Research for Development

Christine Harland

Supply Chain
Management
Concepts, Challenges and Future
Research Directions
Research for Development

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Christine Harland

Supply Chain Management

Concepts, Challenges and Future Research
Directions
Christine Harland
Dipartimento di Ingegneria Gestionale
Politecnico di Milano
Milano, Italy

ISSN 2198-7300 ISSN 2198-7319 (electronic)

Research for Development
ISBN 978-3-031-52246-8 ISBN 978-3-031-52247-5 (eBook)
https://doi.org/10.1007/978-3-031-52247-5

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Acknowledgements

The proposal for this book was made possible by being granted a sabbatical by the
Politecnico di Milano; I thank Alessandro Perego and Raffaella Cagliano for their
support of this. I also thank the joint Polimi/Springer team of Daniele Bignami,
Marina Forlizzi and Prasanth Anandan.
The final chapter of the book represents the views of supply chain management
faculty in the Politecnico di Milano and Cardiff University partnership, particularly
Jonathan Gosling, Amina Imam, Maneesh Kumar, Antonella Moretto, Mohamed
Naim and Margherita Pero, and senior supply chain management practitioners
who ask to remain anonymous. I wish to acknowledge and thank them for their
contributions.
My greatest thanks go to John, Sophie and in memory of Alan—I dedicate a life’s
work to the important people who have always supported me.

v
Contents

Part I The Conceptual Bases for Supply Chain Management

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Purpose of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Combining Perspectives of SCM Research and Practice . . . . . . . . . 4
1.3 Reflecting on Programmes and Projects of Research . . . . . . . . . . . . 5
1.4 Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Key Reflections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2 Developing the Concept of Supply Chain Management . . . . . . . . . . . . . 11
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Origins and Trajectory of Supply Chain Management . . . . . . . . . . . 13
2.3 Materials Planning and Control Perspective . . . . . . . . . . . . . . . . . . . 15
2.4 Relationship Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.5 Holistic Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.6 Supply Chain Management as a Multiple Systems-Level
Endeavour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7 Supply Chain Management as a Strategic Endeavour . . . . . . . . . . . 24
2.8 Supply Chain Management Identity . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.9 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3 Supply Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.2 Bounding ‘Supply’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.3 Supply Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.4 Conceptualising Supply Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.5 A Systems Approach to Supply Chain management . . . . . . . . . . . . 44
3.6 Supply Dyadic Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.7 Supply Triadic Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.8 Supply Bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

vii
viii Contents

3.9 External Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

3.10 Supply Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.11 Supply System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.12 Supply Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.13 Discussion on Supply Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4 Supply Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.2 Conceptualising Supply Chain Management as Processes . . . . . . . 62
4.3 Dyadic Supply Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.4 Triadic Supply Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4.5 Supply Base Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.6 Supply Chain Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.7 Supply Network Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.8 Supply System Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
4.9 Supply Market Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.10 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Part II Challenges
5 Interconnectedness, Complexity and Dynamics in Supply . . . . . . . . . . 87
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
5.2 Connectedness and Integration in Supply Chain Management . . . . 89
5.3 Interconnectedness, Dynamics and Complexity in Supply . . . . . . . 91
5.3.1 Interconnectedness in Supply . . . . . . . . . . . . . . . . . . . . . . . . . 91
5.3.2 Dynamics in Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
5.3.3 Complexity in Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
5.4 Governance of Interconnected Supply Systems . . . . . . . . . . . . . . . . 96
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
6 Supply Risk and Resilience to Global Challenges . . . . . . . . . . . . . . . . . . 107
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
6.2 Defining Supply Chain Risk and Resilience . . . . . . . . . . . . . . . . . . . 108
6.3 Nature of Supply Chain Risk and Resilience . . . . . . . . . . . . . . . . . . . 110
6.4 Managing Supply Chain Risk and Resilience . . . . . . . . . . . . . . . . . . 112
6.4.1 Stage 1—Map the Supply Network to Identify
the Structure of Actors, Key Measures and Ownership . . . . 113
6.4.2 Stage 2: Identify Risk and Its Current Location,
in Terms of Types of Risk and Potential Loss . . . . . . . . . . . 114
6.4.3 Stage 3: Assess the Risk in Terms of the Likelihood
of Its Occurrence, the Stage in the Life Cycle,
Exposure to Risk, Likely Triggers and Likely Loss . . . . . . . 114
6.4.4 Stage 4: Manage the Risk by Developing a Risk
Position and Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Contents ix

6.4.5 Stage 5: Form a Collaborative Supply Network Risk

Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
6.4.6 Stage 6: Implement the Supply Network Risk Strategy . . . 116
6.5 Global Challenges and Supply Chain Risk and Resilience . . . . . . . 117
6.6 Risk and Resilience Relating to Increased Supply Network
Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
6.7 Collaborative Approaches to Risk and Resilience . . . . . . . . . . . . . . 119
6.8 Supply Market Risk and Resilience . . . . . . . . . . . . . . . . . . . . . . . . . . 120
6.9 Crisis Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
6.10 Styles of Leadership and Management for Risk
and Resilience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
6.11 Developing Supply Chain Risk and Resilience for Global
Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
7 Supply Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
7.2 Defining Supply Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
7.3 Supply Policies Formulated by Organisations and Supply
Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
7.3.1 Sustainable Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
7.3.2 Ethical Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.3.3 Exploitation of Lower Standards of Working
Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.3.4 Supply Chain Bullying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
7.3.5 Modern Slavery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
7.3.6 Corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
7.4 Government Policy Impacting Organisations and Supply
Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
7.5 The Role of Public Procurement as a Supply Policy Lever . . . . . . . 144
7.6 Supply Policy Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
7.7 Global Stewardship of Supply Policies . . . . . . . . . . . . . . . . . . . . . . . 149
7.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

Part III Implications for Research

8 Future of Supply Chain Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
8.2 Future Challenges Facing Supply Chain Management . . . . . . . . . . 161
8.2.1 The Ongoing Significance of COVID-19 . . . . . . . . . . . . . . . 161
8.2.2 Critical Minerals and Semiconductors Supply . . . . . . . . . . . 162
8.2.3 Reshoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
8.2.4 Forecasting Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
8.2.5 Supply Chain Visibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
8.2.6 Changes in Labour Availability . . . . . . . . . . . . . . . . . . . . . . . 165
x Contents

8.3 Future Potential Impact of Supply Chain Management . . . . . . . . . . 166

8.3.1 Future Sustainable SCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.3.2 A New Supply Chain Design . . . . . . . . . . . . . . . . . . . . . . . . . 167
8.3.3 New Stakeholders for New Challenges . . . . . . . . . . . . . . . . . 168
8.3.4 New Technologies Are Playing a Fundamental Role . . . . . 168
8.3.5 A Continuous Improvement Approach . . . . . . . . . . . . . . . . . 169
8.3.6 Collaboration Between Public and Private
Organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
8.4 Future of Systems Thinking for SCM . . . . . . . . . . . . . . . . . . . . . . . . 170
8.4.1 A Generic DSRD to Match Problem Context
and Design Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
8.4.2 Future for DSRD in SCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
8.5 Future Governance of SCM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
8.5.1 Network Governance Design . . . . . . . . . . . . . . . . . . . . . . . . . 174
8.5.2 Network Governance Processes . . . . . . . . . . . . . . . . . . . . . . . 175
8.6 Challenges for Future Research in Supply Chain
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
8.7 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
 Part I
The Conceptual Bases for Supply Chain
Management
Chapter 1
Introduction

1.1 Purpose of the Book

This book series of ‘Research for Development’ was conceived by Springer and
the Politecnico di Milano to “promote complex texts that are the outcome of wide-
ranging and highly sophisticated research projects, defined by multi- disciplinary
content and targeting development.” The purpose of this book is to contribute to this
series by focusing on supply chain management, telling a story of the outcomes of a
wide range of international, multi-disciplinary research projects, involving empirical
and conceptual research, in manufacturing and service contexts, public, private and
third sector settings.
The outcomes of these research projects are positioned in the context of extant
research in supply chain management, thereby highlighting their particular contri-
butions to the field. It is intended to weave a tapestry that brings together rela-
tively disconnected areas of a field of academia and practice that uses the brand
‘supply chain management’ but has taken very different perspectives and approaches.
The book addresses contemporary challenges facing supply chain management and
considers what the future may hold for the field and the implications for research.
Within each chapter boxes are used to highlight featured research outputs to
illuminate the story. The story is, in part, a personal one as the highlighted research
is from the many international teams of academics and practitioners that I have been
privileged to work with over the last 35 years. The perspective taken is my personal
perspective that is quite normative, positivistic and pragmatic. In this introduction I
feel it necessary to explain why I have looked at supply chain management from this
perspective and how it has influenced the research contributions presented here.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 3

C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_1
4 1 Introduction

1.2 Combining Perspectives of SCM Research and Practice

As an undergraduate, I studied the first business degree with a specialism in Mate-

rials Management at, what was then, Coventry (Lanchester) Polytechnic and is now
Coventry University in the UK. As a ‘thin sandwich’ degree, academic study was
interwoven with periods of apprenticeship with the Dowty Group, a heavy engi-
neering company headquartered in the UK, sponsoring commercial and engineering
students. The academic content was a broad syllabus of business subjects including
marketing, finance and accounting, business strategy, economics and law. Students
who specialised in Materials Management covered all of the syllabus for member-
ship of the Chartered Institute of Purchasing and Supply (CIPS) and focused their
final dissertation on a Materials Management topic, graduating with both an honours
business degree and MCIPS.
This Materials Management perspective will be explored in Chap. 2 where the
concept of Supply Chain Management is examined as it has developed chronologi-
cally. Materials Management focused on what we might now term ‘the internal supply
chain’, connecting the materials and information flows from the inbound to outbound
ends of manufacturing organisations. However, the academics designing and deliv-
ering the teaching were purchasing and supply management specialists.1 We studied
the US academic work of Dean Ammer, Hal Fearon, Charles Faris, Yoram Wind,
Gary Zenz, Michel Lienders and, from the UK, the seminal work of David Farmer and
Peter Bailey. In the periods of internship, I worked in buying, inventory management,
production planning and control, sales and distribution, warehouse management and
spent an invaluable time on the shop floor, using lathes, mills, drills, observing and
trying a wide range of processes including welding, fabricating, machining, plating
and assembly. Most of my time was spent in Dowty Mining Equipment where mining
chocks to support the roofs of mines were made. I was there during the time when
China came out to the international supply market to source equipment and infras-
tructure for their large-scale industrial expansion. As China did not have currency
to buy this equipment, I learnt about and was involved with product buy-back deals
(examined in Chap. 7). We sold the coal mining equipment to China; they paid us
later with the coal they had mined using that equipment. I was also involved in the
subsequent stages of product buy-back deals—finding buyers for coal, and many
other products we were paid in, including wine, craft goods and basically anything
less economically developed countries had to trade.
Having graduated I worked in industry in buying, inventory management, produc-
tion planning and control and other functions within materials management for organ-
isations including Dowty, GEC Telecommunications and companies in the auto-
motive aftermarket, before being invited to apply for an academic position in the
Materials Management group at Coventry (Lanchester) Polytechnic. From there I

1My sincere thanks go to John Stevens and Malcolm Saunders of Coventry (Lanchester)
Polytechnic.
1.3 Reflecting on Programmes and Projects of Research 5

moved into mainstream Operations Management at Warwick Business School2 and

focused my PhD on the relatively new topic of Supply Chain Management. As part
of my doctoral research, I visited as many international scholars who had published
using the term Supply Chain Management as I could, only to find they were mostly,
implicitly or explicitly, using the term in different ways. The reason for summarising
this education and career history is that having worked in academia and practice in
operations management and purchasing and supply management/ materials manage-
ment, profound differences between these two perspectives and communities were
evident. From Warwick I moved to the University of Bath where Richard Lamming
and I formed and ran the Centre for Research in Strategic Purchasing and Supply
(CRiSPS). During my 18 years at Bath, I led teams of researchers conducting copro-
duced research, particularly with the National Health Service, HM Treasury, the
Police Service but also with large private sector organisations including Hewlett
Packard, British Telecom, Nestle and Nokia.
Later at Cardiff Business School I was head of one of the largest academic groups
in logistics and operations management in Europe. This group has distinct expertise
in logistics, systems dynamics and operational research approaches to supply chain
management. Working in different academic groups has enabled me to view SCM
from multiple perspectives and has led to integration of these perspectives in this
research brief.

1.3 Reflecting on Programmes and Projects of Research

Within this research brief ‘our’ research refers to the contributions to supply chain
management made by academic teams I have worked with throughout my career. In
addition to full time academic positions at Warwick Business School (UK), Univer-
sity of Bath (UK), Cardiff Business School (UK) and Politecnico di Milano (Italy), I
have also held visiting positions at Fundacao Getulio Vargas (Brazil), University of
Padua (Italy), Swedish School of Economics, (Finland), Curtin University (Western
Australia), Politecnico di Bari, (Italy) and Arizona State University (US). My inter-
national co-authors to the contributions highlighted within this text by presenting
our work within boxes are:
Markus Amann, Alessandro Ancarani, Elmer Bakker, Richard Brenchley, Nigel
Caldwell, Guy Callender, Federico Caniato, Stuart Chambers, Jeff Clark, Paul
Cousins, Lisa Ellram, Michael Essig, Petra Ferk, Lin Fitzgerald, Samantha Forrest,
Federico Frattini, Helen Gilhespy, Rick Grimm, Alan Harrison, Michael Henke,
Stuart Humby, Ken James, Thomas Johnsen, Bob Johnston, Louise Knight, Richard
Lamming, Davide Luzzini, Jane Lynch, Katy McKen, Antonella Moretto, Guido
Nassimbeni, Mark Pagell, Andrea Patrucco, Esmee Peters, Wendy Phillips, Philip
Powell, Erik van Raaij, Jens Roehrich, Stefano Ronchi, Frank Rozemeijer, Yasmine

2 I am indebted to Professor Chris Voss for appointing me and supporting me to study for a Ph.D.
in the burgeoning field of Supply Chain Management.
6 1 Introduction

Sabri, Fredo Schotanus, Gene Schneller, Nigel Slack, Roxanne Sutton, Wendy Tate,
Tundai Tatrai, Jan Telgen, Khi Thai, Chris Uden, Helen Walker, Arjan van Weele,
Derek Williams, Finn Wynstra, Mohammad Hossein Zarei, Jurong Zheng, George
Zsidisin.
My perspective of supply chain management has been greatly influenced by the
fact that the majority of my research portfolio has been conducted in complex supply
systems, notably the National Health Service of England and Wales and the United
Nations. It has also focused on how government spending through public procure-
ment can be used as a lever of public policy implementation. As co-founder of the
International Research Study of Public Procurement (IRSPP) with Jan Telgen, I have
been a member of this international research network which has completed 9 phases
of research over 20 years. Working with the National Institute of Governmental
Purchasing (NIGP), the Chartered Institute of Purchasing and Supply (CIPS) and
the Dutch purchasing association NEVI has focused my research particularly on the
profession of purchasing and supply management.

1.4 Structure of the Book

Following this introductory chapter, the book is divided into 3 parts. Part I provides
the conceptual bases and is divided into 3 chapters. Chap. 2 develops the concept of
supply chain management, Chap. 3 examines supply structure and Chap. 4, supply
process.
Part II focuses on challenges in Chap. 5 on interconnectedness in supply, Chap. 6
on supply resilience to global crises and Chap. 7 on supply policy.
Part III looks to the future of supply and implications for research. This final
chapter is coauthored with Jon Gosling, Amina Imam, Maneesh Kumar, Antonella
Moretto, Mo Naim, and Margherita Pero. Contributions to the chapter are based
on two workshops with SCM teams at Cardiff Business School and Politecnico di
Milano.

1.5 Key Reflections

Whilst proposing and positioning the research brief to address Supply Chain Manage-
ment, this term is used initially as it is the most popular brand that has gained
and retained traction in academia and practice. However, this brief tells a story
of the development of the concept of ‘supply strategy’, This is not an attempt to
try to replace the well-established brand of SCM, but rather to stretch boundaries
of the field of SCM beyond how it is conventionally conceived, taught and prac-
tised. The first key reflection is, therefore, that more academic work is required
on conceptualising SCM to provide greater clarity and sense of identity for future
researchers. Chapter 2 features publications of our work dealing with thinking about
and developing knowledge on how we conceptualise SCM.
1.5 Key Reflections 7

The second key reflection is on how strategy is conceptualised within our field.
Operations strategists conceived of strategy as ‘structure’ and ‘infrastructure’, based
largely on the work of Hayes and Wheelwright (1984) and Terry Hill (1985). Over
time, business strategy and economics thinking and language have been embraced
within supply chain management. Chapters 3 and 4 divide research contributions
into ‘structure’ and ‘process’ rather than using the term infrastructure. However, as
is exposed in these chapters, there is still a confusing array of uses of ‘strategy’,
‘structure’, ‘infrastructure’ and ‘process’, so we should still strive to be explicit in
our work about how we are using these terms.
Collaborating with co-authors and having the opportunity to read more widely to
produce this brief and position our work in extant literature has enabled me to reflect
on systems thinking. To make sense of SCM my doctoral thesis delivered a systems
level view of the field as something that was happening within firms, in dyadic rela-
tionships, in external supply chains and in supply networks. Systems thinking has
stayed with me, implicitly and explicitly, in the quest to understand the fragmented,
sometimes chaotic and messy world of supply chain management as it developed
from birth to how it is conceptualised today. In this brief in Chaps. 3 and 4 knowledge
relating to supply structure and process is examined at systems levels of dyadic
supply relationships, triadic relationships, supply bases, external supply chains,
supply networks, supply systems and supply markets.
A further key reflection is on normative and positive approaches to supply chain
management in academic research. Tackling challenges in public sector and not
for profit services has necessarily required understanding of larger, more complex
systems of supply, as discussed in Part II of the brief where challenges are examined.
This impacts on the research methodologies used in much of the research featured
here. We have researched with organisations and practitioners, in addition to objec-
tively observing from the outside, often creating coproduced findings with prac-
titioners using participatory research methods. Coproduced research is not simply
consultancy or bad science; rather it is an engaged, participatory way of conducting
empirical research with different methods to ensure rigour. It provides greater oppor-
tunity for verification, discursive analysis and delivery of shared outputs with measur-
able outcomes and impact. It is still challenging to publish coproduced research in
top academic journals although, as this research brief shows, it is not impossible.
Other academic fields, such as those studying healthcare, social care and climate
change, were quicker to embrace these methods and use evidence-based, participa-
tory, coproduced research methods before operations management, purchasing and
supply management and supply chain management. If SCM is to broaden its under-
standing of behaviour and tackle contemporary wicked problems, we can learn more
about how to produce rigorous research using a wider range of participatory methods.
Related to this is the contemporary academic debate in Supply Chain Manage-
ment around contrasting views on when and how supply chain managers can manage
supply beyond their organisation boundary and when they cannot. When managing is
not perceived as possible, supply chain managers try to understand how to react to, and
cope with, what is happening. This contemporary debate in our field is evident partic-
ularly in the research outputs of academics researching interorganisational networks
8 1 Introduction

and supply chains as complex adaptive systems. These themes are explored through
research featured in Chaps. 3 and 4 where empirical research findings reveal different
approaches to supply chain management structure and process are more or less appro-
priate in different types of supply networks. These themes are explored further in
Chap. 5 where the challenges of interconnectivity in supply are examined.
This research brief also contains reflections on the need for broadening beyond our
traditional firm-based thinking, originating in the theory of the firm and still prevalent
in most MBA teaching. As supply chain managers engage with larger, more complex
supply systems arising from globalisation and outsourcing, and contemporary crises
including war, pandemics, climate change and natural disasters, they engage with
different forms of governance at higher systems levels. Chapters 4, 5 and 6 feature
research findings that stretch our boundaries beyond our SCM, firm-based traditions.
Related to this, Chap. 7 deals with supply policy and the role governments, national
services for health, security and international development and confederal systems
such as the United Nations play in supply. Research on public procurement is featured
as a policy lever for these larger, complex systems of supply to use to implement
policy.
Chapters 2, 3, 4, 5, 6 and 7 provide the conceptual bases for supply chain manage-
ment in Part I and key challenges facing our field of research and practice in Part
II. Throughout these chapters, 8 explicit principles of supply chain management are
developed. These principles are:
Principle 1: Supply chain management is a multi-systems level endeavour within
internal supply chains, supply relationships, supply bases, external supply chains,
supply networks, supply systems and supply markets
Principle 2: Supply chain management integrates strategic perspectives of
operations management, logistics, purchasing and supply management and
marketing
Principle 3: Supply chain management transforms resources to supply goods and
services to ultimate end users
Principle 4: When researching or managing supply in practice we focus on the
procurement of resources, their operational transformation and distribution of
goods and services. The domain of interest of SCM is not interorganisational or
industrial networks of organisations, only the subset of parts involved in operations
and supply
Principle 5: All supply operations exist in their own unique set of supply struc-
tures. From their unique vantage point, they may observe, and attempt to engage
with, upstream and downstream supply structures
Principle 6: Supply structures comprise supply nodes connected by supply flows
and processes
Principle 7: Supply is governed and conducted at four managerial levels of supply
operations, supply management, supply strategy and supply policy
Principle 8: Supply structures and processes are interconnected in complex,
dynamic supply systems and supply markets.
References 9

In the final chapter in Part III, a team of co-authors bring together their reflections,
combined with those of the SCM groups in the University of Cardiff and Politecnico
di Milano, on possible futures for supply chain management. In particular, we draw
out implications for research and the future development of the field of supply chain
management.

References

Hayes, R.H. and Wheelwright, S.C., (1984) Restoring our competitive edge: competing through
manufacturing, Wiley, Hoboken, NJ
Hill T., (1985) Manufacturing strategy, Macmillan, London
Chapter 2
Developing the Concept of Supply Chain
Management

2.1 Introduction

Supply chain management (SCM) is a commonly used term in business and academia,
but with many different meanings, representing different perspectives and varying
spans of influence and interest. The term supply chain management was first used
in a publication from the Booz Allen and Hamilton consultancy practice in the early
1980s (Oliver and Webber, 1982) to refer to materials flows within manufacturers.
Similar concepts were evident from the 1960s, including ‘materials management’
(Ammer, 1962) and ‘materials administration’ (Ericsson, 1969). Related concepts
such as ‘value chain’ from industrial economics/ business strategy (Porter, 1980)
and ‘commercial chain’ from manufacturing strategy (Hayes and Wheelwright, 1984)
have also been used, providing different perspectives for those working in the nascent
field of supply chain management practice and research to consider. In the next
section this chapter examines the origins and different definitions of supply chain
management. A conceptual framework is provided to help position different defini-
tions according to their span of influence and interest, in terms of both the coverage
of business decision-making areas and span of organisations involved.
Whilst supply chain management rapidly developed since its inception, other
fields of business and economics were also pushing their boundaries to consider
similar issues and opportunities for more integrated thinking. Having examined the
chronological development of definitions and concepts of SCM, a section on the state
of the art of where SCM currently sits, relative to other academic and practice fields
is provided. The overlaps and similarities are explored, as are the distinct differences
between thinking and perspectives in other related fields.
As the academic field of supply chain management has grown, research has illu-
minated and enabled reflection here on three key developments that are central to
our research. These reflections push the boundaries of supply chain management
outwards, expanding by embracing theories and concepts from other fields, rather
than focusing on increasing specialisation and fine tuning of existing knowledge

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 11

C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_2
12 2 Developing the Concept of Supply Chain Management

within the field. These three key developments are introduced here and expanded
later in this chapter, then further developed throughout the book.
First, SCM is increasingly being used to describe a multiple systems-level field
with research and practice being performed within organisations, in dyadic buyer–
supplier relationships, in external supply chains and networks of organisations
(Harland, 1996). This systems level perspective is examined here, then explored more
deeply in subsequent chapters dealing with interconnectedness of supply (Chap. 5),
resilience to global crises (Chap. 6) and SCM policy (Chap. 7). It is also used as a
means of classifying extant SCM knowledge on supply structures and processes in
Chaps. 3 and 4.
Second, the concept of supply chain management is stretching and aspiring to be a
more strategic business concept, sometimes termed ‘supply strategy’ (Harland et al.,
1999); to achieve this, it has built on strategic management thinking (Harland, 2022).
This strategic approach is taken throughout the book, rather than concentrating on
more detailed operational aspects of SCM that have been well studied for the last 40
years. Beyond this chapter, this strategic approach is extended by considering the role
that SCM might play in providing resilience to global challenges (Chap. 6) and how,
not only firms but also governments, inter-governmental organisations (IGOs) and
non-governmental organizations (NGOs), might formulate and implement supply
policies (Chap. 7).
Third, as the volume of academic research, conferences, journals and texts has
grown, academic communities identifying with supply chain management have
formed and developed, leading to a debate on whether SCM might be viewed as
an emerging academic discipline (Harland et al., 2006). This is not merely academic
navel gazing but is important for how academic researchers and business practi-
tioners working in the field perceive SCM, and how others working outside the field
looking in at SCM perceive it. The identity of supply chain management is important
for legitimising the field and providing clarity and cohesiveness for those working
within it.
This chapter provides a discussion of these three key areas of reflection on supply
chain management research and practice and features our key research outputs that
have contributed to the development of SCM. However, it is left until the final chapter
to conclude and look ahead to the possible future development of supply chain
management. The final chapter that looks to the future is a co-researched and co-
authored effort involving colleagues from Politecnico di Milano and Cardiff Business
School in the UK. Polimi and Cardiff have formed a partnership and this work is a
product of that partnership.
To underpin the reflections on the development of the concept of SCM and the
contribution of our research to that development, first clarity is provided on the origins
and trajectory of the field to date. As SCM is an applied research field developing from
and with practice, the discussion in the next section necessarily includes key concep-
tual contributions that were made by practitioners and management consultants, as
well as academic researchers.
2.2 Origins and Trajectory of Supply Chain Management 13

2.2 Origins and Trajectory of Supply Chain Management

The first, most referenced, use of the term ‘supply chain management’ was in 1982 in
a publication by two management consultants from Booz Allen and Hamilton (Oliver
and Webber, 1982). They used the term to consider the integration of management
and materials flow within manufacturing organisations, from purchasing dealing with
suppliers, through production, to sales, distribution and customer service dealing with
customers.
However, this conceptualisation of SCM by Oliver and Webber is predated by
contributions in the 1960s. The original concept of materials management (Ammer,
1962) was really the birth of supply chain management. Ammer’s definition of mate-
rials management referred to the total control of materials from sourcing and acquisi-
tion at the inbound, purchasing end of a manufacturer, through production to distribu-
tion of finished goods to the customer. Either Oliver and Webber’s SCM was a skilful
consultancy rebranding of materials management (a term which did not gain signif-
icant traction internationally) or a reinvention, possibly in ignorance of the former
published work. In whatever way it was conceived, there is no doubt that Oliver and
Webber’s contribution heralded a vanguard of academics and practitioners excited
with the potential value of this concept and brand. As a brand, SCM is a success as it
is still commonly used not only by academics and practitioners but also by govern-
ment ministers, the media, consultants, healthcare professionals and a vast range of
other fields. On the other hand, materials management has faded into history.

The author was funded by the Engineering and Physical Sciences Research
Council of the UK to interview published authors to explore their perspectives
of the burgeoning field of supply chain management and discuss the state of
the art of networks and globalisation. As part of this international research
study, Harland (1994) provided a conceptual framework to group and posi-
tion definitions and research contributions to SCM along two axes. The first
axis relates to the span of organisations involved, from raw material source,
processing, component manufacturing, manufacturing/ assembling, distribu-
tion, retail to ultimate end customers, as it became clear that different academics
were referring to varying extents of organisational span within their defini-
tions and conceptualisations. The second axis relates to which ‘structural’ and
‘infrastructural’ operations management decisions were included, based on the
manufacturing strategists’ work and terminology of Hayes and Wheelwright
(1984) and Hill (1985, 1989). In this conceptual framework, ‘structural’ oper-
ational decisions are those relating to capacity management, facilities location,
equipment and systems, and make/buy; ‘infrastructural’ operational decisions
relate to operations human resources and their organisation, quality manage-
ment, operations planning and control, innovation/new product development
14 2 Developing the Concept of Supply Chain Management

and performance measurement. The framework was applied and published in

Harland (1995).

Conceptual development and definitions of supply chain management have taken

different perspectives, although they have been building mainly on original thinking
from three separate, but related, fields, namely purchasing and supply management,
the externalisation and expansion of operations management and the development of
logistics from its origins of physical distribution management. Purchasing and supply
management, operations management and logistics academics and practitioners are
at the heart of the development of what we now know as supply chain management.
In the early 1990s the term SCM was appearing in publications by academics
from all over the world, but they appeared to be ascribing different meanings to the
same definition. Using the Harland (1994) framework, the positioning of individual
contributions to conceptualising supply chain management reveals a complex, messy
picture. However, three main groupings of definitions and conceptualisations are
identified: those focusing on materials planning and control, those focusing on the
buying organisation/supplier relationship, and those taking a more holistic approach,
as shown in Fig. 2.1.
The characteristics of each of these three perspectives are examined next.

Fig. 2.1 Groupings of SCM definitions and research in the mid-1990s, derived from Harland (1994)
2.3 Materials Planning and Control Perspective 15

2.3 Materials Planning and Control Perspective

Dean Ammer’s (1962) concept of materials management pioneered consideration

of potential benefits of integrating across the internal functional areas of manufac-
turing firms involved with materials flow through those firms; these functional areas
included purchasing, inventory management, production planning and control and
distribution to customers. In a Harvard Business Review publication, Ammer (1969)
emphasised how important management and integration of this material flow was
to businesses strategically, proposing that materials management should be viewed
as a profit centre. Also in the late 1960s, Ericsson (1969) conceptualised materials
administration to refer to “an amalgamation of Materials Management, Produc-
tion Control and Physical Distribution Management approaches”. Whilst making
an early acknowledgement that materials administration should not only be internal
to the firm but should include other downstream organisations in the definition of
“planning, development, coordination, organization, control and review of the mate-
rials flow from raw materials supplier to the ultimate consumer”, the main focus of
Ericsson’s conceptualisation was on what occurred inside firms and their immediate
interfaces with suppliers and customers.
In addition to the materials planning and control conceptualisations of the new
brand of supply chain management from 1982 onwards, research in sub-areas were
gathered up into the brand. Many of these groups of researchers leaned into the debate
and interest in supply chain management, albeit retaining their materials planning and
control perspectives. Table 2.1 includes examples of important research contributions
and conceptualisations that authors gathered together to explain this new brand of
SCM.
Essentially, the materials planning and control perspective of SCM focused on
how, by coordinating across these previously separate functional areas within manu-
facturers, materials would flow faster and more efficiently through the firm. Integra-
tion of these functions used manual visual systems, such as Just in Time (JIT), or
information systems, such as Materials Requirements Planning (MRP I). The faster
the materials flow, the less inventory in the firm, therefore requiring less investment in
inventory, yielding increased return on investment. Where practical and appropriate,

Table 2.1 Example contributions to the materials planning and control perspective of SCM
Materials planning and control topics Example authors
Inventory management Orlicky (1975), Peterson and Silver (1979),
Jones and Riley (1985)
Material requirements planning (MRP)/ Wight (1982), Vollman et al., (1989)
distribution resource planning (DRP)
Just-in-time (JIT) Ohno (1978), Hahn et al., (1983)
Logistics Bowersox (1969), Christopher (1971)
Industrial dynamics Forrester (1961), Burbidge (1961), Towill (1982)
Production planning and control van Dierdonck and Miller (1980)
16 2 Developing the Concept of Supply Chain Management

stochastic approaches based on past demand were being replaced with deterministic
approaches to materials planning and control, where production and purchasing were
driven by known and forecast orders. For the first time information systems allowed
orders with suppliers at the inbound end of the business and schedules placed on
the factory floor to be directly linked to customer demand. Inventory was reduced,
delivery lead times improved and customer service reliability increased. The mate-
rials planning and control perspective of supply chain management was cost-down,
efficiency driven but also brought the customer and consideration of customer service
into the operations management domain.

2.4 Relationship Perspective

The main fields important to supply chain management that have focused on rela-
tionships are purchasing and supply management, dealing with the relationships with
suppliers, its mirror image—marketing, dealing with relationships with customers,
and logistics, dealing with physical distribution to customers. Other fields, such as
strategic management and financial management, deal with mergers and acquisitions
as examples of relationships, but these are not central to supply chain management.
Two of the founding fathers of the academic field of purchasing and supply
management, Michiel Leenders and Hal Fearon, trace the origins of purchasing
and supply management back to the 1800s; they highlight the establishment of the
National Association of Purchasing Agents in the US in 1915, the first purchasing
text being written for use at Harvard Business School in 1933 (Lewis, 1933) and
since then, how it has developed as an academic field (Leenders and Fearon, 2008).
Some purchasing and supply management-oriented authors developed the concept of
supply chain management from a more purchasing, supplier relationship perspective,
beyond integration of just materials exchange relationships or buying, into consid-
eration of the broader relationship between buying and selling organisations (e.g.,
Macbeth, 1987; Macbeth et al., 1989; Leenders et al., 1994). The advent of supply
chain management brought purchasing and supply management from being viewed
as a support service (as it was viewed in Porter, 1980) to being a profession and a
strategic business function (notably, Kraljic, 1983; Leenders et al., 1994).
The received wisdom of the time was the ‘Five Rights of Purchasing’ i.e., “to
purchase the right quantity of material, at the right time, in the right quantity, from
the right source, at the right price” (Bailey and Farmer, 1985). At this time, buyers in
practice and the purchasing academic literature took a rational, negotiated approach
to trying to optimise the best combination of these ‘five rights’ when purchasing from
suppliers. Buyers were encouraged to take an adversarial position to suppliers, using
a variety of psychological negotiation techniques to gain control over suppliers and
their sales representatives (Westing et al., 1976; Lee and Dobler, 1977). The focus
of purchasing and supply management was on short-term transactions.
It was later that the importance of longer-term trading relationships with suppliers
was recognised (e.g., Farmer and Ploos von Amstel, 1991). Buyer–supplier dyadic
2.4 Relationship Perspective 17

relationships, particularly between component manufacturers and automotive assem-

blers, were studied as ‘quasi-organisations’ (Lamming, 1993) with their own prop-
erties and characteristics arising from ongoing exchange. Gradually a movement
towards ‘partnership sourcing’ developed, breaking down traditional adversarial
views of how to manage suppliers (e.g., McIvor and McHugh, 2000).
Before supply chain management, the ‘exchange relationship’ was an important
concept in marketing, particular consumer marketing, but the Industrial Marketing
and Purchasing (IMP) group paid more attention to business-to-business exchange.
IMP’s interaction approach (Hakansson, 1982; Hakansson and Snehota, 1989) char-
acterises customer/supplier interaction as consisting of short-term exchange episodes
and longer-term relationships. Whilst the operations management’s materials plan-
ning and control perspective focused on materials and associated information, such as
volume and timing, IMP highlight the importance of social exchange, trust and friend-
ship between people within the business relationship, leading to institutionalisation
and adaptation. Knowledge from psychology, behavioural approaches and industrial
organisation help explain these interactions in marketing and purchasing research,
while operations management research focused more on engineering and cost-based
approaches, such as Transaction Cost Economics. Ellram (1991) defines supply
chain management as an intermediate market form between vertical integration and
arms-length transaction, akin to Williamson’s (1975) ‘relational exchange’.
Table 2.2 provides key relationship research topics and examples of contributions.
The early materials planning and control and relationship perspectives of supply
chain management highlighted the potential benefits of integrating information and
systems across functional boundaries and of understanding and nurturing buyer–
supplier relationships. However, the full potential of SCM was in combining both
materials planning and control and leveraging of relationships through a much more
strategic, holistic approach.

Table 2.2 Key relationship topics and example authors

Relationship topics Example authors
Cooperative, long-term relationships Carlisle and Parker (1989)
Partnership Contractor and Lorange (1988), Lamming (1993)
Relationship spectrum Coase (1937), Williamson (1975), Ellram (1991)
Vertical integration and disintegration Thackray (1986), Kumpe and Bolwjin (1988)
Interaction Ford (1980), Hakansson and Wootz (1979)
Co-contracting Child (1987)
18 2 Developing the Concept of Supply Chain Management

2.5 Holistic Perspective

During the 1980s, researchers in industrial economics, strategic management,

marketing, logistics and manufacturing strategy examined inter-organisational struc-
tures and processes, taking a more strategic perspective of the potential for managing,
or managing in, connected chains and networks of organisations.
Michael Porter (1980) provides early conceptualisation of value and how value
is added within an organisation in his ‘value chain’ and between organisations in a
‘value system’. Design of marketing channel structures was considered in marketing
and logistics before similar structures in the upstream supply market were examined.
Operations management authors were considering the location decision, but largely
relating to where a single manufacturing firm should locate its various factories
around the world. However, Hayes and Wheelwright (1984) led the field of opera-
tions management in considering the ‘commercial chain’ as connected organisations
from raw material source to final product supply and identify the externalisation of
operations as a strategic decision.
John Houlihan was a management consultant whose early publications define
SCM as focusing on a single manufacturing organisation, “integrating purchasing,
manufacturing, distribution and sales” (Houlihan, 1984). However, he differenti-
ates supply chain management from traditional materials planning and control by
discussing that SCM requires “a new relationship: business to business, rather than
purchasing to selling” and “effective policy, planning and organisation”.
In Houlihan (1987) the span of the SCM concept is stretched beyond a single
manufacturing organisation to consider how a company operating over international
boundaries manages its “international supply chain”. Whilst his international supply
chain was under the ownership of one company, this more holistic definition did span
different cultures and systems. Significantly, he then discusses a larger system than
the international supply chain by recommending that a company should consider
the “context of its external placement in a global supply chain” (Houlihan, 1987).
Houlihan discusses that a company might manage the material flows across its own
corporation internationally, but not the possibility of managing across the global
supply chain structure involving other companies. At a similar time, Stevens (1989),
also a management consultant, stated supply chain management “extends much
further than simply a concern with the physical movement of material and is just
as much concerned with supplier management, purchasing, materials management,
manufacturing management, facilities planning, customer service and information
flow as with transport and physical distribution”. He provides a framework of four
evolutionary stages of SCM where the final stage involves integration of materials
flows across suppliers, a manufacturer’s internal supply chain and into customers.
Early conceptualisation of supply chain management as an interorganisational
endeavour stretching from original sources to ultimate consumption is in Harland
(1989), where SCM is defined as “managing the entire chain of raw material supply,
manufacturing, assembly and distribution to the end customer”. In Harrison and
Harland (1990) SCM is defined as “the management of all or some of the businesses
2.5 Holistic Perspective 19

that add value to the goods and services ultimately received by the end customer”.
Harland et al., (1993) expands on the importance of end customers in SCM by stating:
The end customer perspective… includes consideration of the management of the process,
… product service package (the outputs of the process), and…the chain resources (the
inputs to the process); all these are considered in terms of their contribution to end customer
satisfaction.

