THE NEW SUPPLY CHAIN AGENDA:

A SYNOPSIS AND DIRECTIONS FOR FUTURE RESEARCH

by

Theodore P. Stank
Bruce Chair of Excellence in Business and Supply Chain Management
University of Tennessee

J. Paul Dittmann
Director, Demand and Supply Integration Forums
University of Tennessee

and

Chad W. Autry
Associate Professor of Logistics
University of Tennessee

Contact:
Theodore P. Stank
tstank@utk.edu
865-291-7297

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 THE NEW SUPPLY CHAIN AGENDA:
A SYNOPSIS AND DIRECTIONS FOR FUTURE RESEARCH

Structured Abstract

Purpose of this paper: The paper summarizes the findings from the book the New Supply Chain
Agenda (Slone, Dittmann, and Mentzer 2010). Taking the next step, it reviews associated
academic research, identifies critical knowledge gaps, and suggests areas for future academic
research that will aid scholars and managers in improving SCM performance.

Design/methodology/approach: The paper summarizes and extends The New Supply Chain
Agenda and juxtaposes the major elements of that book with a content review of existing
literature in logistics and supply chain management to align gaps in knowledge with a call for
future research.

Findings: The findings deepen understanding of the complexities and interrelationships

prevalent among the five pillars and help identify new ways to improve the performance impact
of supply chain management initiatives.

Research implications: Major areas for future research within the broad topics of talent
management, technology, internal integration, external collaboration, and change management
are identified. Academic research related to each area or pillar is summarized, gaps are
identified, and future research directions are suggested to provide avenues in which theoretical
grounding and scientific rigor may be applied to each pillar of The New Supply Chain Agenda.

Practical implications: Many of the proposed solutions to the challenges faced by supply chain
professionals have not been subjected to the scholarly scrutiny that would determine their
validity. This paper presents areas for meaningful academic research to help supply chain
practitioners separate truth from hype.

Value: The paper seeks to stimulate thinking and suggest new areas in which to do research
related to the book’s key premises.

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 THE NEW SUPPLY CHAIN AGENDA:
A SYNOPSIS AND DIRECTIONS FOR FUTURE RESEARCH

Introduction

Supply chain managers have made incremental progress in facilitating improvement in

organizational effectiveness and efficiency. Yet challenges emerge from areas such as functional

integration, supplier collaboration, performance metric alignment, and information connectivity

that continue to prevent most organizations from achieving more dramatic improvement in key

financial performance areas such as return on net assets and economic value added. Supply

chain managers must pursue radical innovation of thought and process to reach the strategic

potential possible from supply chain management. This statement is as true for supply chain

academics as it is for supply chain practitioners. To truly impact practice, academics must be

able to provide deeper insight into the interrelationships among the various complex, and multi-

dimensional supply chain management concepts.

While there has been an increasing volume of material written describing solutions to

these many challenges, most proposed solutions have not been subjected to the scholarly scrutiny

that would determine their validity. Now, more than ever, meaningful academic research is

required to help supply chain practitioners separate truth from hype. Although research streams

have developed to address issues such as inter-organizational collaboration, inter-functional

integration, information connectivity, 360-degree performance metrics and balanced scorecards,

much work remains before supply chain professionals can fully understand the elements needed

to register radical change in practice. The complexity of the supply chain management

discipline, combined with the current youthful state of its theories and methods applied to date,

continue to limit the usefulness of academic research findings.

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 The following narrative summarizes the findings presented in the new book, The New

Supply Chain Agenda (Slone, Dittmann, and Mentzer 2010), which describes five key principles

or “pillars” that form the foundation from which supply chain managers may lead their

organizations to achieve radical performance improvements. The pillars holistically reflect the

need for supply chain strategy to address an organization’s ability to effectively manage talent,

technology, internal collaboration, external collaboration, and integrated change. Following each

of the five pillars, associated academic research is briefly reviewed, critical knowledge gaps are

identified, and suggestions are made for future academic research that will aid in making the

New Supply Chain Agenda a reality for scholars and managers alike. The authors and the

editors hope the publication of this paper will guide and incite future research as the supply chain

discipline grows and matures.

