masters in supply chain management

masters in supply chain management

The Future of Supply Chain Management: Strategies and Innovations for Success

1. Introduction to Supply Chain Management

The “management” of a supply chain can be broken into two main tasks, which are largely complementary. These are analysis and design, a process through which one ends up with a good SCM, and response, a process built largely on the results of the analysis. As implied by managers’ terms like “the business of business is business,” the “management” part of the SCM has management science as its foundations. In this paper, we consider SCM analysis: we assume that the supply chain has been designed and implemented and concentrate on operational aspects, like forecasting, production planning, and inventory management, and two related recent developments, supply chain design updating and supply chain performance assessment.

The management of a supply chain is risky. It is also exciting and, for many reasons, trendy. The risks come from many different factors, covering almost the entire gamut of modern business concerns, from financial risks to ecological ones. The excitement comes from both having to deal with so many complex issues and from the magnitude of the opportunities for making a difference, or even for completely reformulating manufacturing and logistics systems. The trendy aspect comes from various sources. For example, the plethora of issues, many of them the subjects of new regulations and standards, create a large new academic and consulting market. At home, much of this business goes under the general title of “Supply Chain Management” (SCM). More generally, SCM is simply a modern version of the “Logistics” function, with the substitution of the word “Strategic” for the more traditional word “Distribution”.

2. Key Concepts and Theoretical Foundations

The major, overarching research goal of the project was to identify potential futures for the discipline of supply chain management. Two very good reasons back this endeavor. First, companies are certainly very focused on gathering the best they can from their supply chains today, and they benefit hugely from best practices. Nevertheless, today’s best never cease to evolve, and so companies need to keep an eye on possible future developments that threaten to displace their current practices as well as new practices that their competitors could adopt. In such an environment, benchmarking practices become as important as developing capabilities and internal capacities for innovation. Second, the rapid pace with which digital technologies have been evolving may just make some of today’s differently innovative practices visible to companies in a time horizon that diffuses their adoption throughout the system. There is mounting evidence, in fact, that early experiments with certain new technologies are producing some formidable results.

The field of supply chain management has emerged in recent decades as nothing short of a revolution in business. Companies involved in many different industries have found that they can radically change the way they create products and services, and consequently their results, by using thoroughly thought out supply chain paradigms to drive operational and strategic activities. This whole new field of inquiry has given rise to a good number of academic journals, a myriad of specialized business books, and a number of academic programs. This book adds to our understanding yet another important implication of this surge in supply chain management as a formal area of inquiry. Current supply chain management praxis, that is the best companies do today in the area, is usually a key competitive weapon. In this book, we present the outcomes of a research project that had these companies as its initial sources.

3. Technological Advancements in Supply Chain Management

There are several areas where leading organizations are investing heavily, drawing on long-established tools such as Enterprise Resource Planning (ERP), material requirements planning (MRP), demand planning, transportation management and warehouse management systems, inventory management, and enterprise-wide connectivity, while surfacing the data to support and enable (Advanced Planning and Scheduling) and the emerging use of other sophisticated tools such as AI and machine learning and big data analytics. In our continuing analyses of emerging standards and leading supply chain practices, in discussions with senior executives and solution developers from providers and practitioners at the forefront, and through additional briefings on advanced technologies by leading supply chain executives and technical innovators representing fields of study and practices at leading companies headquartered in Massachusetts, and drawing from innovations in industries that may not be immediately or obviously associated with supply chain management, we tend to see more underlying commonalities than one might at first expect. In truth, there are significant ongoing competitive implications for a number of these areas, particularly where sharing some types of information widely causes a loss of differential advantage or adversely affects core business.

