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Journal of Studies on Manufacturing (Vol.1-2010/Iss.1) Jain et al. / Supply Chain Management: Literature Review and Some Issues / pp. 11-25 Supply Chain Management: Literature Review and Some Issues Jinesh Jain*, G. S. Dangayach*, G. Agarwal*, Soumya Banerjee** *Department of Mechanical Engineering,...

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Supply Chain Management: Literature Review and Some Issues Jinesh Jain

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Journal of Studies on Manufacturing (Vol.1-2010/Iss.1) Jain et al. / Supply Chain Management: Literature Review and Some Issues / pp. 11-25

Supply Chain Management: Literature Review and Some Issues Jinesh Jain*, G. S. Dangayach*, G. Agarwal*, Soumya Banerjee** *Department of Mechanical Engineering, Malaviya National Institute Technology, Jaipur(India) Email: [email protected], dangayach@ gmail.com, [email protected]

**Department of Computer Science & Engineering, Birla Institute of Technology, Mesra (Ranchi) Email: [email protected] Submitted: 10/12/2009 Accepted: 31/01/2010 Appeared: 16/01/2010 HyperSciences.Publisher

Abstract: Supply chain Management has assumed a significant role in firm's performance and has attracted serious research attention over the last few years. A literature review reveals a considerable spurt in research in theory and practice of SCM. Combining and informing on features of Supply Management and distribution Management. This integration has resulted in the concept of extended enterprise and the supply chain is now manifest as the collaborative supply chain across intercompany borders to maximize the value across the entire supply chain. A large number of research papers have been published in various journals in last two decades. In this paper an attempt is made to review the status of literature on Supply Chain Management. A literature classification scheme is proposed. A total of 588 articles from 13 refereed academic journals are classified into articles in five methodologies i.e. Exploratory, Normative, Methodology, Literature Review and Hypothesis testing. This literature review finds that exploratory type of research is mostly preferred it is expected that with the maturity of SCM the hypothesis testing method will pick up. The articles are further categorized in fifteen categories on the basis of content analysis. Based on this review, some possible research issues are identified.

Keywords: SCM, Supply Chain strategy, Literature Review.

those with average performance.

1. INTRODUCTION In the current competitive scenario supply chain management assumes a significant importance and calls for serious research attention, as companies are challenged with finding ways to meet ever-rising customer expectations at a manageable cost. To do so, businesses must search out which parts of their supply-chain process are not competitive, understand which customer needs are not being met, establish improvement goals, and rapidly implement necessary improvements.

Traditionally, Supply Chain Management (SCM) has been a melting pot of various aspects, with influences from logistics and transportation, operations management and materials and distribution management, marketing, as well as purchasing and information technology (IT). Ideally, the allencompassing philosophy of SCM embraces each of these functions to produce an overall supply chain strategy that ultimately enhances firm performance (Croom et al. 2000; Wisner and Tan 2000). In actuality, the literature is still very fragmented and although several studies purport to discuss supply chain issues, most of the existing research only examines one link of the chain, or most importantly only focuses on one ingredient in the supply chain performance mix. Six major movements can be observed in the evolution of supply chain management studies. Creation, Integration, Globalization, Specialization Phases One and Two, and SCM 2.0 These phases are given in Table 1.

Previously manufacturers were the drivers of the supply chain - managing the pace at which products were manufactured and distributed. Today, customers are calling the shots, and manufacturers are scrambling to meet customer demands for options/styles/ features, quick order fulfillment, and fast delivery. Manufacturing quality - a long-time competitive differentiator - is approaching parity across the board, so meeting customer’s specific demands for product delivery has emerged as the next critical opportunity for competitive advantage. Companies that learn how to improve management of their supply chain will become the new success stories in the global market place. Study on Benchmarking shows significant cost differences between organizations that exhibit best-in-class performance and

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The six stage evolutionary era depicts that in a particular era which strategy was emphasized. For instance in the sixth era information Technology was given priority and IT enabled supply chain was the burning issue.

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Journal of Studies on Manufacturing (Vol.1-2010/Iss.1) Jain et al. / Supply Chain Management: Literature Review and Some Issues / pp. 11-25

Table 1. Era in the Evolution of Supply Chain Management S. No.

Era

Description

1

Creation Era

2

Integration Era

3

Globalization Era

4

Specialization Era Phase - One Outsourced Manufacturing and Distribution Specialization Era Phase Two - Supply Chain Management as a Service

In the 1990s industries began to focus on “core competencies” and adopted a specialization model. Companies abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies.

