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ContentsLecture 1 .................................................................................................................................................. 2
What is the right supply chain for your product? - Fisher ................................................................... 2
Arcs of integration: An international study of supply chain strategies. Frohlich ................................ 6
Mena, Humphries & Choi, 2013 - Toward a theory of multi-tier supply chain management............. 9
Lecture 2 Revisiting the interplay between contracttual & Relational governance (Cao) .................... 12
Cole, R., Stevenson, M., & Aitken, J. (2019). Blockchain technology: Implications for operations and
supply chain management. Supply Chain Management ................................................................... 15
Villena, Revilla & Choi, 2011- The dark side of buyer–supplier relationships: A social capital
perspective ........................................................................................................................................ 18
Zhang, Van Donk & van der Vaart, 2016 - The different impact of inter-organizational and
intraorganizational ICT on supply chain performance ...................................................................... 21
Lecture 3 ................................................................................................................................................ 25
Montabon, F., Pagell, M., & Wu, Z. (2016). Making sustainability sustainable. Journal of Supply
Chain Management, 52(2), 11–27. .................................................................................................... 25
Pagell, M., & Wu, Z. (2009). Building a more complete theory of sustainable supply chain
management using case studies of 10 exemplars. Journal of Supply Chain Management, 45(2), 37–
56. ...................................................................................................................................................... 28
Pullman, M., Longoni, A., & Luzzini, D. (2018). Emerging discourse incubator: The roles of
institutional complexity and hybridity in social impact supply chain management. Journal of Supply
Chain Management, 54(2), 3–20. ...................................................................................................... 31
Lecture 4 ................................................................................................................................................ 35
Brandon-Jones, Squire, Autry & Petersen, 2014 - A Contingent Resource-Based Perspective of
Supply Chain Resilience, and Robustness ......................................................................................... 35
The role of collaboration in supply chain resilience Scholten & Schilder ....................................... 358
Do managers’ dark personality traits help firms in coping with adverse supply chain events?
Stephane Timmer,Lutz Kaufmann ..................................................................................................... 41
Lecture 5 ................................................................................................................................................ 44
Ireland, R.D., & Webb, J.W. (2007). A multi-theoretic perspective on trust and power in strategic
supply chains. Journal of Operations Management, 25(2), 482-497. ............................................... 44
Krause, D.R., Handfield, R.B., & Tyler, B.B. (2007). The relationships between supplier
development, commitment, social capital accumulation and performance improvement.. ........... 49
Pulles, N.J., Veldman, J., Schiele, H., & Sierksma, H. (2014). Pressure or pamper? The effects of
power and trust dimensions on supplier resource allocation. Journal of Supply Chain Management,
50(3), 16–36. ..................................................................................................................................... 51
1
,Lecture 1
What is the right supply chain for your product?
A simple framework can help you figure out the answer
Marshall L. Fisher
Harvard business review – 1997
Never has so much technology and brainpower been applied to improving supply chain
performance.
Nonetheless, the performance of many supply chains has never been worse.
- costs have risen to unprecedented levels because of adversarial relations between
supply chain partners as well as dysfunctional industry practices such as: overreliance on
price promotions.
Why? Because managers lack a suitable decision framework.
Fisher devised a framework that helps managers understand the nature of the demand for
their products and devise the supply chain that can be best satisfy that demand.
An effective supply chain strategy starts by considering the nature of the demand for
products. Important aspects are: product PLC, demand predictability, product variety, and
market standards for lead times and service.
When classifying products based of their demand patterns, they fall into one of the two
categories:
- Primarily functional
- Primarily innovative.
Each category requires a distinctly different kind of supply chain. The root cause of the
problem plaguing many supply chains is mismatch between the type of product and the
supply chain.
Is your product functional or innovative?
Functional products: satisfy basic needs, are stable and have predictable demands, long life
cycles
- That means a lot of competition = low profit margin. Companies then introduce innovation
as a differentiator
Innovative products: allow higher profit margins, but demand for them is unpredictable, life
cycle is short (imitators copying them quickly)
With their high profit margins and volatile demand, innovative products require a
fundamentally different supply chain than stable, low-margin functional products do.
