“Cigarette production and consumption have seen dramatic growth in recent decades and although the health effects of smoking are widely recognized, its impacts on the environment are largely overlooked”, the authors of a new World Health Organization report argue, which is titled Cigarette Smoking: An Assessment of Tobacco’s Global Environmental Footprint Across Its Entire Supply Chain (pdf). The report explicitly takes a supply chain perspective: “From tobacco cultivation and curing, to cigarette manufacturing, distribution, consumption and discarding, every stage in the global tobacco supply chain involves considerable resource inputs, and results in the production of wastes and emissions. Consequently, tobacco puts pressure on the planet’s already stressed natural resources and its fragile ecosystems, threatening the livelihoods and future development of communities around the world.” What I learned from the report is that “tobacco’s total environmental footprint is comparable to that of entire countries and its production is often more environmentally damaging than that of essential commodities such as food crops”.
Sometimes a picture is worth a thousand words. A map of our globe enables us to reflect upon key issues in SCM: Who is actually producing our computers? Where does value creation take place? What are the core competencies of the brand company? Who is governing the computer supply chain? What is the role of contract manufacturers? Why is final assembly being done in China and not in the EU or Canada? Why is packaging being done in Eastern Europe or Mexico and not in China; and why not in Northern Europe or Canada, where the consumers are located? What modes of transport should be used? How long does it take to move a container from Hong Kong to Hamburg? What is the size of a container? What are typical container shipping rates? What can be problematic about sourcing raw materials from the Congo? How would you calculate the CO2 emissions of a computer? How could a linear supply chain become circular? What role will machine learning play? How will the supply chain change in the age of automation? What is the potential role of 3D printing? Is a “supply” chain about “supply” or is “demand” actually the factor that we should be looking? Is a supply “chain” actually a “chain”?
The United Kingdom has been one of the key links in EU supply chains for more than 40 years. BBC Newsnight has recently reported on how Brexit could break that chain and what the consequences could be for manufacturers. I like the video and have used it for my Supply Chain Risk Management course to discuss this topic with my students.
New research published in Science (Poore & Nemecek, 2018) analyzes land use in food supply chains. An astounding 3.1 billion ha reduction in land use could be possible by excluding animal products from current diets. That is an area equivalent to Australia + China + European Union + United States. The author also shows that animal products use about 83% of the world’s farmland and contribute about 57% of food’s different emissions, despite providing only 18% of our calories. These findings demonstrate that we need to shift from “company thinking” to “supply chain thinking” if we want to see the full picture.
All successful business models provide a solution for a problem. Let us identify such a “problem” in academia: As university teachers we all know that grading students’ essays can be a tedious and time-consuming endeavor. If that is the problem, a solution could be to let software grade the essays. Five years ago, my immediate reaction would have been that this could never work. However, now, in the era of artificial intelligence and machine learning, it increasingly does work. If we acknowledge that AI is able to drive cars, predict court decisions better than experts and automatically schedules our meetings, we should also acknowledge that AI will very soon support and soon replace us when it comes to grading students’ essays. Pioneers of so-called “robo-graders” believe that “the time is right and it’s really starting to be used now”. Robo-graders learn what is considered good writing by analyzing essays graded by humans. The automated programs then score essays themselves by scanning for the same features.
Exports can be decomposed into a foreign value added (FVA) and a domestic value added (DVA) component. FVA is a key measure of the importance of global supply chains. It refers to the imported goods and services incorporated in a country’s exports. DVA relates to the contribution of a country’s own (i.e. domestic) factors of production. The 2018 World Investment Report, recently published by UNCTAD, shows that “[f]rom 1990 until 2010, the share of FVA in total exports rose continuously, contributing to the growth in global trade” and, “in the past decade, for the first time in 30 years, the growth […] has come to a halt, with the share of FVA declining to 30 per cent in 2017”. But what are the reasons for a declining importance of the “extended workbench” model? First, the model is based on arbitrage; however, the economic success of emerging countries has led to an increase in labor costs. Second, manufacturing in high-wage countries is becoming increasingly profitable due to recent advances in robotics.
Emerald has recently announced the winners of their 2018 Emerald Literati Network Awards for Excellence. Numerous SCM-related articles have received outstanding paper or highly commended awards, and might thus serve as excellent articles to read during summer. Several winning articles relate to external (Abdallah, Abdullah & Saleh, Fawcett et al. and Ralston, Richey & Grawe) and internal (Guo et al., Makepeace, Tatham & Wu and Roh et al.) supply chain relationships. Other articles are about risk management (Jahre, Min, Park & Ahn and Oliveira & Handfield) and resilience (Ali, Mahfouz & Arisha and Tukamuhabwa, Stevenson & Busby). Other winning articles deal with sustainability (Busse et al., Dubey, Gunasekaran & Papadopoulos and Ghani et al.), complexity (Gerschberger, Manuj & Freinberger and Sayed, Hendry & Bell), the Internet of things (Haddud et al. and Yan), disruptive innovation (Pérez, Dos Santos & Cambra-Fierro) and the human factor in SCM (Schorsch, Wallenburg & Wieland). Finally, McKinnon‘s article engages in the journal ranking debate, and our own methodological paper, Wieland et al., provides guidelines for scale purification.
More than many other management disciplines, SCM has been very successful to professionalize and reinvent itself. A good indication for this development are the 2017 JCR journal impact factors, which have just been released. Many, although not all, impact factors of SCM journals have improved. The journal with the highest impact factor among SCM journals and the seventh-highest one among more than 200 management journals is Journal of Supply Chain Management (6.105). Three SCM journals have impact factors between 4 and 5: Journal of Operations Management (4.899), International Journal of Production Economics (4.407) and International Journal of Physical Distribution & Logistics Management (4.215). IJPDLM is now even the Emerald journal with the highest impact factor, which is a great achievement! Two other SCM journals range between 3 and 4: Supply Chain Management: An International Journal (3.833) and Journal of Purchasing & Supply Management (3.667), but International Journal of Operations & Production Management (2.955) and Journal of Business Logistics (2.891) also come close to 3. Both International Journal of Logistics Management (1.776) and Decision Sciences (1.641) were able to improve their impact factors and get closer to 2. It might take some time until our journals will finally be acknowledged by qualitative rankings such as CABS’s AJG and VHB-JOURQUAL, as such rankings tend to be quite conservative. However, with such high impact factors there should be no doubt anymore that SCM plays in the same league as accounting, marketing and finance.
The Guardian has recently published an interesting article with a provoking title: Why We Should Bulldoze the Business School. The author writes: “[In] the business school, both the explicit and hidden curriculums sing the same song. The things taught and the way that they are taught generally mean that the virtues of capitalist market managerialism are told and sold as if there were no other ways of seeing the world.” The author demands “an entirely new way of thinking about management, business and markets” and argues: “If we want those in power to become more responsible, then we must stop teaching students that heroic transformational leaders are the answer to every problem, or that the purpose of learning about taxation laws is to evade taxation, or that creating new desires is the purpose of marketing. In every case, the business school acts as an apologist, selling ideology as if it were science.” To what extent does that also apply for our SCM courses?