Supply Chain Management 2. 0 (SCM 2. 0)

Web 2. 0 is defined as a trend in the use of the World Wide Web that is meant to increase creativity, information sharing, and collaboration among users.

5

6

The term supply chain management was first coined by an American industry consultant in the early 1980s. However the concept of supply chain in management, was of great importance long before in the early 20th century, especially by the creation of the assembly line. This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era is characterized by the globalization of supply chain management in organizations with the goal of increasing competitive advantage, creating more value-added, and reducing costs through global sourcing

Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non asset based carriers and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution and performance management.

presents various connotations given by various researchers; then a literature classification scheme is explained and a research agenda is suggested after identifying the gaps between theory and practice of SCM.

SCM research has included a number of literature reviews and historical studies published in the top scholarly journals in the fields of logistics, logistic management, purchasing and SCM (Croom et al. 2000; Carter and Ellram 2003; Rungtusanatham et al. 2003). SCM literature reviews have also been done in the past. However, for the most part these reviews have been descriptive (offering basic frequencies for topics covered etc.) or normative. Given the increasing focus on SCM in both academic and practitioner literature streams, a review of the concepts, topics, analysis methods and levels of analysis across thirteen academic journals was undertaken. This research investigates the history of the SCM literature looking at the various trends and developments in the field through a historical analysis covering the 18-year-period between 1990 and mid 2008. During this period, SCM evolved into a more prominent area of research (Mentzer et. al. 2001). the objective of this study is to provide an extensive literature review on supply chain management. More specifically, the purpose of this study is to: • Define what constitutes supply chain management research. • Classify SCM research articles according to their approach and methodologies. • Explore the trend in the SCM research and suggest a research agenda for future work.

2. LITERATURE REVIEW 2.1 Supply Chain Management definitions SCM has been interpreted by various researchers. Based on the relatively recent development of the supply chain literature, it is not surprising that there has been much debate as to a specific SCM definition. Ganeshan and Harrison (1995) has defined SCM as a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Lee & Corey (1995) stated that SCM consists of the integration activities taking place among a network of facilities that procure raw material, transform them into intermediate goods and then final products, & deliver products to customers through a distribution system. Christopher (1998) defined the supply chain as the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer. SCM is the " strategic and systematic coordination of the

The organization of this paper is as follows: the next section

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Journal of Studies on Manufacturing (Vol.1-2010/Iss.1) Jain et al. / Supply Chain Management: Literature Review and Some Issues / pp. 11-25

2001). various connotations of supply chain management given by other researchers are given in Table 2.

traditional business functions and the tactics across these business functions within a particular firm and across businesses within a supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole" (Mentzer et al.

Table 2. Various Connotations of Supply Chain Management Reported In the Literature S. No. 1.

Researchers

Year

Definition

Chopra and Meindl

2001

“A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request”.

2.

Mentzer et al.

2001

“The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.”

3.

Handfield & Nichols

1999

“A supply chain encompasses all activities associated with the flow and transformation of goods from the raw material stage, through to the end user, as well as the associated information flows”.

4.

Christopher

1998

“The supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer”.

5.

Lee & Corey

1995

“The integration activities taking place among a network of facilities that procure Raw material, transform them into intermediate goods and then final products, & deliver Products to customers through a distribution system”

6.

Ganeshan and Harrison

1995

“A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials intermediate and finished products, and the distribution of these finished products customers.”

7.

Cooper & Ellram

1993

“SCM is an integrative philosophy to manage the total flow of distribution channel from the supplier to ultimate user”

8.

Cavinato

1992

"The supply chain concept consists of actively managed channels of procurement and distribution. It is the group of firms that add value along product flow from original raw materials to final customer”.

9.

Towil, Naim, and Wikner

1992

"The supply chain is a system, the constituent parts of which include material suppliers, production facilities, distribution services, customers linked together via the feed forward flow of materials and the feedback flow information”

10.

Scott Westbrook

1991

“supply chain is used to refer to the chain linking each element of the process from, raw materials through to the end customer”

11.

Novak & Simco

1991

"The supply chain management covers the flow of goods from supplier through manufacturer and distributor to the end-user”

&

product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer. Managing the chain of events in this process is what is known as supply chain management. Effective management must take into account coordinating all the different pieces of this chain as quickly as possible without losing any of the quality or customer satisfaction, while still keeping costs down”.

