Supply Chain Management

Supply chain management (SCM) is a commonly used term in business and academia, but with many different meanings, representing different perspectives and varying spans of influence and interest. This chapter traces the development of materials planning and control, purchasing and supply relationships and logistics perspectives of supply chain management to today’s more strategic, holistic conceptualisation. Supply chain management is positioned here to be a multi-systems level, strategic endeavour, integrating strategic management thinking from operations management, logistics, purchasing and supply management and industrial marketing. At its core is the transformation of resources from original sources to supply goods and services to ultimate end users. The academic field of supply chain management would benefit from greater conceptual clarity to enhance legitimacy and cohesion required for it to become a recognised discipline.

 Supply structures are connected nodes of sub-parts of organisations involved in the procurement of resources, their operational transformation and distribution as goods and services. Supply nodes are connected by supply flows and processes. Supply chain managers control resources or assets including buildings, equipment, people involved in supply, materials and services transformed into goods and services, social capital accruing from supply, finance and information for supply and supply knowledge and expertise. All supply nodes exist in their own unique supply structures and have unique vantage points from which they observe and engage with their supply structures upstream and downstream. Supply structures are at multiple systems levels of the internal supply chain, the supply dyad, supply triad, supply base, supply chain, supply network, supply system and supply market. The larger the unit of analysis of supply structure, the less empirical research has been conducted, so our understanding of them is less.

This chapter focuses on research contributions to understanding supply chain management through the processes, flows, roles and behaviours that occur within supply structures. Supply processes and flows are tangible and intangible. SCM and logistics research has focused more on tangible flows of materials and information, whereas purchasing and supply management have focused on relational aspects, particularly within the dyadic relationship. Historically there has been more SCM research attention to large, high-volume manufacturers able to influence other organisations in the supply structures they operate in. Less is understood about the supply processes of smaller and less influential organisations. In some supply situations it is possible to be managerial but in others supply chain managers have to cope and react.  There has been very little research in the field of SCM on supply markets, their structures and processes, and how large organisations, confederations and governments may influence supply markets.

As discussed in Chaps 2, 3 and 4, traditional supply chain management thinking has focused on firms’ connections to other firms upstream from them—their suppliers and their suppliers’ suppliers etc.—and downstream—their distributors and customers, customers’ customers etc. However, connected supply structures and processes can be interconnected with other competing and collaborating supply structures. Larger systems of supply such as healthcare services and the United Nations are dynamic and complex systems of interconnected supply structures and processes. Areas of research that supply chain management researchers are now engaging with, such as sustainability and humanitarian aid, require understanding of greater interconnectedness, dynamics and complexity. Traditional, firm-based theories used in SCM may not be appropriate to tackle these more wicked problem areas. Supply chain management for government organisations operating across multiple supply system levels require different approaches to research and governance.

Supply chain risk and resilience have been conceived, in the main, in terms of identifying types and sources of risk, the likelihood and impact of them being realised into losses, and the supply chain’s ability to plan for, mitigate and respond in the event of a disruption to return to a prior ‘normal’ state. An economic, focal-firm perspective has dominated SCM research. Supply chain risks arise from malicious and unintended causes. Supply chain resilience can be robustness, agility or adaptive resilience occurring at micro, meso and macro levels. Supply network risk management process involves mapping the supply network, identifying risks and their location, assessing those risks, developing a risk position and scenarios, forming a collaborative supply network strategy and implementing that strategy. Dynamic, complex, contemporary, global challenges require new approaches to supply chain risk and resilience. Five themes are proposed for the future of supply chain risk and resilience research - risk and resilience with increasing supply complexity, collaborative approaches to risk and resilience, supply market risk and resilience, crisis preparation and new styles of leadership for risk and resilience.

In Chap. 2 it was argued that supply chain management, as we know it today, originates in firm-based, for-profit decision making, benefiting shareholders and other stakeholders in private sector firms’ financial success. This has perpetuated the dominance of an economic perspective to supply chain management, focused on reducing costs, improving competitive advantage, improving profitability and ultimately improving shareholder value. A framework is provided that differentiates between supply policy, strategy, management and operations. Supply policies may be aspirational or restrictive. Supply policies examined here include sustainability, ethical supply, working conditions, supply chain bullying, modern slavery and corruption. Public procurement can be used as a lever by governments to support implementation of government policies relating to innovation, entrepreneurship, industrial development of particular sectors and local economies, small business development, social outcomes, sustainability, supply market competition, corporate social responsibility, community benefits and emergency planning. Implementation of supply policies is impeded by governments’ focus on public policy formulation and not policy implementation. Global stewardship is required in some areas of supply policy, notably in humanitarian aid and also in global crises, such as pandemics. The academic field of SCM should join up research in the SCM specialisms of traditional, firm-based operations and supply chain management, purchasing and supply management, public procurement and humanitarian logistics and supply chain management. 

Supply chain management as a field of research and practice has grown and developed substantially from its origins as a for-profit, manufacturing-oriented, firm-based endeavour. As an academic field SCM now includes research in profit and not-for-profit, public sector and private sector, service and manufacturing. Future challenges facing SCM will be increasingly dominated by the climate crisis and its impact globally. There is a wave of sustainability legislation and regulation approaching. Additionally supply chain managers face challenges arising from global pandemics and wars, shortages of critical materials, reshoring, increasing forecast volatility, increased demands for greater supply chain visibility and accountability and changes in labour availability. The future SCM landscape will require engagement with a greater, more heterogeneous set of stakeholders, demanding new forms of governance and styles of leadership with greater involvement of governments and society. New and emerging technologies including artificial intelligence, machine learning, blockchain, Internet of Things and resulting access to big data will enable more rapidly changing, agile supply chain decisions to be made, encouraging more experimentation and fluidity. Systems thinking will become more important in our understanding of SCM as a multi-level endeavour, incorporating social and environmental perspectives as well as economic. Integration of the sub-groups of SCM in academia, typified as operations and SCM, purchasing and supply management, logistics, humanitarian SCM and public procurement will enable clarity, learning and the formation and strengthening of a cohesive, legitimate, academic discipline.