Here the concept of SCM was developing to become a more holistic perspec-
tive of connected sets of relationships between supply chain organisations that form
networks, working together to serve end customers. This end customer perspec-
tive was also taken by Christopher (1992) who took a holistic perspective that
incorporated downstream distribution channel organizations, leading ultimately to
end customers. Initially Christopher’s focus was more on marketing and strategic
management and therefore concentrated on the downstream part of supply chains.
The International Motor Vehicle Program (IMVP) research project with Toyota
spawned the concepts of ‘lean production’ and ‘lean supply’. Publications from this
research team including Womack et al., (1990), Nishiguchi (1994) and Lamming
(1993) were pioneering in their examination of upstream supply networks serving
automotive assemblers, consisting of tiers, or echelons of suppliers. When concep-
tualising lean production, in addition to upstream they consider the downstream
distribution network right down to the consumer. However, they seem to limit their
definition of the supply chain to being upstream of the manufacturer.
Around the same time, the Industrial Marketing and Purchasing (IMP) group were
expanding their focus on business-to-business relationships into conceptualisation
of industrial networks. Bjorn Axelsson and Geoff Easton (1992) edited a collection
of chapters from members of the IMP group examining various aspects of industrial
networks, all supporting the definition that an industrial network comprised:
“actors involved in the economic processes which convert resources to finished goods and
services for consumption by end users whether they be individuals or organisations”. The
economic exchanges within industrial networks are “conducted within the framework of an
enduring relationship”.

Easton (1992) provided four perspectives of networks—networks as relationships,

structures, position and process.
The perspective of networks as relationships is more than simply conceiving
of networks as an aggregate of short-term, operational exchange relationships.
Networks as relationships are also longer-term relationships, have mutual orientation,
dependence and bonds between parties involved and investments in the relationships.
There is complementarity of objectives of the network members. The network rela-
tionships may provide access to third-party resources, or strength in numbers against
third-party competitors. The dependence and bonds within relationships may provide
stability, particularly over time. Social, technical, information system and contrac-
tual bonds are examples of what ties these network relationships together in the long
term.
20 2 Developing the Concept of Supply Chain Management

When conceiving of networks as structures, if relationships in the network are

long-term the structure of the network is stable. Networks are heterogeneous depen-
dent substantially on the nature of the products and services being provided by the
networks, the resources required and the transformation of resources occurring within
those networks. Bounding the network structure is somewhat arbitrary; often the
members with the strongest, most important relationships are considered to comprise
the structure.
IMP’s conception of network position is less about the physical location in a
network (e.g., upstream, close to original source or downstream, close to ultimate
consumption). Rather, it is more the role that an organisation plays vis-a-vis with
a grave accent over the a other organisations in the network. For example, if the
function of an organisation is as a wholesaler to distribute goods to retailers, this
functional role represents part of what other organisations expect its position in
the network to be. The set of views of an organisation’s role has also been termed
its ‘strategic identity’ (Hakansson and Johanson, 1984); this strategic identity will
change if the organisation changes its role by, for example, acquiring other members
of the network.
Conceiving of networks as process refers to the dynamics of coordination of the
network when organisations are not in a formal hierarchy through ownership, nor are
they completely independent of each other. The cooperation, complementarity and
coordination within relationships within the network provide some overall coordina-
tion, leading to different distributions of power, interest, control, share of resources
and trust accruing. This coordination may provide some stability, but the networks are
dynamically changing as organisations mobilise their resources and seek to mobilise
other organisations’ resources.
Table 2.3 summarises some of the contributions to holistic perspectives of SCM.

Table 2.3 Examples of holistic SCM publications

Holistic SCM perspective topics Example authors
Value chain/value system Porter (1980, 1985, 1987), Kogut (1985)
Distribution/marketing channel structures Stock and Lambert (1987), Achrol et al.,
(1983)
Networks Ford et al., (1986), Mattsson (1985)
Commercial chain Hayes and Wheelwright (1984)
Internal supply chain Houlihan (1984), Stevens (1989)
International supply chain Houlihan (1987)
Interorganisational supply chain Harland (1989), Harrison and Harland (1990)
Supply network Nishiguchi (1994)
Industrial network Axelsson and Easton (1992)
Supply chain management as a management Cooper and Ellram (1993)
philosophy
2.6 Supply Chain Management as a Multiple Systems-Level Endeavour 21

Fig. 2.2 Development of

understanding of supply
chain management

Through the 1990s and into this millennium, interest in supply chain management
in practice and research has risen exponentially, evidenced by the number of publi-
cations, job positions and media attention, as examples. The scope of supply chain
management has expanded from its original focus on materials planning and control
within manufacturing to include study of service supply chains, public sector and
not for profit supply chain management, sustainable supply chains, modern slavery
in supply chains and a whole host of other issues, sectors and perspectives of the
field. There has also been a clear trend of ambition to study larger, more complex
units of analysis beyond supply chain management within firms and with immediate
suppliers, to connected sets of organisations in chains and networks (Harland, 1996).
This development is represented in Fig. 2.2.
This development of the field of supply chain management has changed our under-
standing in business practice and academic research and has also changed the way
the potential of the field has been perceived and embraced. To bring the development
story up to the present day, three themes are focused on in the next sections:
• Supply chain management as a multiple systems level endeavour
• Supply chain management as a strategic endeavour
• Supply chain management identity

2.6 Supply Chain Management as a Multiple

Systems-Level Endeavour

The behavioural theory of the firm (Cyert and March, 1963) focuses on the manage-
ment academic endeavour of the firm and its decision making. Firm-based decision
making and competitive behaviour have largely dominated business schools, MBAs
and undergraduate business programmes. The fundamentals of capitalism within
which shareholders of firms seek return on their investments have necessarily driven
22 2 Developing the Concept of Supply Chain Management

supply chain managers to look to their firm, and their connected supply chains and
networks to improve performance and contribute to financial results.
An upstream and downstream perspective of firms’ span of control is embodied
in the conceptualisation of SCM as a field encompassing traditional internal opera-
tions management and connected relationships with suppliers, suppliers’ suppliers,
customers and customers’ customers, operating at multiple systems levels of internal
supply chains, dyadic relationships, external supply chains and wider supply
networks (Harland, 1996). Applying systems thinking, each of these ‘levels’ may
be viewed as a systems hierarchy. At the heart of systems thinking is the notion of
organised complexity, where each level in the hierarchy is more complex than the
one below. This systems approach to conceptualising SCM was expanded further in
Harland (2022) where, beyond supply networks, supply systems were identified as
an additional hierarchical level of supply involving networks of networks, such as
occurs in very large, confederal, complex supply systems, for example, the United
Nations.
Here, building on the original conceptualisation of SCM as conceptual defini-
tions relating to multiple systems levels (Harland, 1996), a simple Venn diagram is
provided in Fig. 2.3 that shows how these different hierarchical supply systems levels
are nested within each other.

Fig. 2.3 Supply chain management as nested hierarchical sub-systems

2.6 Supply Chain Management as a Multiple Systems-Level Endeavour 23

Conceptualising SCM at multiple systems levels leads here to the first principle of
supply chain management.
Principle 1: Supply chain management is a multi-systems level endeavour within internal
supply chains, supply relationships, supply bases, external supply chains, supply networks,
supply systems and supply markets.

Beyond the connected organisations involved in supply there are other potential
suppliers, distributors and customers who are not connected in the systems being
studied, but rather are available to be connected to. Supply markets are included in
the Venn diagram to represent portions of supply markets with which particular firms
are connected.
Systems thinking is holistic and sees firms as being within larger environments of
interrelated and interdependent organisations that are constantly changing, chaotic
and complex (Jackson, 2003). Rather than reducing complexity by dividing prob-
lems into bite-sized chunks for scientific analysis, systems thinking encourages
synthesis through consideration of the whole. In Harland and Roehrich (2022) it is
argued that supply chain management concerns complex, multi-level systems and that
contemporary challenges require ‘big picture’ approaches, such as systems thinking.
Within systems thinking, Checkland (1981) and Jackson (2003) discuss the
notions of ‘emergence’ and ‘hierarchy’ from organismic biology with ‘commu-
nications and control’ from cybernetics to aid understanding of these big picture
problems. Harland and Roehrich (2022) highlight the importance for SCM to incor-
porate systems thinking to enable understanding of, not only smaller units of analysis
such as internal supply chains and dyadic supply relationships, but to consider the
‘whole’ and the interrelationships between parts of the whole. As parts of the supply
system interact, ‘emergence’ explains the outcome of what this interaction leads
to. Our understanding of how the complexity within supply systems is organised is
supported through recognition of ‘hierarchies’ within systems.
Hierarchy may or may not relate to organisational hierarchy. In SCM individual
buyers may have responsibility for relationships with particular suppliers for a cate-
gory of spend. However, a multi-national organisation placing multiple orders for
many categories of spend may seek to influence the supplier at a corporate level—the
purchasing equivalent of key account management used in sales and marketing. For
example, global pharmaceutical companies provide many line items to individual
hospitals and health services, dealing with many different buyers placing orders with
them. Coordinated purchasing at a national level, as enacted by the former National
Purchasing and Supply Agency in the NHS of England and Wales, enables coordi-
nation, integration and the formulation of purchasing strategy and framework agree-
ments for and on behalf of the many organisations within the total supply system.
National coordination of logistics enables sharing of inventories, warehousing, trans-
portation and distribution across the supply system as a whole. This holistic perspec-
tive and action enable government policy makers to evaluate the total supply system.
They can then intervene with policies, and engage corporate leaders in the private
sector on national policy initiatives such as public health improvement, sustainability
and national security.
24 2 Developing the Concept of Supply Chain Management

In Harland et al. (2021) the research team examine procurement for critical
supplies at the beginning and during the COVID-19 crisis. They identify and
classify procurement action as occurring at different hierarchical levels of the
supply system – local supply relationships and chains, national supply chains
and networks and international supply systems and markets. For example,
local individual hospitals were desperately seeking to source ventilators and
personal protective equipment from their usual suppliers, but when these rela-
tionships failed to supply, were trying to reach out further afield to source
these. Examining the national picture, governments behaved nationalistically,
competing with other countries to secure and stockpile as many of these urgent
supplies as possible. Within the national supply system, regional and local
government organisations and supply chains sought to ringfence and stockpile
for their own use, sometimes collaborating but mainly not. Internationally, the
European Union and the United Nations sought to coordinate supply systems
and markets internationally, for and on behalf of their member states, but also
for global humanitarian aid. Altruism and humanity, piracy and price gouging
were all emerging at all hierarchical levels of the supply system. Demands for
communication up and down these hierarchical levels of the supply system
were being made in an attempt for higher hierarchical systems levels to gain
some semblance of control.

So how might systems thinking and understanding of emergence and hierarchy,

communication and control within systems contribute to the development of supply
chain management? In Harland (2021), taking a systems level approach to exploring
why supply chain management globally failed so badly during the COVID-19 crisis,
it was shown that the only player acting globally in this crisis was the virus itself. Lack
of a big picture approach and lack of willingness to cooperate at different systems
levels and with other supply networks impeded progress in response and recovery to
this crisis. This will be explored further in Chap. 6.
Harland and Roehrich (2022) focus on theories for supply chain management
and propose that these systems hierarchies are important to understand appropriate
applicability of different theories to these different units of analysis of research.
They provide an initial mapping of appropriate theories to each system level.
Table 2.4 provides some examples of theories appropriate to each system level; a
more comprehensive table is provided in Harland and Roehrich (2022).

2.7 Supply Chain Management as a Strategic Endeavour

In tracing the historical development of supply chain management, the story so

far in this chapter has been one of evolution of the concept of SCM as a firm-based
endeavour focusing on operational, materials planning and control activities to reduce
2.7 Supply Chain Management as a Strategic Endeavour 25

Table 2.4 Examples of appropriate theories for research at different supply systems levels, derived
from Harland and Roehrich (2022)
Supply system Examples of appropriate theories
level
Internal supply Dynamic capabilities (Teece et al., 1997), organisational learning theory
chain (March, 1991)
Supply Agency theory (Eisenhardt, 1989), transaction cost economics theory
relationships (Williamson, 1975), power dependency theory (Emerson, 1962)
Supply chain Resource orchestration theory (Sirmon et al., 2007), institutional theory (Di
Maggio and Powell, 1983)
Supply network Weak ties theory (Granovetter, 1973), social network theory (Scott, 1988)
Supply system Complexity theory (Byrne, 1998), systems theory (von Bertalanffy et al.,
1951)
Supply market Factor market rivalry (Markman et al., 2009), supply market concentration
(DeWitt et al., 2006)

costs and improve operational performance, or a relationship management endeavour

to source materials at the right price, quality, quantity and time from the right source.
As the boundaries of supply chain management within firms and in relationships
with suppliers stretched to consider chains, networks, systems and supply markets, it
was still largely focused on materials and information integration to reduce costs and
improve operational performance. The Industrial Marketing and Purchasing (IMP)
group who were also stretching boundaries beyond interaction in relationships to
consider industrial networks were adamant that firms merely ‘coped’ within the
context of networks, rather than being able to manage the network (Hakansson and
Ford, 2002). However, as supply chain management started to become more strategic
in its ambitions and conceptualisation, it was proposed that firms could do more than
cope in supply networks—they could, in some cases, influence and manage parts
of them. Here it is argued that supply chain management initially aligned more
with normative, rational ‘visible hand’ approaches to strategic management in its
development of ‘supply strategy’, rather than the more coping, emergent approaches
of IMP. However, as discussed in Chap. 5 on interconnectedness, complexity and
dynamics in supply, more recent conceptualisation of supply chains as complex
adaptive systems (Carter et al., 2015) has focused the field’s attention on emergence.
In the historical development of the strategic management concept, Bracker (1980)
traces back the roots of strategic management to ancient Greek and Chinese military
strategists; part of the etymology of the word ‘strategy’ is the ancient Greek verb
‘stratego’ which refers to planning how to destroy enemies through using resources
effectively. The concept of logistics was born during World War II to manage manu-
facturing and support military troops and materials movements. It is widely accepted
that the rapidly changing situation after World War II caused recovering firms to
focus on resources and how to compete through securing and using resources more
effectively than competitors.
26 2 Developing the Concept of Supply Chain Management

In Harland (2022) the influence of strategic management on the strategic develop-

ment of supply chain management is examined. The strategic management concepts
of strategic environment, fit and alignment and the influence of more normative,
‘visible hand’ (Chandler, 1977) thinking is evident, rather than more ‘emergent’
approaches to strategy from Mintzberg (1979).
Globalisation of business represented a changing business context within which
firms competed. Previously firms had exported their products and services to other
countries, then established manufacturing locations in other countries. However,
global businesses operated more strategically and took a more holistic approach
to their international operations. Globalisation mandated cooperation through
strategic alliances. Cooperating rather than vertically integrating allowed firms to
focus on their core competences and outsource their non-core competences. This
shifted strategic focus from firm-based ownership and control to cooperative inter-
organisation networks of firms. Firms became a ‘nexus of contracts’ (Reve, 1990)
focusing on integration and innovation; Cunningham and Culligan (1991) argue
that networking may provide a significant source of competitive advantage through
complementary action and the harnessing of synergistic potential of the network in
pursuit of a common goal. In strategic management Whittington (1993) developed the
concept of ‘network strategy’. Global organisations including Proctor and Gamble,
Unilever, Apple, McDonalds and Toyota were recognised as operating strategically
across their inter-organisation networks.
Conceptually, researchers in different but related fields of management were
expanding their boundaries of thinking to catch up with practice as being witnessed
occurring in global businesses. Many fields increased their ambitions to be more
strategic across networks of organisations. Operations management expanded its
boundaries by considering what should be performed within the firm, what should
be performed by other firms and how should relationships with these outsource
providers be managed (Hayes and Wheelwright, 1984). ‘Lean operations’ (Womack
et al., 1990) and ‘lean supply’ (Lamming, 1993) were developed through learning
particularly from Toyota. Increased outsourcing shifted firms to buy rather than make,
causing purchasing and supply management researchers to develop concepts around
relationships and relationship management (Nishiguchi, 1994). Increasingly, opera-
tions management and purchasing and supply management conceptual development
shifted to focusing on improving value to end customers and providing competitive
advantage. At the same time industrial/ relationship marketing conceptualisation of
longer-term, cooperative relationships developed (Hakansson, 1982). However, a key
difference was evident between the operations and supply chain normative perspec-
tive of managing inter-organisation networks, in contrast to the industrial marketing
and purchasing (IMP) perspective of managing relationships but only managing
in, or coping, in networks. At the same time, logistics researchers extended their
boundaries of attention more to the downstream distribution channel, emphasising
the need to keep materials moving efficiently towards customers, mainly through
the use of operational research (OR) techniques. Developments within industrial
dynamics research focused on materials and information flows within connected
chains of organisations (Towill, 1991, 1992). Also at this time, service management
2.7 Supply Chain Management as a Strategic Endeavour 27

academics integrated operations management with marketing thinking, focusing on

the ‘softer’, behavioural aspects of relationships with customers (Parasuraman et al.,
1985).
Our research provided two key contributions to this more strategic perspective of
supply in Harland (1996) and Harland et al., (1999), featured in boxes below.

Through interviewing key supply chain management academics about their

work and performing empirical research in the UK and Spanish automotive
aftermarket, Harland (1996) conceives of Supply Chain Management as a
multi-level endeavour comprising 4 levels. Level 1, the internal supply chain,
level 2 the dyadic supply relationship, level 3 the external supply chain and
level 4 the supply network. The empirical findings highlight the importance
of understanding supply relationships in the context of their supply chains,
and supply chains in the context of their supply networks. It is found that
features of supply networks including structure and behaviour impact on supply
chains and relationships within those networks. It is also found that features of
supply chains impact on relationships; for example, the physical position of the
dyadic relationship in the chain impacts on their perceptions of supplier perfor-
mance in a form of Forrester or bullwhip effect. This more strategic approach
to conceptualising SCM requires understanding of supply as a multi-level
endeavour.

Building on this need for understanding of supply relationships, chains and

networks in (Harland, 1996), Harland et al., (1999) take this further and propose
the concept of ‘supply strategy’.

Harland et al. (1999) choose not to use the brand of SCM but rather to
develop thinking about ‘supply’ and ‘supply strategy’. “The concept of supply
may therefore be summarised as a holistic approach to managing operations
within collaborative inter-organisation networks, allowing the formulation
and implementation of rational strategies for creating, stimulating, capturing
and satisfying end customer demand through innovation of products, services,
supply network structures and infrastructures, in a global, dynamic environ-
ment”. In Harland et al. (1999), a new concept ‘supply strategy’ is proposed.
Supply strategy conceptualises the trend towards globalisation as requiring
cooperative outsource relationships, rather than vertical integration. As part
of the process of globalisation, firms shift from traditional firm-based owner-
ship to participants in inter-organisational networks. There are three impor-
tant characteristics of these global organisations. First, they focus attention on
end customers served by their inter-organisational network. Second, they take
strategic decisions to change the structure and infrastructure of their network to
28 2 Developing the Concept of Supply Chain Management

service end customers more effectively. Third, their restructuring is collabora-

tive with other firms in their inter-organisation network, both upstream on the
supply side and downstream on the customer side. As these inter-organisation
networks focus on improving value to end customers, they have also been
termed ‘value networks’.

Supply strategy as a concept developed in parallel to, and drew on, thinking from
strategic management (Harland, 2022). From strategic management, for any organi-
sation to form strategy, first an understanding of its situation, or strategic environment
is required. Narchal et al., (1987) classifies the strategic environment as existing at 3
levels—the macro environment, the sector or industrial environment and the compet-
itive environment. Most organizations cannot influence their macro and industrial
sector environments but might be able to influence their competitive environments.
Industrial economists assert that firms might gain competitive advantage either by
gaining a cost advantage through economies of scale, or a differentiation advantage
by appearing different to the rest of the competitive pack; competitive advantage is
gained through using combinations of five forces (Porter, 1979). Two of these forces
in Porter’s framework are the bargaining power of suppliers and the bargaining power
of buyers. In conceptualizing supply strategy, these two forces are central.
To explore supply strategy in practice, Harland et al., (2001) conducted extensive
empirical research across supply networks from sectors including automotive, fast
moving consumer goods, electronics, pharmaceuticals and communications tech-
nologies. This research led to a further key contribution—a taxonomy of supply
networks.

Harland et al. (2001) provide a taxonomy of supply networks. Two main drivers
of difference between supply networks emerge from the research – the degree
of supply network dynamics and the degree of focal firm influence on the
supply network. This leads to a 2 × 2 framework providing 4 types of supply
network. It is found that the degree of focal firm influence determines whether
firms might manage their supply networks or merely cope within them. In 2
types of supply network where focal firms have enough influence, they can
manage those networks; in 2 types where they have insufficient influence,
they merely cope within those networks. It was also found that the degree
of supply network dynamics determines behaviour of the focal firm. Where
supply networks are highly dynamically changing, focal firms seek to integrate
knowledge and human resources across the network. In more routinised supply
networks, focal firms seek to integrate equipment and information systems.

The resulting taxonomy of supply networks will be used throughout this text. It
has been broken down to simplify and focus attention on different aspects of it for
2.8 Supply Chain Management Identity 29

Fig. 2.4 Strategic managing

or coping in supply
networks. Adapted from
original thinking in Harland,
C. M., Lamming, R. C.,
Zheng, J., & Johnsen, T. E.
(2001). A taxonomy of
supply networks. Journal of
supply chain
management, 37(3), 21–27

each chapter where it is used. In Fig. 2.4, the first adaptation of the taxonomy focuses
on supply strategy, in terms of managing a network or coping in a network.
The previous two polar extremes of supply strategy (Harland et al., 1999) as
a rational, normative strategic approach to managing supply networks, and IMP’s
network concept of business strategy as one of coping within the context of interor-
ganizational networks (Hakansson and Snehota, 1989; Hakansson and Ford, 2002),
were combined within the Harland et al. (2001) taxonomy. The empirical find-
ings find both prior approaches to supply network strategy as useful, depending
on circumstances.
Firms with a higher degree of influence can drive network collaborative strategies,
exerting power over smaller firms in the network and forcing them to align strategi-
cally with their business strategies, focused on their end customers. Chapter 3 exam-
ines supply structures and considers the implications for firms in different supply
networks, all dominated by more powerful firms. Chapter 4 considers how firms
focus on different processes within different types of supply networks. Firms with
less influence in the supply network have to cope and react to the strategic directions
set by other more powerful actors.
As supply chain management has developed to be more strategic and interorga-
nizational, this has necessarily changed the identity of the field.

2.8 Supply Chain Management Identity

In this chapter the evolution of supply chain management has been traced from
its roots in 1960s’ materials management within a firm to an interorganisational,
more strategic concept of supply strategy relating to complex, multi-level systems
of supply. In universities, researchers now identifying with the field of supply
30 2 Developing the Concept of Supply Chain Management

chain management may have previously identified with being engineers, operations
management, purchasing and supply management or logistics researchers. It is not
surprising that there have been discussions within the field about what supply chain
management is and whether it might be viewed as an academic discipline (Harland
et al., 2006).

In Harland et al. (2006) the question is posed as to whether supply manage-

ment is a discipline. The term ‘supply management’ here is used as an all-
encompassing term, similar to SCM. The study is based on Fabian (2000) who
defines a discipline as “the common focus of a set of researchers who might
perform research in varied paradigms and /or theoretical perspectives” and
provides three disciplinary criteria:
• Disciplinary coherence or integration of a field
• Breadth and depth of knowledge
• Quality standards
Harland et al. (2006) examine supply management and supply chain manage-
ment to find evidence relating to these criteria and whether there is a discipline
debate occurring. At that time, there was some evidence of coherence within
the field but quality of research and legitimation of the field through a disci-
pline debate could only lead the authors to conclude that it was an emerging
discipline, but not yet a discipline.

Focusing on purchasing and supply management, revisiting this discipline debate

later, Spina et al., (2016) conclude that at that time there was not a cohesive body of
theories and rules that disciplines coalesce around to justify considering purchasing
and supply management to be a discipline. However, other authors do refer to SCM
as a discipline (e.g., Carter and Ellram, 2003; Carter, 2011; Giannakis, 2012; Durach
et al., 2017).
We returned to this issue of identity with a group of purchasing and supply
management scholars who coalesced around the International Purchasing and Supply
Education and Research Association (IPSERA) community. This group held two
workshops, a panel debate at the annual IPSERA conference and subsequent data
collection from the IPSERA membership. This research culminated in Ellram et al.,
(2020).

Ellram et al., (2020) argue that academic identity is important; identity coher-
ence grounds people and helps them to feel stable (Syed and Juang, 2014).
Professional identity is one’s “self-concept based on attributes, beliefs, values,
motives and experiences” (Slay and Smith, 2011, p.86). It also provides a sense
of community, providing a moral framework that clarifies one’s obligations
2.8 Supply Chain Management Identity 31

to others in the community (Taylor, 1992). When individuals identify with a

community, this legitimises the community for themselves and they try to help
the community to achieve shared success (Brown and Toyoki, 2013). Ellram
et al., (2020) argue that, whilst academics do identify with their institution and
their academic school or department, they identify their research topics and
research activities more with their academic disciplines (Benbasat and Zmud,
2003). Bibliometrics, journal rankings and individual academic rankings have
contributed to the formation of an academic identity for SCM (Harland, 2013).
The study highlights opinions of senior P&SM academics regarding identity.
The group jointly form a conceptual framework showing SCM to bring together
strategic parts of P&SM, operations management, logistics and marketing, but
other parts of these functions and academic fields remain outside the interest
of SCM.

A simplified representation of the conceptual framework developed by Ellram

et al., (2020) is provided in Fig. 2.5.
Supply chain management is at the centre of this conceptualisation; there are
operational tasks, activities and research interests that are specific to each of the
fields of operations management, logistics, purchasing and supply management and
marketing that SCM scholars may not identify with. As a strategic approach, SCM
integrates strategic aspects of these other fields that deal with transformation of
input resources to provide goods and services to ultimate end users. This leads to the
following two principles:
Principle 2: Supply chain management integrates strategic perspectives of operations
management, logistics, purchasing and supply management and marketing

Fig. 2.5 Supply chain management relative to other closely related fields. Adapted from Ellram,
L. M., Harland, C. M., van Weele, A., Essig, M., Johnsen, T., Nassimbeni, G., Pagell, M., van Raaij,
E., Rozemeijer, F., Tate, W., & Wynstra, F. (2020). Purchasing and supply management’s identity:
crisis? What crisis? Journal of Purchasing and Supply Management, 26(1), 100,583
32 2 Developing the Concept of Supply Chain Management

Principle 3: Supply chain management transforms resources to supply goods and services
to ultimate end users

2.9 Conclusions

There is no single definition or conceptualisation of supply chain management that

unifies the field academically and in practice, although this is common to most fields
of business. There is evidence of diversity that suggests that SCM is still quite a broad
field and not yet sufficiently disciplined to be viewed as an academic discipline. The
diversity in part relates to areas of interest of researchers in terms of whether they
research more strategic or more operational aspects of supply; this is examined in
more detail in Chap. 4 on supply processes. The diversity also relates to the research
unit of analysis or hierarchical level of supply; this is also discussed more in Chaps. 3
and 4. It is also more fundamentally related to who we are and the research traditions
we come from, with profound differences between approaches to SCM from groups
with strong traditions in operations management, engineering, industrial marketing,
purchasing and supply management or logistics.
Currently our field does not have a clear identity or sense of direction; this may
not necessarily be a bad thing, depending on individual desires for academic fields of
study to be ‘well-tended gardens’, more organic ‘weed patches’ (Pfeffer, 1993; van
Maanen, 1995) or a hybrid of both. Views on the future of supply chain management
are examined in Chap. 8.

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Chapter 3
Supply Structure

3.1 Introduction

In the previous chapter, the development of the concept of supply chain management
was discussed by examining the history of where we, as a community of practitioners
and researchers, have come from and where we are today. We are still evolving
and developing our understanding and conceptualisation of our field of practice and
research. In this text SCM is initially conceptualised as ‘supply structure’ and ‘supply
process’, discussing key contributions to our understanding of these.
In this chapter the current lack of definitional clarity relating to supply structure
is exposed; to help clarify definitions, first the chapter examines what we mean
by the terms ‘supply’ and ‘supply chain’ when we use the brand ‘supply chain
management’. In the next chapter on supply process, we examine what happens
within supply structures in terms of flows and transactions, to discuss the aspect of
‘supply chain management’ that deals with managing these processes.
To develop conceptualisation of supply structure, this chapter features our research
on supply dyadic and triadic relationships (e.g., Patrucco et al., 2022; Walker et al.,
2013; Harland, 1996), external supply chains (e.g., Harland et al., 2007), supply
networks (e.g.,Harland et al., 2001, 2004; Lamming et al, 2000; Harland, 1996),
supply systems (e.g., Walker and Harland, 2008) and supply markets (e.g., Walker
et al., 2006; Caldwell et al., 2005). A systems perspective is taken to create a new
classification of supply structures. First, however, it is necessary focus more precisely
on what ‘supply’ is and is not to bound our field and differentiate it from other fields.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 39

C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_3
40 3 Supply Structure

3.2 Bounding ‘Supply’

Building on the definitions in Chap. 2 where the development of the concept of supply
chain management to date was explored, here a deeper investigation of ‘supply’ in
that context is provided. Unlike the use of the term in ‘supply and demand’ in clas-
sical economics, where supply refers to the volume of products and services sellers
are prepared to provide at a certain price and free market competition is an organ-
ising mechanism to establish market prices and volumes exchanged, operations and
supply chain management use the term quite differently. In supply chain manage-
ment and supply management, supply refers to the procurement of resources, their
operational transformation into goods and services, and their distribution to ultimate
end customers. The concept of supply strategy is defined as an “holistic, strategic
perspective of management of operations, stretching across organisational bound-
aries. Central to the concept of supply are the purchasing, use and transformation of
resources to provide goods or service packages to satisfy end customers today and
in the future, and the organisational structuring decisions to accommodate global
markets” (Harland et al., 1999). Supply is used in this text, therefore, to refer to oper-
ations that span organisational boundaries. However, it is emphasised that supply in
this text does not include all other aspects of interorganisational ties. Supply is both
our purpose and how we fulfil that purpose; it is the ‘doing’ bit of organisations and it
connects organisations as resources are procured from other organisations upstream,
transformed and distributed to other organisations downstream. In Johnsen et al.,
(2000) we define a supply network as “a specific (analytical) subset of industrial
networks”.
This leads to the next principle:
Principle 4: When researching or managing supply in practice we focus on the procurement
of resources, their operational transformation and distribution of goods and services. The
domain of interest of SCM is not interorganisational or industrial networks of organisations,
only the subset of parts involved in operations and supply.

This will be elaborated later in this and other chapters.

3.3 Supply Structure

Using the above definition of supply, ‘supply structure’ is used here to refer to the
connected parts of organisations involved in procurement of resources, resource
transformation and product/ service distribution. The term ‘node’ is commonly used
to refer to the entity that is connected to other entities, but often it is used to refer to
an ‘organisation’, such as a manufacturer (e.g., as in Carter et al., 2015). Building
on Principle 4 above, it is more precise to define a node in a supply structure as
the collective resources or assets of an organisation (people, systems, technologies,
activities etc.) involved in supply. In our field we are interested in the following
resources or assets:
3.3 Supply Structure 41

• Physical buildings—e.g., factories, warehouses, retail outlets

• Physical equipment—transforming equipment, such as machinery, storing equip-
ment such as racking in warehouses, displaying equipment, such as rails in
shops
• People involved in supply, including their expertise and knowledge
• Social capital accruing through supply e.g., trust, reputation, commitment
• Finance for supply
• Information relating to supply.
When using the term ‘supply structure’, Kim et al. (2011) refer to the struc-
tures formed by materials flows and contractual relationships. However, in this text,
materials flows are classified as processes, not structures; the parts of organisations
involved in operations and their associated resources are classified here as structures,
but what flows within the relationships are dealt with as processes.
Supply structures are of different types according to the number, type and config-
uration of nodes. Two connected nodes form a dyadic supply relationship, three a
triadic supply relationship. In this chapter types of supply structure are specified,
defined and research relating to each type is examined. Prior to this, some other
principles relating to supply structure are established.
All supply nodes exist within their own unique supply structures, giving them
a unique vantage point from which they can view a limited extent of the supply
structures within which they operate. This is commonly termed the ‘focal firm’
perspective (Wagner and Neshat, 2010) and focal firms have limited ‘supply chain
visibility’ (Francis, 2008). However, following on from the previous principle, supply
researchers and practitioners do not research and manage firms, be it their own or
others their firm is connected to. Rather, we research and manage (or attempt to
manage) subsets or parts of firms dealing with supply. This leads to the following
principle:
Principle 5: All supply operations exist in their own unique set of supply structures. From
their unique vantage point, they may observe, and attempt to engage with, upstream and
downstream supply structures.

Various definitions and terms are used by researchers and practitioners to represent
different supply structures. A ‘supply base’ is commonly used to refer to the set of all
direct connections an organisation has with its immediate suppliers (Bellamy et al.,
2014). The ‘ego-network’ is a term that has been used to describe the set of direct
customers and direct suppliers an organisation has (Lu & Shang, 2017; Park et al.,
2018). Supply network has been used to refer to an organisation’s suppliers and sub-
suppliers, (Kim et al., 2011; Kumar et al., 2019a, 2019b; Pathak et al., 2019a, b), i.e.,
connected organisations upstream of the focal firm. However, it has also been used
to include customers, customers’ customers and so on downstream to the ultimate
consumer, and suppliers, suppliers’ suppliers and so on upstream to original source,
(Harland, 1996). An extended supply chain has been defined as including customers,
suppliers and sub-suppliers (Gualandris et al., 2021). It should be noted that these
definitions do not make explicit whether a ‘supplier’ or a ‘customer’ and, indeed a
42 3 Supply Structure

‘focal firm’ are the entire organisation and a configuration of a number of organisa-
tions becomes an interorganisational network, or industrial network, or whether the
authors are referring, implicitly, only to the parts of organisations involved in supply.

3.4 Conceptualising Supply Structure

Carter, et al., (2015) propose that there is not a meaningful theory of the supply
chain, the phenomenon itself that supply chain management attempts to manage. An
omission they identify is that supply chain management focuses on the organisations
through which products and services flow, but not on those organisations that play
vital, indirect, supporting roles. To expand on this, they provide a figure containing
solid lines showing direct material flows, and dashed lines showing support services.
Interestingly, carriers are not included in direct material flows; whilst carriers do not
have contractual ownership of the goods they carry, they do take physical possession
and transform location of materials, thereby directly adding value, so it could be
argued that they should be viewed as contributing to direct material flow. Indeed,
their omission would not seem to make sense for those researchers and practitioners
interested in materials tracking.
Including supporting services into a conceptualisation of the supply chain does
present challenges for bounding research and management of the supply chain. For
example, Carter et al., (2015) include financial institutions; whilst clearly providing
an essential service of facilitating cashflow and exchange required for supply, this
does push at the boundaries of our field. ‘Supply chain finance’ is a recent devel-
opment within SCM (e.g., Gelsomino et al., 2016) and does promote the benefits
of cooperation in supply chains and with finance providers to facilitate and smooth
supply chain management. Similarly, recent developments on blockchain technology
(Queiroz et al., 2020), and its developing role in supply chain finance (Du et al., 2020)
necessarily introduce more complexity to establishing an identity for, and boundaries
of, the SCM field of practice and research.
Carter et al., (2015) state that a supply chain is a network comprising nodes
and links, where nodes are “establishments”, e.g., “manufacturers, transporta-
tion carriers, warehouses, and financial instititutions” that have agency to make
decisions. They define the links that connect these establishments as “transac-
tions consisting of the flow of materials, information and/ or finance between
nodes”. Within this text, only the parts of these organisations involved in supply
are considered to be nodes within supply structures.
Stock et al., (2000) conceptualise supply structure as combining channel gover-
nance (network, hierarchy, or market) and geographic dispersion (the geographic
scope of the locations of the suppliers, production facilities, distributors, and
customers in the supply chain). Physical location of nodes and geographic dispersion
is important when examining supply structure. In geographically dispersed supply
structures, the physical distance and different contexts surrounding each supply
3.4 Conceptualising Supply Structure 43

structure member, reduces the likelihood of being able to form strong, collective
commitment across the nodes in the structure (Knorringa and Nadvi, 2014).
When supply structures of multiple nodes are considered, the potential for
researching different types of supply structures expands. Choi and Krause (2006)
emphasise differences between supply structures according to numerosity, (the
number and concentration of supply chain members), interconnectedness, (the
pattern of interorganizational ties) and, heterogeneity, (the degree of differentiation
in attributes, such as home country and industry). Kim and Davis (2016) examine
numerosity and find that the more suppliers there are in a supply structure, the
harder it is for a firm to observe suppliers and sub-suppliers. This lack of visi-
bility can impede coordinated action. Supply chain density has been investigated
more than other aspects of supply structure (Gualandris et al., 2021). Awaysheh
and Klassen (2010) examine how physical distance impacts on the improvement
of supplier socially responsible practices. As geographical distance increases, it is
more difficult for managers to gather data, assess the supplier situation and implement
changes (Klassen and Vachon, 2003). The more geographically spread the supply
chain is, the greater the difficulty to maintain frequent communication with suppliers
(Choy and Lee, 2003).
Deliberate design of supply structures has been termed ‘supply chain design’
(Calleja et al., 2018), ‘supply chain architecture’ (Melnyk et al., 2014), and ‘supply
chain configuration’ (Chandra and Grabis, 2016). Design science thinking is a topic
of current interest in SCM (e.g., Naim and Gosling, 2023) and is examined in more
detail in Chap. 8 on the future of supply chain management.
Sustainability, recycling and reverse logistics have given rise to new forms of
supply structures to deal with returning used products for repair, recycling, reman-
ufacturing and reselling (Mishra et al., 2018; Islam and Huda, 2018) and for
distributing waste from supply chains, such as food waste (Sundgren, 2020). Different
supply structures are appropriate for different sustainability processes i.e., structures
for remanufacturing and reselling are likely to differ to those for waste recycling and
redistribution (Gobbi, 2011). Non-traditional supply chain actors may be involved
in supply structures for the purpose of sustainability (Pagell and Wu, 2009), such as
third-party collecting agents (Weraikat et al., 2016).
In this chapter key contributions on supply chain structure are examined to shed
light on the current debate on ‘what is a supply chain?’, to show differences between
characterisations of supply chains as structures of multiple organisations and sub-
organisation structures of organisations involved in primary activities of supply and
secondary or support activities. These differences form part of the contemporary
debate on supply chain management identity and highlight challenges in estab-
lishing clarity of unit of analysis in supply chain management research. This debate
is continued in the final chapter on the future of supply chain management.
This text takes a systems approach to supply chain management, building on an
early conceptualisation of SCM as a multi-level concept (Harland, 1996).
44 3 Supply Structure

3.5 A Systems Approach to Supply Chain management

In Chap. 2 the chronological development of the concept of supply chain management

was traced back to original sources of research focusing on supply within the firm.
Harland (1996) finds that researchers were using the term SCM to mean different
things, differentiated particularly by the system level they were explicitly or implicitly
referring to.