Now from author’s point of view the definition of supply chain and supply chain management can be depicted as “supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All firms have supply chains of varying degrees, depending upon the size of the organization and the type of

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Journal of Studies on Manufacturing (Vol.1-2010/Iss.1) Jain et al. / Supply Chain Management: Literature Review and Some Issues / pp. 11-25

The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. It is clear that supply chain management has a significant role to play and needs critical attention in the corporate setting.

period, we examined 588 articles over 18 years. This not only makes for a more in-depth review, but provides a larger base from which to chart the maturation of the SCM field. It also helps to assess gaps in the literature and project future trends, thereby underscoring the importance and robustness of this study. Finally, Burgess et al., include books, manuscripts and conference proceedings while this research focuses solely on published articles in peer reviewed SCM journals.

2.2 The Literature, Theory and Practice of SCM Numerous articles dealing with the theory and practice of SCM have been published over the reviewed period of last 18 years, but the topic is still under considerable development and debate. Richard Lamming (1996) has given a general review on lean supply chain in which Lean supply has been characterized as “beyond partnership”. Lean supply is the system of purchasing and supply chain management required to underpin lean production. . Ben-Daya et al. (2008) explored the topic in a particular context, i.e. The industrial district (ID), that constitutes a specific production model where complex SC networks can be identified. SC cooperation may take on several forms in IDs and may produce several benefits (e. g. Upgrading quality and reducing costs).

Carter and Ellram (2003) surveyed the articles published in the Journal of Supply Chain Management for the total period of 35 years since its launching i.e. for 1965 to 1999. Their objective was to offer a greater understanding of the evolution of purchasing and supply research over the first 35 years of the Journal of Supply Chain’s existence, and to provide guidance and prescriptions for future supply management research. They observed that nearly 90% of the journal articles under study consisted of normative literature, methodology reviews, and exploratory studies. They further noted that the use of hypothesis testing had increased significantly over the past 10 years of their review (19891999), yet they consider that a greater use of hypothesis testing and the scientific method is recommended as the Supply Management discipline continued to mature. Carter & Ellram (2003) further recommended more literature reviews leading to the introduction of theoretical frameworks of supply management, and the use of more sophisticated research modeling techniques such as MANOVA/ discriminant analysis and inferential statistical techniques. They classified the articles based on a modification of the categories used by ISM, and proposed 32 categories for clear and unambiguous classification, which has proved to be a milestone and has been used in subsequent literature reviews by several researchers. The authors conclude that purchasing and supply management, as a scientific discipline, is maturing. It is interesting to note that the authors have consistently used the terms ‘purchasing’ and ‘supply’ management, which speaks a lot about the stage of development of the discipline of ‘Supply Chain Management’ till 1999.

Vaart and Pieter (2003) drawn conclusions on the need for an inter-disciplinary approach, combining the technical and relational aspects from the respective fields of system dynamics and collaboration in order to deliver superior order replenishment performance. Gunasekaran and Ngai (2005) indicated that E-Business, product, and service-quality, all have a significant direct effect on customer behavioral intentions to purchase again. Balakrishnan and Cheng (2005) reviewed and update the methodology based on spreadsheet that provided enhanced solutions in complex environments with multiple products and bottleneck situations. Nagarajan and Sosic (2004) reviewed literature dealing with buyer vendor coordination models that have used quantity discount as coordination mechanism under deterministic environment and classified the various models. Based on this conceptualization of SCM, the existing literature was examined, in an effort to identify the extent to which these underlying elements were present in SCM academic research to date. A review of previous literature studies, as highlighted in Table 3 (Appendix A), provides the basis for how this review extends our understanding of SCM research.

Croom et al. (2000) analyze 84 studies on SCM in terms of level of analysis and research methodologies, but the time period for their data collection is ambiguous. Their study represents an early attempt to categorize the SCM literature. Significant growth has taken place both in the practice and theory of Supply chain Management since this attempt, making it necessary for reviews of current knowledge and literature. Finally they describe and categorize the research methods into two dimensions: theoretical and empirical and do not provide the number of articles associated with each level of analysis.

Burgess et.al. (2006) reviewed 100 randomly selected articles from 614 usable articles found in the ABI/Inform Database across a 19 year (1985 to 2003) period.. Their sample addressed manufacturing and consu...