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Fisher’s Supply Chain–Product Match/Mismatch Framework

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.

World Bank Study: Global Shortage of Logistics Skills (Guest Post by Kai Hoberg, KLU)

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.

Rethinking the Future of Plastics

Today’s economy is a plastics economy, as most of our global supply chains contain plastics. A report, published by the Ellen MacArthur Foundation, is titled The New Plastics Economy: Rethinking the Future of Plastics. Herein it becomes evident that linear supply chains need to become circular: “The circular economy is gaining growing attention as a potential way for our society to increase prosperity, while reducing demands on finite raw materials and minimising negative externalities. Such a transition requires a systemic approach, which entails moving beyond incremental improvements to the existing model as well as developing new collaboration mechanisms.” The report “explores the intersection of these two themes, for plastics and plastic packaging in particular: how can collaboration along the extended global plastic packaging production and after-use value chain, as well as with governments and NGOs, achieve systemic change to overcome stalemates in today’s plastics economy in order to move to a more circular model?”

Getting Starry-eyed about Journals (Guest Post by Alan McKinnon)

My guest post today comes from Alan McKinnon who for several years has been raising concerns about the academic obsession with journal rankings and low rating of logistics/SCM journals. He has just published a new paper updating his earlier arguments.

In a paper that I wrote five years ago I argued that the development of logistics/supply chain management (SCM) as a discipline was being impaired by the relatively low ranking of specialist journals in this field. I was surprised and heartened by the favourable response I received both from logistics/SCM researchers and academics in other disciplines experiencing a similar problem. I have now returned to the journal ranking debate with a sequel to my original article which reviews recent literature on the subject, analyses new data on the validity of the journal ranking as an indicator of research quality and discusses the recalibration of logistics/SCM journals since 2010/11. The literature challenging the principle, practice and application of journal ranking has been steadily expanding and becoming more critical. Regrettably this is not deterring university managers from basing many recruitment, promotional and resource allocation decisions on the rating of journals. Data generated by the UK government’s assessment of university research (REF) has confirmed that, in the field of business and management, the journal ranking is an unreliable predictor of the quality and impact of an individual journal paper. In this analysis, papers published in lower ranked journals tended to be under-valued, a finding of particular relevance to logistics/SCM journals as they tend to be on the 2nd or 3rd tiers of the major journal lists. Since 2010/11, there has been some overall improvement in the relative standing of these journals, though a couple have been downgraded in the widely-used ABS list. Fortunately the backlash against journal rank “fetishism” has begun with bottom-up campaigns such as DORA and top-down, government-led initiatives in countries such as the UK and Australia aiming to make research assessment fairer, more transparent and more rigorous.

Alan McKinnon is Professor of Logistics in Kühne Logistics University, Hamburg and Professor Emeritus at Heriot-Watt University, Edinburgh. You can find out more about his research and publications at www.alanmckinnon.co.uk and follow him on Twitter @alancmckinnon.

McKinnon, A.C. (2017). Starry-eyed II: The Logistics Journal Ranking Debate Revisited. International Journal of Physical Distribution & Logistics Management, 47 (6). DOI: 10.1108/IJPDLM-02-2017-0097

The End of Supply Chain Theory?

It is among the common research practices in our field to build a statistical model with a limited set of variables in order to take the lens of a theory – often being alien to our field – on a supply chain phenomenon, and to test this model based on maybe 200 datasets. Other researchers collect data from three or four case companies to build or extend a research model that comprises a small set of propositions. So far so good. “So far so outdated”, I should say if I were to be malicious. Why? Researchers in fields like supply chain management might soon (or already?) be competing with “companies like Google, which have grown up in an era of massively abundant data, [that] don’t have to settle for wrong models”, as the editor in chief of Wired put it already back in 2008, proclaiming The End of Theory. So, is the data deluge about to make our research obsolete? If so, how should our community adapt to this new reality?

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.

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.”

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