This research investigates how, in the context of China supply management, the relationship between supplier and buyer influences risk, and how non-Chinese companies manage Chinese suppliers to minimize risk. Four streams of literature were reviewed. Themes emerged when the four were aggregated.
Definitional diversity, although a complicating factor in a synoptic literature review and academic taxonomy, is not entirely negative. Anderson (1983) claims that diversity within a field deepens the knowledge base; debate enhances a field’s status, as this signifies academic precociousness and industrial relevance. In the case of SCM, diversity illustrates its evolution succinctly. The 1990s and 1980s saw many theorists propose concepts analogous with SCM.
A Chronology of Terms/Concepts Analogous with “Supply Chain Management” (SCM)
The common term “supply chain” (hereafter “SC”) is seldom defined in clear separation from “supply chain management” (hereafter “SCM”), which entered the literature via Oliver and Webber in 1982. The appearance of SCM marked a major conceptual expansion. Logistics thereafter transcended the mechanics and metrics of physical distribution and attendant issues of efficiency – interests that preoccupied the “pipeline” era. With SCM came a philosophy of enterprise, only one element of which would be logistics in its traditional guise. SCM promotes a set of concepts and tools for reducing SC risk. Not thus far theorised however is risk in global SCs specifically. The prospect of addressing this absence, and by so doing developing a second major conceptual expansion (from SCM to Global SCM), motivates this research.
This section outlines the origin and ascent of the SC concept and SCM theory.
From “Logistics” to “Supply Chain”
The Council of Supply Chain Management Professionals (2010, p. 114) defines logistics as “the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.” Rushton et al (2010, p.4) contrast logistics and SC in unequivocal terms: “supply chain = suppliers + logistics + customers” and “logistics = materials management + distribution”.
Following the entrance of “supply chain”, logistics refers now to the physical activities involved in the conveyance of goods through the SC. Both SC and SCM signify rejection of forecast-driven push systems and focus on efficiencies, replacing these with a philosophy of integrated, responsive systems that strive for provision of customisation and effectiveness (i.e customer satisfaction).
SCM reveals its historical and practical proximity with operations management by its borrowing of lean, agile, leagile, and other manufacturing tools. Some authors define SCM purely in operational terms, i.e. the flow of materials and products (Tyndall et al, 1998). Oliver and Webber (1982) use SCM to describe “the planning and control of the total materials flow”. Later, Houlihan (1984, 1985, 1987) uses “SCM” in reference to internal integration and material flow across organizational borders. To others (e.g. Ellram and Cooper, 1990), SCM is a philosophy of structure characterised by unity among elements. A minority consider the term to refer principally to management processes (e.g. La Londe, 1997).
By the 2000s, theorisation of business logistics was largely premised on the SC paradigm. Not surprisingly, the issue of SC risk has emerged. Cooper et al (1997) observe that since the logistical chain evolved into a SC, risks have multiplied and the character of risk is complicating as SCs elongate.