The New Supply Chain Agenda

The New Supply Chain Agenda, based on data collected from interactions with nearly 400

companies, establishes five principles that form the foundations or “pillars” of a supply chain

strategy focused on significantly impacting organizational financial performance. The data

reveals that CEOs, boards of directors, and financial analysts in an increasing number of

organizations recognize that the supply chain serves as the primary driver of financial

performance, with the ability to significantly impact revenue through customer service. Further,

they note that the supply chain garners responsibility for 60 to 70 percent of firms’ operating

cost, many of the fixed facility assets, and most of the working capital inventory. The Great

Recession of 2008-2010 served only to increase this focus as supply chain performance

improvements can be used to cut cost and free cash reserves from balance sheets rather than

depending upon increasingly restricted credit markets.

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 Unfortunately, few companies have yet to take advantage of the stakeholder value

opportunity presented through supply chain activities. One primary reason for this lack of

progress is that many firms retain a traditional “functional” view of the supply chain, seeing it

only as the area responsible for managing trucks, pallets, manufacturing lines and warehouses

and thus being unable to make the strategic link between supply chain performance and

shareholder value. Although new technology, products, markets and retail formats remain

critical to competitive advantage, supply chain performance improvements very often promise

the greatest positive impact on economic profit and shareholder value because the full potential

of the supply chain has been so under-utilized in the past versus other corporate initiatives.

There are many reasons why so few organizations have yet to recognize the potential

financial impact of supply chain performance improvements. Supply chain executives

interviewed as part of the research drawn upon in The New Supply Chain Agenda

overwhelmingly said that short term operational thinking in their companies was the greatest

barrier to achieving supply chain excellence. This means an absence of strategic thinking

relative to the supply chain itself. As a result, the month or quarter end surges that plague many

public companies are an example of this short-term orientation. Another reason is an

unwillingness to look outside the firm at best practices across a wide industry range. Many firms

fail to challenge themselves with external best-practice benchmarking in the supply chain area.

This inward focus is often compounded by supply chain metrics that may actually conceal

problems by neglecting crucial information. For instance, one construction-materials

manufacturer reported “good availability” of inventory to fulfill a new order was simply

somewhere in the system, regardless of whether the order was actually delivered to the customer

on time.

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 Development of a supply chain strategy provides the key to overcoming the barriers to

supply chain performance improvement. Such a strategy should demonstrate several key

characteristics. First among these is the requirement to include planning horizons that stretch

beyond the quarterly and yearly timelines that guide operational activities. Critical fulfillment

activities in managerial areas such as transportation, inventory, facilities, orders and cash flow,

for example, may reside within a short planning horizon. Without a longer term strategic focus,

however, these activities will be misdirected and ineffective. Further, a supply chain strategy

must possess sufficient scope to encompass the horizontal processes that guide the flow of

products and information across the extended enterprise. Information such as customer

requirements must flow smoothly back through the functional barriers to suppliers as product

flows forward from suppliers through the firm to the customers. An effective strategy includes

selecting the customers to serve, understanding what they value from the supply chain, planning

the products and services, and choosing the right supply chain partners to deliver that value.

An effective supply chain strategy should address five key pillars of excellence that form

the foundation of the new supply chain agenda. The five pillars include:

1. Talent - ensuring that the right talent is in place to execute a strategy that is cross-
functional and cross-organizational;
2. Technology - making sure the right supply chain technology is chosen and
successfully implemented;
3. Internal Collaboration - developing a clear vision for how each function can work
together to achieve supply chain excellence;
4. External Collaboration - focusing on how each company can achieve breakthrough
results by collaborating externally with both suppliers and customers;
5. Managing Supply Chain Change – executing cross-functional, cross-organizational
supply chain initiatives.

Each of the pillars will be explained in greater detail below. In addition, academic research

related to each pillar is summarized, gaps are identified, and future research directions are

suggested.