- To understand the difference, one should recognize two distinct types of functions:
• Physical function
It includes converting raw materials into parts, components, and eventually finished
goods, and transporting all of them from one point in the supply chain to the next.
• Market mediation function
It ensures that product variety matches what customers want to buy.
2
, Each of the two functions incurs distinct costs.
Physical costs: costs of production, transportation, and inventory storage
Market mediation costs: arise when supply exceeds demand and a product has to be marked
down and sold at a loss or when supply falls short of demand, = lost sales and dissatisfied
customers.
Functional products make market mediation easy because nearly perfect match between
supply and demand can be achieved.
- Companies making such products are free to focus on minimizing physical costs.
- Planning is made in advance using MPR, enabling low cost and maximizing product
efficiency
- Important flow of info takes place within the chain between suppliers, manufacturers
and retailers. Idea= meet predictable demand at the lowest possible cost.
Innovative products, on the other hand, incur high mediation costs due to the uncertain
demand, short lifecycles, costs of excess of suppliers and risk of obsolescence.
- Innovative products are thus the primary focus of managers and firms should be able to
read early sales numbers and react quickly.
- Suppliers are chosen based on speed and flexibility and now for their low costs.
Many companies still struggle with this concept as products that are physically the same can
be either function or innovative. Supply chain processes can be:
Physical efficient process: goal? supply predictable demand efficiently at the lowest possible
cost .
Market responsive process: goal? respond quickly to unpredictable demand to minimize
stockouts, forced markdowns, and obsolete inventory.
Devising the Ideal Supply-Chain Strategy
1. Determine whether their products are functional or
innovative.
2. Decide whether the company’s supply chain is
physically efficient or responsive
3. The matrix can be used to determined the right
strategy
The matrix shows that:
- Functional products require an efficient process
- Innovative products a responsive process
Companies often find themselves in the upper right-hand cell.
- However, this doesn’t make sense as the benefits from improving responsiveness with
innovative products are higher than improving the supply chain’s efficiency.
3
, Getting out of the upper right-hand cell
Mistake: Companies trying to convert functional products into innovative ones but still using
physical efficient supply chains.
- This creates unresponsive chains. Hour glass= Many offerings at the top, many
customers at the bottom but unable to deliver due to the company’s practices being at
the neck of the glass.
The correct direction depends on whether the product is sufficiently innovative to generate
enough additional profit to cover the cost of making the supply chain responsive.
- When to move to the left? product line with frequent offering introduction, great
variety and low profit margins
- A company can have both functional and innovative products
Mistake in the auto industry: applying the same strategy to both functional and innovative
cars.
- JIT system has slashed parts inventories in plants (where holding inventory is relatively
cheap) to a few hours, while stock of cars at dealers (where holding inventory is
expensive) have grown to around 90 days.
Efficient supply of functional products
Coordination across corporate boundaries -with suppliers and distributors- present greatest
opportunities than aggressive costs cutting.
- Companies will reach a point of diminishing returns in their organizations.
Growing acceptance of this view coincides with the emergence of electronic networks that
facilitate closer coordination.
Lessons from the Campbell canned soup approach (Continuous replenishment program):
- Soup is a functional product with price sensitive demand, so, Campbell was correct to
pursue physical efficiency.
- In-stock availability of Campbell product at a retailer’s distributions center did increase
- increased operating efficiency, through the reduction in retailers’ inventories.
Campbell’s continuous-replenishment program embodies a model in which the manufacturer
and the retailer cooperate to cut costs throughout the chain = increasing the size of the pie.
- Pitfalls of the cooperative model= companies playing both a cooperative and
competitive game which does not work (price info needs to be shared and you cannot
play both roles).
Important principle about the supply of functional products:
Customers offer companies predictable demand in exchange for a good product and a
reasonable price. Companies should avoid actions that destroys this relationship!!
- overusing price promotion converts predictable demand in chaotic (many spikes = more
costs)
4
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