structure

Strategic Supply Chain Design and the Product-Relationship Matrix

Daniel Dumke — Mon, 14 Feb 2011 14:06:00 +0000

Yet another case study. This time on strategic network design. Why? A major problem for businesses is to find the right strategy for a given situation. And “right” here means optimal (for a given KPI).
Research question might be: Are there general categories which can be used to make different decision situations comparable? And if yes, what would optimal strategies under these circumstances be?

Definitions

Seuring (2009) tries to answer the first research question using case studies. From literature he defines the strategic decision fields to be

Product design/engineering (products or parts),
Plant and equipment (plant),
Organisation and management (processes),
Labour and staffing (people) and
Production planning and control (planning).

For Seuring the SC decisions best can be categorized using a two dimensional matrix with the supply chain at the y-axis and the product dimension on the x-axis. As you can see in figure 1 he does not focus on the supply / demand side (like eg. Fisher 1997), but in both dimension aims at the process view.
The supply chain dimension with can be divided into configuration and operation, the product dimension into the product design, production and return phase.

Figure 1: The Product-Relationship-Matrix in Supply Chain Management (Seuring, 2009)

Advantages

Overall this framework shows a sequential view on the strategic decisions in a supply chain. But it also supports dynamic adaptations to differing origins, eg: A redesigned product within an existing supply chain would only make the steps II (Product design) and IV (Process optimization) necessary; changes to the network, like adding a new supplier, would concern square III (Formation of production network).

Cases

Using five different cases Seuring goes through the above mentioned strategic decision categories. The cross-case analysis reveals that the categories may sometimes be overlapping (production and return phase), but the decision can still be sorted into one or the other category.

Conclusion

As described in the introduction, the next step would be to use these categories to find general, optimal strategies which should be followed in each of the parts of the matrix in figure 1.
But while I was reading the paper I realized that this might not be possible, since the steps are to vague for that.

Hence, the framework offers an alternative approach, which not only takes a look at the content of the decision, but also adds a process perspec- tive. Such a more dynamic approach allows structuring the related decision based on the relationship and the product life-cycle dimension.

So my question, how can you use this framework beside finding optimal solutions for network design problems?
One suggestion might be, to use the process nature of the framework and analyze the organizational relationships while going through the different decision phases.

What do you think?

Reference:

Seuring, S. (2009). The product-relationship-matrix as framework for strategic supply chain design based on operations theory International Journal of Production Economics, 120 (1), 221-232 DOI: 10.1016/j.ijpe.2008.07.021

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network design

structure

categorization

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Theory about Social Structures

Daniel Dumke — Mon, 06 Sep 2010 01:19:00 +0000

Today I would like to introduce a theory developed by Giddens in 1988 about social structures and how it can be used to analyze theories in Supply Chain Management.

Theory of Structuring

Giddens thought about how social structures influence the behavior of the people within this structure and how those people influence the structure itself. He came to the conclusion, that structure is both a medium for interaction and result of this interaction. It is important to see the duality of structure. Within this structure actors are both affecting and affected by structure. This theory underlies the assumption that actors neither are completely controled by the structure nor completely autonomous.

Structure can be found on every level of human interaction be it the individual, a group, an organization or society. (Inter)Actions always determine structure and vis-versa.

Implementation in Supply Chain Management

Pfohl et al. (2007) analyzed the question if the CargoScoreCard (a supply chain wide framework to identify, calculate and communicate value adding activities within a supply chain) can be used to improve decision making within a chain. The authors use Giddens concept of structure to analyze the different aspects of the framework using the results of an implementation case study. They analyze the interactions in terms of communication, power and sanctions as well as the structure after implementation of the framework. They conclude, that the CargoScoreCard leads to a shared context / reality in which the identification of value adding activities is possible.

Conclusion

I really liked the paper not so much because of the conclusions but because of the innovative way of the application of theory to practice. I have to admit I think that the conclusion does not answer the research question. I aggree that this study showed that the CargoScoreCard leads to a shared reality, since the people / companies have to work together to achieve the goals of the implementation. But the question of the article was if value is added by implementing the CargoScoreCard, and there is no evidence to support this.

Reference:

Pfohl, Hans-Christian, Elbert, Ralf, & Gallus, Philipp (2007). Implementierung interorganisationaler Managementinstrumente in logistischen Netzwerken: Strukturationstheoretische Analyse der Besonderheiten bei der Implementierung der CargoScoreCard im Kombinierten Verkehr Logistikmanagement: Analyse, Bewertung und Gestaltung logistischer Systeme, 231-262

Giddens, Anthony (1988). Die Konstitution der Gesellschaft. Grundzüge einer Theorie der Strukturierung. Campus, Frankfurt a.M./New York

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Designing Supply Chain Strategies

Daniel Dumke — Wed, 25 Aug 2010 06:54:00 +0000

In his fourth video podcasts Professor Richard Wilding talks about Supply Chain Strategies. I found it quite interesting, so I would like to give you a short summary of it here. If you are interested you can just download the podcast for free, you find a link in the reference section.

Hierarchy

Strategies are usually broken down into smaller pieces so that every function within a company has its own individual goals. This leads to some kind of hierarchy like:

Corporate Strategy
Competitive Strategy
for each market segment, mostly driven by marketing
Supply Chain Strategy
derived from the competitive strategy, has to be developed together with marketing to secure alignment

Elements of Supply Chain Strategy

The four key elements every Supply Chain Strategy is built on are

Process Design
Supply Chain Network Design
Information Systems
Organizational Structure

Management within a company has to design each Supply Chain Strategy individually for the respective markets considering the above mentioned categories.

Wilding mentions the example of a beer brewery which engages in business in the Europe vs. Africa. The goals from the strategies might be very different, focussing on responsibility in Europe vs. affordability in Africa.

Let me know what you think about Supply Chain Strategies in the comment section below!

Reference:

Podcast of Professor Richard Wilding of the Cranfield School of Management

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