chain partnerships, rather than in-house efforts, are increasingly seen as an important source of innovation; and (5) manufacturers are investing in both breakthrough and incremental innovation to ensure competitiveness. In sum, the report highlights the importance of supply chain management for manufacturers.
Laboratory experiments in supply chain research
Nobel laureates rarely publish articles in journals within the supply chain arena. Vernon L. Smith was awarded the 2002 Nobel Memorial Prize in Economic Sciences “for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”. In its recent issue, the Journal of Business Logistics had the great privilege to publish an article by Cary Deck and him, in which these ideas were applied to our field: Using Laboratory Experiments in Logistics and Supply Chain Research. It goes without saying that this article is certainly a must-read for SCM researchers, particularly, as the use of laboratory experiments has attracted some attention in our field. In their article, Deck and Smith highlight “several examples where experiments have been used to study issues relevant to logistics and supply chain management” and identify “several additional areas where laboratory experiments could be informative”.
Deck, C. & Smith, V. (2013). Using Laboratory Experiments in Logistics and Supply Chain Research. Journal of Business Logistics, 34 (1), 6-14 DOI: 10.1111/jbl.12006
The earth’s balance sheet
In this video, José Lopez, Executive Vice President of Operations at Nestlé, warns that “we urgently need to account for things differently, we need to put a value on food and water”.
Rigor and relevance in SCM research
Good research stands out through relevant research questions which are answered applying rigorous research methods. Researchers routinely signal methodological rigor in a detailed methods section and reviewers take great care to check whether all methodological steps are applied properly. Besides rigor, it is necessary to ensure that research is relevant in terms of both theoretical and practical contribution. The former is usually reflected in a comprehensive theory section. The latter, however, is often just being skipped. Reviewers are rarely practitioners! It has, indeed, been demonstrated that practitioners often disagree that operations management research papers are useful to their practice (de-Margerie and Jiang, 2011). Salvador (2011) suggests “to get in contact with practitioners and to try to understand how they react to the central theoretical ideas proposed”. Moreover, I believe that reviewers should routinely ask for at least one paragraph on how the researcher has ensured practical relevance, e.g. by involving a practitioner panel.
de-Margerie, V., & Jiang, B. (2011). How relevant is OM research to managerial practice? An empirical study of top executives’ perceptions. International Journal of Operations & Production Management, 31 (2), 124-147 DOI: 10.1108/01443571111104737
Salvador, F. (2011). On the importance of good questions and empirically grounded theorizing. Journal of Supply Chain Management, 47 (4), 21-22 DOI: 10.1111/j.1745-493X.2011.03248.x
Horsemeat supply chains
Food supply chains are affected by trends such as globalization, consolidation, and commoditization. Supply chain managers have eagerly sought to apply textbook knowledge to these supply chains. Consequently, companies have concentrated on core competencies like processing or marketing to meet customer requirements. However, the horsemeat scandal is just another example to reveal that food supply chains got out of control. The more complex supply chain systems become, the less controllable they seem to be. Based on a series of incidents in food supply chains, Roth and her co-authors (2008) have developed a conceptual framework for quality management in food supply chains. The framework contains six Ts, which are identified as critical factors associated with food (or more generally: product) quality: (1) traceability, (2) transparency, (3) testability, (4) time, (5) trust, and (6) training. I believe that this framework can help improving food supply chains, but customers should also stop focusing solely on food price rather than food quality.
Roth, A., Tsay, A., Pullman, M., & Gray, J. (2008). Unraveling the food supply chain: Strategic insights from China and the 2007 recalls The Journal of Supply Chain Management, 44 (1), 22-39 DOI: 10.1111/j.1745-493X.2008.00043.x
Open Researcher and Contributor ID (ORCID)
Some time ago, I have discussed identifiers for a specific edition of a book (ISBN), serials and other continuing resources (ISSN), and content objects like journal articles (DOI). But did you already know the Open Researcher and Contributor ID (ORCID)? According to the ORCID website, it “provides a persistent digital identifier that distinguishes you from every other researcher and, through integration in key research workflows such as manuscript and grant submission, supports automated linkages between you and your professional activities ensuring that your work is recognized”. Hereby, a unique 16-digit code (e.g. 0000-0003-0010-4240) is used to identify a researcher. In a Nature editorial back in 2009 it was discussed that an academic-reward system would be tied less heavily to publications and citations if an author ID system like ORCID gained widespread support. This could soon become true, as ORCID is supported by important organizations, including publishers like Elsevier, Springer, and Wiley.
