Early Days: Developing the Literature (1)

The Evolution of SCM Theory

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).

Defining “Supply Chain” apart from “Supply Chain Management”

“Supply chain management” occurs first in Oliver and Webber’s article of 1982, despite no prior literature having explicitly announced “supply chain”. The present review is logically rather than historically ordered, so elucidates SC before SCM.

“Supply chain” in isolation began receiving theoretical attention in the 1990s, as, paradoxically, some scholars called for its redundancy. To craft value- and demand-related concepts that required contrastive qualification, academic writers coined revisionist definitions (see Table 1.2.1.). Gereffi (1994), for example, writing at a time when geographical diffusion of manufacturing looked both inevitable and irreversible (given the recent fall of formerly socialist states), argued for the replacement of “supply chain” with “commodity chain” in acknowledgement of the globally expanding nature of production.

“Supply” implies supplier, as opposed to customer, supremacy. Christopher (1998) and Vollman et al (2000) proposed extension beyond the customer/supplier dichotomy, with their term “demand chain.” Walters and Rainbird (2004) and de Treville (2004) later asserted that “demand” is more descriptive: the demand chain subordinates the SC, and thereby relegates the SC to functional status. “Chain” invokes linear arrangements of nodes – a configuration naturally envisioned but rarely reflective of diffuse sourcing and production. Lambert et al (1998) restate the linear imagining of supply by defining the SC as companies in alignment for the purpose of bringing goods to market. Even though Christopher in 1992 described the SC as consisting of “networked organisations”, the more realist descriptor “network” has yet to replace “chain”.

Several influential definitions of SC dominate (see Table 1.1.1.). Christopher (1992, p. 10) offers a generic and much-cited definition, describing the SC as “a network of organisations that are involved through upstream (i.e. supply sources) and downstream linkages (IT, distribution channels) in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumers.” This definition portrays multiple organisations operating upstream and downstream to provide value.

In the 1990s, highly-cited, representative definitions of SC, such as the above, emphasized the networking and connectedness aspects of the SC. Later definitions describe features of the SC. Acceptance of the core SC concept is inferable if authors proceed to discuss the particulars of that concept. For example: Ritchie and Brindley (2001) call for a definition that mentions the flow of information and finance that is, they claim, the lifeblood of the SC. Such a claim would be groundless if the integrated network/relationship attribute of the SC was untenable.

By 2000, influential authors were describing the traits of competitive SCs. For example, Christopher and Towill (2000) and Mason-Jones et al (2000) advocated the lean and agile SC – a notion dominating the literature of the subsequent decade. Similarly, Christopher and Peck (2004, p. 1) defined SCs as “dynamic networks of interconnected firms and industries" and then proposed the resilient SC.

It appears that the majority of post-2000 definitions of SC take integration as a given, and its steady climb from aspect to paradigm is discernible. Definitions thereafter differ largely in the activities they append to this model.

Streams have emerged in the SC literature. Articles discuss SCs from one of three perspectives: structural, systems, strategic or relational. Of these, only the systems perspective corresponds with the concerns of traditional logistics. Systems literature focusses on improvement in processes and efficiencies (Cooper et al, 1997). The structural perspective communicates from the premise that correctly configured SCs provide competitive advantage, so much so that competition is no longer between companies or brands, but between their SCs (Christopher, 1998). In the structural perspective, each activity translates to customer value – a concept similar to that of Porter’s “Value Chain” (1985).

Later research (e.g. Ritchie and Brindley, 2001) shows deepening interest in the relationship aspect of SCs. Here focus is on creation and management of inter-organizational relationships, to enable operational and strategic integration (and risk/liability sharing). Some authors extend the SC to include the end customer (e.g. Mentzer et al, 2001). Indeed, customer centrality and increasing distance from traditional logistics is emphatically pronounced by de Treville et al (2004, p. 617) whose “demand chain” is an evolved SC “that emphasises market mediation to a greater degree than its role of ensuring efficient physical supply of the product.” Likewise, Chopra and Meindl (2010, p. 20) define the SC as consisting of “all parties involved, directly or indirectly, in fulfilling a customer request”. Such definitions suggest the customer is increasingly important as the determinant of the activity and character of the already integrated SC.