Harland (1996) categorizes the various definitions and approaches to supply

chain management using a systems level approach, as relating to the internal
supply chain within an organization, the dyadic, or buyer-supplier relationship,
external supply chains and supply networks. Empirical research in the UK and
Spanish automotive aftermarket finds variations of supply structures: in the UK
there is a greater variety of different types of outlets in the service and repair
and DIY markets, supported by a wide variety of different types of supply
chain. The research also finds that physical position in the chain and network
are important to explain how dyadic relationships differ. The behavioural and
process implications are discussed further in this chapter.

To explore research contributions to supply structures, this systems level repre-

sentation has been further developed here to include supply in the internal supply
chain, dyads, triads, supply bases, chains, networks, systems and supply markets, as
shown in Fig. 3.1.
Figure 3.1 builds on the first principle of supply chain management as being a
multi-systems level endeavour; the figure adds to the systems level representation
of SCM by clarifying connectedness within supply structures. This leads to the
following principle:
Principle 6: Supply structures comprise supply nodes connected by supply flows and
processes

Other multi-level systems classifications have been provided since. Möller et al.,
(2005) discusses four levels of ‘strategic nets’—industries, firms’ strategic nets,
firms’ portfolio of relationships and the exchange relationship. Ritter and Gemünden
(2003) also discusses four interorganisational levels of analysis—the interaction/
episode, the dyadic relationship, the portfolio of relationships and the network/
industry/ market. Mattson (1997) associates levels with micro (dyad), meso (net)
and macro (market).
To examine supply structures, research contributions and issues relating to each
systems level will be considered, excluding the internal supply chain for two reasons.
First, operations management has addressed the internal supply chain for some time
and second, this text is based on a portfolio of research on interorganisational supply.
3.6 Supply Dyadic Relationship 45

Fig. 3.1 Supply systems levels

3.6 Supply Dyadic Relationship

A dyad comprises two organisations, or nodes, and the link that connects them is
the interorganisational relationship. Supply dyads comprise the sub-parts of nodes
associated with supply; the link that connects them is the buyer–supplier relationship.
In this chapter the assets within the buying and selling organisations and within
the relationship itself are classified as structural. In the next chapter the flows and
processes between the organisations will be examined.
There are two distinct streams of research on structural aspects of supply dyads,
one relating to materials and inventory, the second being more strategic relating to
choosing who to partner with and why. The first stream of research originally focused
on inventory location decisions—how much inventory of each material should be held
at a supplier, and how much at a firm buying from that supplier. Most of the research
on inventory location originally concentrated on the ‘two echelon’ (dyad) unit of
analysis (e.g., Clark and Scarf, 1960). In this text our main concern is strategic supply
decisions, so the focus in this chapter is not on materials and inventory, which is a
managerial and operational issue, but on strategic aspects of structure. In particular,
46 3 Supply Structure

strategic supplier relationships, or partnerships, and outsourcing are amongst the

most important strategic aspects of dyads.
Historically, industrial organisation and strategic management research focused
on acquisition and mergers to gain total control of the buyer–supplier relationship
through vertical integration. However, Coase (1937) and later Williamson (1975)
made substantial contributions to developing a spectrum of different types of dyadic
relationships from hierarchy (ownership) to market (no interdependence between
the parties). Intermediate market forms involve contracts with varying length and
scale of commitment. The trend towards vertical disintegration is well documented
particularly from the 1980s (e.g., Porter, 1985; Thackray, 1986).
A common intermediate market form that gained popularity was supply chain
partnerships; these became increasingly favoured over the financially risky vertical
integration through merger or acquisition. Supply chain partnerships enabled access
of both parties in a dyad to the skills, technologies and expertise of the other party
(Lambert et al., 1996). Partnerships differed to joint ventures, where usually there was
joint investment in relational assets. Such was the extent of commitment between
the partners in the dyad, the supplier relationship became a ‘quasi organisation’
(Lamming, 1993) as many resources and assets became available to the other partner.
Empirical evidence in Ellram (1995) shows that one of the reasons firms targeted
particular suppliers to partner with was to gain access to technologies. McCutcheon
and Stuart (2000) emphasise that in supplier alliances, the supplier may be willing to
invest in skills and technologies specifically for the alliance; suppliers may be willing
to transfer technologies as commitment to the dyadic relationship (Sako, 1992).
Outsourcing became a significant business trend as organisations sought to
reduce costs through comparative advantage of lower labour, materials, energy and
health and safety costs abroad. Over a 20-year period our research has examined
outsourcing, its implications and the more recent trend to reshoring. Outsourcing
and reshoring are, in part, structural supply issues as changing location and owner-
ship of parties to the relationship relate to the supply dyad nodes and assets within
them. Early predictions of system level impacts of outsourcing were made in Bettis
et al., (1992) where potential damage to industries was highlighted. A number of our
research projects built up a systems level perspective of outsourcing and its impli-
cations (e.g., Knight and Harland, 2001; Harland et al., 2005; Walker et al., 2006,
2008; Moretto et al., 2020; Harland, 2021).

In Knight and Harland (2001) there was early recognition of the potentially
negative impact of aggregate outsourced decisions. Independent, rational deci-
sions at the level of individual organisations provided benefits, particularly in
terms of cost savings; however, as the volume of decisions accumulated, this
gave rise to concerns surrounding detrimental effects to sectors and nations.
For example, many government departments in the UK outsourced their infor-
mation systems management to the same US based firm with no visibility of
other departments making the same decision at a similar time. Eventually this
3.6 Supply Dyadic Relationship 47

single firm controlled over 70% of all UK government information systems,

with some departments accepting very long contractual commitments and use
of the outsource provider’s own service level agreements. These were unin-
tended outcomes of aggregate outsourcing decisions made independently of
each other.

This was built on further in Walker et al., (2008) as the research turned towards
designing proactive interventions to step-in when early signs of detrimental impact
of aggregate outsourced decisions became apparent. More recent research was
conducted to examine the contemporary trend to counteract any detrimental impact
of outsourcing offshore through reshoring (Moretto et al., 2020).

Harland et al., (2005) conducted a Delphi study of senior supply practitioners

from public and private sector organisations to examine potential risks of
outsourcing for sectors and nations. This study found that capacity was being
lost in particular sectors, notably in information systems technologies and infor-
mation systems management. Nationally, employment was being adversely
affected. There was concern about declining levels of expertise in some areas
because training and education differed substantially between nations. The
biggest concern was the sudden, unintended power shift to the outsource
company and its host nation. It was concluded that a more holistic, systems
approach to outsourcing decisions is required to prevent sectors and nations
losing competence and assets and exposing them to risk.

In Harland et al., (2021), research findings provide evidence of serious detri-

mental effects of outsourcing; as international borders closed because of the COVID-
19 pandemic, governments hastily sought to source personal protective equipment,
ventilators and vaccine production capability locally as countries competed to secure
these vital healthcare supplies. In Moretto et al., (2020) and Harland et al., (2021)
evidence was provided of the strategic role of procurement in decisions relating
to sourcing, outsourcing and reshoring. Internationally government interference in
sourcing for COVID-19 critical supplies showed a lack of understanding of supply
markets, how to mitigate against the risks of corruption, how to ensure required
quality standards and how to conduct appropriate due diligence required when
spending taxpayers’ money (Harland et al., 2021).

Moretto et al., (2020) found that the original, often operational, reasons for
offshoring had changed—cost savings were not sustained as labour costs
increased in the country to where production was outsourced; government
investment and tax incentives were reduced or discontinued. However, the
48 3 Supply Structure

major reasons why organisations have been trying to reshore are more to do
with risk relating to brand and reputation. Scandals relating to poor working
conditions and health and safety of workers damaged clothing brands and repu-
tation. Also, strength of brands indicating ‘made in Italy’ or ‘made in Great
Britain’ grew, deterring firms from sourcing abroad.

3.7 Supply Triadic Relationship

Choi and Wu (2009) argue that dyads are not sufficient to be considered as the smallest
unit of analysis to research supply networks, as there is only one link to study. Rather,
the smallest unit is a triad, with three different relationships to examine and impact
on each other. Triads are where 3 organisations are in some way related to each other,
directly or indirectly.

Patrucco et al., (2022) use empirical research to examine four archetypes of

triadic relationships—triangle, A-frame, D-frame and line, shown in Fig. 3.2.
In a triangle triad, a buying organisation has a direct relationship with two
suppliers, and they have a direct relationship with each other. In A-frame triads,
the buying organisation has a direct relationship with two suppliers, but they
do not have a relationship with each other. In D-frame triads, the buyer has
a relationship with a supplier who has a relationship with a sub-supplier; the
buying organisation reaches around the immediate supplier to form a direct
relationship with the sub-supplier. In line triads, the buying organisation has
a relationship with the supplier who, in turn, has a relationship with the sub-
supplier, but the buyer does not have direct contact with the sub-supplier.
3.7 Supply Triadic Relationship 49

Fig. 3.2 Four archetypes of triads. Adapted from Patrucco, A., Harland, C., Luzzini, D.
and Frattini, F. (2022) Managing triadic supplier relationships in collaborative innovation:
a relational view perspective, Supply Chain Management: an International Journal, 27, 7,
108–127

In case studies of each of the four triad archetypes it was found that firms
choose to structure the triads according to location of assets. When the buying
organisation has strong technical capability, it may choose to configure an
A-frame triad, keeping suppliers separate from each other and controlling
their different capabilities and assets. The buyer may configure a triangle
triad when it wishes to leverage complementary resources held in different
suppliers; by encouraging them to form a relationship with each other, they
can combine these complementary capabilities and assets, particularly for inno-
vation. Buying organisations with good technical capability may reach around
a supplier to connect with a sub-supplier, forming a D-frame triad. However,
when they are less capable technically, they may leave the supplier to connect
to the sub-supplier in a line triad. In addition to contributing to research knowl-
edge on triadic relationships, this research provides clear managerial guidance
to buying organisations about which types of triadic relationships are more
or less appropriate under which circumstances, allowing them to be more
managerial in the way they configure the structure of their relationships with
suppliers.

In Zhang and Ren (2016), a triad of a manufacturer, a remanufacturer and a

retailer is examined to show how revenue sharing and a two part tariff contract
enable deliberate coordination of a competitive market for the original manufactured
and remanufactured products.
50 3 Supply Structure

3.8 Supply Bases

Supply bases are the total set of suppliers that an organisation directly connects to
(Bellamy et al., 2014). A supply base has also been defined as the “portion of the
supply network that is actively managed by the focal company through contracts
and purchasing of parts, materials, and services… and it is the portion of the
supply network that is within the managerial purview of the focal company” (Choi
and Krause, 2006, p. 639). In Harland (1994) trends relating to supply bases were
explored. During the 1960s and 1970s manufacturers in the USA and Europe typi-
cally used multi-sourcing to create price competition between suppliers and enable
switching from one supplier to another.

In Caldwell et al., (2005), case studies of public procurement contracting in

the United Kingdom were examined. It was found that through public procure-
ment’s pursuit of efficiency and cost savings through reducing supply bases,
smaller, less competitive suppliers were being driven out of the supply market.
Government departments’ supply bases contracted, but this led to the unin-
tended consequences of reducing market competition and increasing concen-
tration and dominance of a small number of more powerful suppliers. Over
time, the remaining suppliers who had reduced their margins to secure larger
government contracts, gradually started to raise their prices to restore their
depleted margins.

However, learning about Japanese practices led manufacturers to misinterpret

these practices in a purchasing revolution to reduce supply bases significantly through
single sourcing where possible. For example, Rank Xerox reduced its supply base
from 5000 to 300 suppliers. Lamming (1989) reported that Japanese lean producers
involved fewer than 300 suppliers in new product development compared to typical
Western manufacturers who sourced from 1000 to 2500 suppliers. However, at the
time there was a confusion around precisely what single sourcing meant. Japanese
automotive manufacturers would single source a left-hand taillight from one supplier
and a right-hand taillight from another. Whilst the line item and volume were single
sourced, the technology and capability were dual sourced. If one taillight supplier
had a problem, production could be switched to the other quickly by moving the
tooling and associated equipment, often owned or licensed by the buying organi-
sation. Whilst supply base reduction allowed companies to reduce the long tail of
suppliers within their total spend portfolio, enabling them to focus attention on a
smaller, more manageable supply base, it did expose them to risk if the remaining
suppliers were sole sources of capability for critical items.
3.9 External Supply Chain 51

Harland et al., (2005) identified risks of outsourcing leading to reduced supply

bases nationally. It is difficult to restore reduced capacity and capability in a
country when contracts have been awarded overseas. It can be more challenging
to manage an international supply base than a local one.

3.9 External Supply Chain

External supply chains are connected organisations linked sequentially from original
source to ultimate consumption, or portions of these. Purchasing and supply manage-
ment have focused more on links in supply chains upstream from manufacturers i.e.,
a supplier, its connected sub-supplier and so on. Channel management, logistics
and marketing have focused more on downstream links in supply chains involving
the physical distribution of goods to ultimate consumers. Marketing or logistics
channels may involve intermediaries, logistics service providers, distributors and
retailers. Early research represented upstream supply chains and downstream chan-
nels as simple, linear structures, akin to Hayes and Wheelwright’s (1984) commercial
chain.
Researchers studying supply chains as simple linear chains of inter-connected
organisations have tended to focus on reducing costs, integrating information and
improving supply chain performance variables, such as delivery speed. Assets held
within external supply chains included the physical assets to transform the state of
materials to add value and to move them closer to ultimate consumers. The devel-
opment of Materials Requirements Planning systems (MRPI) into Manufacturing
Resource Planning systems (MRPII), Distribution Resource Planning (DRP) and
ultimately Enterprise Resource Planning systems (ERP) enabled powerful supply
chain actors to integrate information in the chain, take more control and increase
their visibility of location of materials and orders. Smaller upstream suppliers were
often coerced into investing in the same systems to allow this integration to occur.
However, these developments were not without adverse consequences, as will be
examined in Chap. 4.

Through extensive case study research across different types of supply chains,
Harland et al., (2007) find that smaller enterprises, unable to afford investment
in integrated planning and control systems, became adrift of larger organisa-
tions who choose to focus and grow their business with others with whom
they could integrate their information systems. This leads to identification of
broader concerns about the unintended consequences of smaller businesses
being squeezed out of supply markets, leading to loss of innovation capability
52 3 Supply Structure

and agility. This research develops prior findings in Zheng et al., (2004) that
identifies smaller firms as being cautious to invest in information technologies
in supply chains because of lack of financial slack, technical knowhow and
managerial capability to exploit benefits of integrated information systems.

3.10 Supply Network

Supply networks have been defined as sets of supply chains (Harland, 1996). In
Lamming et al., (2000) early explanations for how supply networks were structured
examine variation according to product complexity and uniqueness. Highly complex
product manufacturers tend to have broader upstream supply networks because many
suppliers are required to provide the wide range of components used in their products.
Less complex products requiring few components or ingredients tend to be manu-
factured in supply networks with narrow upstream networks. Some supply network
structures are asymmetrical. For example, precision castings networks have few
suppliers in the upstream side of the network supplying metals and metal heating
supplies, but many downstream supply channels serving a wide range of indus-
tries including mobile phones, cameras, bicycles and computers. Conversely, other
asymmetrical supply network structures have very wide upstream networks with
many suppliers but narrow downstream networks with a small number of customers.
Examples of these include aircraft manufacturers. Figure 3.3 shows four archetypes
of supply network structures differentiated by breadth.
Ahuja (2000) find that the more direct and indirect ties a firm has in its supply
network, the more innovative it is.

Fig. 3.3 Different breadth of supply network structures

3.11 Supply System 53

Harland et al., (2001) report findings of empirical research through case studies,
deriving a taxonomy of supply networks. Two main drivers of difference
are found. First, the degree of influence the focal firm had over the network
impacts on their ability to choose other network partners and manage them.
Second, variability in how dynamically changing or tending towards stability
and routinisation of the network impacts on the extent of equipment and infor-
mation systems integration; in high volume, highly routinised networks, such
as automotive manufacturing, it is feasible to invest in high levels of technical
and systems integration between partners in the network. This confirms prior
research of De Toni and Nassimbeni (1995) who find that a firm’s ability to
plan the governance of its relationships with suppliers is closely related to the
stability and effectiveness of the supply network within which they operate.

Structural position in a supply network can impact on a firm’s power and influence
in the network (Burkhardt and Brass, 1990). Network level metrics that are indicative
of structural position include network centralisation, network density and network
complexity (Kim et al., 2011).

Building on the findings from the empirical research leading to the provision
of the supply network taxonomy, a conceptual model for the creation and
operation of supply networks is provided in Harland et al., (2004). Within
the conceptual model, structural aspects of creating supply networks include
partner selection and resource integration.

3.11 Supply System

Supply systems comprise networks of networks. Examples of supply systems include

complex confederal networks, such as the national health services of UK and Italy,
and global systems, such as the United Nations. It is unsurprising that, because of the
scale and complexity of supply systems as units of analysis, there has been very little
empirical research to date from the supply chain management community. However,
there are examples of case study research from the sub-field of humanitarian supply
chain management. For example, Cozzolino et al. (2012) provide a case study of
the United Nations World Food Programme. Primarily the study focuses on the
application of agile and lean principles in humanitarian logistics. However, they
illuminate some structural issues in discussing ‘humanitarian corridors’ in place to
facilitate prompt and effective distribution of food to the location in need of aid.
Oloruntoba and Gray (2006) represent what they call a typical humanitarian supply
54 3 Supply Structure

chain, which is in fact a complex supply system containing government donors,

international agencies, international NGOs, local NGOs in the aid recipient countries,
community based local organisations and partners and consumers i.e., aid recipients.

The Inter-Agency Procurement Working Group in the United Nations

comprised the heads of procurement of each UN organisation; they commis-
sioned empirical research to be conducted across a number of UN organisa-
tions to investigate the potential for e-procurement. The findings in Walker and
Harland (2008) concluded that, at that time, adoption of e-procurement across
the UN supply system would be to the detriment of less developed nations
which would conflict with UN policy. The extent of the digital divide between
developed and less developed nations was significant. Smaller organisations
in less developed nations would not be able to engage with e-procurement and
would therefore be excluded from gaining potential UN orders.

In practice, focus of government attention during the COVID-19 pandemic

necessarily had to consider supply at a supply system level. In Harland et al.
(2021), the complexities of supply decision-making within multi-level health-
care supply systems is examined. At a national level, governments internation-
ally were intervening in supply decisions in order to capture and secure supply
of critical healthcare supplies, such as personal protective equipment and venti-
lators. They were using their power and influence to stimulate expansion of
national supply markets as international borders closed and prevented their
existing supply routes from continuing. However, regional decision-makers
were attempting to secure critical supplies for their particular jurisdiction,
even to the detriment of neighbouring healthcare service providers in adjacent
regions. Local healthcare service providers, such as acute hospitals, were also
trying to secure supplies for their own organisations.

The findings and potential areas for more research relating to supply systems are
explored further in Chap. 4 where supply process is examined and in Chap. 5 where
the challenges of interconnectedness in supply are examined more deeply.

3.12 Supply Market

Supply markets comprise all available suppliers for categories of products and
services. In Harland (2021) the lack of knowledge of supply market capacity and
capability for critical supplies during the COVID-19 pandemic was discussed. Supply
3.12 Supply Market 55

chain management has paid limited attention to supply markets and instead has
focused research on organisations directly connected in supply relationships, chains
and networks. The sub-field of Purchasing and Supply Management has also paid
limited attention to supply markets. A possible reason for this is that buyers seldom
have to understand the whole supply market to be able to make a purchase deci-
sion. The ‘marvel of the market’ (Hayek, 1945) espouses that buyers and sellers can
connect relatively easily to form contracts without visibility and understanding of
the total market structure and operations. In practice, private sector buyers may send
enquiries to a small number of suppliers, asking for written quotations. In the public
sector, public procurement regulations may dictate that invitations to tender are adver-
tised. However, in both situations there is imperfect knowledge and communication
with all possible providers in a supply market at any given time.
Supply market analysis may be performed at a sector level, possibly by a trade
association, government department or industry group, to examine the structure of
the supply market in terms of goods and services provided. For example, analysis
of the energy market may represent the supply market as different categories of
energy—fossil fuels, nuclear, renewable etc.—and the percentages represented by
each category in the overall supply market. Powerful competitors in a market may
analyse the supply market by representing the major companies and their percentage
share of provision; for example, in the automotive supply market the split of market
share of Ford, General Motors, Toyota etc. provides a firm-based perspective of the
market.
Some large purchasing organisations, for example in defence procurement, use
sub-categories of suppliers within supply markets of ‘approved suppliers’. Suppliers
wishing to be able to tender for defence contracts may have to be added to the
approved suppliers list of those authorised and vetted as eligible to supply a govern-
ment department providing national security. Further sub-categories of ‘preferred
suppliers’ may be used. A smaller set of suppliers on the approved suppliers list
may be granted a special status of being preferred over other approved suppliers.
Preference may be awarded according to prior vendor rating of suppliers’ perfor-
mance in terms of quality, delivery speed and reliability, price and service. In defence
contracting, political interference in procurement may occur to support other agenda.
Also, there is widespread international corruption in defence procurement and pref-
erence may be awarded according to rebates offered. The complexities of supply
in these situations will be explored more deeply in Chap. 7 where supply policy is
explored, particularly relating to public policy and procurement.
Laws, public policies and regulations shape the structure of markets (Bain,
1956). The structure—conduct—performance paradigm espouses that market struc-
ture influences firms’ economic actions, or ‘conduct’ which in turn impacts their
performance (Bettis, 1981; Weiss, 1979). Competitive dynamics in supply markets
and the actions of stakeholder organisations, including suppliers and customers,
may also impact firm conduct and performance (Chen and Miller, 2015). Grover and
Dresner (2022) introduce the importance of political influence into the SCM sphere
by explaining how firms may leverage their political connections to influence market
56 3 Supply Structure

structures, with the intent of this improving their firm performance. These contin-
uous competitive dynamics in supply markets impact on the conduct of suppliers
in terms of their pricing and how they use their power; very little attention has
been paid to these competitive aspects of supply markets by supply chain manage-
ment researchers, although practitioners are acutely aware of these challenges. For
example, as discussed further in the final chapter on the future of supply chain
management, buying firms are competing to secure critical resources, such as chips
from Taiwan, and are anxiously observing the actions of the Chinese government
towards Taiwan currently.

3.13 Discussion on Supply Structure

To date there has been only limited empirical research in supply chain management
on supply structures, in part due to the practical challenges of accessing different
supply structures (Kim et al., 2011) and resourcing research to examine them. There
has been more research on smaller units of analysis of supply dyads and triads,
although much of this research has focused on infrastructural issues i.e., what is
happening within these structures. Unsurprisingly, the larger the unit of analysis of
supply structure, the less we know about them.
In discussing the origins and development of the concept of supply chain manage-
ment examined in Chap. 2, the view is expressed that the engineering and operations
management dominance of researchers has caused a focus on firm-based, manufac-
turing oriented research. Whilst the ambitions and sphere of identity of supply chain
management have been growing, as a field we still align with the theory of the firm.
Purchasing and supply management researchers have focused on the relationships
with suppliers, but still have made less progress on understanding supply markets.
Our understanding of supply bases and how firms make decisions to change the
structure of their supply bases has largely been influenced by industrial economics
thinking.
Most supply chain management researchers and practitioners accept supply
markets as a given, and make sourcing decisions based on available suppliers, prod-
ucts and prices. However, larger, more powerful buying organisations can engage
with supply markets and intervene to change the structure of those markets. For
example, Grover and Dresner (2022) explain how firms use political connections to
lobby and influence regulatory or policy change to their potential benefit. In Caldwell
et al., (2005) we show how governments can use public procurement to promote and
maintain competitive supply markets. Some of the opportunities for intervening at
the level of the supply market structure are explored further in Chap. 7 on supply
policy.
References 57

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Chapter 4
Supply Process

4.1 Introduction

This chapter focuses on research contributions to understanding supply chain

management through the processes, flows, roles and behaviours that occur within
supply structures. Operations strategy authors (e.g., Hayes and Wheelwright, 1984;
Hill, 1985) refer to these flows and supporting systems as ‘manufacturing infras-
tructure’. However, over time the language of business strategy has been adopted
within supply chain management. The two main schools of thought in business
strategy were, for some time, divided by those who perceived strategy as struc-
ture and content, originating from Chandler’s (1962) ‘visible hand’ and Ansoff
(1965), and those with more process-oriented, emergent perceptions of strategy,
aligned with the thinking of Mintzberg (1979). However, others, notably Miles et al.
(1978) and Galbraith and Nathanson (1978), conceptualise the linking of strategy,
structure and process with organizational performance, leading to recognition of
the value of ‘blended’ approaches to strategy (Chakravarthy and White, 2006).
Cooper et al. (1997) provide early conceptualisation of supply chain management as
comprising structures and processes. Logistics authors, in particular, have imported
this ‘strategy-structure-process-performance’ thinking (e.g., Rodrigues et al., 2004;
Nakano, 2015).
Firm-based supply chain management focuses on the actions of firms trying to
influence other firms in their supply chains. These actions include trying to integrate
processes in supply chains (Harland et al., 2007), manage risk across organisational
boundaries (Harland et al., 2003), outsource firms’ activities to other firms (Walker
et al., 2006), insource supply chain activities back to the firm or reshore back to within
national boundaries (Moretto et al., 2020), and improve operational performance
(Harland, 1997). A firm-based perspective has dominated supply chain management
and parallels development of the concept of strategic management, within which
firms strive for improved strategic positions over competitors (Harland, 2022).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 61

C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_4
62 4 Supply Process

Focusing more on tangible, operational performance, supply chain management

research has paid less attention to intangible perceptions of performance and their
impact on behaviour (Harland, 1996b). In this chapter research contributions relating
to softer, more people-oriented issues withing supply structures are examined.
Compared to firm-based supply chain management, network-based approaches
are more collaborative, involving shared practices across organisations in supply
chains, networks and systems of supply. In Chap. 5, interconnectedness is explored;
in this chapter connected processes and flows are the focus of attention.
Networking activities involve creating, operating and strategically improving
performance of the network (Harland et al., 1999, 2004; Johnsen et al., 1999).
Different actors in the network may take on different roles (Harland and Knight,
2001). Different behaviours are appropriate in different types of networks (Lamming
et al., 2000; Harland et al., 2001). Sets of competences are important to enable
networking activities (Harland and Knight, 2001; Knight et al., 2005; Harland
et al., 2021). Before considering research relating to processes, flows and roles
within supply structures, in the next section the conceptualisation of supply chain
management as processes, rather than structures, is discussed.

4.2 Conceptualising Supply Chain Management

as Processes

As discussed in the previous chapter, supply structures comprise connected nodes.

For the purposes of this text, the parts of the organisation involved in supply repre-
sent the nodes. The connections between the nodes represent the supply artefacts,
or things, that are exchanged between nodes and the supply processes involved. At
an operational level, nodes are connected by exchange of information, goods and
services, transportation and payment. The artefacts that are exchanged include infor-
mation (such as documents, emails, orders, receipts, invoices, invitations to tender,
performance evaluations), payment, and the materials/goods/services.
Central to operations management thinking is the input-process-output or trans-
formation framework (as described in Slack et al., 1995, p. 11). Input resources are
those materials and services that are transformed by the operational process; trans-
forming resources are those that are required to make the transformation happen
but are not themselves transformed into goods and services for sale. In this chapter
we focus on transformed resources i.e., those resources that flow through supply
structures, such as materials, information and, in service settings, customers. Trans-
forming resources are the assets that form supply structures, including facilities and
people involved in operational transformation and were the focus of Chap. 3. Trans-
formation processes include those processes dealing with sourcing inputs, opera-
tions planning and control and the associated information relating to transformation,
customer processes where customers are involved in service provision and logistics
processes relating to transformation of location, or distribution.
4.2 Conceptualising Supply Chain Management as Processes 63

Fig. 4.1 The purchasing process. Adapted from van Weele (2010) Purchasing and supply chain
management: analysis, strategy, planning and practice, 5th edition, Thomson Learning, London

From the buying organisation’s perspective, the sourcing process is performed

by the purchasing function that represents the bridge to connect to selling organisa-
tions (Ellram et al., 2020). From the selling organisation’s perspective, the sales and
marketing process represents the bridge to connect to the buying organisation. As
buyers and sellers are parties to the exchange relationship, these processes manage
the operational supply flows between the two organisations (Fig. 4.1).
The exchange might be a one-off occurrence or there might be multiple exchanges
between the two organisations over time. The entire spend portfolio of an organisation
includes direct and indirect purchases. Direct purchases are those that are transformed
resources, such as materials and components incorporated into products that are sold.
Indirect purchases are those resources required for the transformation process, but
not necessarily incorporated into products, such as capital equipment, information
systems and vehicle fleet.
Conceptualisation of the exchange process where buyers and sellers connect
to perform the operational commercial transaction is relatively straightforward
and unambiguous as it deals with tangible aspects of supply. However, the intan-
gible elements of supply processes give rise to various conceptualisations of what
surrounds the commercial exchange. Supply processes can be conceptualised as
relating to operations, management, strategy and policy, as shown in Fig. 4.2.
This leads to the following principle:
Principle 7: Supply is governed and conducted at four managerial levels of supply operations,
supply management, supply strategy and supply policy

Continuing the systems thinking approach of conceiving supply chain manage-

ment as hierarchical systems of supply, here research relating to supply processes is
discussed, relevant to the systems levels of supply dyads, supply triads, supply bases,
external supply chains, supply networks, supply systems and supply markets.
64 4 Supply Process

Fig. 4.2 Supply operations, management, strategy and policy

4.3 Dyadic Supply Processes

In the previous chapter dyadic supply relationships were examined as structures. The
Industrial Marketing and Purchasing (IMP) conceptualisation of dyadic interaction
is that actors, resources and activities (ARA) of organisations interact (Hakansson
and Johansson, 1992). They use specific terms for these interactions—actor ‘bonds’,
activity ‘links’ and resource ‘ties’, although other researchers use these terms differ-
ently. Notably, in his seminal paper Granovetter (1973) discusses the strength of
‘ties’ between people as relating to the amount of time, the emotional intensity, the
intimacy or mutual confiding and reciprocal services. Interaction between buying
and supplying organisations over time gives rise to longer-term adaptation and insti-
tutionalisation as bonds form between the actors, activities on both sides of the
relationship become linked and resources owned by each party become tied. In the
interaction model (Hakansson, 1982) short-and longer-term exchange occurs within
relationships influenced by an ‘atmosphere’ of closeness and expectations, power,
dependence and cooperation. The context, or environment, for these relationships
is comprised of the market structure, its dynamism and internationalisation, and the
physical position in the manufacturing channel and its social structure; these were
examined in the previous chapter on supply structure.
An adaptation of Hakansson’s (1982) interaction model is provided in Fig. 4.3.
The motivation to adapt this model is to orient it to supply chain management thinking
and to the previous chapter on supply structure.
This conceptualisation of interaction in dyadic relationships includes psycholog-
ical aspects of supply impacting on behaviour. Cognitive behaviour theory highlights
how expectations and perceptions of both parties to the relationship impact on their
behaviour.
4.3 Dyadic Supply Processes 65

Fig. 4.3 Supply interaction in dyadic relationships: Adapted from Hakansson, H. (1982)
International Marketing and Purchasing of Industrial Goods, Wiley, Chichester

In Harland (1996a) a mismatch tool was designed and used to explore gaps in
understanding between buyers and suppliers (Fig. 4.4).

Fig. 4.4 Mismatch tool exposing gaps in expectations and perceptions of performance
in supply relationships: Developed from Harland, C.M. (1996a) Supply chain management:
relationships, chains and networks, British Journal of Management, S63-S80, March
66 4 Supply Process

Empirical research reported in Harland (1996a) exposes that buyer and supplier
behaviours are impacted by their perceptions of expectations and performance,
rather than actual expectations and performance. First, there is potential for a
communications gap between what the supplier thinks the customer wants
and what the customer thinks they want. Different buying organisations have
different priorities regarding quality, delivery, service, price etc.; closer atten-
tion to understanding each individual customer’s requirements can help to
close this gap. Second, it is possible for another communications gap on what
the supplier perceives their performance is and what the customer thinks the
supplier performance is. Shared, agreed vendor rating methods and data can
help to close this gap. Third is the gap that causes customer satisfaction or
dissatisfaction; this is the gap between what the customer thinks they want and
what they think the supplier is giving them. In the research it is shown that
customers are not always right in their perception of supplier performance.
Bitner et al. (1985) shows that critical or recent incidents can skew their percep-
tions of performance in relationships. Fourth is the gap that determines what
suppliers are focused on improving—this is the gap between their perception
of what the customer wants and their perception of their own performance.
In this research in the automotive aftermarket, it transpires that sometimes
neither buyer nor supplier understand actual performance; both parties express
surprise that, on occasions, hard performance data reveals that suppliers are
performing even better than either party perceives.

Techniques and frameworks in service management have been developed to help

parties to relationships understand each other’s perceptions. See, for example, Para-
suraman et al. (1985, 1988) SERVQUAL, a technique for exposing and understanding
gaps in service relationships. It is not surprising that service management scholars,
from both marketing and operations management, have researched expectations and
perceptions, as services comprise more intangibles than manufactured products.
Governance of supply relationships can be contractual or relational. Poppo and
Zenger (2002) examine the substitutability or complementarity of both types of
governance from a strategic management perspective. This led, for some time, to
the existence of two streams of research, one arguing that they are substitutable
(e.g., Li et al., 2010), the other that they are complementary (e.g., Liu et al, 2009).
However, even those who advocate substitutability find that, in practice, relationships
oscillate between the two forms of governance (Huber et al., 2013). Whilst it is now
generally accepted that contractual and relational governance are complementary in
relationship management (Cao and Lumineau, 2015), more research is needed to
understand under what circumstances each form of governance is appropriate. The
topic of governance is explored more deeply in Chap. 8 on the future of supply chain
management.
Buy back and returns are commonly contracted for to facilitate reverse flows in
supply chain relationships (Huang et al., 2014). Revenue sharing arrangements can be
4.4 Triadic Supply Processes 67

made between manufacturers and retailers to incentivise reverse flows (Mafakheri

and Nasiri, 2013; Zhou and Ye, 2015). Some of the revenues may also be shared
with third party collectors engaged to increase the volume of returns (Weraikat et al.,
2016). Hybrid contracts within supply dyads are used to cover multiple features, such
as relating to sharing responsibility and recovery (Jacobs and Subramanian, 2012)
or incorporating buy back, returns and two-part tariff arrangements (Savaskan and
van Wassenhove, 2006).

4.4 Triadic Supply Processes

Most empirical research in supply has been conducted within firms and their dyadic
relationships; to date there has been only limited empirical research to help under-
stand how triadic relationships should be managed (Kataike et al., 2019). Effective
management of buyer–supplier relationships is important to combine and leverage
complementary resources in the parties (Najafi-Tavani et al., 2018); having three
parties involved in a triadic relationship potentially expands the scope for comple-
mentarity and sharing (Mitrega et al., 2017). Relationships between suppliers may
provide benefits, as well as relationships between firms and their suppliers (Durach
et al., 2020). However, when firms try to manage relationships with more than one
supplier, there may be competitive tensions as well as collaboration between the
parties (Wilhelm, 2011). There is a risk of knowledge spillover and opportunistic
behaviour when information, knowledge and expertise are shared across suppliers
(Ried et al., 2021). Effective management of triadic relationships requires balancing
competition and collaboration, knowing when to facilitate sharing of knowledge
between suppliers, and when to prevent it (Potter and Wilhelm, 2020).

In Patrucco et al. (2022), we find that the four different triad governance
structures—triangle, A-frame, D-frame and line—discussed in the previous
chapter as supply structures, are associated with different configurations of
relational view factors, i.e., management of complementary resources, invest-
ment in relationship specific assets and knowledge and information sharing
(Dyer et al., 2018). Furthermore, the empirical evidence shows that these rela-
tional view factors are deliberately managed by firms, in different ways in
different triadic structures. Choosing the appropriate governance structure is
shown to be based on experience or judgement, rather than any supply chain
management evidence-base. In each type of triad, different mechanisms are
designed to combine buyer and supplier resources, invest in the relationships
and share knowledge and information across the triad parties.

Dubois and Fredriksson (2008) discuss triadic sourcing as an alternative hybrid

form of sourcing to dual and multi-sourcing. The distinction they make is that, in
68 4 Supply Process

addition to there being 2 suppliers, as in dual-sourcing, cooperation and interde-

pendence between the competing suppliers within the triad may be encouraged. In
Heaslip and Kovacs (2019), understanding of how to use contractual and relational
governance is extended through examination of triads in humanitarian logistics.

