Eliciting and representing the supply chain strategy of a business unit

• DOI: https://doi.org/10.1108/IJLM-05-2016-0128
• Pages: 1401-1423
• Date: 13 July 2018
• Published date: 13 July 2018
• Author: Roberto Joaquin Perez-Franco,Shardul Phadnis
• Subject Matter: Logistics,Management science & operations

Eliciting and representing the

supply chain strategy of a

business unit

Roberto Joaquin Perez-Franco

Centre for Supply Chain and Logistics, Deakin University, Geelong, Australia and

Center for Transportation and Logistics, Massachusetts Institute of Technology,

Cambridge, Massachusetts, USA, and

Shardul Phadnis

Malaysia Institute for Supply Chain Innovation,

Shah Alam, Malaysia and

Center for Transportation and Logistics, Massachusetts Institute of Technology,

Cambridge, Massachusetts, USA

Abstract

Purpose –The purpose of this paper is to propose a practical method to elicit –in a manner grounded in

fact –the “as is”supply chain strategy that a business unit currently has in place. It also proposes a

framework to represent the supply chain strategy of a business unit in a clear and actionable manner.

Design/methodology/approach –A framework to represent the supply chain strategy of a business unit

was developed through inductive theory generation. A method to elicit the current, “as is”supply chain

strategy of a business unit was developed through collaborative management research projects and validated

by several third-party projects.

Findings –In different projects –many conducted by third parties –the method was found to be a useful

approach to elicit the “as is”supply chain strategy of a business unit. Practitioners found value in

representing a supply chain strategy as a conceptual system serving as a logical bridge between the overall

strategy and the supply chain operations of the business units.

Research limitations/implications –The proposed framework may have limited scalability beyond a

single business unit. The proposed method may be less useful when the supply chain strategy is undergoing a

dramatic transformation, or when the participants from the company are either not fully engaged in the

exercise or knowledgeable about the strategic rationale behind activities.

Originality/value –The paper provides an innovative approach to tap into the tacit knowledge of the

organization to reveal the patterns of decisions underpinning its current supply chain strategy and to

characterize the supply chain strategy of a business unit as a conceptual system.

Keywords North America, Europe, Supply chain strategy, South America, Conceptual research,

Strategy elicitation, Strategy representation

Paper type Research paper

1. Introduction

Supply chain strategy is important for a business unit

Supply chain strategy has long been considered important. Three decades ago, Shapiro and

Heskett (1985) described “strategy”as one of the two facets—in fact, the most important one—of

what was then called logistics. A few years later, in a pioneering article on supply chain

management, Stevens (1989) claimed that an integrated supply chain strategy is necessary for a

supply chain[1] to realize its potential and provide the business with a competitive advantage.

Since the turn of the century, supply chain strategy has become “an increasingly

important topic”(Morash, 2001, p. 50). Varma et al. (2006, p. 226) claimed that “top

performers have a clear supply chain strategy aligned with overall business objectives and

customer requirements.”Narasimhan et al. (2008, p. 5234) asserted that “in the competitive

global environment in which firms operate today, developing a successful supply

The International Journal of

Logistics Management

Vol. 29 No. 4, 2018

pp. 1401-1423

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-05-2016-0128

Received 16 September 2016

Revised 17 January 2018

17 March 2018

Accepted 6 April 2018

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

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Supply chain

strategy

chain strategy is critical to a firm’s long-term competitive success.”More recently, Roh et al.

(2014) stated that “supply chain practices solidly built upon a supply chain strategy can

enhance the firm’s and its supply chain partners’business performance and thus their

competitiveness.”

Because of this, it is important for practitioners to be able to discuss their own supply

chain strategy in a substantive and factual manner. Many events may move a business unit

to discuss its supply chain strategy. Aitken et al. (2003), for example, argued that changes to

the supply chain strategy are necessary as a product proceeds through its life cycle, in order

to maintain competitiveness. Other motivators may be changes inside the business unit,

such as the arrival of a new CEO with a different strategic vision for the company, or

changes in the business environment, such as new regulations, new technologies, new

competitors and entry to new markets.

Discussing a specific supply chain strategy is difficult

Despite its importance, discussing a specific supply chain strategy in a substantive and

factual manner remains a difficult task for practitioners, and—as a consequence—“it is

often the case that high-level discussions of supply chain strategy are completely void of

facts”(Hicks, 1999, p. 27). Part of the difficulty of discussing the supply chain strategy of a

business unit may stem from what Bakir and Bakir (2006) called the “elusiveness”of

strategy. But it may also be that the difficulty of discussing supply chain strategies in a

substantive manner results from the fact that “many questions remain unanswered about

how best to characterize supply chain strategies”(Frohlich and Westbrook, 2001).

An important question is how to represent a supply chain strategy in a clear and

actionable manner. To better understand what this question entails, imagine a scenario

where a practitioner, for example the new head of supply chain in a business unit, wants to

discuss with her staff a new supply chain strategy that she is considering. It will be assumed

here that lack of information is not a problem: all the relevant aspects of the new supply

chain strategy are known to her, since it is her creation. The question, then, is how can this

practitioner articulate this supply chain strategy (i.e. express it distinctly), conceptualize it

(i.e. represent it with concepts) or characterize it (i.e. define it in form or describe its

distinctive features), so that her staff can understand it well enough to engage her in an

intelligent and substantial discussion about its merits and flaws?

Supply chain strategy is not always well defined or explicit

Despite the availability of representational frameworks in the supply chain literature

(e.g. Cigolini et al., 2004; Frohlich and Westbrook, 2001; Perez-Franco, 2010, etc.), supply

chain strategies are not always well defined in practice. Harrison and New (2002) conducted

an international survey on supply chain strategy, targeting “senior managers with

responsibility for supply chain operations”within “relatively large business units”“from all

the major industrial sectors.”A“major issue to be investigated in the survey was the current

state of supply chain strategy”and its “relative importance”within the business unit. From

the 258 usable responses they received, more than half (58 percent) of the respondents

reported that their business units lacked a well-defined supply chain strategy. This

percentage broke down as follows: 43 percent of all units reported having supply chain

strategies that “lacked detail,”with “only some elements defined,”and 15 percent reported

that their supply chain strategies were either “patchily defined with poor definition”or

altogether “non-existent.”This cannot be entirely explained as a lack of interest in supply

chain strategy: a total of 180 business units reported that supply chain strategy was “an

important or very important factor”for them, and almost half of these (47 percent) lacked a

well-defined supply chain strategy.

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