More Complexity = More Disruptions?
Trends in management towards a concentration on core competencies and outsourcing of non-core activities have created complex networks, i.e., global supply chains. At the same time, it has been discussed that this increased complexity has also made companies more vulnerable. An interesting paper, Structural Drivers of Upstream Supply Chain Complexity and the Frequency of Supply Chain Disruptions, co-authored by Bode and Wagner, is currently forthcoming in the Journal of Operations Management. Herein, the authors distinguish between three drivers of upstream supply chain complexity: (1) horizontal complexity (= the number of direct suppliers in a firm’s supply base), (2) vertical complexity (= the number of tiers in the supply chain), and (3) spatial complexity (= the geographical spread of the supply base). Based on survey data, the authors find that all of these three drivers increase the frequency of supply chain disruptions. It is further found that these three variables even amplify each other’s effects in a synergistic fashion.
Bode, C., & Wagner, S. (2015). Structural Drivers of Upstream Supply Chain Complexity and the Frequency of Supply Chain Disruptions. Journal of Operations Management, 36, 215–228 https://doi.org/10.1016/j.jom.2014.12.004
Design for Postponement
Today, I would like to draw your attention to one of my favorite articles in the field of supply chain management: Design for Postponement by Swaminathan & Lee (2003). The article identifies three key postponement enablers: First, process standardization, where the initial steps of a process are standardized across a product line and distinct personalities are added at a later stage (e.g., localized manuals or power supply modules of a printer). Second, process resequencing, where more common components are added at the beginning of a process (e.g., cut of clothes), whereas components that create product differentiation are added later (e.g., color of clothes). Finally, component standardization, where key components are standardized to postpone decisions. The article also explains interesting concepts like “vanilla boxes” and “partial postponement”. I believe that postponement should be a key element of a supply chain management curriculum and that this classic article is really helpful to teach it.
Swaminathan, J.M., & Lee, H.L. (2003). Design for Postponement. Handbooks in Operations Research and Management Science, 11 (Supply Chain Management: Design, Coordination and Operation), 199-226 https://doi.org/10.1016/S0927-0507(03)11005-5
The Mechanisms of Supply Chain Resilience
Two ingredients are needed to create supply chain resilience (Wieland & Wallenburg, 2013): robustness, which is proactive, and agility, which is reactive. Robustness builds on anticipation “to gain knowledge about potential changes that might occur in the future” and preparedness “to maintain a stable situation”. Agility builds on visibility “to gain knowledge about actual changes that are currently occurring” and speed “to get back to a stable situation”.
Wieland, A., & Wallenburg, C.M. (2013). The Influence of Relational Competencies on Supply Chain Resilience: A Relational View. International Journal of Physical Distribution & Logistics Management, 43 (4), 300-320 https://doi.org/10.1108/IJPDLM-08-2012-0243
A Trail Guide to Publishing Success
Are you currently conducting conceptual, qualitative, or survey research? Are you also aiming to publish the results in a top journal? Then I have some tips for you that could bring you one step closer to your goal. These tips can be found in a recent JBL editorial: A Trail Guide to Publishing Success: Tips on Writing Influential Conceptual, Qualitative, and Survey Research. Herein, the authors identify and describe agreed-upon basics that can help to “(1) increase consistency in the review process, (2) reduce publication cycles, and (3) begin to roll back the length of articles”. For three types of research (conceptual, qualitative, and survey research), best practices are presented for crafting articles. I especially like a table with warning signs “that authors are wandering down a perilous path”, which can be used as a check list for your own research. These warning signs might also help reviewers to evaluate the quality of a manuscript.
Fawcett, S., Waller, M., Miller, J., Schwieterman, M., Hazen, B., & Overstreet, R. (2014). A Trail Guide to Publishing Success: Tips on Writing Influential Conceptual, Qualitative, and Survey Research. Journal of Business Logistics, 35 (1), 1-16 https://doi.org/10.1111/jbl.12039
The Governance of Global Value Chains
It can be very insightful to see how supply chains are viewed in other research fields. Gereffi, Humphrey and Sturgeon (2005) take a transaction-based political economy perspective to explain The Governance of Global Value Chains. To do so, three variables (complexity of transactions, ability to codify transactions, capabilities in the supply base) are identified, and combinations of the values of these variables constitute the structure of global value chains, leading to five types of governance (market, modular, relational, captive, hierarchy). Hereby, “market” contains the lowest level of explicit coordination and power asymmetry, whereas “hierarchy” contains the highest one. I was somewhat surprised that the article, although having been cited more than 2,700 times, has been quite ignored by SCM researchers. Likewise, Ponte and Sturgeon (2014) in their recent article that attempts to draw together GVC theory lacks any citation to the SCM literature. We might, more than in the past, think outside of the boxes we have framed if we don’t want to miss results potentially relevant for our highly overlapping fields of enquiry.