4.5 Supply Base Processes

Earlier in this chapter supply relationship processes were examined, involving the
dyadic processes between a firm and a particular supplier. In this section, processes
relating to a whole or parts of the total supply base of an organisation are discussed.
Certainly, decisions made regarding a supply base impact on individual supply rela-
tionships, but supply base decisions are made at a higher systems level. They show
intention to make broader change across the supply base, rather than affect only one
supplier.
Monczka et al. (1993) provide evidence of the increasing importance of improving
firms’ supply bases to impact firm performance. They research how supply base
change might substantially improve overall supply base performance in terms of cost,
quality, the rate of new product introduction, delivery, product design and technology,
and other key performance areas which impact on firms’ competitive performance
and position. Their prior research in Monczka and Trent (1991) shows that, in order to
focus more attention on a smaller set of suppliers, firms actively reduce their supply
bases (discussed in more detail in the previous chapter on supply structure). However,
in Monczka et al. (1993) they find that, despite these supply base reductions, there
has been only limited improvement in supplier performance.
Improving supply base management relies on employing educated, qualified
people capable of dealing with global suppliers (Handfield and Nichols, 2004). They
focus on mainly behavioural and informational factors. They propose that trust,
communication, personal relationships with suppliers, and maintaining good rela-
tionships in hard economic times are all important. They also advise not to rely on
one single information system to fit all suppliers, but rather to ensure sharing of
accurate information and data definitions.
Dong et al. (2020) argue that developing the supply base with whom a firm has
direct connections (unlike members beyond the first tier in chains and networks) is a
more practical, achievable improvement activity. They find that developing research
and development intensity positively impacts firms’ financial performance. Handfield
and Nichols (2004) also promote working with the supply base to achieve early
engagement of suppliers in design.
Organisations make decisions about which suppliers within their supply base, or
outside their existing base in the wider supply market, they should use to source their
requirements for materials and services. Single sourcing is where a buying organisa-
tion decides to use one supplier; whilst clearly being risky to rely on one supplier with
no back-up in the case of supply disruption, there are reasons why single sourcing is
used. Larson and Kulchisky (1998) find that single sourcing, where successful, gives
4.6 Supply Chain Processes 69

rise to higher quality, lower total cost and stronger trust and cooperation in the buyer–
supplier relationship. Yu et al. (2009) differentiate between single sourcing and sole
sourcing; they define sole sourcing as where a firm sources from one supplier and
that is the only supplier in its supply base with capability to supply that item, whereas
single sourcing is placing all the requirement with one supplier but having another
supplier as back-up with capability to supply. The decision to switch from one single
source to another within the supply base may be taken according to perceptions of
purchase costs, switching costs and through negotiation across the two competing
suppliers (Wagner and Friedl, 2007). A common term for single sourcing an item
but dual sourcing capability is ‘parallel sourcing’ where two or more suppliers with
similar capabilities are concurrently sole-source suppliers for very similar compo-
nents. While using a sole source for a component, the assembler establishes parallel
sources to provide performance comparisons and competitive bidders for the next
model cycle (Richardson, 1993, p. 342). Zirpoli and Caputo (2002) describe parallel
sourcing as ‘controlled competition’.
Dual sourcing is where requirements are split between two suppliers. Optimising
the proportions of the split has been the focus of operations researchers within the
SCM field and involves factoring in their lead times as well as their relative purchase
and order costs (Lau and Zhao, 1994). Whilst deciding to use a smaller number
of suppliers for any given item will usually reduce costs, the increased risk and
realisation of disrupted supply may lead to lower customer service levels (Bichescu
and Fry, 2007).
Having declined in usage during times of supply base reduction and lean, multi-
sourcing increased in popularity in practice as knowledge and awareness of supply
chain risk and mitigation increased (Yu et al., 2009). However, there are some
widespread catastrophes that cause supply disruption across firms’ supply bases
and, indeed, across large portions of total supply markets; in these circumstances,
multi-sourcing may not protect a firm from disruption (Berger and Zeng, 2006).

4.6 Supply Chain Processes

Whilst in strategic management there was early interest in collaboration in supply

chains for strategic advantage (Jarillo and Stevenson, 1991), in the supply chain
management community focus on processes in external supply chains has largely
been relating to planning and control information systems and supply chain dynamics.
Information systems-based planning and control has focused on deterministic plan-
ning of materials requirements, where known and forecast customer orders are
blended to form a picture of current and future demand. Demand is ‘exploded’
through bills of materials, or recipes, to generate requirements of components
or ingredients, offsetting inventory levels and existing orders in the supply chain
(Landeghem and Vanmaele, 2002). Originating in the 1960s as Materials Require-
ments Planning (MRP) to integrate materials planning and control information within
manufacturing firms, it was extended to MRP II (Manufacturing Resource Planning)
70 4 Supply Process

to plan and schedule manufacturing operations as well as materials requirements.

Enterprise Resource Planning (ERP) was developed from MRPI and MRPII (Jacobs,
2007) and integrated these with computer integrated manufacturing. Today ERP is an
integrated suite of information system modules for business management. ERP has
also developed through ERPI, ERPII and ERPIII as web based and cloud technologies
have enabled an expanded, multi-organisational scope and role, integrating business
processes across organisations (Clegg and Wan, 2013). In addition to improving
systems integration, Sundtoft and Mouritsen (2013) describe ERP as a creator of
new connections and an innovator to enable new opportunities. However, they also
highlight that it might eliminate uniqueness and constrain creativity as tacit knowl-
edge and human generated ideas are suppressed. The philosophy and practicalities
of ERP are process oriented; ERP processes necessarily cut across organisational
boundaries, both within firms and between firms (Hong and Kim, 2002).
Large, powerful, supply chain leading firms that oblige members of their supply
chains to purchase and implement their chosen ERP platform have been shown
to be mature in their use of strategic sourcing, category management and supplier
relationship management (Huang and Handfield, 2015). However, Harland et al.
(2007) find that smaller businesses can become disenfranchised within supply chains
as they may not be able to afford the required investment in ERP; they become adrift
of ‘eLands’ or ever expanding ‘islands of automation’. This poses a potential risk for
larger organisations who may alienate sources of innovation in their supply chains.
The study of supply chain dynamics originates with the work of Forrester (1961)
and Burbidge (1961). Forrester (1961) examines the dynamics between a factory, a
warehouse, a distributor and retailers by simulating flows of goods, information and
delays in the chain. His effect—the Forrester Effect—(also known as the ‘bullwhip’
effect) is where real demand information from the end of a supply chain can be
distorted as it is interpreted, processed and passed up the supply chain. The distortion
is amplified the further a firm is from the source of demand i.e., the end customer.
Burbidge (1961) simulates the relationships between process flow rate, fluctuations
in demand and inventory variation and develops the “Law of Industrial Dynamics”
(Burbidge, 1984) as:
If demand for products is transmitted along a series of inventories using stock control
ordering, then the demand variation will increase with each transfer.

Central to the development of industrial dynamics in supply chains is the work of

Towill (1991). In Wikner et al. (1991) Towill’s team start to identify how to smooth out
the distortions in supply chains caused by stale information, batching and rounding
up lots and orders in supply chains, disturbances caused by machine breakdowns,
delays in making ordering decisions and delays in transmitting information in the
supply chain.
Broadly speaking, the industrial dynamics work considers ‘hard’ information
and its flows and distortions in supply chains. The explanations for these distortions
centre around demand volatility, ordering patterns and inventory volume and location
decisions. Supply dynamics are examined further in Chap. 5 on interconnectivity,
complexity and dynamics.
4.7 Supply Network Processes 71

4.7 Supply Network Processes

In his perspective of networks as processes, White (1992) first conceptualises

management as a continuing process of new and changing network connections in
order to extend and reinforce agency in networks in a constant struggle for control.
Control emerges from interaction within networks.
There are two different schools of thought evident relating to supply relationships,
chains and networks. These align with two schools of strategic management thinking.
Operations management and supply chain management scholars have tended to
align with the Chandlerian planning school of thought (Chandler, 1962, 1977). IMP
scholars have adopted a more Mintzbergian (Mintzberg, 1994, p. 222) set of princi-
ples by rejecting the idea that firms can formalise and plan networks, but rather only
cope within them. However, we provide evidence from a number of our empirical
research studies that find that, in certain circumstances, it is possible to take more of
a formal, planning approach within supply networks.

In 1995 a research project of engaged research was established between the

University of Bath Centre for Research in Strategic Purchasing and Supply
(CRiSPS) and NHS Supplies, an organisation formed in the National Health
Service in the UK in 1991 to supply the NHS (Harland, 1996b). The research
started as a 3-year project but continued for 15 years as a partnership between
CRiSPS and the NHS. The partnership engaged in coproduced research to take a
strategic perspective of supply for the NHS across a network of 419 trusts and 24
directly managed units, all providing acute, community, mental health, mental
handicap and ambulance services and other related service providers including
GPs, health centres, and the national blood service. The academic aim was to
investigate under what circumstances it was possible to intervene successfully
in supply network management by evaluating and changing supply network
structure, infrastructure (or process) and performance. The practitioner organ-
isation’s aim was to bring together disparate supply activities and decisions
across the NHS for each category of spend within the (then) £20 billion spend
portfolio comprising pharmaceuticals, medical equipment and consumables,
buildings and maintenance, food, laundry, clothing, agency staff, vehicle fleet,
energy and administration, to supply at better value for money all the goods
and services required for healthcare.
Building primarily on operations management thinking, a supply network
strategy process was designed and applied by the researchers working with
teams of practitioners in each category of spend. This process involved mass
education across the practice teams on state-of-the-art thinking on supply chain
72 4 Supply Process

management, then information gathering, analysis and strategy formulation

and implementation to change the way supply chains were structured, the
processes within them and, consequentially, their performance. At the time it
was estimated that approximately 25,000 suppliers supplied different parts of
the NHS.

The portfolio of coproduced research generated by this partnership included

supply process research on roles, networking activities and competencies.

Lamming et al. (2000) provide a conceptual model of nine supply networks’

networking activities: partner selection, resource integration, information
processing, knowledge capture, social coordination, risk and benefit sharing,
decision making, conflict resolution and motivation. Harland et al. (2001)
examine these empirically in automotive, fast-moving consumer goods,
electronics, pharmaceuticals and communication services supply networks,
involving key actors upstream and downstream of a focal firm. This is a rare
‘whole’ network study (Provan et al., 2007) where the unit of analysis for
the empirical research is beyond the dyad and triad, tracing back to third tier
suppliers upstream and customers downstream. It is found that two main dimen-
sions differentiated supply networks from each other—the degree of supply
network dynamism and the degree of focal firm influence in the network.
These two differentiating dimensions are used to form a 2 × 2 of archetypes of
supply network. Examining the specific networking activities from the concep-
tual model of supply networks (Lamming et al., 2000), it is found that firms in
these networks perform distinctly different activities (Fig. 4.5).
4.7 Supply Network Processes 73

Fig. 4.5 Activities in different types of supply networks. Adapted from Harland, C. M.
et al. (2001), A taxonomy of supply networks, Journal of Supply Chain Management 37, 4,
21–27

Supply network Types 1 and 2 are highly dynamic, constantly changing

networks; they are people-focused, exchanging and integrating human
resources and capturing and sharing knowledge in the network. In contrast,
Types 3 and 4 are relatively stable, routinised, typically high-volume supply
networks; they focus on equipment and system integration (e.g., integrated ERP
systems) and information processing through the supply network. In Types 2
and 4 focal firms have substantial influence in their networks, choosing who is
in their network and, to a degree, managing the network. Types 1 and 3 have
little influence in the network and must motivate, negotiate and compromise
with other actors, sharing risks and benefits; these firms can only cope in their
supply network, not manage them. Four archetypes of supply networks are
evident, within which firms either manage or cope, and focus on human or
equipment/system capabilities.

Until this point, published studies of supply network processes were largely of
firms with a high degree of influence in their network who were large manufac-
turers in relatively stable, routinised sectors that were more suitable to automation,
systematisation and systems integration, such as automotive manufacturing (e.g.,
Nishiguchi, 1994). Little was known about supply networks where firms networked
through people reaching out to motivate, negotiate and share. Historically, the oper-
ations and supply chain management community have advanced understanding
of systems integration in supply chains for improved efficiency of information
flows, increasing delivery speed through integrated MRP/ERP, shared design and
manufacturing through CADCAM, as examples.
74 4 Supply Process

This more managerial approach to supply networks is in contrast to the IMP

view that actors merely cope within networks, rather than manage them. Hakansson
and Johanson (1992) argue that the complexity and dynamics of interdependen-
cies between network actors make it impossible for any organisation to manage the
network. Hakansson and Snehota (1995) reinforce this argument by explaining that
individual organisations might develop and implement strategies for improving their
position in the network, thereby managing within the network but cannot manage
the network. Whilst accepting that this debate depends on how managing is defined,
opportunities to plan and control networks can be exploited by very powerful organ-
isations; certainly, the networks examined in Harland and Knight (2001) provide
evidence that the National Health Service in the UK does intervene in networks to plan
and control them. Supply chain management scholars have previously researched
powerful organisations such as Toyota (Womack et al., 1990) and Benetton (Mason-
Jones and Towill, 1999); both were sufficiently powerful to manage their supply
networks. However, it is recognised that network management might only be possible
in particular circumstances relating to the dynamics and complexity of the network
and the degree of connectedness or bonding between the actors (Harland and Knight,
2001). It also relies heavily on the competences of the managing organisation that
needs to be highly skilled and expert in conflict management, leadership, lobbying,
project management, strategic management and knowledge management.
One approach to the deliberate management of resources in relationships, chains
and networks is resource orchestration. Resource orchestration theory (ROT) is an
extension of the Resource Based View (RBV) of the firm, originating in the business
field of strategic management. Barney (1991) designates resources as strategic if
they are rare, valuable, not easily mobile, and non-substitutable. Helfat et al. (2009)
define resource orchestration as purposeful creation, extension or modification of
the resource base available to an organization, assembling them and orchestrating
them into strategic, unique configurations. Sirmon et al. (2007) propose three types
of orchestration activities—structuring the resource portfolio by acquiring strategic
resources, bundling resources together to build unique capabilities required, and
leveraging those capabilities through mobilising, coordinating and deploying them
to provide value to customers, gain competitive advantage, and create shareholder
wealth. These strategic resources can be acquired from immediate suppliers (Sirmon
et al., 2011) or further up in the supply chain or supply network (Hitt, 2011; Ketchen
et al., 2014).
SIrmon et al. (2011) extend ROT by considering breadth across the scope of the
firm, the life cycle at different stages of firm maturity, and depth across levels of the
firm. In so doing, they identify that resource orchestration may necessarily change
over time, as a firm matures and as interorganisational networks evolve and develop.
When considering firms’ life cycles, Jawahar and McLaughlin (2001) identify that a
more participatory style of management is required as firms mature, to motivate and
secure continued commitment from external stakeholders. Esper and Crook, (2014),
Wowak et al. (2016), Gong et al. (2018) and Fawcett et al. (2022) highlight the
importance of firms having capability to orchestrate the resources of other firms in
their supply chains and networks. Particular resources that firms try to orchestrate
4.8 Supply System Processes 75

in their supply chains and networks include engineering capability (Gong et al.,
2018), information systems (Miao et al., 2017), and joint R&D (Carnes et al., 2017,
Andersén, 2021).
It is not the resources themselves that give rise to sustainable competitive advan-
tage, but rather how these resources are structured, bundled and leveraged (Hitt, 2011;
Sirmon et al., 2011). Resource structuring is collecting and acquiring resources,
bundling is grouping together resources to create capabilities required for specific
activities, and leveraging is exploiting resources to deliver value for customers and
wealth for organisation owners (Sirmon et al., 2007). Recent studies examine how
resource orchestration improves delivery of innovation (Carnes et al., 2017; Andersén
and Ljungkvist, 2021; Esper and Crook, 2014).
To be effective, resource orchestration requires managerial capabilities to coor-
dinate resources of network partners to achieve the collective network outcome
(Provan et al., 2007). Network orchestration requires different managerial capabili-
ties to create, coordinate, integrate, reconfigure and transform resources, and lead and
manage across partners (Möller et al., 2002). These managerial capabilities may need
to differ according to the relative size of network actors, network structure, location
of power, and the nature of the collective outcome. For example, a supplier-driven
network aiming for cost efficiency would require different orchestration capabilities
compared to a network fostering innovation, which would require a more complex
set of capabilities (Möller et al., 2002).

4.8 Supply System Processes

Supply systems are complex networks of networks, connected to form a confederal

system. Examples of supply systems include the National Health Service of England
(NHS), the United Nations and professional and trade associations working for and on
behalf of their association members. Supply may be governed across the system by a
centralised organisation with responsibility for leading on supply, such as the former
NHS Purchasing and Supply Agency. Centralised bodies may have the authority to
perform supply decision making and create supply arrangements for and on behalf of
the supply system. In Italy, CONSIP is a central purchasing body set up by the Italian
Ministry of Economy and Finance for the rationalisation of public administration
purchases through, for example, framework agreements and an e-marketplace for
public administration organisations to use. In other circumstances, such as in the
United Nations Inter Agency Procurement Working Group, procurement leads for
each UN agency regularly meet to share knowledge and discuss procurement policies.
Supply systems contain supply networks of connected supply nodes. Connec-
tions across these networks may be through governance, policy formulation and
implementation but also there may be connections through collaboration across the
supply networks. For example, collaborative procurement is a feature of many supply
systems where different agencies collaborate to gain benefits of economies of scope
and scale (Rutkowski et al., 2022). These benefits include better prices and terms,
76 4 Supply Process

improved quality and reduced transaction costs (Essig, 2000; Nollet and Beaulieu,
2003; 2005; Schotanus and Telgen, 2007). In the public sector, collaborative public
procurement is a form of horizontal collaboration.

In Walker et al. (2013) we take a relational view perspective to examine

barriers to and enablers of collaborative procurement in the public sector.
The empirical research shows that commitment of collaboration partners and
standardisation of routines and procedures are important within collaborative
arrangements. Also, top management support and appropriate structures for
governing the collaboration are found to enable good collaboration within the
supply system. Cooperation, communication and knowledge sharing are key.
However, conflicting local policies and differing priorities of collaboration
partners impede success of collaboration. The research also provides guidance
for policy makers to consider establishing knowledge sharing networks across
collaborating partners, such as PIANOo in the Netherlands.

4.9 Supply Market Processes

Most supply transactions are not conducted through engagement with a supply market
or even with any great degree of understanding about the supply market, its structure,
concentration and dynamics. Most transactions occur with existing suppliers known
to the buying organisation, or those who are on an approved supplier list. However,
when firms are involved in sourcing for an innovative product or service, they may
need to find out more about the supply market. Open innovation (Chesbrough, 2003)
involves new forms of sourcing processes as firms reach out to find new suppliers to
engage with (Bogers et al., 2018).
Gathering supply market intelligence is an essential role within purchasing and
supply (Handfield, 2006). Being able to gather, analyse and leverage appropriate
information from the supply market provides a vital part of a firm’s knowledge
management and how it uses that knowledge to improve performance (Yang, 2010).
Absorptive capacity is a firm’s ability to scan, absorb and use effectively knowledge
gained from activities such as supply market analysis (Tu et al., 2006).
Supply market intelligence and analysis includes understanding how a market
works, the direction in which a market is going, competition and concentration in
the market, capacity and capability in the market, key suppliers and their locations,
potential for supplier development, and sustainability performance. Supply market
analysis also helps to manage risk by identifying and analysing how favourable the
supply market is to buyers compared with suppliers, and the probability of supply
market failure.
4.10 Conclusions 77

In Caldwell et al. (2005) we examine how analysis of some supply markets

reveal high concentration with a small number of suppliers dominating the
market. In order to encourage innovation and reduce risk of disruption
through supply failure, public procurement encouraged more competitive
supply markets to develop through engaging with a greater number of suppliers.
One method to encourage greater competition is to break demand down into
smaller lot sizes, enabling firms with smaller capacity to engage in public
contracts.

The term ‘crowdsourcing’ was coined by Howe (2006) to refer to organisations

making an open call to a broad network of potential providers, then incorporating
their contributions into products and services for sale. Crowdsourcing is the act of
outsourcing to a ‘crowd’ (Afuah and Tucci, 2012). Applications of crowdsourcing
include sourcing new product ideas (Bayus, 2013), last mile logistics (Castillo et al.,
2018; 2022), sourcing labour in retailing (Ta et al., 2021), analysis of geological
data (Brabham, 2008) and tackling complex R&D challenges set by large corpora-
tions such as Boeing, Dupont and Proctor and Gamble (Howe, 2006). The specific
purpose of crowdsourcing as a commercial sourcing model differentiates it from
open sourcing, which is where free access to source code, for example, is provided
for anyone to improve and the improved outputs are distributed free of charge.

4.10 Conclusions

Categorising research on supply processes using a systems hierarchy is an over-

simplification; not all research units of analysis can easily be categorised as existing
at a single systems level. However, the justification for using this systems level
categorisation in this text is to try to provide definitional clarity by highlighting that
research units of analysis for supply processes should be more explicitly stated.
What is clear through taking this systems level perspective is a perpetuation of
different perspectives highlighted in Chap. 2. Purchasing and supply management
researchers have focused particularly on supply processes in dyadic relationships
and supply bases. Materials planning and control research has largely been at the
level of the external supply chain. More strategic, holistic researchers have been
interested in supply processes in networks. Researchers in public procurement and
humanitarian aid have necessarily dealt with systems of supply. However, there is
still little empirical research in the supply chain management community on supply
markets and new innovations around crowd sourcing and open innovation.
78 4 Supply Process

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 Part II
Challenges
Chapter 5
Interconnectedness, Complexity
and Dynamics in Supply

5.1 Introduction

As discussed in Chaps. 2, 3 and 4, traditional supply chain management thinking has

focused on firms’ connections to other firms upstream from them—their suppliers and
their suppliers’ suppliers etc.—and downstream—their distributors and customers,
customers’ customers etc. (Harland, 1996a). Chapter 4 examines research relating to
the flows and processes between firms in supply chains; research on these connections
has traditionally centred on operational transactions involving materials, information
and finance. These tangible flows and processes have enabled researchers and prac-
titioners to trace flows back up through chains of supply by following the money,
orders and deliveries. Themes of supply chain integration and supply chain dynamics
focus on improvement of the supply chain as a system, but to date have not dealt
sufficiently and explicitly with the complexity and dynamics of interaction with other
chains, networks and systems.
Empirical research in supply chain management has largely focused on firms’
direct connectedness in their immediate dyadic and triadic relationships (Patrucco
et al., 2022). There is a significant practical issue of gaining access to perform research
beyond dyads and triads and facilitating the scale of supply network research (Carter
et al., 2015a, b). Cooperation of suppliers in research is required for them to share
knowledge on their suppliers and facilitate access to them. Once these sub-suppliers
are committed to engage in the research, they also have to facilitate access, and so on
along the connected supply chain. The scale of empirical research in supply networks
is costly in terms of research resources and time; it took over 18 months in some of
our empirical research in supply networks to secure access to start the research (e.g.,
Harland et al., 2001). In addition, most empirical research to date has gathered data
on materials and information connections between firms, rather than consider the
supply chain more holistically as including services provided by other companies
to support the primary transaction flows, as proposed by Carter et al., (2015a, b).
Beyond these connected supply chains and networks, realisation of impacts of crises,

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 87

C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_5
88 5 Interconnectedness, Complexity and Dynamics in Supply

such as natural disasters, wars, pandemics and increasing cost of living, has caused
increasing recognition of ‘interconnectedness’ across supply chains and networks.
This interconnectedness is in supply systems nationally and globally (Harland, 2021).
For example, increasing cost of fertilisers and pesticides has impacted on wheat
supply that, when combined with problems in wheat supply caused by the war in
Ukraine has resulted in rising costs of food globally. Restrictions of movement of
people during COVID-19 and the closure of international borders prevented smooth
supply of goods and services in many global supply chains, causing a knock-on
impact to other supply chains. Nexus suppliers that serve many different sectors may
not be visible until crises reveal their key positions interconnecting many supply
networks. Recognition of interconnectedness and realisation of its impact typically
occurs when supply is disrupted and supply market capacity becomes restricted.
As the field of supply chain management has developed, empirical research has
started to reach beyond data centred on a focal manufacturing organisation to consider
broader systems of supply spanning the public and private sectors (e.g., Harland et al.,
2019), and humanitarian aid supply systems (e.g., Sabri et al., 2019). It is difficult to
define the boundary of these larger units of analysis for research. To research supply
networks and systems often necessitates conceptualisation of interconnectedness,
complexity and dynamics in a more expansive way than historically the tradition of
supply chain management research has conceived.
A related expansion of thinking in supply chain management is occur-
ring in our need for more and different theories to understand these larger,
more complex systems (Tate et al., 2022). For a long time, research in
supply chain management was largely atheoretical, then researchers began to
borrow theories, predominantly focusing on Transaction Cost Economics (TCE)
and Resource Based View of the firm (RBV). More recently, the need for
more theories and for theory building within the field has been recognised
(Pagell et al., 2022). Dealing with these larger, more complex systems of
supply requires theories dealing with multiple levels (Carter et al., 2015a, b).
Attempts are being made to stretch the use of theories from microeconomics, origi-
nally based on the theory of the firm, to larger systems, although it is not yet clear how
fit for purpose firm-based theories are to help explain interconnectedness, complexity
and dynamics of larger supply systems. Recently, theories such as systems theory
and within that, complex adaptive systems theory, are being imported into supply
chain management. Systems theory supports explanations of interconnectedness and
control between hierarchical levels in supply systems (Harland and Roehrich, 2022).
Complex adaptive systems theory is being used to explain emergence and the organic
nature of complex supply systems (Harland, 2021).
Styles of leadership and governance in complex supply systems look very different
to those for traditional, firm-based supply chain management (Walker and Harland,
2008; Harland, 2021). However, relational governance has only recently been
researched beyond dyadic and triadic relationships, and currently little is known
about how to govern supply networks and systems. There are also political, philo-
sophical and economic debates about whether supply markets should be interfered
with and subjected to governance. Beyond anti-trust legislation, governments in
5.2 Connectedness and Integration in Supply Chain Management 89

developed economies have shown reluctance to interfere with free market mecha-
nisms. However, philosophy and economics were quickly discarded by politicians
who leapt in to exert nationalistic and regional political control over supply chains
and supply markets during the COVID-19 pandemic.
This chapter considers interconnectedness and the complexity of dynamically
changing supply networks, systems and markets. Contemporary debates on how
supply chain management theory and practice should embrace interconnectedness
and complexity are examined. Less common in these debates is the consideration
of how leadership and governance of supply might need to be different to that used
by firms in managing tangible flows in connected supply chains. Conventional, hier-
archical decision making may be appropriate where individual firms are able to
exert power to manage their supply chains. Networks and interconnected systems of
supply, such as are common in public services, healthcare and humanitarian aid, are
routinely involved in developing and using different styles of governance. Certainly,
some interconnected complex systems such as military defence may continue to use
hierarchical governance as long as money and power allows individual actors to
dictate to others. But many other interconnected systems do not exhibit centralised
control in this way.
This chapter builds on our understanding of connectedness and integration within
supply chain management as the current state of the art to then consider interconnect-
edness in supply and the associated complexity and dynamics. Finally, the implica-
tions of interconnectedness on governance are examined. In Chap. 8 on the future of
supply chain management we explore possible futures for how our field might develop
in research and practice to cope with more complex, interconnected situations.

5.2 Connectedness and Integration in Supply Chain

Management

In Chap. 2, the development of the concept of supply chain management was traced
chronologically from its inception when Oliver and Webber (1982) first used the term.
In addition, earlier roots in materials management, purchasing and supply manage-
ment, logistics and channel management were examined to understand the devel-
opment of what we now know as supply chain management. The concept focused
on connectedness of functions, or departments, within firms in the internal supply
chain, or connectedness of firms directly involved in adding value as materials,
information and finance flowed through organisations en route to a final customer
(Harland, 1996a). Supply chain management was conceived as management of
directly connected functions and organisations.
Pragmatically, empirical research in supply chain management has examined
firms and their immediate dyadic relationships with suppliers, and sometimes three-
way, or triadic relationships including another supplier. There have been some more
recent attempts to study and conceptualise supply networks as structures (examined
90 5 Interconnectedness, Complexity and Dynamics in Supply

in Chap. 3) and processes (examined in Chap. 4). The main purpose of supply chain
management research to date has, largely, been to understand, improve and leverage
these connections between firms to increase economic performance.
Often implicitly, the connections being studied and conceptualised in supply chain
management research are materials, information, finance and, ultimately, goods and
services being distributed to customers. The focus has, therefore, been on connecting
operations that transform input resources to outputs and move them to ultimate
consumers who pay with the only real currency of the supply chain (Harland, 1996a).
Other connected organisations upstream receive portions of end customers’ payments
as transactions are made for component materials and services provided by upstream
suppliers. Improving this direct connectedness in supply chains is more commonly
termed ‘supply chain integration’.
Supply chain integration is at the core of supply chain management. Simchi-
Levi et al., (2000) define supply chain management as the integration of suppliers,
manufacturers, warehouses etc. to be more efficient and effective at delivering mate-
rials, products and services. Effective information sharing in supply chains and the
associated systems and technologies to achieve this have also been central to the
conceptualisation of supply chain integration (Gunasekaran and Ngai, 2004). Over
and above the information shared relating to transactions (orders, deliveries, invoices,
payments etc.), the most common types of information shared between connected
firms in supply chains include demand forecasts (Mishra et al., 2009), information
on inventories and their locations, operations capacity (Lee and Whang, 2000) and
sharing of technical and administrative data in Electronic Data Interchange (EDI)
(Sahin and Robinson, 2002). Sharing information additional to transactional data
is intended to enable connected supply chain members to plan and control their
operations more efficiently.
Bagchi et al., (2005) emphasise that supply chain integration could go beyond
information sharing and transactional flows by including collaboration on R&D,
inventory management and supply chain design. Supply chain collaboration can be
more strategic as directly connected members of supply chains form shared goals,
make joint decisions, exchange knowledge and align incentives (Soosay and Hyland,
2015). However, in connected supply chains, it is common that a single organisation
coordinates this; for example, in reverse logistics, the manufacturer often leads the
coordination and supply chain collaboration (Guo et al., 2017).
Underpinning supply chain management and supply chain integration is a concep-
tualisation of connected firms in a supply chain joining forces to form a closed unit
to perform better and compete more strategically and effectively against other supply
chains (Christopher, 1992; Thorelli, 1986). These strategic, performance driven moti-
vations often drive the efforts on supply chain integration as empirical evidence
supports the relationship between supply chain integration and performance (e.g.,
Frohlich and Westbrook, 2001; Vickery et al., 2003).
The three main governance mechanisms for how supply chain integration can be
achieved, and how connected organisations might be controlled, include acquisition
and ownership, centralised coordination by a powerful member of the chain, and
5.3 Interconnectedness, Dynamics and Complexity in Supply 91

shared governance across the members of the supply chain. Acquisition and owner-
ship were pursued as corporate giants sought to take direct control over their upstream
supply chains. Woollen clothing manufacturers acquired sheep farms, newspapers
acquired forests, timber mills and paper manufacturing, and automotive manufac-
turers took over paint suppliers. However, this vertical integration trend reversed
as these large-scale investments proved to be too risky and fraught with prob-
lems of supply chain capacity imbalances. Harland (1996a) highlights the reverse
trend towards vertical disintegration, replacing ownership and direct control with
relationships and other forms of supply chain integration and coordination.
Contemporary understanding and conceptualisation of supply chain management
extends beyond the directly connected members of an integrated supply chain of
materials, information and financial flows to include other involved organisations,
such as service providers who enable the operation of supply chains (Carter et al.,
2015a, b). In addition to being connected to these other providers of support, it
is also recognised that connections are made between supply chains and networks
in supply systems and markets (Harland, 2021). In the next section this is termed
‘interconnectedness’.

5.3 Interconnectedness, Dynamics and Complexity

in Supply

Interconnectedness, dynamics and complexity in supply are difficult to unravel and

treat as individual topics as they are woven together in supply systems and markets.
However, an attempt to examine research relating to each theme is made here, before
treating them as interwoven phenomena.

5.3.1 Interconnectedness in Supply

From a micro economic, firm-based perspective, focal firms can attempt to understand
and manage beyond their directly connected supply chains and networks that deal
with operational transformation of input resources into product and service outputs.
Carter et al., (2015a, b) conceptualise the supply chain as including a physical and
support supply chain; the support supply chain includes organisations not directly
involved in the physical flows transforming input resources into final products. The
support supply chain is vital to enable those in the physical chain to function e.g.,
financial institutions enable cashflow and financial transactions to fund the phys-
ical chain operations. Whilst enabling consideration of activities and organisations
outside the boundary of the physical supply chain and network, these support supply
chains do not necessarily imply interconnectedness. For the purposes of this chapter,
interconnectedness is used here to provide understanding of how supply chains and
92 5 Interconnectedness, Complexity and Dynamics in Supply

networks are part of more complex nets including other competing, but possibly
collaborating, supply chains and networks. Interconnectedness is used to imply some
sense of shared intentions, impacts and recognised knock-on effects of one supply
chain’s actions on another.
Where members of supply networks are highly interconnected, they may develop
a shared commitment to the adoption of environmental and social practices (Fontana
and Egels-Zandén, 2019; Vurro et al., 2009). Supply chain interconnectedness has
been positively linked to the achievement of collective outcomes, through the greater
ability to develop common norms (Roberts, 2003) and to collaborate across members
of the supply structure (Bellamy et al., 2020).
In complex supply chains, clustering (the forming of loosely connected sub-groups
of suppliers, Pathak et al., 2014) may be important to help achieve collective outcomes
(Lu and Shang, 2017) although there is little empirical evidence to support this to
date (Gualandris et al., 2021). The most common conceptualisation of supply inter-
connectedness is supply chain density (Gualandris et al, 2021); supply chain density
refers to the number of supply chain nodes that are closely clustered geographi-
cally (Craighead et al., 2007). Supply chain density has been positively associated
with supply chain outcomes ((Carnovale and Yeniyurt, 2015) and supply chain trust
(Dahlmann and Roehrich, 2019). Greater supply chain density can give rise to norma-
tive dynamics between collaborating members of supply chains, impacting on how
they work together to improve their chains (Fontana and Egels-Zandén, 2019).
Ivanov and Dolgui, (2020) propose that we need to understand the complexities
of what they term ‘intertwined supply networks’ as very few supply networks are
wholly independent with no connections to other supply networks. During the process
of tracing back supply chains to create maps of a supply network, typically it is
not questioned if any of the nodes in the network are connected to other, possibly
competing, supply networks. Upstream suppliers who are not first tier to a focal
firm, or recognised as a strategic supplier by them, may indeed potentially be very
important (Mena et al., 2013). Yan et al., (2015) termed these upstream suppliers who
potentially could have a strategic impact on a focal firm ‘nexus suppliers’. Nexus
suppliers become visible and critical usually at a time of scarcity and limited supply;
i.e., it may not be recognised that they are nexus suppliers until a problem arises.
It is also the case that, historically, supply chain management practice and research
has focused on firm-based decision making. The domain and boundaries of supply
chain management thinking have been limited to the extent of influence that firms’
executive decision making might have. There has been little consideration until
recently of the influence and interference of governments and society. Corporate
social responsibility, sustainability and social media have come to the fore of research
and practice, effectively increasing the importance of interconnectivity of firms, their
supply chains and networks and wider society, sometimes influenced by government
policy. Harland et al., (2021) report good practice of suppliers repurposing their
manufacturing facilities during the COVID-19 pandemic to produce Personal Protec-
tive Equipment (PPE), ventilators and hand sanitising gel for societal good, but also
governments sequestering these items illegally from airport runways to prevent their
legal export to other countries during the crisis.
5.3 Interconnectedness, Dynamics and Complexity in Supply 93

The COVID-19 pandemic accentuated the interconnectedness of suppliers

within supply markets. Harland (2021) observed that prior to the shortages
experienced during COVID-19, most buyers did not need to have a compre-
hensive, detailed understanding of the supply markets they purchased from. In
practice, private sector buyers made enquiries of a small number of approved,
potential suppliers and placed orders according to prior vendor ratings, quota-
tions and supplier relationship management strategies. However, as demand
increased and supply shrank in some markets, many industrial and consumer
buyers found that prices were hiked, fakes and poor-quality items quickly
appeared, and rivalry between buyers increased. In critical supply markets,
governments and large firms scrambled to find out supply market capacity,
who the main suppliers were, their relative shares of the market, and possible
alternative sources. This emergency action was exacerbated by the closure of
international borders.

In practice, government policy, law and regulation have always impacted on supply
chain management and affected interconnectedness through anti-trust and monopo-
lies and mergers intervention, industrial policy and public procurement. These themes
will be examined in more detail in Chap. 7 where supply policy is examined.
Supply chain management as a field has been quite negligent to date in terms of
the limited extent of research, practice and teaching relating to supply markets and
interconnectedness of firms within markets. Recent trends of open innovation (Ches-
brough, 2020) and crowd sourcing (Estelles et al., 2012) have expanded thinking and
interest in how buyers might connect to firms with new, innovative ideas. Innovation
exploration, rather than just exploitation, has increased the potential for supply chain
managers to explore supply markets and seek out nascent, new actors. Expanding
sourcing ambition to find not just suppliers, but whole networks of connections that
come with those suppliers, is increasingly common in innovative sourcing for smart
city projects, for example.
Whilst it is rarely featured in supply chain management texts and courses, under-
standing supply markets is vitally important to strategic supply chain management.
Prior to connecting, through transacting with suppliers, buyers may assess suppliers’
capabilities, reputation and credibility through seeking references, using reference
agencies and visiting suppliers. Supply market analysis is not simply understanding a
snapshot of the market today; it includes understanding the likely direction of travel,
be it growth or decline, and how significant barriers to others entering the market are.
Large, powerful buying firms can develop supply markets; governments can invest in
and promote growth of strategic supply markets for the future. Van Weele’s (1994)
categorisation of supply market research as macroeconomic (e.g., understanding
global markets for scarce resources), mesoeconomic (e.g., relative size of supply
markets nationally) and microeconomic (e.g., firms analysing potential suppliers for
a specific product) helps us appreciate what is meant by the term ‘the supply market’.
94 5 Interconnectedness, Complexity and Dynamics in Supply

In Chaps. 3 and 4 we define supply markets and their boundaries according to the
domain of interest held by the entity posing a question about supply.
Related to this interconnectedness within supply markets is ‘factor market rivalry’
(FMR) (Markman et al., 2009), a theory of competition over positions of any required
resources, be they materials, finance, products, labour etc. In discussing FMR rela-
tive to supply chain management, Ralston et al., (2022) define it as “the upstream
competition for supply chain resources”. Supply may be limited when an upstream
supplier receives simultaneous demands for increased supply from different supply
chains buying from it; whilst not recognised as a strategic supplier, or even as a
supplier of a critical material or service, this limit on supply can constrain down-
stream operations (Ellram et al., 2013). Hilend et al., (2023) identify the increased
focus on scarce natural resources and illicit activity in supply chains to secure them.

