Archive by Author | Andreas Wieland

Purchasing & Supply Management: What We Should Teach (Guest Post by Lydia Bals)

Today’s guest post comes from Lydia Bals, who presents project PERFECT’s recent insights on competences in purchasing & supply management.

Project Perfect Logo

Professional purchasing & supply management (PSM) forms the link between a complex network of internal and external stakeholders with increasing international dependencies and performance requirements. As part of the PERFECT project (Purchasing Education and Research for European Competence Transfer) a group of researchers conducted case study research to identify individual buyer competences, knowledge and skills that are required to cope with such current requirements and prepare for future trends. In total, 46 interviews were conducted with representatives from 16 companies, standing for various industries in the European Union, and differing in their sizes and business models. The practitioners emphasized that PSM employees should possess both operational and basic PSM knowledge as well as competences related to communication and relationship management. In terms of specific future competences, “sustainability” and “digitization” stood out. Digitization is expected to particularly impact PSM operational tasks with regards to automation: Sub functions, especially taking care of the purchase-to-pay process, are expected to disappear. As a result, companies are advised to qualify personnel accordingly to facilitate their transfer to other, more strategic roles. Regarding the strategic PSM tasks, looking at the source-to-contract process, the critical question for the future is how technology will enable different ways of working, e.g. by application of big data analytics. As these are newer competence areas, the practitioners indicated that a breakdown of knowledge and competences for “sustainability” and “digitization” is needed to prepare employees as well as students adequately for such future developments. For more information, see the full Project PERFECT Intellectual Output 2 White Paper.

Lydia Bals is Professor of Supply Chain & Operations Management at the University of Applied Sciences Mainz and affiliated with the Department of Strategic Management & Globalization, Copenhagen Business School. She was the project lead for the PERFECT case study data collection and analysis.

Behavioral Supply Chain Management

I am pleased to announce that our new article, The Human Factor in SCM: Introducing a Meta-theory of Behavioral Supply Chain Management, which I co-authored with Timm Schorsch and Carl Marcus Wallenburg, has now been published by the International Journal of Physical Distribution & Logistics Management. Our article provides a comprehensive overview of the behavioral supply chain management (BSCM) research landscape. In addition, we present a meta-theory of BSCM that encompasses all central elements of the research field. We also formulate five promising future research opportunities: Research being conducted in this area could (1) integrate cognitive and social psychological research, (2) apply a holistic view to decision-making and problem solving, (3) strengthen the concept of emergence and apply meso-level theory approaches, (4) complement our meta-theory, and (5) broaden the scope of inventory and capacity decision-making. We are confident that the critical discussions in our article and the formulated research opportunities will help scholars in positioning their own research to enhance its contribution.

A copy of our article can be requested via ResearchGate.

Schorsch, T., Wallenburg, C.M., & Wieland, A. (2017). The Human Factor in SCM: Introducing a Meta-theory of Behavioral Supply Chain Management. International Journal of Physical Distribution & Logistics Management, 47 (4), 238-262 DOI: 10.1108/IJPDLM-10-2015-0268

Business vs. Economic Perspectives on the Supply Chain

I recently discovered an interesting overview, Supply Chain Perspectives and Issues: A Literature Review by Park, Nayyar & Low (2013), which has been published by the World Trade Organization. It explicitly distinguishes between the economic and business perspectives on supply chains. Indeed, many supply chain phenomena take place somewhere between these two worlds, as the “supply chain” system is broader than the “organization” system and also different from the “market” and “economy” systems. As the authors write, “[t]he economics perspective attempts to understand [supply chains] through trade theory, along with the motivations for specialisation and production location decisions. […] The focus in the business literature is more concerned with a firm-level perspective.” My impression is that SCM research has often covered the latter perspective but neglected the former one. The authors also link the supply chain management and global value chain literatures, which is a promising path to go, as I have also highlighted in a previous post.

