Origins of Supply Chain Management: First 20 Years of Research The concept of Supply Chain Management ( SCM) is fairly new in the business literature; Giunipero et al. [1] and Mentzer [2] indicate that it was initially introduced in the 1960s by J.W. Forrester, in his book Industrial Dynamics, where the author established that success of industrial companies was intrinsically related to the “interactions between flows of information, materials, manpower and capital equipment” [1]. Nevertheless, after this initial effort to define the term, approximately 20 years passed before for the actual concept of “Supply Chain Management” to be addressed by scholars and practitioners in only a “handful” of articles between 1985 and 1987 [1, 3].
The end of the 1990s was characterized by an exponential growth in SCM research. Several literature reviews [1, 3] concur on the significant growth in the appearance of publications addressing the subject, particularly since 1999. In 2006, Burgess et al. [3] circulated a literature review where 100 peer-reviewed articles were randomly selected to study the nature of SCM publications available at the time. The group of researchers determined that out of the total sample chosen, only a small fraction were articles dated from 1985, and a total of 77 were published between 1999 and 2003. Figure 1 depicts the time distribution of publications based on Giunipero’s [1] research, which accounted for a sample size of 405 articles, covering the years between 1997 and 2006.
According to Mentzer [2], at least three factors may have contributed to the increase in interest of scholars and practitioners on the fundamentals behind the concepts of SCM in the early 2000s: trends on global sourcing, emphasis on time and quality-based competition, and their respective contribution to a greater environmental uncertainty. Globalization of suppliers and customers has brought an additional set of variables to consider in order to effectively managing business functions such as procurement, logistics, manufacturing, sales, marketing, etc.; which has posed a challenge on multinational firms to secure sustainability in highly competitive environments. Lead-time and quality, both understood as potential “market qualifiers”, are considered by Martin and Towill [4] as fundamental elements of a lean supply (chain) and therefore necessary to enable cost as a market winner , also identified by Kaplan and Norton [5] a as one of the key elements for any productivity-based financial strategy. The globalization of supply chains in combination with an increased emphasis on competition based on agility, summed to a fast pace on technology and economic condition changes, is what according to Meltzer’s perspective, it is creating the business intricacy that helped SCM become a popular area of study [2].
Defining SCM has been an area of focus for researchers, interested in developing the conceptual models necessary to enable the field to grow and reach higher maturity. Conversely, some authors argue there is still a lack of consensus on the definition of SCM [3], which would suggest the field is still in developmental stages [3, 6]. Burgess et al. [3] identified significant inconsistencies in the sources utilized by authors at the time of referring to the definition of SCM. This research team encountered that out of the sample of 100 articles reviewed, 12 percent developed their own particular definition, 30 percent used an existing definition (9% of which used adapted definitions that were incrementally changed ), and 58 percent did not use a definition of SCM at all. Interestingly, there is understanding among scholars that most of the research efforts have been focused on theory development or theory building, rather than theory validation or empirical research [6]. One of the purposes of this paper is to provide a perspective on the most popular definitions of SCM and provide insight into the debate among scholars and practitioners on the subject.
Defining Supply Chain Management
As it has been previously indicated, the popularity of the concept of Supply Chain Management is not necessarily a good indicator of consensus of researchers on what it is. Some authors have interpreted SCM as an activity or a process, while others have visualized it as a system or a network [3]. Moreover, in an effort to identify the nature of SCM as a field of study, researchers have studied and grouped the diversity of meanings into constructs, having encountered even more multiplicity in perspectives. Burgess et al. [3] indicate that majority of articles reviewed in their study position SCM as “Process Improvement orientation.” Other authors have characterized SCM as “inter-organizational relationships” and further, as an “information systems” construct. Figure 2 portrays the results of Burgess et al’s [3] study on SCM constructs.
