Impact of the Fourth Industrial Revolution on Supply Chains (Guest Post by Wolfgang Lehmacher, Forum)
My guest post today comes from Wolfgang Lehmacher, who presents a white paper prepared by the World Economic Forum in collaboration with BVL International.
The report, titled Impact of the Fourth Industrial Revolution on Supply Chains, provides preliminary considerations for Fourth Industrial Revolution-driven supply chains. Based on the impact on supply chains of advanced technologies, in particular the Internet of Things, artificial intelligence, advanced robotics, enterprise wearables and additive manufacturing, the report highlights seven areas of focus for business and government: new roles and responsibilities, supply chain performance, agile organizations, ecosystem for skilling, support for SMEs, leadership and neutral platforms. The Fourth Industrial Revolution changes the way in which we produce and manage the supply chain, and paves the way for the creation of new value chains. The following developments are expected to play a major role in this process going forward: Open innovation, i.e. greater openness of companies towards involving both other companies and their customers in innovation and development processes, distributed manufacturing as an approach to the comprehensive decentralization of production structures and the elimination of classic manufacturing paradigms, and new collaboration models between companies, primarily horizontally, but also vertically.
Wolfgang Lehmacher is Head of Supply Chain and Transport Industries at the World Economic Forum. During his career he was Partner and Managing Director (China and India) at the global strategy firm CVA and President and CEO of GeoPost Intercontinental. He is member of the IATA Air Cargo Innovation Awards Jury and the Logistikweisen, a think tank under the patronage of the German Federal Ministry BMVI. He is FT, Forbes, Fortune, BI contributor and author of books, including The Global Supply Chain – 2017 and How Logistics Shapes Our Lives – 2013 (German).
There has been a recent trend in several management disciplines, including supply chain management, to create knowledge by systematically reviewing available literature. So far, however, our discipline lacked a “gold standard” that guides researchers in this endeavor. The Journal of Supply Chain Management has now published our new article, Durach, Kembro & Wieland (2017): A New Paradigm for Systematic Literature Reviews in Supply Chain Management. Our systematic literature review process follows six steps: (1) develop an initial theoretical framework; (2) develop criteria for determining whether a publication can provide information regarding this framework; (3) identify literature through structured and rigorous searches; (4) conduct theoretically driven selection of literature and a relevance test; (5) develop two data extraction structures, integrate data to refine the theoretical framework, and develop narrative propositions; and (6) explain the refined framework and compare it to the initial assumptions. We believe that these best-practice guidelines, although developed for the SCM discipline, can be used as a blueprint also for adjacent management disciplines.
Durach, C.F., Kembro, J. & Wieland, A. (2017). A New Paradigm for Systematic Literature Reviews in Supply Chain Management. Journal of Supply Chain Management, 53 (4), 67-85. DOI: 10.1111/jscm.12145
Trust plays an important role in supplier–buyer relationships. One way to approach this important concept is game theory. If you have ever wondered how game theory could be taught in a supply chain management course, I can recommend Nick Case’s The Evolution of Trust – an interactive guide to the game theory of why and how we trust each other. The guide starts by explaining the game of trust (= the prisoner’s dilemma). Then it illustrates what happens if multiple games and multiple tournaments are played with different players. We can learn from this guide that “the game defines the players” but also that “the players define the game”. We can learn that, in order for trust to evolve, we need the knowledge of possible future repeat interactions, we need a win–win situation, and we need a low level of miscommunication. I will definitely use The Evolution of Trust in my future supply chain management courses.
I spent the last couple of days in Atlanta, where the 2017 CSCMP Academic Research Symposium (ARS) took place. I truly enjoyed all the interesting discussions. Among the highlights of the conference were the best paper presentations. This year’s Bernard J. LaLonde Best Paper Award (best paper published in the Journal of Business Logistics) goes to Murfield and her co-authors, Supplier Role Conflict: An Investigation of Its Relational Implications and Impact on Supplier Accommodation. The two runner-ups are Fawcett et al., Sweating the Assets: Asset Leanness and Financial Performance in the Motor Carrier Industry, and Zaremba et al., Strategic and Operational Determinants of Relationship Outcomes With New Venture Suppliers. These articles are certainly good candidates for your reading lists. In Atlanta we also announced the CfP for the 2018 CSCMP European Research Seminar (ERS), which is ARS’s European counterpart. It will be held in Rotterdam, The Netherlands next year. As the new ERS Co-Chair I welcome your submissions.
I have used Fisher’s (1997) supply chain–product match/mismatch framework (What Is the Right Supply Chain for Your Product?) in my teaching for years! Herein, the author argues that functional products require a physically efficient supply chain strategy, whereas innovative products require a market-responsive supply chain strategy. Fisher’s framework finds empirical support: Wagner et al. (2012) demonstrate that “the higher the supply chain fit, the higher the Return on Assets (ROA) of the firm”. Interestingly, a majority of the firms from their sample achieve a negative misfit, i.e. they target high responsiveness for their supply chain although their products are functional. Extensions of the framework exist, for example by Lee (2002), who adds a “supply” dimension, and more recently Gligor (2017), who argues that “benefits generated by perfect supply chain fit might be offset by the resources deployed to achieve that fit”. Research presented by Perez-Franco et al. (2016) helps to “capture, evaluate and re-formulate the supply chain strategy of a business unit”.
Fisher, M.L. (1997). What Is the Right Supply Chain for Your Product? Harvard Business Review, 75 (2), 105-116.
My guest post today comes from Kai Hoberg from the Kühne Logistics University (KLU) in Hamburg. Together with his co-authors, Alan McKinnon and Christoph Flöthmann, he has just published a new report, which is commissioned by the World Bank and analyzes the shortage of qualified logistics personnel.
Qualified logistics personnel is in short supply worldwide. This is the conclusion of our new report, titled Logistics Competencies, Skills, and Training: A Global Overview. While there are too few well-trained executives in the logistics sector in emerging countries, there is an acute shortage of qualified staff at the operational level in developed economies. We argue that this skills shortage is likely to worsen in the absence of new initiatives. There are two aspects that deserve further elaboration: First, physically, there are too few people available to cover vacant position in the logistics sector. Second, the currently employed workforce is partially lacking the skills demanded for their job. Based on an empirical analysis, we derive multiple recommendations for relevant stakeholders, i.e. companies, governmental institutions and logistics associations. The proposed measures include innovative training methods like logistics-related business games that can be employed without requiring high upfront investments or long implementation lead-times.
Kai Hoberg is Associate Professor of Supply Chain & Operations Strategy at KLU. In his academic career he was a visiting scholar at Cornell University, Israel Institute of Technology, University of Oxford and National University of Singapore. He is on the scientific advisory board of the German Logistics Association (BVL) and has been working with companies like Procter & Gamble, McKinsey & Company, Jungheinrich and Zalando on supply chain innovation projects.