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Talent

Selecting the right people to oversee pivotal supply chain responsibilities requires a

sound understanding of the characteristics necessary to lead modern supply chain organizations,

including leadership skills, superior business skills that leverage cross-functional understanding,

technical savvy, and global orientation. Organizations require supply chain managers who

understand how to lead diverse employee groups in complex, multi-cultural environments,

building teams and managing people by effectively communicating effective and socially

responsible messages to multiple stakeholders (Tate, Ellram, and Kirchoff, 2010). Supply chain

leaders should also foster close interpersonal relationships to build credibility for themselves and

for supply chain management across the organization (Andraski 1998; Defee, Stank, and Esper

2010). In particular, they should develop close collaborative relationships with their companies’

leaders in sales and marketing, human resources, and finance.

Leaders in the supply chain must also demonstrate the ability to make difficult decisions

that are in the best interests of the entire business, not just one function. Successful supply chain

managers must be able to speak the language of senior executives as easily as they can talk about

trucking efficiencies and demand forecasting. This requires that they have an understanding of

the overall business and can show how supply chain management can contribute to enhancing

economic profit and shareholder value, not simply the traditionally studied notion of transaction

cost reduction (Hitt 2011). Supply chain executives need to be experts at managing supply chain

functions such as information, inventory production, transportation, warehousing strategic

planning. The supply chain process, however, extends across functions and outside the firm,

including relationships with suppliers and customers, often on a global basis. This arrangement

requires that supply chain managers coordinate processes that are often performed by entities not

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within the direct span of control of the focal organization. Thus supply chain functional

expertise is a necessary but not sufficient criterion for managers of organizations that wish to

leverage channel wide strategic potential

Finding supply chain managers with a true global orientation may be the most difficult of

the characteristics to find, as well as one of the most important (Harvey and Richey 2001).

Global sourcing and operations have expanded tremendously in recent years, for both retailers

and manufacturers. There are few companies that do not either source globally, sell globally, or

have competitors that do. Therefore supply chain executives must deal effectively with suppliers

and customers worldwide. Managing an international supply chain requires far more than

knowing what time it is in Shenzhen or what the proper meeting etiquette is in Dubai.

Increasingly, it calls for the ability to function effectively across all business activities and

multiple entities in other cultures. Global executives need deep, fact-based problem-solving

skills. They also need to focus on forging strong inter-personal relationships, which are

extremely important in most countries of the world (Harvey and Richey 2001).

Assembling a global team with the right chemistry to work together effectively creates

challenges that go beyond language differences. Global executives face daily issues that many

are not prepared for, ranging from finding a time for a staff meeting to navigating differing laws

and customs. One manufacturing executive, for example, had to plan his group’s work schedule

around long paternity leaves in Europe. He also found that while furloughs may work well in the

U.S. as a quick cost cutting move. Further complicating the matter is that differences in cultural

and legal issues are great even within regions. A Latin American manager from a very large

Fortune 10 company noted that “Even though we speak common language, Spanish (except for

Brazil), there are so many differences from one country to the next that it’s easy to get lost in

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translation. Even as a regional Latin American manager, I find it very challenging to clearly

understand the different meanings of a message in different Latin American countries.”

Academic research in supply chain management and logistics has only rarely focused on

the crucial process of developing talented managers capable of managing the diverse challenges

within the supply chain. While logistics and supply chain researchers have actively borrowed

theory from other areas of social science, for the most part the theories and concepts prevalent in

the well-developed areas of human resources have not yet to capture the broad attention of

researchers in supply chain disciplines. A recently published content analysis by Keller and

Ozment (2009) provides a summary of previous logistics and supply chain research covering

recruiting, developing, supervising, and retaining high quality logistics personnel, including both

frontline and management level issues. Although not large in volume considering the scope of

time and journal outlets considered in the research, Keller and Ozment identified thirty-seven

separate articles related to the identification of critical characteristics and job requirements of

logistics personnel (see, for example, LeMay et al. 1999) and related research that extends or

applies theory from the social sciences to better understand the components necessary in hiring,

developing, motivating, and retaining supervisors and frontline workers in various logistics

operations (see, for example, Autry and Daugherty, 2003; Richey, Tokman, and Wheeler, 2006;

Ellinger, Ellinger, and Keller, 2002).