Gereffi, G., Humphrey, J., & Sturgeon, T. (2005). The Governance of Global Value Chains. Review of International Political Economy, 12 (1), 78-104 DOI: 10.1080/09692290500049805
Ponte, S., & Sturgeon, T. (2014). Explaining Governance in Global Value Chains: A Modular Theory-building Effort. Review of International Political Economy, 21 (1), 195-223 DOI: 10.1080/09692290.2013.809596
Examining Transactions within a Supply Chain Context
In a previous post, I presented a discussion about the relationship between transaction cost economics (TCE) and supply chain management (SCM), which was started by Williamson (2008) and continued by Zipkin (2012). This discussion called attention to several theoretical gaps at the TCE/SCM interface. In their 2012 article, Supply Chain-Wide Consequences of Transaction Risks and Their Contractual Solutions, Wever et al. argue that “a shift [is needed] within the TCE literature from a focus on bilateral transactions, to examining transactions within a supply chain context”. They present five models which “(1) provide justification for moving the TCE framework beyond the dyad; and (2) explain the implications of the shift toward an extended TCE framework for the (optimal) use of supply chain contracts”. It turns out that supply chain members need to take into account both transactions on the supply side and transactions on the demand side, as only this can reduce exposure to transaction risks.
Wever, M., Wognum, P.M., Trienekens, J.H., & Omta, S.W.F. (2012). Supply Chain-Wide Consequences of Transaction Risks and Their Contractual Solutions: Towards an Extended Transaction Cost Economics Framework. Journal of Supply Chain Management, 48 (1), 73-91 DOI: 10.1111/j.1745-493X.2011.03253.x
Eight Rules for Formal Conceptual Definitions
Theory-building empirical research needs formal conceptual definitions. Particularly, such definitions are necessary conditions for construct validity. But what is a “good” formal conceptual definition? In his seminal JOM paper, A Theory of Formal Conceptual Definitions: Developing Theory-building Measurement Instruments, Wacker (2004) presents eight rules for formal conceptual definitions: (1) “Definitions should be formally defined using primitive and derived terms.” (2) “Each concept should be uniquely defined.” (3) “Definitions should include only unambiguous and clear terms.” (4) “Definitions should have as few as possible terms in the conceptual definition to avoid violating the parsimony virtue of ‘good’ theory.” (5) “Definitions should be consistent within the [general academic] field.” (6) “Definitions should not make any term broader.” (7) “New hypotheses cannot be introduced in the definitions.” (8) “Statistical tests for content validity must be performed after the terms are formally defined.” These rules are explained in detail in Wacker’s article. I am convinced that Wacker’s rules lead to better measurement instruments.
Wacker, J.G. (2004). A Theory of Formal Conceptual Definitions: Developing Theory-building Measurement Instruments. Journal of Operations Management, 22 (6), 629-650 https://doi.org/10.1016/j.jom.2004.08.002
Resource Dependence Theory and Supply Chain Management
In their seminal publication, The External Control of Organizations, Pfeffer and Salancik (1978) have postulated resource dependence theory. Basically, it argues “that organizations are constrained and affected by their environments and that they act to attempt to manage resource dependencies” by setting up different forms of interorganizational arrangements. However, the original theory has sometimes been criticized for empirical and conceptual shortcomings, e.g., for combining the dimensions of power imbalance and mutual dependence in the single construct of interdependence, making theory testing challenging. In their article, Synthesizing and Extending Resource Dependence Theory: A Meta-Analysis, recently published in the Journal of Management, Drees and Heugens (2013) “consolidate 157 tests of [resource dependence theory] and corroborate its main predictions”. They show that the theory is, indeed, “a premier perspective for understanding organizational–environmental relations”. Given that a supply chain is a hybrid of one’s own organization and its environment, this result might encourage new research in our field.
Drees, J.M., & Heugens, P.P.M.A.R. (2013). Synthesizing and Extending Resource Dependence Theory: A Meta-Analysis. Journal of Management, 39 (6), 1666-1698 DOI: 10.1177/0149206312471391
Toward a Theory of Supply Chain Management
We have to admit that there is still no such thing as a “theory of supply chain management”. A new article by Mena et al. (2013), titled Toward a Theory of Multi-Tier Supply Chain Management, might bring us one step closer to such a theory by taking into account that supply chains have become more complex, more fragmented and longer. This piece of research, which is based on an inductive case study research design, hands theory-testing researchers interesting propositions on a silver platter: First, depending on the supply chain position, the members of the supply chain draw power from different sources. Second, the buyer needs to connect directly with the supplier’s supplier (“closed supply chain”) to influence product characteristics. Third, with a growing degree of such a direct connection, power is increasingly replaced by trust. Finally, closed supply chains are more stable, but require more management resources.
Mena, C., Humphries, A., & Choi, T.Y. (2013). Toward a Theory of Multi-Tier Supply Chain Management. Journal of Supply Chain Management, 49 (2), 58-77 DOI: 10.1111/jscm.12003
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