5.3.2 Dynamics in Supply

Introduced in Chap. 4, the original work on industrial dynamics of Forrester (1961)

and Burbidge (1961) underpinned the development of supply chain dynamics
thinking and research. Forrester (1961) simulated flows within a production and
distribution system containing echelons of a factory, a warehouse, a distributor
and retailers. His simulation included flows of goods, information and delays. The
Forrester Effect (also termed the Bullwhip Effect) is where real demand information
from lower echelons in a supply chain can be distorted as demand is interpreted,
processed, aggregated and communicated to successive upstream supply echelons.
The distortion from original demand is increasingly amplified further up the supply
chain. At the same time as Forrester, Burbidge (1961) proposed that as demand is
transmitted along a series of inventories in a production process, demand variation
increases with each successive transfer. Burbidge (1984) later called this the “Law
of Industrial Dynamics”. Towill (1991) applied the principles of industrial dynamics
to supply chains of suppliers, manufacturers, distributors and customers.
Traditionally, supply chain dynamics have taken a hard system, engineering
perspective, to manage disturbances in supply chains from tangible factors, for
example, machine breakdowns, lags in transmission of information, aggregating
orders and inventory replenishment systems (Towill, 1992). However, more recently
supply chain dynamics of environmental practices have included consideration of
how environmental practice is diffused from customers to their suppliers and so on
in supply chains (Hall, 2000).
Dynamics in supply are evident at larger systems levels, although traditional
supply chain management has not made substantial contribution to our understanding
at these levels. For example, in agriculture whilst biological research has advanced,
combined with government intervention through supporting capital investment in
the sector, both these developments worked to reduce any biological constraints on
food production. However, simultaneous additional government incentives offered
in agriculture constrained motivations of farmers to produce more (Nerlove, 1979).
5.3 Interconnectedness, Dynamics and Complexity in Supply 95

Whilst the general and theoretical study of dynamics of supply and demand in markets
are the domain of economists, there is an overlap with the field of supply chain
management in Nerlove’s agricultural problem; the aggregate of individual farmers’
responses to these external market level forces caused a dynamic complexity to the
interconnected food production supply systems.
Supply chain dynamics research of connected firms’ behaviour in food supply
chains provides evidence of the bullwhip effect; for example, supplier orders two
echelons upstream from Electronic Point of Sale (EPOS) data at retailers varied 10
times more than the EPOS data; also the distortion in automotive supply chains was
twice that in suppliers just one echelon upstream (Disney et al., 2004). However, it
is known that promotional campaigns offering incentives, for example at the time
of religious festivals, cause bullwhip dynamics in supply chains and this leads to
shortages of supply that impact on other supply chains and networks in the system
(Rahman et al., 2020). These dynamic effects at higher system levels have received
less research attention in supply chain management.

5.3.3 Complexity in Supply

Complexity in supply chains and networks may be classified as structural complexity

and dynamic, or operational, complexity (Bode and Wagner, 2015). Traditionally,
increasing supply chain complexity has been discussed in relation to logistics, supply
bases, longer supply chains and geographically spread supply networks, as examples
(Manuj and Sahin, 2011). The sheer number of organisations in a supply structure can
give rise to complexity and impede analysis and coordinated risk management (Bode
and Wagner, 2015). Operations and supply chains are increasingly exposed to global
risks of constant, non-linear disruptions. Supply chain risk managers must navigate
a plethora of paradoxes and evaluate trade-offs, often resisted by stakeholders who
perceive themselves as being disadvantaged.
In increasingly complex supply systems, heterogeneity of network actors pursuing
a widening range of objectives may impede speed and effectiveness of learning across
organisational boundaries. This is particularly the case where supply systems span the
public–private interface. Unlike in a completely private sector owned supply network,
there is often no one, central, powerful board with executive power over other organ-
isations in the same group of companies. In supply systems involving public actors,
learning often occurs after the fact, for example when an audit organisation exposes
lack of coordinated action across various government departments, increasing repu-
tational and political risk for the government organisations involved. Governance in
complex supply systems may be decentralised and fragmented, impeding learning
across organisational boundaries (Harland et al., 2021).
Increasing complexity in supply increases risk and vulnerability (Craighead et al.,
2007), in part because practically it is difficult to gain visibility in complex supply
networks and systems (Wu and Pagell, 2011). Bozarth et al., (2009) classify supply
chain complexity variables as those relating to upstream, those relating to within
96 5 Interconnectedness, Complexity and Dynamics in Supply

the manufacturer and those relating to downstream factors. Drivers of supply chain
complexity include the number of supplier relationships to be managed, how different
those suppliers are, delivery lead time and reliability of suppliers, the extent of
global sourcing and the level of interrelatedness between suppliers (Caridi et al.,
2010). Bozarth et al., (2009) identify that complexity can be classified into factors
associated with complexity of details, such as product complexity, and dynamic
complexity, such as arising between members of supply chains.
Complexity and dynamics in supply arises as actors and other variables within
supply systems interact with each other and are interdependent on each other.
Connectedness and interconnectedness give rise to complexity and dynamics, in
addition to the contextual environment within which a supply system operates.
Research areas that SCM academics have been moving into more recently, such
as environmental and social issues, are laden with more complexity and dynamics
than traditional firm based SCM research has addressed. Environmental and social
issues are intertwined and often involve routine engagement with stakeholders, such
as governments and NGOs (Pagell and Wu, 2009).
Recognition that simple linear structures of supply chains of connected relation-
ships that have previously been studied in SCM do not represent the more complex
reality, has been receiving SCM research attention from early in this millennium (e.g.,
Choi et al., 2001; Surana et al., 2005; Nair et al., 2009). Systems thinking, systems
theory (Harland and Roehrich, 2022), complex systems, complex adaptive systems
theory and chaos theory (Dooley, 2022) have all gained increased research atten-
tion by SCM scholars. Whilst systems dynamics in supply chains received earlier
recognition (e.g., Towill, 1991) it was not until this millennium that more complex,
interactive, interdependent behaviours and dynamics within larger systems of supply
were considered (Choi et al., 2001). For example, Syntetos et al., (2018) examine
how human interference through judgement may increase complexity of supply chain
dynamics, increasing the number of variables to be considered when trying to smooth
or dampen amplification of deviations from demand, or noise in the supply chain
system.

5.4 Governance of Interconnected Supply Systems

In this section, we reflect on the limited state of knowledge on governance in supply

to date, revisiting some of the themes from research examined in Chap. 4. However,
it is in Chap. 8 on the future of supply chain management that governance for our
interconnected, complex and dynamically changing future is explored in more detail.
Operations and supply chain management has largely espoused a normative
and practical approach to supply, providing managerial guidance on how supply
chains and networks might be managed strategically and operationally. Harland
(1996a) contrasts this normative approach with the IMP approach that challenges
the feasibility of grand strategic designs for networks, proposing that actors in
networks merely cope by acting and reacting in relationships with specific other
5.4 Governance of Interconnected Supply Systems 97

actors (Hakansson and Snehota, 1995). Harland (1996a) relates this ‘coping’ to
the strategic management concept of emergent strategies that ‘emerge by accident,
muddle or inertia’ (Whittington, 1993).
In connected supply networks, Harland et al., (2001) provide a taxonomy based
on empirical evidence showing how it is possible to intervene and attempt to manage
supply networks under certain circumstances, and how this might be done. However,
less has been discussed about if and how interconnected supply, for example
attempting to influence other firms’ supply networks, might be desirable and/ or
feasible.
The planning and control orientation of supply chain management has focused
on supply chain and supply network integration to influence suppliers’ suppliers
and so on upstream and customers’ customers, and so on downstream. This can
be legitimised by a focal firm as they view these supply chains and networks from
their vantage point as being theirs, because of their connectedness via other firms
in their networks. However, there is increasing interest in how organisations might
access and influence resources beyond their connected supply chains and networks
to structure new supply networks for specific purposes.

Our empirical research has taken us into larger, more complex systems of
supply where particular organisations have attempted to innovate on a large
scale to tackle large social or regional problems. From 1995 to 2016 our
coproduced research programme with the National Health Service (NHS) of
England and Wales involved many projects relating to interconnected, rather
than connected supply. Harland (1996b) provides empirical evidence of the
role of NHS Supplies in negotiating and forming framework agreements with
energy suppliers to enable NHS hospitals to procure energy directly using
those framework agreements’ prices, terms and conditions. Because ambulance
trusts had their own individual designs of ambulances, NHS Supplies formed
national framework agreements for ambulance chassis and with approved
bespoke body builders who supplied bespoke ambulances to each trust, using
the prescribed chassis manufacturers. In this way, NHS Supplies were able
to engage suppliers in supply markets to form a national supply base and
engage hospitals representing a national customer base, without having direct
purchase order and material flow connections to these actors who were in
their own supply networks. NHS Supplies intervened in the supply market for
continence products by creating new supply routes direct from manufacturers
to patients for home delivery. In acting in this hub role, NHS Supplies created
interconnectivity across the existing connected supply networks in the NHS
supply system.

Interconnectivity features in many areas of our research. In Knight and Harland

(2001) we argue for monitoring of the aggregate impact of incremental, individual
procurement contracts placed by public organisations. Harland et al., (2005) caution
98 5 Interconnectedness, Complexity and Dynamics in Supply

against unchecked outsourcing across public organisations having the potential to

skew supply markets. Walker et al., (2006) provide empirical evidence of accumula-
tive effects of individual public organisations outsourcing various services, causing
the supply market to become imbalanced and highly dominated by suppliers who
secured most of the incremental contracts.
This leads to the eighth principle of supply chain management:
Principle 8: Supply structures and processes are interconnected in complex, dynamic
supply systems and supply markets
This example research runs in the same vein as much of the public procure-
ment/public policy implementation research we have conducted which is examined
further in Chap. 7. The aggregate of supply decisions made in connected supply
chains and networks may impact adversely on larger supply systems because of the
interconnectivity across supply chains and networks in larger supply systems and
markets.

In Caldwell et al., (2005) the potential negative impact of governments making

incremental sourcing decisions on a contract-by-contract basis, only seeing
directly connected suppliers, was examined. The entire UK national schools
build programme was exposed to risk as it transpired that one powerful nexus
supplier was present in almost every supply network for school build projects
but was hiding behind different suppliers who contracted with the government.
This only became visible when this large construction company had financial
problems. This nexus supplier had created interconnectivity across the entire
construction sector, meaning that the knock-on impact of this supplier failing
would ripple across many different supply networks.

Harland (2021) identified that SCM has focused primarily on connectedness, but
there has been very little research on interconnected phenomena. The COVID-19
pandemic highlighted “the depth of our interconnectedness” (UN, 2020). Tuka-
muhabwa et al., (2017) emphasise that most SCM research of supply chain risk and
resilience has concentrated on catastrophic, single disruptions, rather than examining
the interconnection of multiple, non-linear events that, as their combination emerges,
causes substantial disruptions. Tukamuhabwa et al., (2017) highlight that developing
countries are particularly vulnerable to these multiple, non-linear events that can lead
to chronic and sustained disruptions over time. Harland et al., (2003) and Juttner and
Maklan (2011) are two other research studies dealing with the cumulative impact of
multiple, smaller, disruptions in interconnected systems.
5.4 Governance of Interconnected Supply Systems 99

In Harland and Knight (2001) we provide findings of coproduced research with

NHS Supplies and disablement service centres in the UK focusing on pros-
thetics, which are devices to replace missing body parts such as limbs, and asso-
ciated services. Prosthetics services of the NHS were described as ‘Cinderella
services’ as they were chronically underfunded. Patients with disabilities were
unable to acquire appropriate products and services to perform basic tasks,
such as taking a shower safely. There was lack of choice to enable people
with disabilities to lead full, active lives, including participating in sports and
increasing mobility. Prior to the research, there were separate supply networks
for patients with different types of needs. The engaged research involved mobil-
ising key public and private sector suppliers of prosthetic products and services,
clinicians and technicians and patient representatives requiring prostheses and
additional support. A new group—the Prosthetic Strategic Supply Group—
was formed. The research team worked with the group to analyse the supply
networks, identify key priorities and needs for the service and lobby the UK
government for policy change and additional funding. Deliberate interconnec-
tion of these separate service supply networks proved successful in coordi-
nating action and policy change, resulting in substantially improved funding
for these services.

Humanitarian aid supply chain management has to deal with, and try to coor-
dinate across, emerging, dynamically changing networks of NGOs, governments,
charities, volunteers, healthcare providers, local infrastructure providers and local
populations affected by a humanitarian crisis. Coordinating across these various and
diverse stakeholders is very challenging (Seybolt, 2009). Research in humanitarian
aid supply systems is often necessarily collaborative, coproduced research because
of the need for deep understanding of rapidly evolving situations (Sabri et al., 2019).
Despite the challenges faced, there is an increasing body of knowledge about SCM
in the humanitarian aid context (Quarshie & Leuschner, 2020).
The United Nations Office for Coordination of Humanitarian Affairs (UNOCHA)
has created a network of resource pools geographically located in anticipation of
where humanitarian aid might be required. These resources can be deployed rapidly
to support local supply systems and infrastructures at the scenes of humanitarian
crises. UNOCHA is therefore providing interconnectivity across supply chains,
networks and systems. Donation management is vital to humanitarian aid and char-
itable organisations (van Wassenhove, 2006), be they donations of cash, supplies
or volunteers. Coordinators of complex humanitarian crisis situations understand
the importance of rapidly establishing clear, accessible communication channels.
Increasingly, interconnection across the many organisations and individuals arriving
at the scene of humanitarian crises is through mobile phone use and social media
(Yates and Paquette, 2011).
100 5 Interconnectedness, Complexity and Dynamics in Supply

Our research projects in the United Nations examine one of the most complex
global supply systems in the world. In one project we were commissioned by the
United Nations Inter Agency Procurement Working Group comprising heads of
procurement of all UN organisations, to perform coproduced research to inform
UN policy on the adoption of e-procurement across the complex UN supply
system. Many UN organisations were considering adopting e-procurement to
help coordinate all their dispersed supply chains (Liao et al., 2003) but wanted
to understand more about how e-procurement was being used, adoption issues
in the UN and how adoption might impact UN policy implementation. The
multi-method research involved a questionnaire survey across the UN, case
studies within UN organisations and a workshop involving all the heads of
procurement in the UN. Only a small number of UN organisations were using
e-procurement but the majority intended to increase its use beyond low-value,
non-critical goods and services to influence more of their total spend portfolios.
Those UN organisations with longer-term, development roles in developing
countries had more stable operations that lent themselves to systematisation,
such as use of e-procurement. In-depth case studies with the World Health
Organization, the International Labour Office and the United Nations Office
of Nairobi revealed the importance of UN policy implementation relating to
child protection, landmines and support of developing nations, and involved
vetoing use of suppliers using child labour, or with connections to landmine
production, for example. At the time of the research the UN had a policy that the
majority of their procurement spend should support the economic development
of developing nations.
The workshop across the UN-IAPWG members revealed and examined the
potential benefits to UN organisations of increasing the implementation of e-
procurement. In particular the development organisations, rather than humani-
tarian aid organisations, and those with large scale logistics operations, such as
WHO, were keen to use e-procurement to improve their supply operational effi-
ciency. However, the workshop also considered the policy implications of the
research. The workshop discussions centred on the digital and economic divide
between developed and less developed nations and concluded that, whilst many
UN organisations might be ready to implement e-procurement, their suppliers
in developing countries were not. The likely impact of e-procurement imple-
mentation across the UN would be to source more from developed nations with
digital and economic capability to support e-procurement, running counter to
the UN policy to use their spending power to support developing countries. The
research resulted in a coproduced policy which, at that time, favoured pausing
on further take up of e-procurement until the UN IAPWG could be satisfied
that it would not damage implementation of their development policies for less
developed countries.
5.4 Governance of Interconnected Supply Systems 101

The challenges and opportunities arising from interconnectedness of supply vary

substantially in different sectors. Healthcare is, arguably, one of the most complex
SCM settings in terms of its heterogeneity and interconnectedness. Internationally,
nationally and regionally, healthcare service provision and healthcare supply systems
vary significantly in terms of their structure, processes and governance (Scala and
Lindsay, 2021). This variety exists, in part, because of the nature of healthcare, a
sector that is led by international research and technology development that drives
developed nations to source globally. The variety includes humanitarian medical aid
provided to less developed countries, particularly vaccines and basic healthcare that
poorer populations cannot access (Hira, 2009).
Structurally, a small number of global pharmaceutical giants with revenues
exceeding many nation states’ GDPs, dominate the sector (Hu et al., 2015). Another
important factor in the heterogeneity of SCM in healthcare is the plurality of provi-
sion of healthcare services by public, private and insurance-based providers (Harland
et al., 2021). As a consequence, many organizations perform SCM and procure-
ment of goods and services for healthcare organisations, including procurement
offices, regional and national government departments for health, hospitals, general
medical practices, clinics and private sector Group Purchasing Organisations repre-
senting insurance-based healthcare. Organisations representing trading blocs (such as
the European Commission, 2021) in themselves develop interconnectedness across
supply systems in the healthcare sector through their interventions in healthcare
supply markets. However, the interconnectedness and complexity of the sector make
collaboration complicated, so SCM is often practised at the level of the individual
organisation, such as a hospital (Dai et al., 2020).

Learning from COVID-19, it was apparent that governments need to be more

strategic about stockpiles, their purpose, location and how they should best be
utilised (Harland et al., 2021). The three phases of research within our project
at the beginning, during and at the end of the COVID-19 crisis also informed
understanding of the nature of interconnectivity and hierarchies within health-
care supply systems. Local supply systems containing separate, connected
supply networks relating to each healthcare provider, became interconnected
as hospitals sought, and in some cases were given, help from other hospi-
tals to secure essential Protective Personal Equipment, ventilators, oxygen
etc; however, the independence of others became more accentuated as rivalry
increased and local organisations created their own stockpiles. Whilst hier-
archies of supply existed at local, regional, national and international levels,
greater interconnectivity between these hierarchical systems levels occurred
as communication channels were created to locate inventory and communi-
cate needs. Some prior interconnectivity across national supply systems in the
European Union broke down as it was reported that member states ‘hijacked’
supplies legally bound for other countries to satisfy their own national demand
(Bloomberg, 2020).
102 5 Interconnectedness, Complexity and Dynamics in Supply

Interconnectedness can be contrived by governments by, for example, creating

national stockpiles of critical goods to be used during emergencies. However, Hand-
field et al., (2020) provide evidence that during the COVID-19 crisis, these stockpiles
were distributed across healthcare supply chains with little evidence of any distribu-
tion strategy. When enacted, national emergency plans form interconnectivity across
previously separate supply systems. It is important that these plans are formed and
updated to include awareness of the impact they have on supply systems.
Philosophically, some in our field might argue that supply chain management is
the study and practice of firms in connected chains and networks of organisations,
which is very much the realm of traditional supply chain management research.
However, understanding of interconnectivity across these chains and networks was
vital during the COVID-19 pandemic; SCM experts brought in from private sector to
help advise governments viewed these complex, interconnected systems as chaotic
and lacking control compared to the focal firm supply networks they were familiar
with. Large-scale ‘wicked’ problems relating to the climate crisis, war or global
food poverty, as examples, require interconnected thinking and action. The COVID-
19 virus crossed system and geographic boundaries, as do displaced populations and
migrants. By embracing a more holistic perspective of SCM integrating humanitarian
SCM and public procurement knowledge, interconnected phenomena and challenges
could be tackled, but Harland (2021) questions if it is feasible and desired by national
governments to form global supply chain management responses to global crises. If
supply chain management is going to play a part in tackling these global challenges,
then we have to stretch beyond our firm-based thinking within connected chains
and networks. Whether stretching SCM in this way is feasible and/ or desirable is
revisited in Chap. 8 when we consider the future of SCM.

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Chapter 6
Supply Risk and Resilience to Global
Challenges

6.1 Introduction

Supply chain risk and resilience have been important themes in supply chain manage-
ment research and practice since the late 1990s (e.g., Smeltzer and Siferd, 1998).
They became well-established as the body of research and knowledge grew at the
start of this millennium (e.g., Harland et al., 2003; Jüttner et al., (2003); Zsidisin and
Ellram, 2003; Cousins et al., 2004; Rao and Goldsby, 2009). Supply chain risk and
resilience have been conceived, in the main, in terms of identifying types and sources
of risk, the likelihood and impact of them being realised into losses, and the supply
chain’s ability to plan for, mitigate and respond in the event of a disruption to return
to a prior ‘normal’ state. In line with most thinking in supply chain management, the
assessment of risks to supply chains and calculation of losses has historically been
dominated by an economic, firm-based perspective.
However, there are recent calls for new, more radical approaches beyond those
traditionally accepted, to treat supply chain risk and resilience for a contemporary and
future world with a radically, dynamically changing global risk landscape, arising
from increasing complexity and interconnectedness (e.g., Ketchen and Craighead,
2021; Azadegan and Dooley, 2021; Harland, 2021). The World Economic Forum
(2023) provides a ranking of the greatest global risks facing us in the next two
years as: (1) cost of living crisis, (2) natural disasters and extreme weather events,
(3) geoeconomic confrontation, (4) failure to mitigate climate change, (5) erosion
of social cohesion and societal polarisation, (6) large scale environmental damage
incidents, (7) failure of climate change adaptation, (8) widespread cyber-crime and
cyber-insecurity, (9) natural resource crises and (10) large-scale involuntary migra-
tion. These global risks will impact not only on economies, societies and the envi-
ronment, but also on firms’ decision-making regarding supply in their dyadic and
triadic relationships, supply bases, chains, networks, systems and supply markets.
The question posed in this chapter is ‘how should supply chain management
research and practice develop to understand how to manage risk and improve

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 107
C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_6
108 6 Supply Risk and Resilience to Global Challenges

resilience to global challenges?’ All supply chains and firms within supply chains
will not face the same risks and will not be impacted equally by realisation of those
risks into losses. This chapter will, therefore, examine research and its potential
impact on practice that organisations can learn from to assess their particular risk
portfolio and decide on appropriate action. As in the rest of the book, themes relating
to the need for increasing collaboration across supply networks and systems, and
for a broader environmental and societal perspective to be taken, in addition to an
economic perspective, will be emphasised. These broader, networked approaches will
require new ways of conceiving and managing risk and building resilient networks
and systems of supply, requiring new styles of supply chain management leadership.
First, a summary of the current ‘state of the art’ of research on supply chain risk
and resilience is provided. Current definitions, typologies and conceptual frame-
works are briefly presented. The chapter focuses on conceptualising supply chain
risk and resilience for a dynamically changing global environment, and the implica-
tions for supply chain practitioners and academics. In particular, the need for more
holistic approaches requiring collaboration across organisations, chains and networks
of supply is proposed. This thinking builds on the previous chapter that paints a
richer picture of interconnected, complex and dynamically changing contexts and
systems of supply. To underpin this chapter on risk and resilience, a brief summary
of definitions is provided next.

6.2 Defining Supply Chain Risk and Resilience

A quantitative, economic perspective of risk has underpinned the substantial body

of academic knowledge in this area following Mitchell’s (1995) definition of risk
as “the probability of loss and the significance of that loss to the organisation or
individual”. This quantitative, economic perspective is also evident in SCM prac-
tice where risk registers are created by organisations to classify risks as ‘high’,
‘medium’ or ‘low’, according to their potential likelihood of occurrence and their
likely impact. Typically, likely impact is expressed in economic terms to enable
business managers to make return on investment judgements about their choices of
investments in mitigating risks.
Risk, whether it is organisational, operational or supply chain risk, can be defined
as any state that differs from expected outcomes (March and Shapira, 1987). Supply
chain management’s use of deterministic and stochastic approaches to project and
forecast ahead help to paint a picture of what otherwise would be an unknown future.
As the future becomes present, and actual eventualities replace forecast outcomes,
any deviation from the ‘plan’ arising from previously unknown variables, can be
viewed as realisation of risk. Investments already made in supply resources in the
entire network of supply working to the plan may, in the face of deviation, give rise
to losses.
The working definition for this chapter conceives of supply chain risk as a combi-
nation of these two perspectives in the context of the supply chain. Louis and Pagell’s
6.2 Defining Supply Chain Risk and Resilience 109

(2018) definition succinctly captures this, defining “supply chain risk as the unwanted
negative deviation from expected outcomes that can adversely affect supply chain
operations and may result in detrimental consequences to a focal firm”. The poten-
tial detrimental consequences considered here are beyond purely economic conse-
quences and bottom-line impact; to paint a richer picture of risk, less tangible impacts
on reputation, stakeholders’ commitment and environmental detriment, as examples,
are considered.
Whilst risk and resilience are inextricably connected conceptually and in practice,
they represent two distinct themes of knowledge. Like risk, there is a plethora of
definitions of resilience in the literature (for a comprehensive review, see Hohenstein
et al., 2015). Broadly speaking, these can be divided into definitions relating to
reactive and proactive approaches to resilience, as concluded by Tukamuhabwa et al.
(2015). Examples of reactive approaches include Sheffi and Rice’s (2005) definition
of resilience as the “ability to bounce back from a disruption” and Wieland and
Wallenburg’s (2013) as “the ability of a supply chain to cope with change” However,
more proactive, managerial definitions view resilience capabilities as positive reform
in the face of adversity, such as Pettit et al.’s (2013) “the ability to survive, adapt
and grow in the face of turbulent change”.
As with supply chain risk, an economic perspective of resilience has also
dominated supply chain management research and practice. Likely outcomes and
losses have been estimated in terms of their financial impact on organisations and
approaches to resilience have been assessed in terms of potential return on investment
(in terms of avoidance of potential loss, rather than positive gain). Approaches to
assessing and mitigating supply chain risk have largely concentrated on individual,
focal firms and their likely risks, impact of realisation into loss and consequen-
tial financial impact. This firm-centric approach has impacted on their decisions of
how they should manoeuvre their own risk position in their supply chains, rather
than working for and on behalf of their supply chains. However, there is increasing
recognition that SCM should conceive of risk in broader terms, considering at least
environmental and societal impacts in addition to economic effects, in line with triple
bottom line thinking on sustainability. Post COVID-19 and other global crises, there
is now greater awareness of the interconnectivity of risks and the potential for more
networked, collaborative approaches to tackle current and future risks that span inter-
national boundaries and impact on multiple industries, societies, supply networks,
firms and people.
This chapter adopts a more proactive and richer approach to risk and resilience, to
explore how supply chains might be more strategic in their thinking and approaches
to these important themes. It conceives of risk and resilience, not just from the
perspective of what firms should do within their directly connected supply chains,
but as a bigger, more networked, endeavour involving collaboration across supply
networks, systems and markets and consideration of a broader set of stakeholders.
Before considering broader perspectives of supply chain risk and resilience, first
it is necessary to build on the development of thinking to date on the nature of supply
chain risk and resilience.
110 6 Supply Risk and Resilience to Global Challenges

6.3 Nature of Supply Chain Risk and Resilience

Fundamentally, all supply chains are inherently risky and will suffer disruptions
(Craighead et al., 2007). All, therefore, require some form of inherent, or day to
day operational resilience (Azedegan and Dooley, 2021). However, different supply
chains are exposed to different types of risk and there are different types of resilience
to mitigate against risk, according to which risks are predicted and strategic choices
made on investment in risk mitigation. To understand the nature of supply chain
risk and resilience, typologies have been developed that provide categorisations of
different types of risks that might be anticipated and different approaches to resilience
to mitigate risks to try to avoid realisation into losses. There are no right or wrong
typologies, and no accepted or dominant typologies prevail. Rather, typologies are
appropriate in business practice and research according to the context and purpose
of examining risk and resilience.
Specifically considering supply networks, Harland et al., (2003) categorise types
of supply risk (see box below). In a similar list of different types of risk, Jüttner et al.,
(2003) also include environmental risks. In a study of risks in private sector supply
networks, Hallikas et al., (2004) identify four types of risk—too low or inappropriate
demand, problems in fulfilling customer deliveries, cost management and pricing,
and weaknesses in resource management and flexibility.

Harland et al., (2003) examine risk in supply networks that are becoming
increasingly complex and dynamically changing because of product/ service
complexity, e-business, outsourcing and globalisation. They provide a typology
of risk and loss. Types of risk identified are strategic, operations, supply,
customer, asset impairment, competitive, reputation, financial, fiscal, regula-
tory and legal. Types of loss include financial, performance, physical, psycho-
logical, social and time. They develop and empirically test a supply network
risk tool that comprises six stages – mapping the supply network; identifying
risk and its current location; assessing the risk in terms of its likelihood, expo-
sure, likely triggers and likely losses; managing the risk by developing a risk
position and scenarios; forming a collaborative supply network risk strategy;
implementing that strategy.

Harland et al., (2004) provide a conceptual model for creation and operation
of supply networks that identifies supply network design and benefit and risk
sharing as key in formulating supply network risk strategies. The empirical
research reveals that less than 50% of supply network risk is visible to the
focal firm at the centre of the research. Also, there is a tendency for senior
managers to focus on potential catastrophic risk that is not that likely to occur,
6.3 Nature of Supply Chain Risk and Resilience 111

rather than everyday operational risk that is occurring routinely and being
realised as losses. These smaller risks individually appear insignificant but, in
aggregate, are very significant in terms of their total economic impact on the
focal firm.

Risks can also be categorised according to intent, be it malicious or unintended

(DuHadway and Carnovale, 2019). Already ripe for a conspiracy theory driven world,
interest in malicious risk increased following the evidence of malicious practices
during the COVID-19 crisis. Examples of malicious risks include:
• falsifying, concealing or misrepresenting data and information
• fraudulent product substitution
• circumventing accepted quality standards and controls
• counterfeit goods
• stolen goods
• intellectual property theft
• piracy
• hacking
Unintended risks include those arising from accidents or externalities that prevent
supply chain operations being performed as intended, or through some form of failure
in supply chain performance. Examples are:
• late deliveries
• accidents/fires
• product quality failure
• natural disasters
• bankruptcy
• economic downturns
• wars
• global shortages
Types of risk are closely associated with risk sources. Sheffi and Rice (2005)
propose that the primary source of risk is demand for products and that this source of
risk is increasing because of interdependent trends of increased customer expecta-
tions, more global competition, longer and more complex supply chains and increased
product variety with shorter life cycles. In a useful review of typologies of supply
chain risk, Ho et al., (2015) identify that some authors classify risk types or sources
into groups; for example, the location of the source of risk may be internal to the firm,
internal to the supply chain or external to the supply chain e.g., Jüttner et al., (2003),
Lin and Zhou, (2011), Louis and Pagell, (2018). Rao and Goldsby (2009) classify risk
factors as pertaining to environmental, industrial, organisational, problem-specific
and decision-maker related factors.
Types of resilience can be grouped into ‘robustness’, or preventive action that cush-
ions the blow of a disruption, and ‘agility’, i.e., speed and effectiveness of reaction to
112 6 Supply Risk and Resilience to Global Challenges

a disruption (Wieland and Wallenburg, 2013). Most supply chain management liter-
ature has focused on micro level activities that firms undertake to create resilience.
Azadegan and Jayaram (2018) classify these micro level activities as inherent or
anticipatory. Inherent resilience activities are day to day actions such as postpone-
ment, improving communication and supply chain integration, such as integrated
enterprise resource planning (ERP). Anticipatory resilience includes activities that
are performed just in case a disruption occurs, such as holding safety stocks, multi-
sourcing line items and technologies, and prioritising critical supplies to customers
and from suppliers. Interestingly, Azadegan and Jayaram (2018) provide a third
category of resilience, namely ‘adaptive resilience’.
‘Adaptive resilience’ is a term that is widely used outside the supply chain manage-
ment field. It refers to the ‘plasticity’ of capacity and capability to adapt in response
to a situation (McCarthy et al., 2017). Adaptive resilience has been applied to
many diverse research situations including developing a deliberate strategic business
competitive position (Teller et al., 2016), organisational capability of disaster respon-
ders (Nilikant et al., 2014), survivability of culture heritage exposed to tourism (Bui
et al., 2020), how regional economies cope with technological change (Rocchetta
and Mina, 2019), how health systems adapt (Barasa et al., 2018) and how coral
reefs might be managed (Anthony et al., 2015). Whilst SCM research has examined
‘adaptive cycles’ (e.g., Adobor, 2020), there is only limited and recent recognition
of the potential of learning from ‘adaptive resilience’ in a supply chain context (e.g.,
McCarthy et al., 2017). There is currently limited understanding of what adaptive
resilience might look like in a supply chain context, such as the capability to switch
suppliers, or use substitute materials (Azadegan and Jayaram, 2018).
Azadegan and Dooley (2021) provide a more nuanced picture of resilience in
their typology that classifies resilience as micro-, macro- and meso-, focusing on the
level of resilience. Micro-resilience is where buyers and suppliers take coordinated,
joint action on risk prevention and recovery from disruptions. Macro-resilience is
where businesses, including those in competition, collaborate with governments,
trade associations and other relevant institutions to manage or create regulations
to deal with longer term supply risks. Meso- resilience is where supply networks
collaborate to tackle short to medium term risks to supply; in practice this may be a
private consortium of supply networks collaborating.

6.4 Managing Supply Chain Risk and Resilience

Conceptual frameworks for supply chain risk and resilience (SCRR) help practi-
tioners and researchers think about and focus attention on aspects of SCRR or guide
them through a process to manage risk and build resilience. All SCRR conceptual
frameworks integrate different features of risk or resilience, or both, and provide
a structured way of thinking about these features. Some frameworks are static,
providing snapshots of risk and resilience at any one time, while others are more
6.4 Managing Supply Chain Risk and Resilience 113

dynamic, encouraging ongoing activities to manage risks or deal with disruptions

over time.
Jüttner et al., (2003) conceptualise risk in their framework of four constructs of
risk sources, supply chain risk drivers, mitigating strategies and consequences of
risks becoming realised into events causing losses. Sources of risk may be political
risk, market risk or volatility of customer demand. Jüttner et al. (2003) specifically
differentiate these sources of risk from the consequences of risk such as the impact
on operations, humans or customer service levels, as examples. Supply chain risk
drivers represent more direct pressures on the firm, such as competitive pressures.
Risk mitigation strategies are the responses made by firms to direct pressures. From
these constructs of risk, Jüttner et al., (2003) derive a definition of supply chain vulner-
ability as “the propensity of risk sources and risk drivers to outweigh risk mitigating
strategies, thus causing adverse supply chain consequences” and of supply chain risk
management as “the identification and management of risks for the supply chain,
through a co-ordinated approach amongst supply chain members, to reduce supply
chain vulnerability as a whole”.
Some conceptualisations of supply chain risk provide processes or tools for the
practice of supply chain risk management. Here we return to the supply network risk
tool in Harland et al., (2003) that comprises six stages in a cycle to manage risk in
supply networks, namely:
1. Map the supply network to identify the structure of actors, key measures and
ownership
2. Identify risk and its current location, in terms of types of risk and potential loss,
3. Assess the risk in terms of the likelihood of its occurrence, the stage in the life,
exposure to risk, likely triggers and likely loss
4. Manage the risk by developing a risk position and scenarios
5. Form a collaborative supply network risk strategy
6. Implement the supply network risk strategy
Since this conceptual framework was published, various authors have contributed
to understanding more about how to perform each of the stages of this process and
provide tools to support that understanding.

6.4.1 Stage 1—Map the Supply Network to Identify

the Structure of Actors, Key Measures and Ownership

Global uncertainty and complexity increase the need for supply chain managers to
understand and map their supply chains (Choi et al., 2020). Supply chain mapping
is an important stage of supply chain risk management (Ho et al., 2015). MacCarthy
et al. (2022) also highlight the increasing need for firms to understand and map
their supply chains to ensure they are not exposing themselves to reputational risk
from any malpractice in the supply chain. Supply chain mapping provides visibility
that is essential to recognise any cyber security vulnerabilities (Cha, 2022) and to
114 6 Supply Risk and Resilience to Global Challenges

understand how and where digital tools might be used in the supply chain (Mubarik
et al., 2023).
Most supply chain risk management practitioners and researchers tend to map
supply chains and networks from the perspective of a focal firm. Individual organi-
sations map and analyse their own unique supply networks by positioning themselves
in the centre of the map then looking upstream at their supply network and down-
stream at their distribution and sales network (Harland, 2019). MacCarthy et al.,
(2022) provide more detail of different types of supply chain maps at different hier-
archical levels. These levels are global value chain maps, supply network maps,
supply chain maps, value stream maps and process maps.

6.4.2 Stage 2: Identify Risk and Its Current Location,

in Terms of Types of Risk and Potential Loss

The maps of supply chains and networks from applying stage 1 are used to locate
and identify risks. Supply chain risk identification is the process of discovering,
understanding, defining and categorising supply chain risks by seeing early warning
indicators. Ho et al., (2015) find that supply chain researchers tend to use mainly
qualitative methods to identify risks. Tang and Musa (2011) propose examining
flows in supply chains, particularly materials, cash and information, to identify risks.
Specific tools and techniques for risk identification are proposed by Tummala and
Schoenherr (2011), including use of the engineering design technique of Failure
Mode and Effect Analysis (FMEA) and Ishikawa cause and effect, or fishbone,
analysis.

6.4.3 Stage 3: Assess the Risk in Terms of the Likelihood

of Its Occurrence, the Stage in the Life Cycle, Exposure
to Risk, Likely Triggers and Likely Loss

Risk assessment involves assessing the probability of an event occurring and the
significance of the consequences of the risk being realised as a loss (Harland et al.,
2003). There are various processes and approaches to assess risks. Zsidisin et al.,
(2004) recommend considering the variables within agency theory to assess risk,
namely information systems that monitor supplier performance, outcome uncertainty,
goal conflict, relationship length, adverse selection and moral hazard. Their empirical
research findings emphasise the importance for practitioners to obtain information to
verify supply chain activities, promote goal congruence and reduce outcome uncer-
tainty. In the absence of hard data, Tummala and Schoenherr (2011) suggest using
qualitative approaches, such as Delphi and focus groups that use experience and
judgement to assign probabilities of occurrence to each identified risk.
6.4 Managing Supply Chain Risk and Resilience 115

There is more established literature relating to risk assessment and mitigation

than there is to risk identification, in part because there is no agreed typology of
types and sources of risks (Louis and Pagell, 2018). Techniques used by researchers
include the Analytic Hierarchy Process (AHP), some form of supply chain vulner-
ability mapping, a hazard and operability method and process engineering methods
to identify where value added processes may be at risk. There are many studies
proposing a wide range of qualitative and quantitative approaches to understand and
mitigate risk in volatile environments upstream (Costantino and Pellegrino, 2010)
and downstream in the supply chain (Geng et al., 2023). There are also different
techniques available to assess macro risks (for example, a natural disaster occurring)
compared to micro risks (such as a supplier failing to deliver components) (Ho et al.,
2015).