Technological developments in recent years have changed the nature of supply chain operations. To capitalize on technology, executives must view data seriously, adopt digital solutions, and seek robust connectivity. The stakes could not be higher: these foundational technologies are likely to have a profound effect on the structure of supply chains, competition, differential advantage, and redundancy. Our concern in this chapter is with the practical day-to-day implications of these technologies for supply chain management. We attempt to demystify and put into perspective some of the key technologies at the core of many advanced supply chain initiatives (Internet of Things, blockchain, AI and machine learning, robotics, 3D printing/additive manufacturing, and big data analytics) by discussing precisely what the technology will be used for, some of the more meaningful industry use case experiments, why it has taken on such urgency, and the implications for requirements and performance. What are some of the areas and challenges for which new ‘tools’ are taking on a key role?

4. Sustainability and Ethical Considerations in Supply Chain Operations

Socially and environmentally sustainable supply chains have obstacles in common. They require transparency, cooperation among businesses and NGOs in analyzing and defining problem areas, as well as furthering solutions by working on projects, and benefits to participating firms. At the same time, companies need to perform activities—monitoring and investigation processes—that push them to make sensitive internal information public when it would not otherwise be divulged, causing adverse reactions and loss of face if not financial losses. Corporate social responsibility requires social responsiveness to stakeholders or moral decision-making in which individuals and organizations decide in light of established ethical principles what is fair and just. Ethical principles are not cost-sensitive—their importance depends on how long a period of time is under consideration. However, effective corporate action presents choices; long-term goals can be justified by cost/benefit analyses of the positive and negative consequences of action and inaction. Ethical criteria and public relations can be used to sell the benefits of socially responsible behaviors and policies. Successful corporate behavior can build and sustain dignity and reputation that involves stakeholders willingly collaborating with the company on necessary and often difficult measures.

In addition to the challenges brought on by globalization, technology, and the need for improved customer service, corporations today also face a difficult balancing act in managing their supply chains. While cost cutting is still the primary goal of supply chain management, there is also the increasingly important need for sustainable or environmentally friendly practices, which can be expensive to adopt or maintain. Concern about child labor, sweatshops, and socially responsible behavior also influence supply chain management strategy as activist organizations pressure companies to abandon all business relationships with alleged and potential criminals. Such protests are often linked to regulatory pressures, as several nations have imposed due diligence and duty of care requirements on companies and their supply chain networks, requiring them to ensure that their business partners do not violate laws and treaties. This section discusses the various corporate, regulatory, and activist pressures and what businesses are doing to deal with them, including the use of social audits, codes of conduct, and the designation of a permanent monitor of compliance.

5. Case Studies and Best Practices in Supply Chain Management

Deploying information technology in such a manner requires significant shifts in current IT practices, including the placing of greater emphasis on the integration of software applications that are spread over many technology platforms. Such integration, in turn, calls for significant investments of company resources and closer collaborative efforts between a company and their IT providers. For its part, the IT industry has taken very significant strides at transforming itself towards a more deeply collaborative relationship with its clients.

These and similar developments have led to growing interest among academics and business executives in a wide range of issues that impact the management and practices of global supply chains. Within this broad spectrum, several factors are of critical importance. Of these, technology and innovation are considered key elements in advancing global supply chains. Information technology, in particular, has been singled out as the most important tool for managing global supply chains. It makes possible the close, quick, and seamless integration of the supply chain. Such integration is especially beneficial in the management of customized and complex products in which design changes drive the supply chain. It can help promote tight coordination of logistics between the first and second tiers of suppliers in global supply chains, where genuine strategic partnership is impossible.

An important contributing factor is the growing “borderlessness” that increasingly characterizes the world we live in today. The growth of the World Wide Web, the rapid diffusion of modern communication technologies, the increasing capacity and reliability of ocean and air carriers, and the proliferation of Western retailing chains in other parts of the world are just a few of the many developments that have contributed to the trend towards a global marketplace.

Supply chain management (SCM) at the global level is attracting increased attention from star academics, policy makers, and business managers. The interest is only natural given the enormous potential rewards and the complexities that characterize this level of SCM. While the potential payoffs from achieving SCM at the global level are no doubt enticing, the task of managing a global supply chain is extremely challenging, even for the most experienced business practitioners.