The development and empirical validation of an e‐based supply chain strategy optimization model
| Pages | 347-360 |
| Date | 01 July 2003 |
| DOI | https://doi.org/10.1108/02635570310477406 |
| Published date | 01 July 2003 |
| Author | Herbert Kotzab,Niels Skjoldager,Thorkil Vinum |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
The development and empirical validation of an
e-based supply chain strategy optimization model
Herbert Kotzab
Department of Operations Management, Copenhagen Business School,
Frederiksberg, Denmark
Niels Skjoldager
Infonizer, Copenhagen, Denmark
Thorkil Vinum
Vinum & Company, Copenhagen, Denmark
Introduction
Current models for supply chain
management (SCM) agree that the sharing of
business information is a crucial element,
which binds supply chains together from
end-to-end (e.g. Cooper et al., 1997; Schary and
Skjùtt-Larsen, 2001). However, there is no
consensus as to which of the many
SCM-business processes should be
coordinated on a tactical or operative level
across the chains in such a manner. Recent
SCM theory concentrates on strategic
collaborative planning and execution.
The sharing of business information seems
to be an acceptable assumption in dyadic
business relationships, in which two
companies agree on aligning processes and
share the information necessary to conduct
SCM and achieve efficiencies in the
operations (Zhenxin et al., 2001). However,
most supply chains involve far more than
just two companies, which may not have the
same interests, understanding of SCM,
resource levels, willingness to invest in
necessary IT infrastructure and
consequently might also have a different
strategic focus. Conflicts of interests are
unavoidable:
Putting together strategy, information
technology and the supply chain to achieve
success is not easy (Nickles et al., 2001).
Research question and
methodology
How can a SCM executive reduce uncertainty
within supply chains, which involve more
than two companies in order to develop and
execute supply chain strategies? The problem
might be easy to solve in such chains, where
a focal company has a dominating role, such
as the initiatives carried out by channel
captains like Wal-Mart and Procter & Gamble
(see Kotzab, 1997) and/or General Motors
(Deloitte Research, 2001).
Both have implemented integrated IT
systems, which binds together the focal
company and its vast pool of supply chain
partners; projects that demand large
resources and the pre-existence or creation of
relations between the focal company and its
supply chain partners.
In order to answer the question raised, we
introduce a model that integrates the current
academic view on SCM as a management
tool, new research on the subject of
state-of-the-art e-business, which can be
viewed as somewhat close to the
practitioners' implementation of conceptual
SCM, and three managerial economics
theories (transaction cost theory, network
theory, and resource-based theory). The
model, which we call e-supply chain strategy
optimization model, can be used to analyze
supply chains systematically and to provide a
holistic view of the possibilities when
formulating e-strategies for entire supply
chains in complex environments. Essential
elements are the analysis of supply chain
resources, relations and strategic preferences
for supply chain design, which in turn form
the basis for the formulation of optimal,
executable supply chain strategies.
The complexity of developing and
executing a valid supply chain
stragegy
The supply chain management definition
``problem''
There is no ``right or wrong'' definition of
SCM. Many researchers within the field have
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[ 347 ]
Industrial Management &
Data Systems
103/5 [2003] 347-360
#MCB UP Limited
[ISSN 0263-5577]
[DOI 10.1108/02635570310477406]
Keywords
Supply chain, Strategic planning,
Model, Research
Abstract
Examines the formulation of
supply chain strategies in complex
environments. Argues that current
state-of-the-art e-business and
supply chain management,
combined into the concept of
e-SCM, as well as the use of
transaction cost theory, network
theory and resource-based theory,
altogether can be used to form a
model for analyzing supply chains
with the purpose of reducing the
uncertainty of formulating supply
chain strategies. Presents
e-supply chain strategy
optimization model (e-SOM) as a
way to analyze supply chains in a
structured manner as regards
strategic preferences for supply
chain design, relations and
resources in the chains with the
ultimate purpose of enabling the
formulation of optimal, executable
strategies for specific supply
chains. Uses research results for a
specific supply chain to validate
the usefulness of the model.
The authors are ranked in
alphabetical order.
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