6.4.4 Stage 4: Manage the Risk by Developing a Risk

Position and Scenarios

The fourth stage of Harland et al.’s (2003) tool proposes that a risk position is
developed using scenarios, to inform the development of a risk strategy. Scenario
planning is quite different to forecasting or predicting the future; it embraces the
fact that the future is uncertain and that, rather than reduce our understanding of
possible futures to one simple forecast, instead we should consider a range of possible
futures. By considering these scenarios, managers can think creatively about how
they might make better supply chain decisions to be more resilient to an uncer-
tain future that could go in a number of different directions (Chermack, 2011). For
example, Manuj et al., (2014) use four different scenarios to consider the appro-
priateness of hedging-postponement, hedging-speculation, assuming-postponement
and assuming-speculation. The four scenarios are high supply risk, low supply risk,
high demand risk and low demand risk. Using scenario analysis, they challenge
received wisdom about appropriateness of when to use postponement and when to
use speculation. Olson and Wu (2011) use simulation to create scenarios to compare
different outsource locations according to changing variables, to enable creation of
a risk strategy for outsourcing. However, Thomas and Chermack (2019) argue that
supply chain risk management research has tended to use the term ‘scenario planning’
inappropriately by using it to refer to some form of ‘what-if-analysis’ of certain risks
being realised, then to propose solutions for these. They argue that scenario planning
instead should focus on potential driving forces that could lead to possible futures
and encourage a dialogue around possible subsequent futures for the organisation.
116 6 Supply Risk and Resilience to Global Challenges

6.4.5 Stage 5: Form a Collaborative Supply Network Risk

Strategy

Harland et al.’s (2003) tool recommends forming a collaborative supply network

risk strategy, rather than one solely from the focal firm perspective and only for their
benefit. Lavastre et al., (2012) provide empirical evidence of the importance of supply
chain risk management being interorganisational and collaborative with industrial
partners in the supply chain. Li et al., (2015) find that risk information sharing and
risk sharing practices are vital for effective supply chain risk management. The
empirical research of Chen et al., (2013) finds that collaborative supply chain risk
management to mitigate process risk and demand risk has direct impact on supply
chain performance.

Conceptualisations of supply chain risk have focused mainly on single private-

sector organisations and their perceptions of risks relating to their immediate
suppliers. Examining three cases of complex supply chains, networks and
systems straddling the public-private sector interface, Harland (2019) observes
that differences in the nature of the task being undertaken, the diversity of
actors’ and stakeholders’ goals impact on risk and risk mitigation. Specifi-
cally, different risks in supply orchestration, innovation diffusion and learning
leveraging require different approaches to mitigation. Supply orchestration in
these complex systems involves social interaction, negotiation and coordina-
tion across diverse actors, often having conflicting objectives. Innovation diffu-
sion across actors not originally involved in the innovation requires commu-
nication, motivation and incentives to adopt. Learning initiatives are hindered
across complex confederal systems of supply as there is no single organisation
with executive power. Mitigation is more about policy guidance, listening and
adapting and leveraging social capital.

6.4.6 Stage 6: Implement the Supply Network Risk Strategy

Implementation of any strategy is challenging. There is less attention paid in the

supply chain risk management literature to implementation than there is to identi-
fying, assessing and mitigating risks. Jüttner (2005) includes consideration of require-
ments for effective implementation of supply chain risk strategies and finds that
companies report a heavy emphasis on the softer aspects of management, such as
trust, openness to share risk-related information and willingness to share risks. This
is later supported by the findings of Li et al., (2015).
6.5 Global Challenges and Supply Chain Risk and Resilience 117

Relating to resilience, Sheffi and Rice (2005) provide an anatomy of a disruption

as a profile of eight stages—preparation, the disruptive event, first response, initial
impact, time of full impact, preparation for recovery, recovery and long-term impact.
The more resilient an organisation is, the less severe the impact of a disruption and the
quicker the firm can recover to the original state prior to when the disruption occurred.
This profile helps to understand how a disruption impacts, but to be resilient, firms
need to work on building resilience capabilities. There are many published lists of
what these capabilities are; Soni et al., (2014) provide a list including: agility, collab-
oration, visibility, risk management culture, adaptive capability, risk and revenue
sharing, trust among players, information sharing, sustainability, corporate social
responsibility, information security, supply chain structure, strategic risk planning
and knowledge sharing.
It is only intended here to provide a brief overview of the ‘state of the art’ of supply
chain risk management and resilience. The rest of the chapter focuses on how supply
chain risk management and resilience might need to develop to tackle contemporary
global challenges.

6.5 Global Challenges and Supply Chain Risk

and Resilience

As outlined in the introduction to this chapter, the world is changing rapidly, causing
extreme risks and global challenges, as identified by the World Economic Forum. The
“multiple and multi-directional concurrent changes in supply and demand” (Ketchen
and Craighead, 2021) are creating dynamic and complex challenges. These chal-
lenges demand a contemporary perspective on supply chain risk and resilience to deal
with these extreme conditions (Sodhi and Tang, 2021). Mitigation and preparedness
are becoming increasingly important. The economic value of investing in mitigation
and preparedness compared to response to humanitarian crises has been estimated as
a 1:7 ratio (Kovacs and Sigala, 2021); i.e., forward planning and preparation yields
seven times the return on investment compared to response.
Globalisation and outsourcing have increased recognition of the growing
complexity and challenges that global supply chain management faces, compared to
more national and local SCM (Manuj and Mentzer, 2008). However, it is only recently
that supply chain risk management research has started to turn some of its attention
to global challenges facing supply chains, as opposed to challenges facing global
supply chains. Ghadge et al., (2020) consider how to manage climate change risks in
global supply chains. Ngoc et al., (2022) examine increasing risks to global supply
chains arising from the Russia-Ukraine war. There is a plethora of supply chain risk
management research publications during and after the COVID-19 crisis (e.g., Baz
and Ruel., 2021; Harland et al., 2021; Yang et al., 2021; Hohenstein, 2022). However,
the field of supply chain management has, largely, reacted to and learnt from global
challenges and crises, rather than consider how it should prepare for any current
118 6 Supply Risk and Resilience to Global Challenges

and future crisis. Existing SCM practices of supply chain agility, responsiveness and
resilience are insufficient (Ketchen and Craighead, 2021). It is proposed here that a
shift is required to conceptualise and manage supply chain risk and resilience in new
ways to deal with emerging themes relating to global challenges. These themes are
(1) risk and resilience with increasing supply complexity, (2) collaborative
approaches to risk and resilience, (3) supply market risk and resilience, (4) crisis
preparation and (5) new styles of leadership for supply chain risk and resilience.

6.6 Risk and Resilience Relating to Increased Supply

Network Complexity

It is generally accepted that supply chains and networks have become more complex,
particularly because of the global trend of outsourcing to seek comparative advan-
tage of lower resource costs (Harland et al., 2005). It is also accepted that increasing
complexity has a detrimental impact on supply chains in terms of increased disrup-
tions and lack of visibility to tackle those disruptions (Chopra and Sodhi, 2014).
Harland et al., (2003) find that as supply network complexity increases, so does risk
in supply networks; specifically, sources and types of risks increase with increased
outsourcing and globalisation. In Harland et al., (2003) increasing product/service
complexity, globalisation and outsourcing are identified as causes of increased risk
in supply chains. These risks are related to the increasing complexity and dynamics
of constantly changing networks of supply (Harland et al., 1999).
Before COVID-19, supply chain managers were recognising challenges of
managing international, long supply chains arising from the trend towards
outsourcing; issues with quality, brand and reputation were causing concern, leading
to reshoring decisions (Moretto et al., 2020). However, no one considered that inter-
national borders might close, or had contingency plans in place for that eventuality;
COVID-19 quickly shone a spotlight on risks and losses arising from the impact
of closed borders on complex, international supply chains and networks (Harland,
2021).
Global challenges such as public health, poverty or exploiting new technologies,
as examples, require innovation. Transitioning from supply innovation exploration
to exploitation is challenging even in private sector networks controlled by a large,
dominant actor. However, the risk to innovation success is even more pronounced in
complex confederal systems of supply, such as those in healthcare, humanitarian aid
or smart cities. Good ideas and proven innovations often have patchy exploitation
and take-up across hospitals and municipalities because of devolved budgets and
decision-making. National governments, healthcare systems and task forces are often
frustrated by the challenges of coordinating innovation take up in these complex
systems of service provision. A further risk to innovation relates to the many and
diverse legacy systems and technologies already in place; for example, different
US state police forces procure different types and specifications of police vehicles
6.7 Collaborative Approaches to Risk and Resilience 119

for largely similar purposes; similarly in the UK different ambulance authorities all
buy different specifications of ambulances. However, it is not simple to standardise
nationally; existing fleets, service and maintenance facilities and inventories, and
local knowledge and experience are all embedded assets and represent capital residing
in these legacy systems. Also, political pressures to buy from local suppliers to
maintain local votes impede national standards being chosen.
Harland (2019) proposes that oft used theories in supply chain management are
more suited to environments where rational planning and control are possible, but the
theory toolkit requires complementing with ‘softer’, more behavioural-based theories
to support social networking and negotiation in more complex supply systems, lever-
aging social capital which is the ‘glue’ in complex supply networks and systems.
In complex, dynamically changing supply systems, risk shifts around the system
with each change. Interconnectivity was examined in the previous chapter; concep-
tualising these complex, dynamically changing supply systems as complex adaptive
systems (CAS) may support our understanding of how to approach supply risk and
resilience.

6.7 Collaborative Approaches to Risk and Resilience

In Harland (2019) it is emphasised that most empirical studies of supply chains and
networks are from a focal firm perspective; it is possible in this central, powerful
position to form a risk strategy and impose it on other network actors. However,
this represents a distinct type of supply network. Harland et al., (2001) provide a
taxonomy of different types of networks within which many focal firms lack sufficient
power or centrality to impose their risk strategies on other firms in the network. The
presence of more than one large, powerful actor in a supply chain or network may
present challenges for forming a risk strategy at the level of the chain or network and
may require more collaborative approaches. Harland (2019) also raises the issue of
conflicting goals in supply chains and networks that span the public/ private interface;
at this interface the private sector suppliers are commonly driven by profit motives,
whereas the public organisations answer to a broader set of stakeholders with a wider
range of, often conflicting, objectives.
‘Orchestration’ is one approach to collaborating in complex supply chains,
networks and systems. Supply orchestration is where a large, powerful actor
‘conducts’ an existing ‘orchestra’ comprising known, trusted suppliers with proven
capabilities, based on prior experience of supplying similar products or services.
However, in complex supply systems that come together for a new initiative to
tackle a global challenge, there is no track record of working together. The risks
of orchestrating those supply chains are much higher. A centrally positioned actor
may attempt to take on this role but then must try to bring together and manage
many, varied actors, often with incompatible information systems and coordination
mechanisms, and maybe different languages, cultures and competences. Harland
(2019) uses the example of large-scale humanitarian crises to discuss orchestration
120 6 Supply Risk and Resilience to Global Challenges

risk. Harland (2019) highlights the increased use of social media-based communica-
tion in humanitarian aid supply networks, as the individuals involved from many aid
organisations and volunteers arriving at an emergency scene often represent different
languages and use many different communication and information systems. Anal-
ysis of patterns of recovery following the New Zealand earthquakes reveal that firms
already embedded in strong, collaborative, interorganisational networks of organisa-
tions are more capable of recovering. Toyota attributes its recovery from the Tohoku
tsunami of 2011 to a coordinated, collaborative effort engaging the suppliers and
dealers in its supply chains (van der Vegt et al., 2015). Risk management strategies
and approaches to resilience that rely on centrally coordinated orchestration may be
insufficient to deal with complex systems of supply involved in tackling global chal-
lenges. For example, global collaboration on the climate crisis is facing challenges
of lack of shared perspectives. The dominance of an economic perspective from
many developed countries, impedes placing non-economic environmental and social
values at the centre of collaborative efforts. Supply risk and resilience discussions
may be confused by fundamentally different perspectives. Supply chain manage-
ment research has still tended to place economic value above all others (e.g., Carter
et al., 2015), although such prioritisation has been challenged by others (e.g., Wu
and Pagell, 2011).

6.8 Supply Market Risk and Resilience

As discussed in previous chapters, only limited attention has been paid to supply
markets by supply chain management researchers. Supply markets can represent
significant sources of risk for a range of reasons including supply market domination,
corruption, price fixing and cartels, lack of quality standards, lack of capacity and lack
of visibility and transparency. Certain supply markets are relatively dysfunctional.
For example, the global market for olive oil is corrupted with gutter oil retrieved from
waste management systems in China (Lu and Wu, 2014), the fraudulent adulteration
of extra virgin olive oil with cheaper oils (Yan et al., 2020) and its exploitation through
organised crime (Rizzuti, 2022). It is estimated that about 80% of manuka honey sold
globally is fake (Zhou et al., 2018); as manuka honey is used therapeutically in health
services, particularly for wound dressing, this is extremely serious. The illegal use
of protected animals in Chinese medicine has been well publicised, but it is still
surprising to learn that illegal animal trade is the third most prevalent illicit activity
in the world, after weapons and drugs (Pistoni and Toledo, 2010). Even high security
supply chains, such as pharmaceuticals, can be penetrated with fake products (Clark
and Burstall, 2018).
Supply market intervention is an immotive topic, with many capitalist govern-
ments unwilling to interfere with free trade. Whilst this political and ideological
position is beyond the scope of consideration in this text, here we may consider what
supply chain managers might do to mitigate risks in dysfunctional supply markets.
There are some bottom-up approaches that could support supply market development.
6.9 Crisis Preparation 121

For example, Gomez et al., (2018) discuss increasing flow of information and visi-
bility, improving coordination among supply chain members, eliminating interme-
diaries where possible, reducing food miles, and engaging policy makers to regulate
more appropriately. Ecology researchers, such as Irland (2007), promote intervening
in supply markets to encourage growth in supply of certified green building materials
to enable architects, construction companies and homeowners to access sustainably
sourced materials more readily. Through coproduced research, Caldwell et al., (2005)
provide evidence of how public procurement can help to promote more competitive
supply markets.

6.9 Crisis Preparation

The COVID-19 pandemic found governments, healthcare systems and supply

systems unprepared for the scale, severity and impact of this global crisis. Prior to
COVID-19, the Global Health Security Index (GHS, 2019), a study by John Hopkins
University Economic Intelligence Unit and Nuclear Health Initiative, ranked the
US and UK as 1st and 2nd globally for their preparedness for a pandemic. They
cautioned that “collectively international preparedness is weak”. However, at the
onset of COVID-19, even these allegedly most prepared nations rapidly descended
into chaos, with a US senator comparing the medical system to William Golding’s
‘Lord of the Flies’ (portraying barbaric descent into group think, emotional response
and immorality). Supply markets, networks, chains and relationships for critical
supplies rapidly failed, being overwhelmed by price hiking, counterfeits, poor-quality
substitutes and piracy (Harland et al., 2021).
Much of the research on supply chain resilience has focused on the ability to
bounce back following a disruption (Sheffi and Rice, 2005), but the scale of the
disruption may give rise to use of the terms ‘crisis’ (Natarajarathinam et al., 2009)
and ‘disaster’ (Richey, 2009). Some crises and disasters are localised, with local
and regional impact, such as Hurricane Katrina. Some are local but their impact
may be global, such as the Tohoku tsunami in Japan. A small number, such as the
2008 financial crash and COVID-19, are truly global in scale and impact. Crises and
disasters may occur very rapidly with little warning, such as natural disasters, but
others, such as the climate crisis, develop over longer periods of time; this contrast
has been termed slow-onset vs. fast-onset (van Wassenhove, 2006).
Clearly, it is not possible to predict accurately or be totally resilient to large scale,
global crises, such as COVID-19. However, by considering the possibility of global
crises in scenario planning, there is the potential to improve supply resilience. To help
with this preparation, supply chain risk management practitioners and researchers
might learn from emergency and disaster management and humanitarian supply chain
management knowledge, tools and techniques.
To encourage dialogue in scenario planning as part of supply chain risk manage-
ment, there are a range of techniques, including brainstorming, to consider possible
122 6 Supply Risk and Resilience to Global Challenges

Fig. 6.1 Example template

for crisis scenario risk and
resilience planning

futures. The 2 × 2 below in Fig. 6.1 is an example of a simple tool based on humani-
tarian supply chain management thinking; it can be used to imagine various possible
scenarios in the event of a crisis.
In emergency management, strategic procurement and location of funds and
supplies can be anticipated as part of preparedness (McGuire and Schneck, 2010;
Torabi et al., 2018). The United Nations Office for Coordination of Humanitarian
Affairs (UNOCHA) has created a structure of country-based pools of finance ready
to be deployed locally in emergencies, based on possible scenarios. However, the
open dialogue required for this type of planning requires new style of leadership and
management.

6.10 Styles of Leadership and Management for Risk

and Resilience

Perceptions of risk impact behaviour of supply chain managers trying to mitigate

risks and build resilience. Available data on risk and loss in supply networks is
often ragged and incomplete, leading to supply chain managers making assumptions
based on history, intuition and possibly prior critical incidents that are prominent in
their thinking (see Critical Incident Theory, Bitner et al., 1990). Empirical evidence
from research discussed in Harland et al., (2003) reveals that more systematic scan-
ning across supply networks on specific issues might provide a clearer picture of
actual, rather than perceived, risk. The research shows that organisations tend to focus
on potentially catastrophic risks while paying less attention to constant, every day,
smaller risks that, in total, represent substantial realised losses. For example, Hewlett
Packard were previously unaware of the scale of aggregate realised losses relating to
day-to-day penalties and costs of inaccurate and incomplete import documentation;
rather, their risk strategy had been focused on potential single event catastrophes.
6.10 Styles of Leadership and Management for Risk and Resilience 123

Looking for rational, measured responses based on experience is a technical

response to risk; however, uncertainty may demand more creative thinking, outside
the box, but there is social risk to those engaging in this. People tend to orient
decisions based on memory, using usual frames of reference. However, in unique
situations, the state of confusion must be made coherent. Skilful practitioners learn
to conduct frame experiments to make more sense of the mess to project possible
impact of their chosen frames. In dealing with uncertainty, such as reputational risk,
operational risk decisions are more influenced by individual decision-makers’ social
preferences and biases.
One stream of thinking on leadership in risk management is to encourage
‘divergence’ (Grötsch et al., 2013) i.e., reframing by encouraging divergent views.
Paparone and Topic (2019) discuss methods of how to do this, including increasing
cross-cultural empathy, rewarding introspection and critical reflection and mitigating
groupthink. Reframing can also be performed through focusing on value patterns;
for example, corporate social responsibility could be used as a lens through which
to reframe supply chain risk (Cruz, 2013).
Rather than always seeking to predict as accurately as possible and engineer
possible solutions, as is traditional in supply chain management, our field of research
and practice should also develop capability in accepting uncertainty and learn to deal
with the following:
• Lack of / ambiguous information relating to cause of risk and its effect
• Acceptance that people make behavioural responses to risk
• Recognition of the importance of intuition and sense-making
• Lack of adequate computational resources to assist in assessing risk and its effect
Intuition is a psychological evaluation process based on non-conscious use of
heuristics (guessing) or cognitive schema (the complex structure of individuals’
beliefs, values and experiences). Cognitive schema act as a filter. Intuition can lead
to systematic biases in decision-making, as can cultural differences. For example, in
cultures where individual achievement and ‘can-do’ attitudes are valued, individuals
may understate potential negative impact (e.g., in US cultures) compared to more
consensus cultures (e.g., Nordic Scandinavian cultures). Consensus cultures may
encourage braver thoughts and negative ideas to be surfaced.
Sense-making can be in two stages of a crisis—making sense as a crisis unfolds
and after the event making sense with the benefit of hindsight. During crises, actors
often take decisions to simplify complexity and, in so doing, this impacts on how
their reaction to the crisis plays out. After a crisis, it is possible to try to make sense
of how an organisation and its supply chain recovered, to learn from the experience.
This learning should be fed back into preparing for future crises.
New styles of leadership may encourage reframing of how supply chain
risk and resilience are approached. Reframing through divergence and reframing
value patterns are two possible approaches. Divergence seeks to increase inter-
organisational and inter-personal diversity in the team charged with assessing and
dealing with an emergent risk. Diverse individuals are encouraged to assess the novel
situation—each will necessarily do it from their own, differing perspectives. When
124 6 Supply Risk and Resilience to Global Challenges

considering value patterns, spectra of extremities are often used. Spectra relating to
value patterns include simplicity vs. complexity, data-driven decisions vs. intuition,
traditional vs. innovative, as examples. It may be important to retain anonymity when
reporting reframing exercise results, to prevent individual participants being viewed
as rogue or not team players.

6.11 Developing Supply Chain Risk and Resilience

for Global Challenges

The Institute of Risk Management is an international organisation that educates and

trains practitioners in risk management, in partnership with universities. Two themes
feature prominently in their portfolio—horizon scanning and the appetite for risk.
One of the earliest uses of the term ‘horizon scanning’ was by Bill Gates as he
developed his vision of the future embracing information technologies (Gates, 1995).
Horizon scanning is now viewed as a systematic approach for exploring emerging
trends and issues (Ricciardi et al., 2017). In addition to looking ahead, horizon
scanning also involves systematically challenging the status quo through multi-
disciplinary teams and stakeholders, with senior management necessarily being open
to constructive challenge. The process of horizon scanning is very similar to those
developed in supply chain risk management (e.g., Harland et al., 2003), but rather
than identifying, assessing and forming strategies for risks, horizon scanning focuses
on identifying potential technologies and their opportunities as well as risks.
To date, horizon scanning has been used primarily by policy advisors and policy
makers (Könnölä et al., 2012; Amanatidou et al., 2012) in particular to examine agri-
culture (e.g., Baulcombe et al., 2009), ecology (e.g., Sutherland et al., 2014), health-
care (e.g., Urquart and Patrick, 2016; Hines et al., 2019), defence (e.g., Palomino
et al., 2012) biosecurity (e.g., Ricciardi et al., 2017) and food safety (e.g., Marvin
et al., 2009).
Within the supply chain management community there are scholars looking to
particular new and emerging technologies as opportunities. For example, it is possible
that technological development relating to the Internet of Things (IoT) may provide
mechanisms for gathering and processing large quantities of data to support collabo-
rative approaches to forming and implementing risk strategies (Birkel and Hartmann,
2020) and for innovation in supply chains (Li and Li, 2017). The potential of IoT has
been examined particularly for cold supply chains (Tsang et al., 2018). Blockchain is
an important new topic in supply chain management and has been examined in global
supply chain risk analysis (Choi et al., 2019) and as a potential for improving supply
chain resilience (Min, 2019). The potential use of social media in supply chain risk
management has been highlighted (e.g., Huang et al., 2020; Chae et al., 2020). The
potential for artificial intelligence (AI) in supply chain risk management has recently
received research attention within the computing field (Ganesh and Kalpana, 2022).
References 125

However, to date, supply chain management practitioners and researchers have

tended to focus on firm-centric risks to supply chains. Whilst there has been
some recent consideration of opportunities presented by individual technologies by
scholars, as outlined above, as a community SCM has not yet embraced a broader
perspective of horizon scanning to identify, filter and prioritise research across avail-
able and emerging technologies as part of supply chain risk management. Wider
horizon scanning exercises, such as Foresight (Martin, 1995) have been incorporated
into government decision making, particularly in more consensual policy making
environments (Georghiou, 1996). But there is a big gap between these national-
level horizon scanning exercises and supply chain risk management in practice and
research. Some industries or fields are served better than others with field specific
horizon scanning exercises; e.g., Sutherland et al., (2023) perform an annual scanning
exercise for biological conservation. Elsewhere, however, it is variable across sectors
and regions as to what is available for supply chain managers and researchers to incor-
porate into their endeavours on supply chain risk management. This represents a gap
in research and practice that requires addressing.
A further area lacking sufficient attention in the supply chain management field
is the more behavioural aspect of ‘risk appetite’. Risk appetite has certainly been
considered in financial trading (e.g., Carpenter, 2000) and insurance (e.g., Aven,
2013). There are some publications by quantitative modellers that treat risk appetite
as a variable within supply chain risk management models (e.g., Bandaly et al., 2014;
Qazi et al., 2018). There are examples of consideration of risk appetite to particular
supply chain risks such as cyber risks (e.g., Windelberg, 2016). But supply chain
management risk methodologies and frameworks have yet to pay sufficient attention
to risk appetite and other more behavioural aspects of risk and resilience.

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Chapter 7
Supply Policy

7.1 Introduction

In Chap. 2 it was argued that supply chain management, as we know it today,

originates in firm-based, for-profit decision making, benefiting shareholders and
other stakeholders in private sector firms’ financial success. This has perpetuated
the dominance of an economic perspective to supply chain management, focused
on reducing costs, improving competitive advantage, improving profitability and
ultimately improving shareholder value. More recently, there has been growing
interest in supply chain policies, notably sustainability and social policies. Whether
firms’ motivations to embrace more sustainable and socially responsible practices
in their supply chains are genuine, or designed to manipulate customers’ and stake-
holders’ perceptions, as in ‘greenwashing’, many private sector firms are increasingly
promoting their aspirations to support a more sustainable and socially responsible
agenda.
Although the majority of empirical supply chain management research has been
conducted in the private sector, there is growing research interest in supply chain
management in public and not-for-profit settings. In the public sector a wide range
of policies impacting supply chains serving governments is evident, in addition to
broader sustainability and social responsibility policies. These include policies to
improve social value, benefit local communities, and expose and eradicate modern
slavery, child labour and poor working conditions in supply chains, as examples.
Governments can use a range of tools to implement and enforce policies, including
legislation, regulation, policy guidance, fiscal measures, grants and incentives, as
examples.
In this chapter, first supply policy is defined as distinct from supply strategy,
supply management and supply operations. Then supply policy is conceptualised as
a broad area encompassing five themes:
• a supply policy or set of policies formulated by organisations, relationships,
chains, networks and supply systems (e.g., a sustainable supply policy)

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 133
C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_7
134 7 Supply Policy

• a government policy that impacts supply markets and organisations

• a lever of government policy implementation using public procurement to impact
specific supply chains serving the public sector
• supply policy implementation
• global stewardship of supply policies
The arguments build on the previous chapter on risk and resilience to global crises
by developing ideas on global stewardship of supply chains arising from research
findings during the COVID-19 crisis. Within the chapter our research is featured,
including examples from case study-based research of policy-led supply chain deci-
sions aspiring to improve poverty in the United Nations supply system (Walker and
Harland, 2008), quality of healthcare (Walker et al., 2008), environmental sustain-
ability (Amann et al., 2014), social value (Lynch et al., 2019), and support of small
businesses (Harland et al., 2019). The significance of the potential impact of policy-
led supply decision-making is examined and how this potential might be achieved
(Harland et al., 2021). First, it is necessary to define supply policy.

7.2 Defining Supply Policy

The terms ‘policy’ and ‘strategy’ are often used interchangeably in practice and
research in a vague way to refer to some form of plan or intended action by organisa-
tions. Sometimes the term ‘policy’ is used at an operational level. For example, Davis
(1993) discusses different supply chain policies as operating decisions that impact on
inventory; Nair and Closs (2006) refer to supply chain policies of inventory manage-
ment and expediting deliveries. Simatupang and Sridharan (2002) discuss the need
for integrated policies in the supply chain, rather than local policies, again referring to
more operational supply chain decisions. Mentzer et al., (2001) describe supply chain
policy integration as where members of the supply chain share the same goal and
the same focus. Authors publishing on sustainability will often refer to sustainable
supply chain management as a policy (e.g., Ghosh and Shah, 2012). To differentiate
policy from strategy, some authors use the term ‘policy’ to refer specifically to public
policy made by governments (e.g., Beaver and Prince, 2004) and how this impacts
SCM (e.g., Tokar and Swink, 2019).
To provide clarification on what a supply policy is and isn’t, this chapter offers a
definition of supply policy to distinguish it from SCM strategy, operational decision-
making and public policy. In doing so, it clarifies differences in level, motivation and
implications to characterise supply policy as distinctly different from how many SCM
authors have used the term previously. Supply policy is defined here as an aspiration,
or representation of a belief, that provides guidance for action, or a corset that restricts
or constrains action. An aspirational policy guides members of the supply chain on
what to aim for and to continue aiming for into the future. For example, a policy
to work together to improve the health, safety and welfare of workers in the supply
chain is an aspiration that supply chain members might collectively subscribe to. A
7.2 Defining Supply Policy 135

restrictive, or corset, supply policy attempts to stop members of supply relationships,

chains and networks from doing something. For example, supply chain members
may agree to boycott using a particular supplier and its subsidiaries, or organisations
based in a certain country, on the grounds of concern about those organisations or a
country’s behaviour or political climate.
Aspirational policies may appear less tangible, more complex, challenging to
implement and difficult to evaluate their impact, relative to restrictive policies. Aspi-
rational policies are often (but not always) well intentioned, but can be quite nebu-
lous in their definition, targets and measures. At face value, restrictive policies seem
more straightforward in that they instruct firms not to do something; however, the
full implications of taking this restrictive action may only be revealed over time. For
example, forbidding supply chain members from using suppliers that employ chil-
dren may seem to be an ethically sound supply chain policy, but, as Bourdillon et al.,
(2010) explain, and will be discussed later in this chapter under ethical supply chain
management, working with organisations and communities to improve education
and children’s health is a complex issue. Whilst the United Nations International
Labour Organisation is committed to end child labour by 2025, as are children’s
charities such as Save the Children, there is understanding in these organisations of
the complexities created by the economic benefit provided by some organisations to
educate these children, and the impact this economic benefit has on the children’s
own development, their families and their local communities. As policies represent
beliefs, aspirations and values, they are implemented to change thinking, culture
and behaviour in supply chains. Policies should not be changed frequently as they
are long-term value commitments. Performance of supply chain policies may be
assessed according to impact on supply chain members, but also may impact on
external contexts and conditions, such as the environment or society.
To distinguish supply chain policy from strategy, supply chain strategy is defined
here as an action plan aligned to individual organisation or interorganisational
strategy. Strategies are reformulated as external and internal conditions change;
strategic management should be an ongoing process to steer the direction of an
organisation as it navigates the changing environment within which it operates.
Unlike supply chain policies, supply chain strategies should, therefore, change as
circumstances change. Supply chain strategies are essentially to improve supply
chain performance (Kampstra et al., 2006) for individual companies in the supply
chain and for the supply chain as a whole (Mentzer et al., 2001). Traditionally,
performance has been viewed as economic/ financial performance. Supply chain
strategies may focus on strategic themes, such as innovation, global sourcing, risk and
resilience, and collaboration. However, there may be tensions and conflicts between
an individual company’s corporate strategy and the strategies of each member of the
supply chain (Hofmann, 2010). Supply chain strategy has traditionally focused on
firm-based decision-making and how individual firms impose strategy across other
members of the supply chain. To impose a supply chain strategy requires power
and influence in the supply chain, such as in the widely studied case of the Toyota
supply chain (e.g., Womack et al., 1990). There has been less research attention paid
136 7 Supply Policy

Fig. 7.1 Hierarchy of

supply policy, strategy,
management and operations

to more consensus-oriented supply chain strategies, where members of the supply

chain discuss and form mutually beneficial action plans.
Supply chain managerial and operational decisions are defined here as day-to-day
decisions relating to inventory management, forecasting, contracting, scheduling,
expediting, storage and distribution, as examples; this book focuses more on supply
policy and strategy, rather than management and operations of supply. Supply policy,
strategy, management and operations was conceptualised earlier in Fig. 4.2 as a
triangle indicating hierarchical levels of decision making, with operations at the
base of the triangle and policy at the top, as shown below in a simplified version in
Fig. 7.1.
Individual organisations and supply chains will seek alignment or, at least,
minimise conflicts between these different hierarchical levels of supply. The motiva-
tions for supply chain policy, strategy, management and operations are different and
they have different implications. People working to ‘get the job done’ in supply chain
operational roles may be rewarded according to economic efficiency and customer
service targets. Policy and strategy makers are usually in more senior organisational
roles and may see a bigger picture for their organisation and supply chain, driven
by various stakeholders’ demands. Supply chain managers who have responsibility
for managing operational performance must also deal with demands from above in
the managerial hierarchy, so can become the pressure points in organisations and
supply chains, trying to deal with any conflicting objectives involved with alignment
of policy, strategy, management and operations.
There are many policy themes adopted by organisations today that impact on
their own organisations, communities local to them and their supply chains; exam-
ples include environmental sustainability, philanthropy for community benefit, small
business development, ethical supply and equality and diversity. In the following
sections, a brief overview of research relating to contemporary supply policies is
provided. However, in this chapter it is not the intention to focus in on particular
supply policies, but rather to examine the potential impact of supply policy and how
public policy might effectively create supply policy in supply markets and, in a more
7.3 Supply Policies Formulated by Organisations and Supply Structures 137

targeted way through the use of public procurement, in supply chains serving the
public sector.
Having defined supply policy, the next section briefly examines supply policies
that are increasingly evident in practice and attracting research attention from the
SCM academic community.

7.3 Supply Policies Formulated by Organisations

and Supply Structures

Supply policies are not new. It might be argued that a quotation attributed to Henry
Ford around the turn of the twentieth century is an example of an aspirational supply
policy to provide all families a new way of life by providing value for money vehicles:
I will build a motor car for the great multitude...constructed of the best materials, by the best
men to be hired, after the simplest designs that modern engineering can devise...so low in
price that no man making a good salary will be unable to own one-and enjoy with his family
the blessing of hours of pleasure in God’s great open spaces.

Corporate social responsibility practices have been evident by firms’ owners prac-
tising philanthropy through care packages and charities supporting their employees
and communities. However, it is only relatively recently that supply chain manage-
ment as a field has recognised the need for supply policies in practice and improved
understanding of them through research. In the following sections a brief review of
contemporary supply policies is provided.

7.3.1 Sustainable Supply

The ecological environment has been recognised as a supply chain management

issue since the mid- 1990s (e.g., Drumwright, 1994; Lamming and Hampson, 1996;
Walton et al., 1998; Beamon, 1999). During this time some global brands were turning
their attention to green issues and the importance of engaging their supply chains in
environmental initiatives, for example The Body Shop (Wycherley, 1999) and Xerox
(McIntyre et al., 1998). However, more recently researchers and practitioners have
embraced a broader concept of ‘sustainable supply chain management’. Seuring and
Müller, 2008, p. 1700) define sustainable SCM as:
the management of material, information and capital flows as well as cooperation among
companies along the supply chain while taking goals from all three dimensions of sustainable
development, i.e., economic, environmental and social, into account which are derived from
customer and stakeholder requirements.

Sustainable supply chain management (SSCM) has embraced the prior concept of
Corporate Social Responsibility (CSR), originally defined by Carroll (1979, p.500)
who stated:
138 7 Supply Policy

the social responsibility of business encompasses the economic, legal, ethical, and discre-
tionary expectations that society has of organizations at a given point in time.

SSCM research and practice often refers to the accounting oriented ‘triple-bottom
line’ (Gold et al., 2013) of how organisations account for their economic, environ-
mental and societal performance. As SSCM has evolved and developed, key themes
have emerged in business practice and research.
In business practice, firms such as The Body Shop have been guided by their
environmental, human rights and anti-animal testing policies for over 40 years,
elements of which demonstrate what the company aspires to, and how their poli-
cies frame and constrain their decision-making. Examples of sustainability initia-
tives adopted in for-profit organisations include reducing packaging and waste,
assessing suppliers’ environmental performance, developing more eco-friendly prod-
ucts, paying fair wages and ensuring safe, appropriate working conditions (Walker
and Preuss, 2008). However, despite recognition of the climate crisis, environmental
degradation, resource depletion and increasing regulation and global initiatives to
tackle these, implementation of sustainability driven reforms in supply chains is
still lagging well behind the pace of policy formulation (Gold and Schleper, 2017).
Corporate social responsibility and sustainability policies published and promoted by
for-profit organisations may be propaganda, ‘greenwash’ and other cynical attempts
to manipulate public, customer and stakeholder perceptions, caused in part by the
prevailing economic pressures and conflicting stakeholder demands on organisations
(Cho et al., 2015). Srivastava (2007) highlights how the lack of empirical research and
frameworks for green supply chain management are also impediments to assessing
and achieving progress.
Different positions relating to sustainable SCM are evident in the SCM academic
community. For example, Carter and Rogers (2008) emphasise the economic prior-
ities within the triple bottom line, by asking if environmental supply chains pay.
The relevance of this question is challenged by Pagell and Wu (2009); Pagell and
Shevchenko (2014) claim that “primacy of profits” is a normative assumption,
emphasising that sustainability initiatives should not be driven by the demands of
profit maximisation (which in the US and Western Europe is largely focused on short-
term profit maximisation). There are those who support and promote the need for
prioritising environment, economy and society equally in triple bottom line thinking
(Gończ et al., 2007), although the notion of equal priorities across these three elements
of sustainability may also be challenged. There is clear evidence that not-for-profit
organisations including governments, NGOs, community interest organisations and
charities have stakeholder objectives that prioritise environmental and social impact
above economic impact in many situations, giving rise to supply chains that view
their success beyond simply profits (Wu and Pagell, 2011).
Whilst definitions of SSCM incorporate environmental, economic and social
sustainability, in practice more attention has been paid to date to environmental
sustainability. However, more recently there has been a growing interest in aspects
of social sustainability, often using the term ‘ethical’ supply.
7.3 Supply Policies Formulated by Organisations and Supply Structures 139

7.3.2 Ethical Supply

Ethical supply chain management is a contentious topic and presents challenges to

organisations trying to impose their ethical values on their supply chains. Ethics
are moral principles that govern behaviour; however, they are value-laden, giving
rise to many different perspectives and opinions of what is right, just and fair. For
example, Mahatma Gandhi is reported to have argued that whilst it is difficult, but
not impossible, to conduct strictly honest business, honesty is incompatible with
amassing a large fortune. A quotation attributed to Henry Ford states “a business
that makes nothing but money is a poor kind of business”. In the essays of Michel
de Montaigne, the ethics dilemma is illustrated in his quote “there are truths on
this side of the Pyrenees which are falsehoods on the other”. Another example is
the Chinese Guanxi practice of giving gifts in business transactions; this presents a
much-debated ethical dilemma as whether to out it as corruption, view it as a local
way of building social capital, or a way of showing politeness and tact in respecting
local customs (Smart and Hsu, 2017).
Ethical policies may be formulated by organisations based on beliefs, but there is
still a long way to go to implement these policies effectively and evidence changed
practice. Weber and Gillespie (1998) discuss the differences between ethical beliefs
embedded in policy and those evident in policy implementation; they question
whether organisations and individuals sincerely intend to implement them, and if
it is feasible to implement them. Disingenuous policies are made for show only, but
there are also policies with some support but not sufficient resource commitment, so
they fail to be implemented with any effect.
Supply chain management policy makers should consider the different ethical
perspectives they may encounter in their supply chains and how they will address
ethical differences. They also need to consider the different ethical dilemmas that
may be experienced within their supply chains but are not necessarily visible to
them, where unethical practices are occurring several tiers upstream from them. In
the following sections we examine ethical issues of exploitation of lower standards
in working conditions, supply chain bullying, modern slavery (including protection
of children and women) and corruption.