Keller and Ozment (2009) divide this research into five areas, including research

comparing student perspectives on requirements for success to those of corporate recruiters;

research oriented toward the skills required for career development; research pertaining to the

work environment and success of non-supervisory, frontline employees; literature relating to

logistics reputation; and research pertaining to logistics diversity. The authors additionally

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identified gaps in existing research that provide insights into areas for future research, several of

which mirror the needs identified in the New Supply Chain Agenda. The following represent key

talent management areas requiring future research that are closely related to calls for changes in

practice from The New Supply Chain Agenda:

 Identifying the antecedents and consequences of managerial performance in obtaining

financial, market, and logistics goals;
 Discovering ways to better promote the value of supply chain management to the
organization and supply chain as a whole; and
 Expanding research into diversity issues that extend beyond gender to include
globalization and cultural differences.
 Identifying critical future employee skills for supply chain talent development and
management purposes.
 Understanding how human capital within firms impacts supply chain outcomes.

Technology

The New Supply Chain Agenda identifies supply chain technology as one of the primary

facilitators of a supply chain excellence strategy. A wide array of supply chain-related

technology exists, and the benefits of implementing the right technological portfolio can be

significant for many firms (Richey, Tokman, and Dalela 2009). Yet great care must be exercised

in selecting and applying technology within a context as complex as the extended supply chain.

If improperly understood or implemented, technology can create more harm than good. For

example, the book notes an anecdote where a supply chain professional from a retailer

specializing in children’s toys told of trying to implement a new fulfillment system that went far

beyond schedule and over budget. As a result, the end-of-year holiday demand hit before the

fulfillment system implementation was complete, resulting in an inability to process orders.

People throughout the company worked 50 days straight, including Sundays, to try to stay ahead,

yet the firm was forced to send thousands of letters explaining that toys ordered would not arrive

until after the holiday season.

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 The interviews conducted for The New Supply Chain Agenda revealed three important

rules for successfully implementing new supply chain technology. Rule One is to make sure that

leading edge technology is used appropriately. The complexity of global supply chains often

pushes supply chain executives to the limits of existing technology, and thus leads sometimes to

their seeking the potential of new, beta technology (beta technology refers to new technology

that is not yet fully de-bugged). To engage in a beta implementation, firms must have a

tolerance for projects having no definite end or set budget. Yet ironically, supply chain

executives must often meet very demanding and disciplined business targets, with definite

schedules and budgets, thus creating a challenging dilemma. The interviews indicated that firms

that can tolerate higher levels of risk have the opportunity to develop a successful application

and competitive advantage. Alternatively, companies with risk avoidance cultures should avoid

beta projects in the supply chain area and adopt a strategy to follow once the technology

stabilizes. In either scenario, the worst-case situation is for a firm to find that, in the middle of

an implementation, the technology has not yet been successfully implemented anywhere.

Rule Two is the realization that people issues are tougher to address than technical issues.

In the supply chain technology arena, cross-functional and cross-company human-technology

interface issues add a much higher dimension of complexity to adoption, acceptance, and usage

decisions. With appropriate principles of disciplined project management in place and excellent

project leadership, completing the technical task should be the easiest part of an implementation.

The tougher issue always involves getting people to use and embrace the new supply chain

technology.

Rule Three for supply chain technology is to make sure that supply chain technology

projects have a clear business case. A clear business case generates the momentum necessary for

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supply chain technology success, but supply chain professionals often struggle to quantify the

benefits of new technology proposals. Senior executives should make it clear that if a project

team fails to quantify a benefit, that benefit is effectively considered to be “zero.” One way for

supply chain professionals to avoid failed implementations is to condition themselves to ask

several key questions at the beginning of any supply chain technology project.