Teaching Case – Zara: The World’s Largest Fashion Retailer

The Case Centre has recently selected the winners of their 2017 Awards and Competitions. This year’s winning case in the Production and Operations Management category is closely related to supply chain management: Zara: The World’s Largest Fashion Retailer, written by Kasra Ferdows, Jose A.D. Machuca & Michael Lewis. This case is an updated version of the 15th in the ranking of top 40 overall best selling Zara case. The new case “presents a detailed and updated description of Zara’s unique operating model and many of its best practices: its retailing, design, order administration, production, and distribution systems” and “also includes new sections about Zara’s on-line business and Inditex’ increased attention to ethical and sustainability issues in its extended supply chain”. The learning objectives cover several important aspects of global supply chain management, including the design and operations of global supply networks, making this teaching case particularly relevant for courses related to our discipline.

Implications from the Rana Plaza Disaster (Guest Post by Brian Jacobs and Vinod Singhal)

Today’s guest post comes from Brian Jacobs and Vinod Singhal, who present the results of their recent research on social issues in global textile supply chains.

Rana Plaza, an eight-story building in Bangladesh that housed garment factories employing approximately 5000 workers, collapsed on April 24, 2013. The resulting fatalities (over 1100) and injuries (over 2400) made it one of the worst industrial accidents in history. The scale of this tragedy increased awareness of the risks and costs of sourcing from low-cost countries. Such risks and costs are often assumed to be sufficient to motivate firms to source production in developed, high-cost countries rather than developing, low-cost countries. To examine this assumption, we studied the stock market reaction to 39 global apparel retailers with significant sourcing in Bangladesh. We found that although stock market reaction to retailers on the day of the Rana Plaza disaster was negative, its magnitude and significance dissipated by the following day. Our research shows that capital market forces alone are insufficient to prevent tragedies such as the Rana Plaza disaster, or to motivate large scale changes in sourcing patterns. In fact, garment exports from Bangladesh have increased since 2013 even though substandard working conditions persist. While managers should weigh ethics and their moral obligation in addition to financial considerations, it is doubtful that firms can affect the needed changes without participation by non-market forces such as NGOs and policymakers. For full details of our research, please see our article The Effect of the Rana Plaza Disaster on Shareholder Wealth of Retailers: Implications for Sourcing Strategies and Supply Chain Governance, forthcoming in Journal of Operations Management.

Vinod Singhal is a Professor of Operations Management and holds the Charles W. Brady Chair at the Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia. Brian Jacobs is an Associate Professor of Supply Chain Management at the Eli Broad College of Business, Michigan State University, East Lansing, Michigan.

Jacobs, B., & Singhal, V. (2017). The Effect of the Rana Plaza Disaster on Shareholder Wealth of Retailers: Implications for Sourcing Strategies and Supply Chain Governance. Journal of Operations Management DOI: 10.1016/j.jom.2017.01.002

Value of Air Cargo: Air Transport and Global Value Chains

I recently found an interesting report: Value of Air Cargo: Air Transport and Global Value Chains, published by Developing Trade Consultants. The authors write: “Global Value Chains (GVCs) represent a new trade and development paradigm. They enable countries to specialize in narrowly defined tasks, such as component production, research and development, or assembly. Tasks originating in a variety of countries are then combined through a complex network of trade and investment links, to produce finished goods […].” The report analyzes data to investigate the linkages between GVC trade and air cargo. It shows that countries engage in more trade in value terms if they have better air cargo connectivity – which is measured by an “Air Connectivity Index”. A strong association is found between a higher ACI score (i.e. stronger air connections to more countries) and a higher total trade value: “[O]ne percent increase in air cargo connectivity is associated with a 6.3% increase in total exports and imports.”

The Pen Is Mightier than the Keyboard

My students tend to use their laptops in classes. I have forwarded this very interesting article by Mueller & Oppenheimer (2014) to them. It was published in one of the most influential journals in psychology and contains good arguments to stop this practice. First, the authors summarize existing research that finds that laptops serve as distractions. Students typically self-report a belief that laptops in class are beneficial. Even when they admit that laptops distract them, they believe the benefits outweigh the costs. Research finds that students using laptops are not on task, show lower academic performance, and are less satisfied with their education than students who do not use laptops. Second, the authors’ own results suggest that “even when laptops are used solely to take notes, they may still be impairing learning because their use results in shallower processing”. They found that “students who took notes on laptops performed worse on conceptual questions than students who took notes longhand”.

Mueller, P., & Oppenheimer, D. (2014). The Pen Is Mightier Than the Keyboard. Psychological Science, 25 (6), 1159-1168 DOI: 10.1177/0956797614524581

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