7.3.3 Exploitation of Lower Standards of Working Conditions

From the mid- 1980s through to 2000, outsourcing and offshoring was a major trend
in behaviour of firms and public sector organisations. As well as providing an oppor-
tunity for cost reduction and access to complementary assets, risks of outsourcing
were identified (see, for example, Earl, 1996). For example, outsourcing to newly
emerging economies can give rise to international exploitation, with outsourcing
nations gaining benefits from softer legislation on issues such as human rights and
140 7 Supply Policy

health and safety. Nations taking on undesirable activities may place economic bene-
fits above some health and safety concerns, such as lack of maintenance and safety
equipment on machinery, poor training of operators and softer national legislation
on pollution than in more developed nations.
A tragic example of outsourcing companies exploiting poorer health and safety
safeguards in developing nations is the disaster at Rana Plaza, Dhaka, Bangladesh.
An 8-storey manufacturing building containing 5 ready to wear garment factories
collapsed on 24 April 2013, with an unknown number of predominantly female and
child garment workers inside. 1134 were killed and over 2500 injured. It transpired
that even local building and construction regulations (which were relatively low
compared to international standards in developed countries) had not been complied
with. Many household name clothing brands sourced products from these factories;
some firms, such as H&M and Primark were quick to respond to the disaster by
donating to a fund to compensate victims and their families, while others such as
Benetton, Matalan and Carrefour appeared slower to accept their responsibilities.
Whilst it has long been argued that risk and responsibility cannot be outsourced
(e.g., Harland et al., 2003), in practice some organisations try to absolve them-
selves from their responsibilities post-outsourcing. Negotiations within outsourcing
arrangements should focus attention on which party takes responsibility for different
risks. Whilst not universal, in some public sector outsourcing arrangements, the need
for appropriate governance to manage risks in the outsource relationship has been
explicitly recognised (Farneti and Young, 2008).

7.3.4 Supply Chain Bullying

Supply chain bullying encompasses a range of coercive, aggressive behaviours of

organisations seeking to force compliance of other firms in their supply chains (Co
and Barro, 2009). Prevalent in many food supply chains, organisations such as the
UK retailer Tesco have been accused of supply chain bullying (Durocher-Yvon et al.,
2019); reported examples of bullying behaviour include demanding 10% price reduc-
tions from suppliers and failing to pay suppliers in a reasonable time. International
buying groups are common in retail and are formed to provide economies of scale
for the collective membership over their suppliers (Hernández-Espallardo, 2006);
however, use of power through international buying groups has also been highlighted
as a bullying tactic. Supply chain bullying impacts particularly on small to medium
sized businesses (Arend and Wisner, 2005).

Harland, Caldwell et al., (2007a, b) identified that smaller businesses were

disadvantaged and cast adrift by larger, more dominant supply chain firms
who enforced adoption of information systems, particularly ERP, to integrate
their supply chains. These systems and technologies were unaffordable and
7.3 Supply Policies Formulated by Organisations and Supply Structures 141

impractical for smaller businesses to purchase, install and operate. Empirical

evidence was provided of the cautiousness of SMEs to invest in information
technologies because of resource poverty and attitude to investment; they only
did so reluctantly under pressure from larger downstream customers, when
faced with the risk of being deselected from supply chains.

Ironically, in the pursuit of improving corporate social responsibility, it has been

argued that over-zealous firms inspecting and monitoring suppliers’ compliance with
their own CSR goals could be perceived as supply chain bullies, rather than CSR
champions (Boyd et al., 2007).

7.3.5 Modern Slavery

Modern slavery has been defined as “the recruitment, movement, harboring or

receiving of children, women or men through the use of force, coercion, abuse
of vulnerability, deception or other means for the purpose of exploitation” (Such
et al., 2020, p. 217). Modern slavery is increasingly recognised as a human rights
phenomenon but, as it has only recently appeared on organisations’ radars, currently
there appears to be a significant variety of organisational responses to tackle this
(Monciardini et al., 2021). However, larger firms are clearly concerned enough by
this issue to survey their suppliers to find out more about any practices in their supply
chains that might be perceived as using modern slavery (Flynn and Walker, 2021).
Echoing themes in the previous chapter on supply chain risk and resilience, Geng
et al., (2022) find that firms are more likely to focus attention on modern slavery if
there is increasing media coverage of the issue that might potentially cause reputa-
tional damage to them. Cousins et al., (2020) propose that there are economic benefits
in terms of shareholder value in responsible sourcing; firms could mitigate risk by
taking positive action to ensure their supply chains do not contain firms involved in
modern slavery. However, there is evidence that firms take strategic action to defend
their competitive positions, without actually taking positive action against modern
slavery. They issue ambiguous statements about transparency in their supply chains
to provide reassurance, transfer responsibility and limit the scope of their consid-
eration of the issue (e.g., focusing attention on auditing their national rather than
international supply chains, as identified by Meehan and Pinnington (2021).
Researching modern slavery in supply chains is problematic as firms using modern
slaves are reluctant to be exposed to research in case their actions are found to be
criminal (Meehan and Pinnington, 2021).
142 7 Supply Policy

7.3.6 Corruption

Corruption is detrimental to political progress and economic development (Jain,

2001) and increasingly occurs within supply chain relationships, making a supply
chain perspective of corruption vital (Arnold et al., 2012). Building on the discussion
of risk and resilience in the previous chapter, the risk of reputational damage to
companies caused by exposure of potentially corrupt practices in their supply chain
may cause more negative impact to share price than the ensuing consequences of
investigation or any resolution through the courts (Kim and Wagner, 2021). Anand
et al, (2005) expose how rationalisation and socialisation tactics are used by those
engaged in corrupt practices to appease any disquiet they feel themselves and to
persuade others around them that their actions are somehow acceptable.
In developing a typology of supply chain corruption practices, Silvestre et al.,
(2020) highlight the role that weak institutional contexts play in corruption being
prevalent. They also discover that well motivated standards for socio-environmental
sustainability practices may give rise to increased corruption in attempts to deviate
from these standards.

7.4 Government Policy Impacting Organisations

and Supply Structures

Governments create policies in a wide range of areas relating to the public services
that they provide. In developed countries these services typically include health,
education, economic development, foreign policies, homeland security, defence,
justice, food and agriculture, environment, transport and infrastructure, business and
trade, and culture, media and sport. National, multi-level government systems, such
as federal and state or national, provincial and local governments, are typically found
in countries with medium to large populations. International, multi-level governance
is a relatively recent conceptualisation following the emergence of new govern-
ment structures arising from implementation of the Maastricht Treaty in Europe in
1992 (Hooghe and Marks, 2001). These levels of government have authority and
funding but are both constrained and guided by overarching policy networks from
higher levels with associated laws, regulations, fiscal instruments and other devices
of government.
Law and regulation usually take time and political commitment to bring about.
Once formed, they prohibit or enforce action; failure to comply with them may
lead to prosecution and legal recourse in the courts. Legal recourse may be against
individual employees of firms or against the firm as a corporate entity, although
the chief executive officer and other officers in appropriate positions may be held
responsible for violations. Whilst an in-depth review of research relating to the many
laws and regulations internationally that impact on SCM practice is not possible here,
some key areas of legislation are briefly considered. These example areas demonstrate
7.4 Government Policy Impacting Organisations and Supply Structures 143

how governments use the law to impact organisations and supply structures, usually
supply markets, to prohibit or enforce behaviour.
A contemporary debate is ongoing on the need for, and reluctance of, many
governments to intervene through legislation in the free working of supply and
demand forces in supply markets. Many countries have laws and enforcement agen-
cies relating to monopolies, mergers, acquisitions, anti-trust and restrictive trade
practices to prevent markets becoming skewed through dominance of one or a small
number of powerful firms, or collusion of firms in cartels. There is also legislation
relating to trade with some countries that impacts the free working of global supply
chains.
Traditionally supply chain management in practice and research has regarded
legislation and regulation as an issue of compliance (e.g., Lamming and Hampson,
1996). Compliance is context specific, according to relevant legislation applicable
to the specific location of firms within supply chains. Globalisation of supply chains
has increased complexity of understanding and complying with local legislation
(van Tulder et al., 2009). Examples of concern in supply chain management include
the importance of understanding local country tax laws (Saudi et al., 2018), legal
challenges to corporate social responsibility codes of conduct imposed by supply
chain focal firms on global supply chains (Zakaria et al., 2012), compliance with
Shariah laws on tracking and traceability in logistics (Ahmad and Shariff, 2016),
and trying to enforce food safety laws in global food supply chains (Aruoma, 2006).
Whilst supply chain managers need to be aware of relevant legislation prohibiting
or enforcing them to act, or not act, in certain ways in certain markets, there is recent
evidence of a political role for supply chain management and firms to take (Fan et al.,
2022; Grover and Dresner, 2022). For example, political lobbying is increasingly
being used to try to influence trade legislation (e.g., Yang, 2022), individual firm
outcomes (Ridge et al., 2017), and environmental legislation, be it to oppose or
support (Delmas et al., 2016). Collective global supply chain lobbying is evident
in the agri-food sector to protect workers’ rights (e.g., Busch, 2007), but can also
work the other way round with individual firms such as the Chinese online retailer
Shein increasing investment in lobbying as their supply chains are being subjected
to probes about workers’ rights.
There are a range of fiscal interventions that governments make that impact on
supply chains including taxation, subsidies, grants and incentives, and price controls.
For example, taxation is used to penalise firms emitting carbon (e.g., Zhou et al.,
2021) or exporting (Hsu and Zhu, 2011). Supply chain managers can proactively
exploit comparative advantage by sourcing from lower tax countries (e.g., Shunko
et al., 2017). The use of government subsidies is widely evident, particularly relating
to sustainability (e.g., Chen et al., 2019), although the lack of government subsidies
in developing countries has been highlighted as preventing employment growth in
circular supply chains (Mangla et al., 2018). Governments in developing countries
appear more willing to intervene with price controls, as evident, for example, in
Kenya (Muthini et al., 2017), Indonesia (Silalahi et al., 2019) and India (Mahajan
and Tomar, 2021).
144 7 Supply Policy

Governments may use Economic Stimulus Packages (ESPs) as sets of incentives

to stimulate growth, particularly following a severe crisis. Franklin D. Roosevelt’s
New Deal programme of incentives from 1933–1939 targeted many sectors of the
economy to stimulate growth following the Depression in the US. Following the
2008 global financial crisis, many countries launched ESPs with resulting impact
on supply chains, for example in construction supply chains in Australia (Thangaraj
and Chan, 2021) and consumer durables in China (Bems et al., 2010). However,
there were calls for the recovery from the financial crisis to take a more sustainable
approach (Barbier, 2010).
Governments also intervene in supply markets through involvement in reciprocity
or countertrade agreements, although these arrangements are less in favour than they
were in the 1990s when the OECD estimated they accounted for around 30% of
world trade. Countertrade is trade between nations where currency is not readily
available. It takes different forms, the most traditional being barter, or a straight,
simultaneous exchange of goods. However, there are many other forms to facilitate
trade include counter purchase, offset, switch trading, buyback and compensation
trade agreements. For example, when China was developing its industrial infrastruc-
ture, it engaged in product buyback arrangements to buy equipment and pay for it
later with the products produced by that equipment. As a buyer for a UK mining
equipment company, I was personally involved in these large product buyback coun-
tertrade agreements. Countries still needing to engage in countertrade today include
many developing countries and it is still prevalent in the global arms trade.
In addition to governments formulating and implementing policies that impact
supply nationally, regionally and locally, they can also impact particular supply chains
that supply goods and services to the public sector. One formal route for this is public
procurement which may be used as a policy lever.

7.5 The Role of Public Procurement as a Supply Policy

Lever

Depending on the percentage of the economy administered by the state, governments

spend substantial amounts of money and can therefore have a significant impact on
national economies. Government spending represents and influences 32–50% of
National Gross Domestic Product of developed nations (OECD, 2021); in addition
to the direct contracts that governments make with their suppliers, these contracts
activate all the supply chains to those contractors, contributing to GDP (Harland,
2021). Governments procure a vast array of goods and services, ranging from large
capital projects such as hospitals and bridges, to routine revenue goods and services,
such as cleaning services and stationery. In nations where government spending on
goods and services constitutes a significant proportion of government total annual
expenditure (e.g., Netherlands: 46.8; United Kingdom: 32.1, United States: 25.2;
average OECD countries: 29.4%; OECD, 2021), governments have the potential to
7.5 The Role of Public Procurement as a Supply Policy Lever 145

exert a significant influence over private sector supply chains supplying the public
sector through their contracting. This provides opportunities for governments to use
their spending as a policy lever to impact business, economy, and society (Knight
et al., 2007; Harland et al., 2013; Harland et al., 2019). Public procurement provides
the formal process for governments to procure goods and services and is subject to
regulations in most jurisdictions.

Based on empirical case study research within the International Research Study
of Public Procurement (IRSPP), Harland, Telgen et al., (2007a, b, p. 352)
provide a conceptual framework of 7 stages of public procurement. The stages
are:
1. sourcing and delivering goods and services
2. compliance with regulation
3. efficient use of public funds
4. accountability
5. value for money
6. supporter of broader government policy objectives
7. deliverer of broader government policy objectives
This 7-stage framework does not imply that public procurement progresses up
through the stages, but rather that public procurement organisations in different
countries may be using public procurement to achieve various objectives. For
example, in South Africa public procurement was operating at stages 6 and
7 to support and deliver aspects of government policy on black economic
empowerment, whilst at the same time fighting non-compliance with public
procurement regulations. In contrast, the UK was pursuing accountability and
value for money i.e., they were operating at stages 3 and 4. The research also
shows that, within countries, it may be appropriate to operate at different stages
when dealing with different parts of the overall public spend portfolio.
The framework has also been used by countries to understand their AS-
IS position and to consider alternative TO-BE scenarios of what they might
achieve.

In addition to contracting with suppliers according to regulations, there is

increasing evidence that public procurement can also help deliver government
policies including:
• innovation (e.g., Edler and Georghiou, 2007)
• entrepreneurship (e.g., Loader, 2013)
• industrial development of particular sectors and local economies (e.g., Vecchiato
and Roveda, 2014)
• small business development (e.g., Glas and Eßig, 2018)
• social outcomes (e.g., Grandia and Meehan, 2017)
• sustainability (e.g., Brammer and Walker, 2011)
146 7 Supply Policy

• supply market competition (e.g., Caldwell et al., 2005)

• corporate social responsibility (e.g., Flammer, 2018)
• community benefits (e.g., Wontner et al., 2020)
• emergency planning (e.g., Handfield et al., 2020)
This role of public procurement has been recognised and emphasised in European
regulation (European Directive 2014/24/EU) that states:
Public procurement plays a key role in the Europe 2020 strategy […] for smart, sustainable
and inclusive growth […], as one of the market-based instruments to be used to achieve smart,
sustainable and inclusive growth while ensuring the most efficient use of public funds.

It has been shown that public procurement can be leveraged to impact on economy,
environment and society, thereby being an effective tool of government policy imple-
mentation (Harland et al., 2019; Glas et al., 2017). Harland et al. (2021) provide
evidence of how public procurement has been used strategically to support broader
government policies relating to encouraging innovation, developing small businesses,
improving employment, economic development, encouraging socially responsible
practice in private sector firms, improving local services and supporting sustainable
supply. Policy-led public procurement was evident during the COVID-19 pandemic
helping to mitigate the effects of the crisis (Handfield et al., 2020) and ensure
continuity of the supply of critical goods and services (Vecchi et al., 2020).
However, policy-led SCM that leads to successful outcomes in terms of contract
award incorporating policy agenda requirements does not necessarily lead to impact.
Harland et al., (2021) highlight the importance of supplier performance management
in ensuring that policy impact is achieved. Suppliers need support in terms of resource
investment and information/communication to deliver the required performance
(Harland et al., 2019).

As guest editors of a special issue of the Journal of Public Procurement,

Harland et al., (2021) examine policy led public procurement. We highlight
that implementation of policy goals in public procurement requires appropriate
instruments and performance measures which, if absent, impede the successful
exploitation of public procurement as a policy conduit (Patrucco et al., 2016;
Flynn, 2018). Articles in the Special Issue provide evidence of contemporary,
international policy-led public procurement initiatives including small busi-
ness innovation (Selviaridis, 2021) gender equity in public contracting (Orser
et al., 2021), prevention of corruption (Ausuquo, 2021), inclusion of minori-
ties (Allen, 2021), and promotion of sustainability (van Berkel and Schotanus,
2021). Harland et al., (2021) adapt a prior conceptual framework of Schapper
et al., (2006) to conceptualise that policy-led public procurement is not only
the formulation of new policies and goals, but also the management of these
issues within the public procurement system. Policy-led procurement incorpo-
rates planning, realising and measuring success i.e., performance management
(Grandia and Meehan, 2017; Patrucco et al., 2020).
7.6 Supply Policy Implementation 147

Regulation and compliance are not the only tools to implement policy goals
in contract awarding procedures. Rather, a systematic approach is required
that includes public supplier performance management, including broader
aspects of public procurement, such as supply market knowledge, collaborative
relationships, and long-term orientation.
Amann et al., (2014) examine the process of including sustainability
goals in public procurement tenders and whether these goals were achieved
through public procurement contract award. Through the lens of inducement-
contribution theory, 281 procurement files across four EU member states
are examined. The study examines differences between achievement of
environmental goals and social responsibility goals.
There are three main findings of the research. First, it is found that public
procurement, through the use of incentives, is able to change the structure and
content of supply to balance implementation of economic, environment and
social policies. Incentives encourage the development of new supply markets
and opportunities for growth in existing supply markets. Second, it is found
that, through the use of decrees, circulars and guidelines, public administrations
are encouraged to use socially responsible public procurement to shape supply
markets. Third, evidence is provided of the successful impact of policy-led
public procurement in terms of increased environmentally friendly and socially
responsible goods and services being procured by public administrations.

7.6 Supply Policy Implementation

In the previous section, the use of public procurement as a policy lever to support
implementation of government policies was considered. Here, a broader examination
of the challenges and means of implementing supply policies is provided.
It is a well-recognised challenge to convert any policy into efficacious action
(O’Toole, 2000). One of the main reasons is that policy makers rarely have personal
experience of policy implementation (Mayntz, 1983). There is often a lack of under-
standing by policy makers of what capacity and capability there is in those areas
with responsibility for policy implementation (Nunan et al., 2012). This detachment
from implementation is particularly evident when policies are designed to impact on
supply chains outside public sector. For example, the UK government policy to vacci-
nate all young people against meningitis was impossible to implement as the supply
market did not have the global capacity to produce sufficient vaccine in the proposed
timescale. Some policies require more complex capacity and capability being in place
(Varone and Aebischer, 2001); for example, current policies to encourage migration
to electric vehicles is hampered by lack of vehicle charging infrastructure. Busi-
ness incubators and pilot schemes do not necessarily address the challenges posed
148 7 Supply Policy

by scaling up mainstream delivery in policy implementation (Hannon and Chaplin,

2003).
Relating specifically to supply policy, some challenges must be learnt during
the process of policy implementation at scale, as evident when trying to imple-
ment sustainable supply policies in international supply chains (Oelze et al., 2016).
Referring to information integration in supply chains, Power (2005) highlights the
challenge of getting supply chain partners to agree the terms relating to implemen-
tation and that early involvement of stakeholders is critical. Tokar and Swink (2019)
refer to these as ‘shared foundational principles’ required.
In the public sector policymakers and public policy research have been criticized
for focusing more attention on policy forming rather than implementation, and for
assessing macrolevel influences of policy on industries rather than engaging with
organizations at a micro- level (Hiatt and Park, 2013). This compounds the effect
of policy implementation being somewhat distanced from organisations and their
supply chains, leaving organisations to formulate and attempt to implement their
own supply chain policies. Legislation forces compliance, which is a powerful tool
in policy implementation, but organisations are quick to seek out potential benefits to
them of following policy guidance, even where it is not legislated (Nidumolu et al.,
2009).

Harland et al., (2019) examine why, when it is recognised how important small
businesses are to economies and society, particularly in terms of employment
and the innovation capabilities they bring to supply chains, that government
policies to support small businesses are often not implemented successfully.
They examine the role of public procurement as a lever of government small
business policy implementation. Through coproduced research with senior
public procurement practitioners and small business representative agencies
in 13 countries, they investigate which policy implementation mechanisms to
engage small businesses in public contracts are more effective. Developing a
policy feedback framework based on Mettler (2002) and Pierson (1993), they
examine two sets of mechanisms to support small businesses, one to improve
resources available to improve small business capacity, the other to improve
advice, information and training to improve small businesses’ predisposition
to engage with government contracts.
It is found that direct financial support mechanisms such as set asides,
targeted economic development, prompt payments and provision of financial
assistance are perceived as the most effective to engage small businesses in
bidding for government contracts. These mechanisms result in resource effects
that improve small businesses’ capacity to engage. Information oriented public
procurement mechanisms that result in interpretive effects, such as monitoring,
measuring, websites, publicity and online help are perceived as not helping
small businesses to bid for and gain government contracts.
7.7 Global Stewardship of Supply Policies 149

Despite policy feedback research providing evidence that participation of

key individuals in policy formulation is key (Mettler, 2002), most of these poli-
cies and associated implementation mechanisms to support small businesses in
developed countries is formulated at arm’s length of the small business commu-
nity with a ‘we know best’ attitude. The resulting sets of policy implementation
mechanisms being used are very broad, more like a ‘scatter gun’ approach. In
some less developed countries, such as Uganda and South Africa, ministers
engage more with public procurement and small business representatives in
their policy formulation and use a smaller range of more focused, financial
support mechanisms as a result, which are proving to be effective.

7.7 Global Stewardship of Supply Policies

Global stewardship is evident in a range of areas. In infectious disease control, global

antibiotic stewardship is a response to combat antimicrobial resistance (AMR) (Goff
et al, 2019). “The cost in lives from AMR over the next 40 years could go as high as
10 million per year with the cost to economic development as high as $3 trillion per
year if current trends continue”; calls for better stewardship of the drug marketplace
to be broadened have been made (Utt and Wells, 2016). To try to provide global
stewardship, the World Health Organisation have created a WHO framework to
combat AMR (WHO, 2018). Global stewardship is also evident relating to protecting
oceans (Österblom et al., 2017) and is being called for to protect pollinators and global
food security (van der Sluijs and Vaage, 2016).

Harland (2021) reflects on the need for global stewardship of supply in certain
circumstances, notably humanitarian aid and global crises. Examples of global
stewardship in these situations include World Health Organisation health clus-
ters, the UNICEF vaccines programme, UNOCHA humanitarian aid funds
deployment, and UN global procurement, such as UNDP IAPSO. During
COVID-19, GAVI COVAX was a programme that attempted to raise suffi-
cient funds globally to provide vaccines to low- and middle-income countries
but was fraught with political problems and resistance (Usher, 2021). The
dominance of global pharmaceutical companies that benefit financially from
fractured and divisive approaches to pharmaceutical procurement, combined
with nationalistic and local protectionism witnessed during the COVID-19
crisis, work against attempts at global stewardship (Hermsen et al., 2020).
Relating to the supply chain management academic community, the essay
reflects on the need for joining up the ‘discontinuous wefts’ within a ‘supply
150 7 Supply Policy

chain management tapestry’ to bring together largely disparate areas of SCM

specialisms of traditional firm-based operations and SCM, purchasing and
supply management, public procurement and humanitarian logistics and SCM.
Until there is some form of at least interconnectedness of the field of SCM, it
will be challenging for the field to contribute substantially to the debate on the
need for, and feasibility of, global stewardship that requires knowledge from
the different areas of the SCM field.

7.8 Conclusions

The potential for the SCM community in research and practice to contribute and
make a substantial impact on supply policy areas is vast. Whilst sustainable supply
is now a significant and growing sub-field of SCM, more research attention to date
has been paid to environmental sustainability than social responsibility. In practice,
organisations are more aware of the need to evidence that they are being environmen-
tally responsible in their supply chains. There is still only limited research within
our community on supply chain management aspects of societal issues including
displaced populations, migration, humanitarian emergencies, poverty and modern
slavery.
As SCM develops, it is likely that the boundaries of our field will grow, particularly
to embrace and grow research in supply policy themes. However, this will require us
to redesign our approaches to evidence the value of SCM research, to understand how
to measure research impact in broader ways. This is considered in the final chapter
of the book on the future of supply chain management.

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 Part III
Implications for Research
Chapter 8
Future of Supply Chain Management

8.1 Introduction

Supply chain management as a field of research and practice has grown and devel-
oped substantially from its origins as a for-profit, manufacturing-oriented, firm-based
endeavour. As an academic field SCM now includes research in profit and not-for-
profit, public sector and private sector, service and manufacturing. The development
of the concept of supply chain management was traced in Chap. 2. From a structural
perspective, SCM research and practice have been stretching from internal SCM
within manufacturing organisations, to dyadic relationships, triads, chains, networks
and systems of supply. This systems level perspective of supply structures was exam-
ined in Chap. 3 where it was observed that, to date, there has been only limited
empirical research of these larger units of analysis.
SCM roles, processes and behaviours have developed beyond those associ-
ated with efficient materials and information transactions. Today, supply chain
management is a more strategic concept that is recognised in practice and research
as contributing to organisation policy and strategy implementation. Supply roles,
processes and behaviours were discussed in Chap. 4.
In the second part of the book, challenges facing supply chain management were
considered. Chap. 5 developed an argument that SCM’s traditional focus on mate-
rials, information, goods and services flows connecting organisations was a perspec-
tive based on powerful focal firms seeking to optimise those flows. Beyond these
direct connections, organisations and supply networks are interconnected in markets,
sectors and local and global economies. Historically, supply chain risk and resilience
have also been based on connected supply, focusing on how to tackle disruptions to
supply to return to a prior steady state and how to build resilience to future disrup-
tions. However, as was discussed in Chap. 6, contemporary challenges of a global
pandemic, war in Ukraine and increasing complex geopolitical dynamics have caused
the field of SCM to reflect and learn from supply chain failures during these global
crises. Chapter 7 further developed this line of thinking by exploring how supply

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 159
C. Harland, Supply Chain Management, Research for Development,
https://doi.org/10.1007/978-3-031-52247-5_8
160 8 Future of Supply Chain Management

chain management can be a lever of organisational and public policy implementation,

through the examination of contemporary supply policy themes, such as sustainable
supply.
In this final chapter we look forward in time to speculate on the nature of future
challenges facing supply chain management and how SCM might develop in the
future. The authors are a team from the Cardiff University/Politecnico di Milano part-
nership, who consulted with SCM faculty colleagues in both universities to research
their expertise and opinions on the future of SCM. Two workshops were held, one with
SCM faculty at Cardiff, the other with the Polimi SCM faculty, to explore what SCM
might become in the future. Prior to the workshops, participants provided elevator
speeches of what they thought SCM is currently; these speeches were analysed and
used to create a structured discussion within the workshops on how SCM might
develop in the future. After the workshops, a series of interviews with senior supply
chain practitioners in private and public organisations and professional associations
was conducted to research their perceptions of future challenges they face and SCM
as a field faces. The discussion incorporated themes arising from the workshops.
The themes generated from the workshop and interview process support that the
original focus of SCM on an operational, micro economic perspective, has expanded
and developed to face contemporary and future challenges. In this chapter we inves-
tigate and consider what those challenges might be, and what potential future impact
supply chain management might have on tackling those challenges. People-oriented
and environment-oriented themes came across strongly in the workshops, as did the
need for SCM to contribute and evidence value beyond simply economic value. A
future for supply chain management as a contributor to social and environmental
value is examined here.
Throughout the book SCM has been examined from a systems perspective,
conceptualising it as a multi-systems level endeavour. This increasing complexity,
dynamism and hierarchical systems view featured in the workshop discussions.
Systems thinking, therefore, is vital to the future development of our field. In this
chapter, we focus on the future for systems thinking and where this might take the
field of supply chain management as it continues to develop and expand.
Other than our field’s consideration of contractual and relational governance and
the use of agency theory, there has been quite limited examination of governance and
leadership within the field of supply chain management. In the taxonomy of supply
networks provided by Harland et al., (2001) we observe that different approaches
to management are required in different types of supply network. Chapter 5 built
on this as our thinking extended beyond agency in connected supply chains and
networks, to consider how supply chain management might develop in intercon-
nected, complex, dynamic systems of supply. In this chapter we look forward to
a future where supply chain management will embrace new forms and styles of
governance for this interconnected, complex world. The discussion here echoes the
importance of SCM becoming more people-focused in practice and research, that
transpired in the workshops.
Finally, we conclude with some thoughts about the future of supply chain manage-
ment research, what our colleagues think about the paths new colleagues entering
8.2 Future Challenges Facing Supply Chain Management 161

the field might take and what future challenges they might face as researchers. First,
however, a picture of the future context for supply chain management is provided,
in terms of the major challenges the field might have to face.

8.2 Future Challenges Facing Supply Chain Management

The World Economic Forum (2023) predicts that in the next ten years global risks
faced will shift further towards being dominated by environmental risks. In the shorter
term, as discussed in Chap. 6 on risk and resilience, the cost-of-living crisis dominated
predicted threats, but there is evidence globally of the significantly increasing chal-
lenges ahead due to environmental issues. The longer-term predicted rankings of risks
are (1) failure to mitigate climate change, (2) failure of climate change adaptation,
(3) natural disasters and extreme weather events, (4) biodiversity loss and ecosystem
collapse, (5) large scale involuntary migration, (6) natural resource crises, (7) erosion
of social cohesion and societal polarisation, (8) widespread cyber-crime and cyber-
insecurity, (9) geoeconomic confrontation, (10) large scale environmental damage
incidents. Potentially, all these global risks and possible global crises could impact
on supply, directly and indirectly. From our workshops and interviews with senior
SCM practitioners, the following supply chain challenges have been highlighted:
• Ongoing significance of COVID-19
• Critical minerals and semiconductors
• Reshoring
• Challenges of forecasting
• Supply chain visibility
• Changes in labour availability

8.2.1 The Ongoing Significance of COVID-19

In September 2023 the WHO dashboard reported 771 million cases of COVID-19
with just under 7 million deaths. It is the second most deadly pandemic, surpassed in
impact only by the 1918 influenza virus H1N1 that killed 50 million people globally.
There is now an enhanced understanding of the challenges of integration required
for preparedness, readiness and response within nations, to integrate planning and
coordination locally and nationally. The scale of this challenge is even greater as,
in addition, integration across nations and regions globally is required to end the
acute phase of this pandemic. In WHO (2022) core components are identified as
preparedness and response coordination, surveillance, research and development
with equitable access, vaccination and resilient healthcare systems. However, to
end the acute phase requires a recommended 70% of populations being vaccinated,
already achieved in richer countries, but only 10% vaccination has been achieved in 34
prioritised poorer nations. A network of partners (including Africa CDC—the Africa
162 8 Future of Supply Chain Management

Centres for Disease Control and Prevention, WHO, the United Nations’ Children’s
Fund, Gavi the vaccine alliance, World Food Program, World Bank, other humani-
tarian agencies, non-governmental organizations and local partners) has formed the
One Support Team to tackle vaccination inequity in each local context, supporting
One Country Teams led by each national government in priority areas.
The global and profound reach of the impact of the COVID-19 pandemic has given
rise to other major challenges. This pandemic has been a major cause of the deteri-
oration of the existing situations in locations of humanitarian emergencies and has
reversed decades of development aid work; there are now 339 million people needing
aid, compared to 235 million in 2021 (Global Humanitarian Overview, 2023).
Sodhi and Tang (2021) consider extreme conditions whose impact are felt beyond
individual or sets of supply chains, to societies and countries as requiring “extreme
supply chain management”. Extreme supply chain management must tackle the
combination of demand uncertainty, supply uncertainty, lack of labour availability,
lack of supply chain visibility, geopolitical instability, rigidity caused by the perma-
nent (as opposed to project) nature of supply chains, and unreliability of financial
flows in supply chains; all these can occur in extreme conditions.
The pandemic brought into sharp focus the vulnerabilities existing in global supply
chains, necessitating a profound reconsideration (Sodhi and Tang, 2022). In the
aftermath of COVID-19, an array of problems has arisen, causing unprecedented
disruptions, and reshaping the operational landscape for firms of all sizes and their
supply chains in diverse sectors. Volatility is compounded by pivotal events such as
Brexit, the US-China Trade War, in addition to the ongoing battle against COVID-19
(Roscoe et al., 2022; Nikookar and Yanadori, 2022). This increased volatility renders
the extended supply chain significantly more susceptible to disruptions.
Concurrently, these large, global companies are increasingly engaging in closer
collaborations with government and state entities, which creates more challenges.
This strategic recalibration is focused on enhancing supply chain resilience in antic-
ipation of more crises in the future (Panwar et al., 2022). Firms have already made
many modifications to their supply chain architectures as a response to COVID-19
(Handfield et al., 2020; Azadegan and Dooley, 2021); here we shine a spotlight on
other critical developments that are forming a continuous wave of incoming future
challenges for supply chain managers to plan for and respond to.

8.2.2 Critical Minerals and Semiconductors Supply

A substantial proportion of Western corporations depend heavily on global suppliers

for the provision of essential minerals crucial to semiconductor manufacturing,
which, in turn, serves as a foundational raw material for a multitude of manufacturing
sectors. Consequently, any disruption—whether stemming from geopolitical factors
or natural disasters —that impacts semiconductor production can initiate a domino
effect, reverberating across a range of vital industries. This predicament necessi-
tates a profound examination of the strategic selection of nexus suppliers for these
8.2 Future Challenges Facing Supply Chain Management 163

pivotal minerals; firms must consider which geographic regions are more resilient to
geopolitical tensions and natural disasters. These strategic decisions should incor-
porate learning, such as from Toyota’s strategic adaptations after the Fukushima
disaster. However, the risk of disruption in the supply chain remains as advised
by Woetzel et al., (2020) of the McKinsey Global Institute—“The probability of a
hurricane of sufficient intensity to disrupt semiconductor supply chains may grow
two to four times by 2040…The probability heavy rare earths production is severely
disrupted from extreme rainfall may increase 2 to 3 times by 2030”. The industry’s
growing dependence on semiconductors necessitates a concerted focus on upskilling,
reskilling, and the cultivation of new graduates proficient in rapidly evolving tech-
nological paradigms. Even if Original Equipment Manufacturers (OEMs) secure a
steady supply of critical raw materials, a dearth of adequately skilled and adaptable
labor forces in Europe and the Americas poses a formidable challenge.

8.2.3 Reshoring

The impact of closing international borders during the COVID-19 pandemic coupled
with the US China trade war caused many firms to change their outsourcing strategies
to reshoring (Moretto et al., 2020). The war in Ukraine has caused firms to ‘unhook’
from their supply networks in Russia (Srai et al., 2023). However, given the sunk
costs and assets this unhooking has caused them to leave behind, at some point in
the future they may well wish to rehook.
Many multinational corporations (MNCs) are exploring reshoring strategies to
mitigate future risks. This shift in supply chain strategy is a response to supply
inconsistency, heightened uncertainty in upstream supply chains, fluctuations in lead
times, and increased price volatility (Shi et al., 2023; Raj et al., 2022; Gereffi et al.,
2022; Panwar et al., 2022). The situation is further compounded by trade barriers,
the challenge of managing suppliers across different time zones, and the growing
demand for rapid responsiveness. These factors have prompted global companies to
consider the localization and regionalization of their resources (Raj et al., 2022; Xu
et al., 2020). This paradigm shift underscores a strategic emphasis on the develop-
ment of shorter, more localised, and regionally concentrated supply chains in alterna-
tive supplier networks. As multinational corporations are trying to reconfigure their
supply chains towards increased localisation and regionalisation, these actions may
significantly impact developing nations, potentially disrupting global societal well-
being (Panwar et al., 2022). The repercussions of dismantling global value chains
ripple out to developing and emerging economies, posing threats to sustainable devel-
opment, threatening attainment of goals including carbon reduction and poverty
alleviation (Anner, 2020; De Marchi et al., 2020. The socioeconomic and technolog-
ical progress in these regions is intrinsically linked to their active participation in the
global economy, largely facilitated by global supply chains. When suppliers in devel-
oping countries engage with global MNCs they have opportunities to upgrade their
skills and capabilities in products and processes, enabling them to perform better in
164 8 Future of Supply Chain Management

global value chains (Pietrobelli and Rabellotti, 2011; Humphrey and Schmitz, 2002).
There is an argument that, rather than reshore as a knee-jerk reaction, we should learn
from the COVID-19 experience to fortify resilience and durability of these supply
chains, ensuring their ability to rebound from disruptions and remain functional
during future crises (Panwar et al., 2022). There should be greater consideration of
the benefits of supplier diversity and sunk investment before unhooking from large
sections of global supply chains through reshoring. There is a counterargument that
reshoring and focusing on localised supply chains can help OEMs achieve social and
environmental sustainability agendas, but the process of uprooting and reorienting
the supply chain incurs significant costs and faces challenges of finding available
and capable capacity (Roscoe et al., 2022). Consequently, reshoring is unfolding at a
sluggish pace within the automotive, chemical, and commodity sectors, as noted by
Alicke et al., (2021). The following quote from empirical research suggests a lack of
appetite for companies to localise once disruption due to COVID-19 started to ease -
“As time passed, we found a reduced sense of urgency to completely overhaul supply
chain designs and an emerging rationale for shorter term tactical changes such as
switching production volumes and having backup suppliers.” (Roscoe et al., 2022,
p. 1423). In the pharmaceutical sector, intense government pressure and geopolitical
risks constrain pharmaceutical companies from any reshoring (Roscoe et al., 2022).