The existing academic research on supply chain technology, specifically as it relates to

the three Rules presented in The New Supply Chain Agenda, is uneven at best. With regards to

Rule One, research in the area of technological adoption has only begun to scratch the surface of

the immature technology dilemma; no existing studies have been focused on the adoption of beta

technology, and none of the limited research on immature technology adoption has been

executed within the supply chain management context. In general, research in the IT field

related to immature technology adoption has been constrained to studies of early adoption as a

result of IT trend chasing (Wang 2010), limited discussion of new technology adoption in

response to government mandate and timing issues surrounding new technology upgrades

(Mukherji, Rajagopalan, and Tanniru 2006). Since the research field surrounding beta

technology adoption is virtually wide open, any studies of the subject with respect to supply

chain technology would represent a significant contribution to both the IT and supply chain

management disciplines.

There has been a growing amount of research in academic journals focused on Rule Two,

firms’ readiness to implement supply chain technologies, as well as issues associated with their

acceptance and adoption processes. Whether or not a firm is ready in the holistic, group-

psychological sense to implement a potentially useful technology is an important initial factor to

consider. Parasuraman’s (2000) groundbreaking work in this area provided an initial method for

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measuring a firm’s technology readiness. Richey, Daugherty, and Roath (2007) later applied an

adapted variation of Parasuraman’s framework within the logistics service technology support

context to predict several logistics performance outcomes, while Richey and Autry (2009) later

used similar measures to examine whether supply chain technology could serve as an effective

substitute for interfirm collaboration efforts when needed. Research has begun to assess the

impacts of the long-held Technology Acceptance Model (TAM) on supply chain-related

phenomena, beginning with a study by Patterson, Grimm, and Corsi (2003). Subsequently,

Lippert (2008) studied how supply chain firms handled post-adoption implementation and ramp-

up issues, while Autry et al. (2010) discovered that elements of the internal and external

technology environment significantly influence employees’ acceptance of supply chain

technology, as well as the adoption decision as a whole.

The academic research related specifically to Rule Three, supply chain technology value

propositions, is currently negligible. However, the literatures related to internal marketing and

project management afford some clues as to which future research in this arena might be

valuable. The internal marketing literature has been concerned with how managers’ view

internalized products and initiatives, and information assets are specifically mentioned as being

enabled by internal marketing processes (Gronroos, 1981). Although this literature is nearly

three decades old, no identifiable research has sought to evaluate the technology adoption

process through an internal marketing lens; this, despite much popular press being devoted to the

difficulties of “selling” technology to top managers. In the supply chain technology realm, this

subject is virtually untouched in rigorous study. The field is ready and waiting for research,

particularly normative models that would prescribe how supply chain managers should go about

extolling the benefits of supply chain technology investments to the firm’s financial and/or

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strategic officers (i.e., Parent and Reich 2009). In addition, though research in the field of

project management has offered real-options studies of technology investment decisions (e.g.,

Chen, Zhang, and Lai 2009), little is known about the psychological processes that decision

makers experience when evaluating technology projects, especially those of the supply chain

nature, i.e., that are to be shared with or used to link to other organizations.

Clearly, there is much work for academics to do related to technology. Future research in

this area should address:

 Understanding the aggregation of readiness across multiple firms to influence the

effectiveness of technologies that serve to connect them;
 Describing how imbalanced technological readiness within and across firms’ functional
groups influences the organization’s overall capabilities for managing external
technology linkages;
 Exploring adoption issues that impact upstream and downstream supply chain firms, as
well as service providers and others at further echelons;
 Understanding how organizations deal with the need to perpetually upgrade technology,
particularly when upgrades impact other information users;
 Identifying the ideal composition and dynamics of supply chain information technology
selection and implementation teams;
 Whether and how supply chain technology projects should be “rolled-out” piecemeal,
versus all in one iteration;
 How to implement supply chain technologies when multiple partner firms are connected
using the same system but have differential technology clock speeds and/or budgets for
upgrade/reinvestment; and
 How the costs of information technology are considered when determining the ROI of
supply chain initiatives.