Figure 2: Constructs of SCM (adapted from Burgess et al.) [3″Giunipero et al. [1] argue that even though researchers have not reached an agreement on the “perfect” definition of Supply Chain Management, consensus has been achieved on the meaning of a supply chain. Mentzer et al. [2] concur with this thesis and expand upon it by developing a conceptual model for one of the most widely accepted definitions of SCM. Defining a Supply Chain Mentzer defines a Supply Chain (SC) as the grouping of organizations or individuals that participate on upstream and downstream flows of “products, services, finances and information” from the source to a customer [2]. Note the three key elements encompassed by this definition:
Upstream flows correspond to the “supply” activities of supply chain
Downstream flow correspond to the “distribution” portion of supply chain
The final customer is part of the supply chain
Given the nature of entities and amount or connections that may take place within the supply chain, at least three different levels of complexity may be distinguished in any given arrangement [2] (depicted in Figure 3) : a “direct supply chain” that consists of a firm, a supplier and a customer only, an “extended supply chain” with additional layers of suppliers and customers, and the “ultimate supply chain” that involves both the ultimate supplier and customer.
An important element highlighted by Mentzer et al. [2] on their thesis on supply chain is the condition of its existence regardless of the presence of any effort to manage it: supply chains “exist in business” even if there is not management intended to orchestrate the involved entities. This contrast of definitions provides an initial perspective on the meaning and purpose of SCM. Another significant aspect regarding this business singularity is that firms may become part of multiple supply chains simultaneously. For example, Amazon takes place in a wide variety of supply chains for books, electronics & computers, toys, music, among others, which provides support to the network-based perspective of defining SCM.Definition of Supply Chain Management
Mentzer et al. [2] indicate that, in general, authors considered in their research provide a definition of SCM that may be categorized into three groups: a management philosophy, implementation of a management philosophy, and a set of management practices. It is out of the scope of this paper to elaborate on the detailed process that Mentzer followed to build a definition for SCM based on the elements implicit in these three areas of study, therefore, the focus of this paper will remain instead on the resulting constructs. As a management philosophy, SCM establishes that each company in the supply chain impacts the performance of the other involved firms, along with the overall results of the entire chain [2]. Mentzer calls this perspective “Supply Chain Orientation” (SCO): “The idea of viewing the coordination of a supply chain from an overall system perspective, with each of the tactical activities of distribution flows seen within a broader strategic context”[2]. In other words, SCO refers to the awareness of firms of their interdependence on the supply chain. Based upon the concept of SCO, Mentzer develops his definition of SCM as the actual deployment of the SCO on the firms in the supply chain: SCO is the philosophical background, and SCM is the implementation of that philosophy. More specifically, Mentzer’s definition of SCM is: “… the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across business in the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole” [2]. Additional attempts have been made by other scholars and practitioners to define SCM, but according to Giunipero [1], only Mentzer addresses the majority of critical terms and perspectives critical for developing a solid framework that may facilitate future research. Burgess, on the other hand, argues that consensus on the meaning of SCM does not exist yet. Nonetheless, it is evident that Mentzer’s definition persists as one of the most widely accepted and referenced among business and operations literature, again, critical for any framework development.
Figure 3: Types of channel relationships (Mentzer et al. [2″
References
[1] L. Giunipero, R. Hooker, S. Joseph-Matthews, T. Yoon, and S. Brudvig, “A decade of SCM literature: past, present and future implications,” Journal of Supply Chain Management, vol. 44, p. 66, 2008.
[2] T. M. John, D. William, S. K. James, M. Soonhong, and et al., “Defining supply chain management,” Journal of Business Logistics, vol. 22, pp. 1-25, 2001.
[3] B. Kevin, J. S. Prakash, and K. Rana, “Supply chain management: A structured literature review and implications for future research,” International Journal of Operations & Production Management, vol. 26, p. 703, 2006.
[4] C. Martin and T. Denis, “An integrated model for the design of agile supply chains,” International Journal of Physical Distribution & Logistics Management, vol. 31, p. 235, 2001.
[5] R. S. Kaplan and D. P. Norton, “Having trouble with your strategy? Then map it,” Harvard Business Review, vol. 78, pp. 167-176, 2000.
[6] S. Gunjan and K. Rambabu, “A critical analysis of supply chain management content in empirical research,” Business Process Management Journal, vol. 17, pp. 238-266, 2011.