8.2.4 Forecasting Challenges

The future for supply chain management is likely to face “multiple and multi-
directional concurrent changes in supply and demand” (Ketchen and Craighead,
2021). The new and uncertain dynamics of the post-COVID-19 era have caused
an array of forecasting challenges within the domain of supply chain manage-
ment (Browning et al., 2023). The task of predicting the occurrence of geo-political
tensions and other unforeseen events remains challenging (Sodhi and Tang, 2022), but
the pandemic’s disruptive influence has increased forecast volatility. Substantial fluc-
tuations in demand and supply are causing greater erraticism in forecasts, impacting
inventory management that now swings from risk of stockouts to risk of excessive
inventory stockpiles. Even the forecasting of transit times and delivery schedules
has evolved into a multifaceted undertaking, because of the challenges highlighted.
Moreover, instability in energy prices, raw material costs, and labour availability
makes precise forecasting of manufacturing expenses a formidable challenge. The
evolving landscape is further impacted by sustainability considerations, inclusive
of environmental regulations and consumer preferences for eco-friendly products,
exerting transformative influences on supply chains. Forecasting the ramifications
of these elements on supply chain strategies is an increasingly complex challenge.
Lastly, the growth of e-commerce in the post-pandemic era heightens the complexity
of supply chain management by amplifying challenges related to last-mile delivery,
returns handling (Frei et al., 2020), and the intricacies of demand fluctuations within
the domain of online retail.
8.2 Future Challenges Facing Supply Chain Management 165

Effectively addressing these challenges necessitates the fusion of judgmental and

statistical forecasting methodologies, enriching analytical approaches with human
insights (Sanders and Wood, 2022). This demands the utilisation of advanced tech-
nologies, such as artificial intelligence (AI) and machine learning (ML), the incor-
poration of agile forecasting techniques, the reinforcement of supplier relationships,
and a rejuvenated emphasis on risk management and scenario planning to comple-
ment deficient forecasts. Nevertheless, it is crucial for managers to remain attuned
to the synergy between human judgement and the outputs generated through the
demand-sensing approach, ensuring that local contextual nuances and the influence
of geopolitical and other factors on demand and supply are thoughtfully consid-
ered during decision-making. However, wise human judgement relies on competent
people, which is a scarce resource in the UK and Europe and requires significant
investment in upskilling and reskilling people to avail and use required skill sets for
accurate forecasting and early detections of weak signals of disruptions in the supply
chain (Browning et al., 2023).

8.2.5 Supply Chain Visibility

Another challenge OEMs face when operating in the global supply chain is lack of
visibility of supply operations, especially beyond immediate dyadic relationships.
Having visibility of suppliers’ capabilities and actions will help to develop a reori-
entation strategy and better manage suppliers’ inventory with the aid of technology.
However, according to Alicke et al., (2021), only 2% of companies have visibility
beyond the second tier. Companies are investing in developing data analytics capa-
bilities using AI/ML algorithms to face the challenges that inaccurate forecasting
presents (Browning et al., 2023).

8.2.6 Changes in Labour Availability

The International Labour Organisation (ILO, 2020) publishes monitors on labour

globally. COVID-19 lockdowns affected employment, education and training. 62%
of all employed people globally work in the informal economy; women, youth and
migrant workers are more highly represented in the informal economy and were worst
hit as employers cut back. Verick et al., (2022) of the ILO found that young women
were the most affected. There are global shortages of skilled labour, particularly in
construction (Kim et al., 2020) and hospitality (Morosan and Bowen, 2022).
Working from home (WFH) that was mandated during COVID-19 has continued
to be a feature of working life; evidence shows that employers need to provide support
to prevent negative impacts on employees physical and mental health as work and
home life boundaries become blurred (Oakman et al., 2020). Our interviews with
senior SCM practitioners revealed how this has impacted employers who are now
166 8 Future of Supply Chain Management

expected to offer hybrid working to attract new recruits. As WFH is not possible
in some sectors, like construction and hospitality, this has exacerbated the skills
shortage in those sectors. However, Chen (2021) reports the need for employee skill
improvement, psychological stress relief, work-family balance and company culture
reinforcement for those WFH.
Supply chain management can impact on all these future challenges.

8.3 Future Potential Impact of Supply Chain Management

The previous section summarises future challenges facing supply chain management
and broader economies, societies and the environment. Here we consider how supply
chain management might impact these challenges in the future and how we might
have to change evaluation of SCM performance in both practice and research.

8.3.1 Future Sustainable SCM

There is a wave of sustainability legislation and regulation being formulated and

issued by various national and international governments. This legislative context
might be met by different levels of SCM response—awareness and understanding,
compliance and beyond compliance. In the first level of awareness and understanding,
supply chain managers must assess and evaluate what is required of firms’ internal
and external supply chains and networks and when action must be taken. Examples of
these changes to legislation and regulation include the European Green Deal, the EU
Taxonomy Delegated Act, EU Sustainable Finance Disclosure Regulation, Corpo-
rate Sustainability Reporting Directive (OJEU, CSRD, 2022), and the US Energy
Act (2020). The United Nations Environment Program (UNEP) addresses environ-
mental issues at the global and regional levels. Its core objectives are to advocate
for the global environment, support governments in setting the global environmental
agenda, and promote the coherent implementation of the environmental dimension
of sustainable development within the UN system. It operates through four main
workstreams—(1) Environmental Rule of Law; (2) Human Rights and the Environ-
ment; (3) Multilateral Environmental Agreements: Implementation and Compliance;
(4) Institutional Strengthening. UN conventions, treaties and standards may be used
as the basis for development of laws and regulations.
Legislation is demanding greater compliance and accountability from companies
regarding their supply chains. An example is the Extended Producer Responsibility
(EPR) framework (Sachs, 2006) that, as outlined by the European Commission,
places responsibility on companies not only for their direct actions but also for the
environmental impact of their products throughout their lifecycle. If a supplier within
a company’s supply chain fails to meet environmental standards, the focal company
may be held responsible. An increasing number of customers have started to demand
8.3 Future Potential Impact of Supply Chain Management 167

greater visibility of supply chain practices; environmental impact of sectors such as

fashion, textiles and food are under the media spotlight causing more consumers to
scrutinise their personal purchases.
The requirement for compliance with legislation effectively provides a level
playing field across those organisations and countries impacted by the legislation;
costs of compliance are spread across supply markets covered by the legislation.
Legislation can also provide clarity and structure for supply chain decision making.
However, problems arise when different countries impose different standards of legis-
lation on organisations operating in those countries. Firms then face decisions relating
to comparative advantage and may decide to relocate parts of their supply chains
to lower cost locations. Firms that previously had competitive advantage through
voluntarily setting and promoting their own sustainability standards can find this
previous ‘order-winning criterion’ changed to a ‘qualifying criterion’ (Hill, 1985)
with the creation of legislation, regulation and standards that all firms must comply
with. Those firms that previously had competitive advantage because of performing
beyond compliance can find themselves back in the competitive pack.
Sustainability legislation may compel firms to evaluate the impact of supply chain
choices beyond economic impact, to their environmental and social consequences.
This includes factors like carbon emissions, resource consumption, waste generation
and social sustainability. To evaluate the impact of supply chain choices comprehen-
sively, companies must extend the focus beyond impact on customers and traditional
stakeholders, to include the environment and society at large. To evaluate social
impact, supply chain managers should consider labour conditions, social responsi-
bility, and ethical sourcing. This could involve local communities, regulatory bodies,
and non-governmental organizations. Handfield et al., (2020) argue that the disrup-
tion caused by international border closures and lockdowns during COVID-19 had a
much greater impact on society as firms that were struggling to restart laid off workers
for weeks or months. They propose that future supply chains that were redesigned
to be more ‘compressed’ and less geographically spread might reduce this adverse
societal impact.

8.3.2 A New Supply Chain Design

Changing pressures to consider social and environmental aspects may influence

supply chain design choices. This may cause firms to reconsider prior decisions,
such as make or buy, where to localize production activities (offshoring versus re-
shoring production, Moretto et al., 2020) or which means of transportation to use for
logistics. To navigate these complexities, businesses may require specialized tools
and systems to ensure visibility and the proper assessment of sustainability aspects
of their supply chains. As a response to recent global crises such as the COVID-19
pandemic and war in Ukraine, some government policies have been changed to
encourage reshoring (Pegoraro et al., 2022). Supply chain management can there-
fore support government policies by leading these reshoring initiatives. However,
168 8 Future of Supply Chain Management

reshoring is not simple; the benefits of embeddedness in offshore relationships and

networks might be lost in the process of reshoring (Baraldi et al., 2018). Care should
be taken to plan, educate and train as much for reshoring as for the original offshoring
decision (Pedroletti and Ciabuschi, 2023). For the future, closer relationships with
organisations in countries with similar macro conditions might reduce the risk of
instability arising in parts of the supply chain, avoiding having to reshore (Barbieri
et al., 2020).

8.3.3 New Stakeholders for New Challenges

Managing supply chains in this new context means involving a wider and heteroge-
neous set of stakeholders. This new SCM landscape involves a more heterogeneous
set of players, including non-traditional actors such as research centres, start-ups,
influencers, and third parties. Van Hoek (2020) proposes that closer relationships
between SCM researchers and practitioners might help improve resilience to future
crises. Flows of knowledge between buyers and suppliers in circular supply chains are
likely to be more bi-directional (Batista et al., 2023). This complexity necessitates
a more flexible and holistic approach to supply chain management, moving away
from rigid structures towards a collaborative, multi-level, multi-dimensional under-
standing of supply chain dynamics. In this new domain, also some non-traditional
stakeholders (e.g., NGOs) and cross-sectoral collaborations may have to be managed.
An ecosystem approach, with a proper management of the existing relationship and
governance, might represent the future stream of management of supply chains.

8.3.4 New Technologies Are Playing a Fundamental Role

Seyedghorban et al., (2020) propose that as procurement changes to embrace and

leverage digital integration, it will become a greater contributor to profit genera-
tion. In Li (2020) three approaches to digital transformation used in digital supply
by global leaders, including Amazon, Alibaba and Google, are identified—inno-
vating by experimenting, radical transformation by successive incremental changes,
and dynamic sustainable advantages through a constantly evolving and replenishing
portfolio of temporary advantages. Digitalisation provides immediate and compre-
hensive information enabling this constant reassessment and redesign, rather than
step change, periodic redesign; this is akin to adjusting capacity constantly to meet
demand rather than lagging behind demand through periodic step changes. The
resulting fluidity encourages experimentation as mistakes can quickly be rectified
in the next redesign.
At the same time, supply chain management’s adoption of automation is likely to
have a profound impact on industries, employment and broader society. The potential
for AI facilitated supply chains may enhance resilience through recognising future
8.3 Future Potential Impact of Supply Chain Management 169

problems, analysing risks through what-if scenarios and stress-testing simulation,

reconfiguring supply chains through automation and securing against threats, and
activating operations including mitigating against future supply chain shocks (Modgil
et al., 2021). Big data analytics and AI have the potential to help support green supply
chain processes (Benzidia et al., 2021). Nayal et al., (2022) find that AI supports
supply chain risk management; greater supply chain integration facilitates AI uptake
in supply chains. AI is a topic discussed in current literature, with just some pilot
projects in place. At the same time, generative AI is adding a new challenge, with the
possibility to delegate to new technologies the full management of some processes,
especially for non-critical actors.

8.3.5 A Continuous Improvement Approach

Learning is an important theme for the future impact of supply chain management.
Learning from bottlenecks in the COVID-19 vaccine supply chain has improved
understanding of how the mass vaccine programmes in humanitarian aid areas might
also be improved through better signalling within supply chains (Finkenstadt and
Handfield, 2021a). The same authors also reflected on learning from problems of lack
of visibility in personal protective equipment (PPE) supply chains during COVID-19
(Finkenstadt and Handfield, 2021b); they find that visibility and velocity are critical
requirements when making supply decisions across local, state and federal health-
care and public health systems. Harland et al., (2021) tracked learning by supply
chain management practitioners from the beginning of the COVID-19 pandemic;
they reveal how awareness and motivation impacted on the effective deployment of
critical capabilities. Practitioners reflected on how this has changed their approach
to preparedness for emergencies in the future.

8.3.6 Collaboration Between Public and Private

Organisations

Currently the SCM sub-fields of operations management, purchasing and supply

management, humanitarian logistics and public procurement are not well integrated;
Harland (2021) proposes that the future impact of our field would be greater if
we integrated knowledge across these areas of research. The COVID-19 pandemic
focused more attention on the importance of emergency preparedness, a familiar
topic in humanitarian logistics. Lessons were learnt about the role of governments
and public procurement in intervening in supply markets. Prior to the COVID-19
pandemic, the field of supply chain management paid little attention to government
and vice versa (de Vries et al., 2021). At the start of the pandemic, governments
had little knowledge about supply markets, particularly their capacity and location
170 8 Future of Supply Chain Management

of key suppliers (Harland, 2021). However, supply chain experts were called in by
governments to form advisory panels. In the future, hopefully the potential impact
of SCM thinking on government decision making will be greater.

8.4 Future of Systems Thinking for SCM

The recent articulation of design science methodology has highlighted the deep-
rooted nature of engineering approaches to solving practical problems while allowing
for generalisation (Aken et al., 2016). Design science research (DSR) has its roots
in professional fields, such as medicine or engineering, and is aimed at developing
solutions (Simon, 1988). Simon (1988) suggests that the ‘science of design’ is rooted
in systems engineering. Undoubtedly, there is considerable scope for a DSR approach
in logistics and supply chain management.
Aken et al. (2016) argue that, while there is value in building on disciplines
such as systems engineering, translating the approach to designing artefacts is too
positivistic and there is lack of consideration of social science aspects. Yet much
of the design engineering movement does suggest the need to include the human
element in synthesising both artefacts and/or organisational structures (e.g., Dixon,
1966; Jenkins, 1969; Simon, 1988; Parnaby, 1979; and Towill, 1992). Most notably,
Checkland (1999), who built on Jenkin’s (1969) systems engineering approach to
develop the soft systems methodology (SSM), advocates a social science perspective
of system design.
While transferring engineering methods into a social science context remains a
challenge for operations management research (Aken et al., 2016), there are well-
established approaches that consider technology (artefacts), processes (organisa-
tional structures) and attitudes (human aspects), taking an intervention based, systems
approach (Olivia, 2019). However, much of what has appeared in the past has been
forgotten. We propose that the future of supply chain management should embrace
a systems approach, aligning solution design to the problem domain, and using
appropriate tools and techniques to underpin the outcomes of DSR.
Systems engineering is:
the science of designing complex systems in their totality to ensure that the component sub-
systems making up the system are designed, fitted together checked and operated in the most
efficient way (Jenkins, 1969).

Jenkins (1969) states that:

the first property of a system is that it is a complex grouping of human beings [including
management and technical teams] and machines and the system should be designed in such
a way that each component and human being is ready to play its designed role efficiently in
making the [system] achieve its predetermined [multiple] objectives.

Jenkins (1969) advocates a four-stage design process—systems analysis using

flow-block diagrams involving recognition and formulation of the problem, solution
design, solution implementation and operation of the system.
8.4 Future of Systems Thinking for SCM 171

Parnaby (1979), following a similar schema to that of Jenkins (1969), emphasises

the human aspect in recognising that manufacturing systems involve many people
and exist to serve people. These systems interact and are constrained technically
and sociologically in complex ways with our social system and physical environ-
ment. However, each system is different in how it interacts and impacts society
and the environment. Towill (1992) extends this systems engineering approach to
supply chain dynamics, building on Parnaby’s (1979) appreciation that the outputs
of manufacturing systems are inputs to other systems.
We place design, design thinking and systems thinking centre stage of our view
of the future of supply chain management.
Design… is the core of all professional training: it is the principal mark that distinguishes
the professions from the sciences. Schools of engineering, as well as schools of architecture,
business, education, law, and medicine, are centrally concerned with the process of design
(Simon, 1988).

Both Dixon (1966, p.9) and Simon (1988) argue that the concept of design is so
important that it should be seen as a scientific discipline. Hence, the more modern
focus on ‘design thinking’ (Brown 2008). In proposing DSR, with its roots in engi-
neering, for general problem solving in operations management, Aken et al. (2016)
suggest that an emerging research gap exists in relation to integrating social science
elements. But a fundamental development of systems engineering, as proposed by
Jenkins (1969), is Soft Systems Methodology (SSM) (Checkland, 1999). Explicitly
addressing so called ‘wicked problems’, where the problem is not well defined, in
contrast to the design of artefacts, SSM rejects the concepts of goal seeking and
optimisation, instead proposing that when addressing social science problems there
is a need to develop action-based learning-cycles to maintain a system’s desired
behaviours.
What we can deduce from the brief review above is that DSR needs a fundamental
synthesis of existing systems methods to guide those embarking on DSR of supply
chains. We therefore highlight the distinguishing features of different approaches
and how they may be exploited for different contexts.
Following in the same vein as the long history of systems approaches to problem
solving and research design, Naim and Gosling (2023) develop a generic design
science research design (DSRD). This guides researchers and practitioners on how
to use appropriate systems approaches from engineering and social science to address
different problems with varying degrees of uncertainty (Kurtz and Snowden, 2003).
Kurtz and Snowden (2003) provide the Cynefin framework, a phenomenological
device to help people make sense of complexities without imposing assumptions of
order, rational choice and intent.
172 8 Future of Supply Chain Management

8.4.1 A Generic DSRD to Match Problem Context

and Design Solution

Building on the Cynefin framework developed by Kurtz and Snowden (2003),

Table 8.1 guides design researchers on appropriate systems methods and tools for
different domains. To use this guidance, it is anticipated that a multidisciplinary
system design team would agree at the outset, and revisit during the lifetime of a
design project, which domain the problem resides in and the desired solution domain.
DSR approaches in research and practice are all similar to Jenkins’ (1969) four
stages. The first stage of recognising and elucidating the problem to be tackled is
critical in determining in which Cynefin domain the problem resides. This sets the
direction of travel for the DSRD. Supply chain management problems typically reside
in the complex domain as they are in complex socio-technical systems, consisting
of machines, products, processes and people, with multiple flows and objects. The
problem can then be decomposed into sub-elements, which may be represented, anal-
ysed and synthesised in another domain, but the solution developed will ultimately
have to be recharacterised for the complex whole.
For example, consider the complexity of articulating the problem of ensuring that
production planning and inventory control systems do not exacerbate the ‘bullwhip’
problem in supply chains. The core of Naim and Towill’s (1994) approach to tackle
this problem is to apply control engineering and computer simulation modelling,

Table 8.1 The relationship between problem domain and solution design tools / techniques
Domain Explanation and examples Systems principles, tools and
techniques
Simple It is easy to determine, model and forecast Based on ‘facts’, deterministic
cause and effect relationships and develop tools and techniques are used to
standard operating procedures e.g., single analyse and determine the
minute exchange of dies problem and to develop
solutions
Complicated It is still relatively easy to determine, model Here we may see the
and predict cause and effect although they are opportunity to utilise both
separated by time and space e.g., develop qualitative and quantitative
discrete event simulations of factory shop approaches
floors
Complex Cause and effect relationships are observable We may turn to soft systems
but only after they occurred. Behaviours and methodology (SSM), including
patterns emerge, which are then described ‘rich pictures’ visualisation
through narrative forms e.g., case studies of modelling, CATWOE analysis,
supplier development initiatives influence diagrams and causal
loop diagrams
Chaos This domain is unwelcome, and cause and The goal here is to move out of
effect relationships are not apparent in this chaos and relocate into another
domain e.g., catastrophic events, such as a domain as quickly as possible
tsunami impacting a global supply chain
8.4 Future of Systems Thinking for SCM 173

which are in the Cynefin Complicated domain, as they are predominantly automated
and consist of algorithmic rules and software code. However, at the outset, the DSRD
problem is in the Complex domain because of the many and different types of vari-
ables to be considered. Checkland’s soft systems methodology (SSM) could be used
to generate visual models. These models are simple representations of a complex
real-world situation, so are in the Simple domain, thereby helping those working in
the system to understand the problem and work on possible solutions. Such visual
models include causal loop diagrams, that determine cause and effect, which can then
be translated into the Complicated domain in the form of control engineering block
diagrams and transfer function formulations. The resulting potential multiple solu-
tions may then be represented in Simple domain form, say, as cost–benefit figures,
to help decision makers make informed choices. The choices made then must be
implemented in the real-world, i.e., back in the Complex domain.

8.4.2 Future for DSRD in SCM

A foundational and comprehensive body of knowledge that articulates the application

of DSRD from both an engineering and social science perspective exists. The systems
movement, consisting of a portfolio of methods and tools, ranging from systems
engineering through to soft systems thinking, allows for a contingent approach to
DSR. This generic DSRD guides the selection of the most appropriate techniques
dependent on which domain of the Cynefin framework the problem resides. However,
the final outcome may be the result of various translations of the original problem
definition through multiple domains during the design process life cycle.
Two main challenges still face SCM researchers and practitioners using the DSRD
approach. First, it is very difficult to identify sources of SCM problems as they may
develop from multiple sources, such as changing customer requirements, legislation,
new technologies or competitive forces, and these interact dynamically. As has been
discussed throughout this book, hard analysis and forecasting are less able to deal
with these complex, interconnected, dynamic problems; rather, seeking to enhance
capability and resilience to respond to this emergent, unfolding world is increasingly
becoming recognised as a more appropriate approach.
Second, if the whole system is greater than the sum of its parts, how might we
deconstruct the whole into simpler, meaningful constituent solutions that, when rein-
tegrated, ensures the whole retains synergy and the essence of the multifaceted
system. Recognition of the nuanced balance of emergence and hierarchy seems
central to contemporary SCM systems debates.
These debates are also reflected in appreciating the need for change in how we
perceive future governance of SCM systems.
174 8 Future of Supply Chain Management

8.5 Future Governance of SCM

If the field of supply chain management is to engage more with complexity in larger
systems of connected supply and interconnectivity of supply across supply systems,
there are some fundamental differences between these domains and our traditional
homeland of connected supply relationships and chains. As we stretch our bound-
aries, we should look to other fields for knowledge and learning. One of the most
important differences between connected focal firm-based supply and interconnected
supply is in governance—how we conceive of governance in interconnected supply
situations, how we design appropriate governance structures, how we implement and
work within those structures and how we research appropriate governance.
Interconnected supply systems may be considered as a form of interconnected
interorganisational networks, albeit SCM’s interest lies only in those activities asso-
ciated with supply. Interorganisational networks have been studied in other fields
including organisation studies and strategic management. In these fields there have
been substantial contributions made to our understanding of network governance,
specifically the design of network governance, processes of network governance and
hybrids of design and process.

8.5.1 Network Governance Design

Interorganisational networks represent collective action; to understand network

governance design we need to understand more about the “structure of collective
action” (Powell, et al., 2005). Provan and Kenis (2008) highlight the prior focus in
organisational studies on organisations, rather than multi-organisational networks,
and the challenges of researching these larger units of analysis. Philosophically,
they also assert that governance has been perceived as being about hierarchy and
control and therefore question whether governance of collaborative networks would
be appropriate (Kenis and Provan, 2006); however, goal directed networks (Kilduff
and Tsai, 2003) are likely to require some form of governance to ensure they reach
the goals they intend.
Three types of network governance have been identified—shared governance, lead
organisation and network administration organisation (Provan and Kenis, 2008); the
choice of network design depends on trust, size of the network (number of partici-
pants), goal consensus, and the nature of the task that determines the need for specific
competencies. Shared governance is where all the organisations in the network collab-
orate and jointly manage the network, with no individual organisation dominating
governance. Shared governance networks may help to be inclusive of participants
and build a community across the network. Lead organisation is where one central
organisation steps up, or is mandated, to lead the governance of the network for
and on behalf of the other organisations in the network. This approach to network
governance is appropriate when there is a single, powerful organisation that is able
8.5 Future Governance of SCM 175

to influence other members of the network, such as in the case of Toyota (Womack
et al., 2007). A network administration organisation is where an organisation or indi-
vidual expert, external to the network, such as a management consultancy or project
management organisation, performs administrative duties necessary for the network
to function to achieve its goals. Using a network administration organisation form of
governance may enhance legitimacy (Provan and Kenis, 2008) and help solve difficult
problems where conflict resolution across network members might be required.

8.5.2 Network Governance Processes

In the future as supply chain management embraces interconnectivity as well as

connectivity and expands research into more behavioural and psychological aspects
of SCM, researchers in our field are likely to look to how to govern supply networks
and systems. Research on interorganisation network governance processes can
provide valuable insights for supply governance. Key tasks involved in managing
networks have been identified as managing accountability, legitimacy, conflict,
design and commitment (Milward and Provan, 2006), creating and supporting partic-
ipatory leadership and facilitating knowledge exchange (Huxham and Vangen, 2013),
managing flows of resources (Reay et al., 2013), managing tensions (Provan and
Lemaire, 2012) and promoting network learning (Knight and Pye, 2005). Agra-
noff and McGuire (2001) provide a framework of four types of behaviour in public
management networks—activating, framing, mobilising and synthesising—to help
understand stages of how these network management tasks might be performed.
Styles of leadership in networks are more people-oriented than task-oriented and
more ‘host’ than ‘hero’ (Keast et al., 2004). This has been described as ‘integrative
leadership’ which is more shared, distributed, collective, relational, dynamic, emer-
gent and adaptive (Popp et al., 2014). New modes of leadership are required that
rely on particular roles to be played in the network. These network roles have been
investigated in supply networks (Harland and Knight, 2001).
Whilst contracts may be involved between parties to a network, informal gover-
nance based on interpersonal contacts are relied on in network governance (Keast
et al., 2004); governance is, therefore, a hybrid of contractual and relational (Zheng
et al., 2008; Cao and Lumineau, 2015). Although individual members of networks
represent their organisations, they come together for a common purpose and are
interdependent in achieving that purpose. Spectra of governance types range from
informal, non-purposive to formal, purposive (Alvarez et al., 2010), integrated to
disintegrated (Bitran et al., 2007).

In empirical research, Harland and Knight, (2001) identify a set of roles that
powerful organisations acting as boundary spanners in supply networks take;
these roles are network structuring agent, coordinator, advisor, information
176 8 Future of Supply Chain Management

broker, relationship broker and innovation sponsor. Network structuring agents

monitor and influence the competitiveness of supply markets through restruc-
turing supply routes through networks, later further examined in Caldwell et al
(2005). Network coordination may be where an organisation intervenes to plan
and control the supply network for a particular project, or it may be ongoing
coordination to formulate and implement policy change. Network advisor is a
role taken by an organisation that has a concentration of knowledge and exper-
tise on a particular matter affecting the network. Organisations may act as
an information broker to collate, analyse and share information across parties
within the network; lead purchasers will operate in this way across a network
of organisations agreeing that a particular organisation should take the lead in
procurement, for and on behalf of the other organisations. An organisation may
act as a relationship broker to encourage and change how two other organisa-
tions in the network work with each other; further evidence of this is provided in
Patrucco et al., (2022) examining triadic supply structures and process, where
organisations work with two suppliers to encourage them to collaborate and
share technological information. Some organisations take a strategic network
management role to be an innovation sponsor where they try to bring organi-
sations together to collaborate on an innovation project, for example, a smart
city project.

Gulati et al., (2011) propose that there are three mechanisms that support interor-
ganisational network performance—reach, richness and receptivity. Reach refers to
how effective an organisation is in reaching out to distant members in its networks.
Richness represents the potential additional resources an organisation might be able
to access through its ties in the network. In this way, reach and richness are indicators
of the value to be gained from a network. Receptivity is how capable the organisation
and its network partners are at facilitating flows of these resources; receptivity is,
therefore, an indicator of how a network might realise its potential in leveraging
network resources. Of these three mechanisms, operations and SCM has focused
more on richness as it has adopted the resource-based view of the firm (RBV) from
strategic management and developed it for organisations as resource orchestration
theory. There has been little contribution made by SCM on reach, in terms of under-
standing how an organisation scans its existing and potential network partners and
explores supply markets to find new potential for connecting with other firms. This
reinforces the arguments in Chaps. 3 and 4 on supply structures and processes, where
it was highlighted that scant attention has been paid by SCM on supply markets, their
exploration and analysis.
Network governance is not a new topic to the field of management (Lawless and
Moore, 1989; Jones et al., 1997). However, to date there has been limited application
of this thinking in supply chain management, although there are some exceptions
(e.g., Johnsen et al., 2000; Harland et al., 2001; Harland and Knight, 2001; Bitran
et al., 2007; Alvarez et al., 2010; Pilbeam et al., 2012). Traditional hierarchical
8.6 Challenges for Future Research in Supply Chain Management 177

planning and control approaches to management should be supplemented with other

network governance approaches as increasingly supply chain managers deal with
multiple, diverse stakeholders in larger, more complex systems of supply.

8.6 Challenges for Future Research in Supply Chain

Management

There is no doubt that colleagues joining the academic community of supply chain
management face a very different future for their research careers compared to the
past. As Sodhi and Tang (2021) state:
… it is appropriate to rethink supply chain management (SCM) for research and practice to
cope with extreme conditions, now and in the future, whether due to pandemics, war, climate
change, or biodiversity collapse.

Schleper et al., (2021) develop a future SCM research agenda based on knowledge
gaps identified by practice failures in supply chains resulting from the COVID-19
pandemic. The topics for more research include risk balancing between buyers and
suppliers, researching if local supply would improve supply chain resilience, the
appropriateness of loyalty and support of suppliers in crises, re-evaluation of payment
terms and supply chain finance during crises, how sustainability improvements might
be related to supply chain resilience and which forms of governance and leadership
are more effective in supply chains in a crisis.
Research that integrates and leverages knowledge on social capital and resource
orchestration might benefit from including Gulati et al’s. (2011) mechanisms of
reach, richness and receptivity. SCM research and practice needs to understand more
about exploring and scanning supply markets and supply network members to reach
out to more potential resource value. In addition, it needs to develop more under-
standing of capability within organisations and their networks to leverage potential to
enable flows of resources and how they might be better absorbed and utilised. SCM
researchers might contribute research that distinguishes more clearly between inter-
personal informal relations and more formal interorganisational ties within social
capital, as highlighted by Adler and Kwon (2002).
Harland (2021) advocates the benefits of weaving together currently separate
areas of knowledge in operations and SCM, purchasing and supply management,
humanitarian logistics and SCM and public procurement. Research that specifically
addresses this integration within our field might have a synergistic effect. However,
van Hoek and Loseby (2021) push this further by adding that research on new tech-
niques and new technologies is required as well as integrating knowledge in different
areas.
Embracing continuous, incremental changes in SCM, rather than step changes
interspersed with steady state, encourages us to conceive SCM as management of an
ongoing serial of overlapping projects. This will increase the need, as a minimum,
for greater understanding of project management. For example, project relational
178 8 Future of Supply Chain Management

risk management (Bryde et al., 2023) is a topic that has received little research atten-
tion from the SCM field to date. However, the bigger picture is how SCM research
fails to deal adequately with time. Various authors have highlighted that SCM treats
supply chains rather like static entities (Nilsson and Gammelgaard, 2012), particu-
larly focused on supply structures, that can somehow be optimised and improved like
well-oiled machines (Wieland, 2021). However, in this book we have examined SCM
as structure and process. In organisational studies a process-oriented perspective
views transformation as constant and organisational change is viewed as “unfolding
moments” rather than snapshots at specific times (Reinecke and Ansari, 2015: 261).
Time has been acknowledged in SCM in the appreciation of ‘clockspeeds’ differing
between different industries, requiring different supply chain designs (Fine, 2000),
but overall, our field has significantly more to contribute to understanding of temporal
aspects of SCM.
The future for SCM has been discussed in this book as becoming increasingly
complex, dynamic, interconnected and involving many stakeholders’ perspectives
that necessarily change over time. Whilst the potential value of longitudinal research
has been promoted (e.g., Fynes et al., 2005) and there have been some longitudinal,
particularly qualitative, research studies of supply chains, there is still a lack of
longitudinal research in the field (Tukamuhabwa et al., 2015). However, beyond
observing supply over time in longitudinal studies, time as a dimension in its own
right warrants research attention.
“By acknowledging that our world is complex, striving for constancy,
predictability, and efficiency, as the engineer’s view assumes, has to be replaced with
a focus on change, unpredictability, persistence, and transformability” (Wieland,
2021).
Wieland (2021) proposes ‘panarchical supply chain management’; as opposed to
traditional supply chain management which is static and reductionist in its assump-
tions, panarchical supply chain management is holistic and dynamic. Management is
more about ‘dancing’, experimenting and navigating, rather than controlling and opti-
mising in an engineering or scientific way. Panarchy embraces conceiving of levels
in systems, but where these levels may operate at different speeds. Lower system
levels may be quite fast at responding to demands for change, whereas higher system
levels may be slower. The interaction between levels serves to enable innovation and
change but simultaneously conserve and preserve.
For supply chain management to contribute to understanding of policy and policy
implementation may require the field of SCM to stretch further beyond its economic
perspective boundaries. In particular, to contribute to understanding of stewardship
may require us to expand our research more into sociological and psychological
approaches.
Economic approaches to governance such as agency theory tend to assume some form
of homo-economicus, which depict subordinates as individualistic, opportunistic, and
self-serving. Alternatively, sociological and psychological approaches to governance such
as stewardship theory depict subordinates as collectivists, pro-organizational, and trust-
worthy. (Davis et al., 1997).
8.6 Challenges for Future Research in Supply Chain Management 179

Others support the need to shift organizational governance from agency toward
stewardship (Hernandez, 2012) and to improve our global surveillance (Rappuoli
et al., 2017).
The growing role of government in supporting business, including the creation of industry
commons, also presents avenues for further research. (Sodhi and Tang, 2021).

Within the supply chain management community there are scholars looking to
particular new and emerging technologies as opportunities. For example, it is possible
that technological development relating to the Internet of Things (IoT) may provide
mechanisms for gathering and processing large quantities of data to support collabo-
rative approaches to forming and implementing risk strategies (Birkel and Hartmann,
2020) and for innovation in supply chains (Li and Li, 2017). Supply chain integra-
tion, discussed in Chap. 4, has been well researched in the field of SCM. However,
increased data sharing requires governance of these data ecosystems; this is a topic
that requires research in the future (Legenvre and Hameri, 2023). The potential of
IoT has been examined particularly for cold supply chains (Tsang et al., 2018).
Blockchain is an important new topic in supply chain management and has been
examined in global supply chain risk analysis (Choi et al., 2019) and as a poten-
tial for improving supply chain resilience (Min., 2019). The potential use of social
media in supply chain risk management has been highlighted (e.g., Huang et al.,
2020; Chae et al., 2020). The potential for artificial intelligence in supply chain
risk management has recently received research attention within the computing field
(Ganesh and Kalpana, 2022).
Finally, the field of SCM should develop a broader approach to how our research
should be evaluated. The value of SCM research may be evidenced from different
perspectives (Harland., 2013). Evidence-based approaches were first used in law,
but the evidence-based movement really took off in medicine in the late 1980s. It is
surprising to many that, until that point, research evidence was not used systemat-
ically in clinical decision making. Rather, the clinician relied on their own educa-
tion, training, experience and assessment of the symptoms presented by the patient.
Evidence-based medicine was promoted to counteract the known wide variation in
clinical practice, failure in uptake of therapies known to be successful and continued
use of those proven to be ineffective. Evidence-based management did not gain
traction until Pfeffer and Sutton’s (2006) Harvard Business Review article.
Economic impact of SCM research is relatively easy to measure. Social impact
evidence such as impact relating to poverty, inequality, and empowerment and envi-
ronmental impact evidence including impact on climate or resource depletion, are
not easy to quantify or measure (Hazell et al., 2010).
Evidencing value of SCM research from an academic perspective today is rela-
tively automatic. We seek to publish our research findings in highly ranked academic
journals. Bibliometrics involves the collection, analysis and presentation of data
relating to evidencing individual authors’ academic impact, in terms of their publi-
cations in ranked journals and citations of their publications. Journal rankings are
produced enabling authors and readers to assess journal quality which is often
180 8 Future of Supply Chain Management

(although it can be argued as misguided) taken as a proxy for the quality of articles
published within those journals.
However, non-academic impact is more challenging to measure, evidence and
compare. Methodologically, traditional positivistic, empirical approaches to SCM
have been used and economic impact of research assessed. Engaged scholarship,
coproduced research, collaborative research and action research are some of the
terms used to describe academic research that is performed jointly with practice.
In these cases, it is problematic to untangle impact contributions from academics
or practitioners, particularly when iterative, back and forth, methods are used that
continuously engage practice throughout the research process. In Sabri et al. (2019)
the dilemma of the rigour-relevance gap and the usefulness of research continuing in a
positivist paradigm (Gammelgard, 2004) are discussed in the context of humanitarian
supply chain research.

8.7 Conclusions

Over forty years on from its inception, supply chain management has grown, devel-
oped and become a recognised field of research, education and practice. This book
has presented a systems perspective of SCM as multi-level, pushing boundaries of the
field into larger, more complex, interconnected systems of supply. Within the field we
still need specialists in parts of the whole, but we also need to be preparing the next
generation of practitioners and academics to understand more complex problems and
opportunities. More holistic thinking, integrating across the broadening knowledge
base in our field, and learning from outside our field is required.
A key theme that has emerged during the research for this book and in bringing
together the portfolio of research featured within it, is the importance of people
in the supply chain management field. Historically SCM has been influenced by
operations management and engineering perspectives. There have been calls for
greater consideration of behavioural and psychological perspectives to inform our
thinking and development. Whilst organisation studies approaches have influenced
operations management, exploring new forms of work organisation and teamwork
within firms (e.g., Longoni and Cagliano, 2015), there is less evidence to date of
this learning influencing supply chain management research. In this final chapter
we have drawn together key themes for the future that see SCM developing as a
socio-technical system, echoing Cagliano et al., (2019) who emphasise the need to
consider people, organisation structure and culture, underpinned by socio-technical
theory (Trist et al., 2013).
New technologies impacting supply chain management, such as artificial intelli-
gence, machine learning, Internet of Things and smart cities, give rise to fears and
concerns about how to harness them, rather than allow them to develop at their own
pace unfettered. However, through learning how to codevelop and exploit these tech-
nologies safely may enable a more human-centric and socially sustainable approach
to supply chain management (Romero et al., 2016; Cagliano et al., 2019).
References 181

Professional, competent supply chain managers in practice have been shown to

step up to keep people safe in COVID-19, supply humanitarian aid in locations in
crisis but also supply grand opera, the realisation of beautiful design and caring
community services. Our field has stretched way beyond its origins in factories
to make profit for owners, to a valued, diverse space for researchers and practi-
tioners in not-for-profit, service and public environments. The future for supply
chain management is limited only by our capacity and capability, our vision and
commitment.

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