Supply chain resilience 2013
In the face of disruptions and volatility, supply chain managers are concerned about resilience, which can be broadly defined as “the ability of a supply chain to cope with change” (Wieland and Wallenburg, 2013, forthcoming). Two recent publications present ways to implement supply chain resilience. First, the Business Continuity Institute has published a report that summarizes the key outcomes of its 4th Annual Supply Chain Resilience Survey. It discusses causes and consequences of disruptions, presents techniques to identify key supply chains, and offers approaches and solutions to achieve resilience. Second, the World Economic Forum, in collaboration with Accenture, offers a “blueprint for resilient supply chains based on four core components: partnerships, policy, strategy and information technology”, which is discussed in a report, Building Resilience in Supply Chains, developed as part of the Forum’s Supply Chain Risk Initiative. I believe that these publications will, indeed, help supply chain managers to cope with change.
NC State’s Supply Chain Resource Cooperative
I spent the last couple of days at North Carolina State University to work on a joint research project with my good friend Robert Handfield. I was very impressed by NC State’s Supply Chain Resource Cooperative, an “industry–university partnership dedicated to the development of future supply chain professionals”. Robert and two of his colleagues have published an article to describe how this cooperative works: NC State’s Supply Chain Resource Cooperative educates in the real world (published in Interfaces in 2011). Essentially, it integrates “field-based student course projects with real problems that companies are facing”. The projects are identified by the company, but NCSU narrows the scope and assigns the projects to students. The SCRC’s organizational structure enables projects to be jointly led by SCRC directors and supply chain managers that financially support the SCRC. I believe that this cooperative might become a role model for other industry–university partnerships, as it perfectly combines supply chain theory and practice.
Handfield, R., Edwards, S., & Stonebraker, J. (2011). NC State’s Supply Chain Resource Cooperative Educates in the Real World Interfaces, 41 (6), 548-563 DOI: 10.1287/inte.1110.0584
Theory testing from a critical realist perspective
In a previous post, it was demonstrated that researchers can play two different roles, as they can either build or test theories. An SMJ article by Miller and Tsang (2011), which is titled Testing management theories: Critical realist philosophy and research methods, focuses on the latter role we can play. The authors claim: “Not only do we have a plurality of theories within management research, there is also no consensus about the criteria for evaluating theories.” Taking a critical realist perspective, they advance practical guidance for evaluating management theories by proposing a four-step approach to theory testing. This approach includes (1) identifying the hypothesized mechanisms, (2) testing for the presence of the mechanisms in the empirical setting, (3) testing isolated causal relations, and (4) testing the theoretical system. The authors underline that “steps 2 and 3 have been neglected for the most part”. In sum, a lot can be learnt about theory testing from this brilliant article.
Miller, K., & Tsang, E. (2011). Testing management theories: Critical realist philosophy and research methods. Strategic Management Journal, 32 (2), 139-158 DOI: 10.1002/smj.868
Full Product Transparency (guest post by Ramon Arratia, Interface)
In his new book, Full Product Transparency, sustainability pioneer Ramon Arratia argues that we have to move from corporate to product sustainability. I am happy that Ramon followed my invitation to contribute to my blog:
The conventional approach to exercising corporate responsibility in a company’s supply chain is to draft a company supplier standard and then audit for compliance using that document. Positive and usually well-intentioned, the impact is inherently limited by the narrow scope of the dialogue and the teacher–student nature of the relationship. The typical 700 questions questionnaire sent to suppliers usually asks meaningless things such as: “Does your organisation have an environmental policy in place?” Or: “Does your organisation have an environmental management system (EMS) in place?” This is just bureaucracy for the sake of it, taking lots of time from both parts and adding little transformative value to the real environmental impacts of the products. The ideal question for suppliers is: “Send me the environmental product declaration (EPD) of your product and your plan to radically improve it”. After all, you are not buying the whole company. Besides, around 80% of the environmental impacts of products are not in the manufacturer’s realms but in their supply chain.
Ramon Arratia is a sustainability director at Interface and has previously been employed in similar roles at Vodafone and Ericsson. Interface is the winner of the International Green Awards 2012. Ramon is also a blogger of Cut the Fluff.