Internal Collaboration

Functional silos, i.e., organizing in a multidivisional form, are an often unfortunate

feature of most every firm. Such organization is not necessarily all bad in that silos serve as a

foundation to build deep process expertise, as well as a vehicle to establish firm accountability.

The problem with multidivisional organization occurs when functional boundaries become

barriers to supply chain excellence. Each function in the firm must understand that it plays a

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critical role in a successful supply chain and that it needs to work closely with other functions in

order for the firm as a whole to achieve supply chain excellence. Successful internal

collaboration typically occurs when the firm’s sales, marketing, and operations functions find a

way to align and focus on serving the customer in a way that maximizes product availability

while minimizing cost and asset investment.

A world-class supply chain begins with product design, and a world-class design starts

with the customer. A well-known axiom of product design holds that once engineering

completes the design, at least 80 percent of the product quality and cost are set. Most

manufacturing companies acknowledge this and therefore most involve manufacturing in the

product design process. However, a few companies have taken the next step to understand that

the same principle also applies to the involvement of the total supply chain in the product design

process. They know that supply chain excellence also starts with the design of the product. Yet,

as new products are designed and introduced, four chronic cross-functional problems often

emerge that can cripple a supply chain. These include too much obsolete inventory, excessive

product line complexity, poor forecasts, and ineffective demand management. Misaligned

functional silos often cripple the ability of firms to deal with these four problems (Van Hoek and

Mitchell 2011).

Many additional cross-functional problems exist that prevent supply chain excellence, but

the greatest of these is the inability to match supply with demand (Esper et al. 2010). Sales and

Operations Planning (S&OP) is the most common term that firms use to describe a wide range of

activities employed to match supply with demand. In organizations where effective S&OP

processes are in place, these processes represent a forum where representatives from both the

Demand and Supply sides of the enterprise can share their own generated and disseminated

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knowledge with their counterparts, where each can help the other to interpret that knowledge in

useful ways, and where that shared interpretation can then lead to effective decision-making

about how to run the business. S&OP processes are at their best when they are truly decision-

making in nature. Enterprises are often faced with imbalance between demand for products and

services in the marketplace and the ability to supply those products and services. In fact, those

two numbers (demand for a product and ability to supply the product) are almost never in

balance. When demand exceeds supply, shortages result and customers are often left unhappy

and revenue is left unrealized. When supply exceeds demand, production assets are under-

utilized, inventories grow, and costs escalate (Esper et al. 2010).

Effective S&OP processes are important decision-making forums, in both the tactical and

strategic sense. At the tactical level, decisions can be made about how to enhance demand when

supply exceeds demand (e.g., increased advertising expenditures, pricing adjustments, new

promotional activity), or how to dampen demand when demand exceeds supply capacity (e.g.,

reducing advertising, raising prices, discontinuing promotional activity, and incentivizing

customers to switch to other products and services). At the strategic level, decisions can be made

about opening new markets or expanding distribution outlets when capacity exceeds demand, or

about expanding supply capacity when demand exceeds supply. It should be emphasized that

these types of decisions, both tactical and strategic, cannot effectively be made without the

shared interpretation of knowledge that occurs in the S&OP process. Individuals responsible for

managing demand must understand the issues faced in the supply chain, and individuals

responsible for managing supply must understand the issues faced in the marketplace.

The academic research describing and examining internal collaboration efforts such as

S&OP processes is currently in a state of infancy. To date, only a few research articles have

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addressed the drivers, contingencies, and outcomes of collaborating across functional boundaries

in a general sense. Among these, the article by Sabath and Whipple (2004) has generated

significant interest, finding that in many cases it is easier for functional units to collaborate with

external entities than within the firm itself. As Bowersox, Closs, and Stank (2000) noted, it is

often easier for internal units to integrate within the function than to collaborate across functions.

This is often due to the reward structures many firms enact, which compensate tasks specific to

the function, but are sub-optimized when cross-functional outcomes are considered. Research in

this arena has only recently begun to develop schematics that depict how a business might

optimize functionality if its internal functions worked more relevantly as a unified process (i.e.,

Esper et al. 2010).

Based upon the above summary, additional research within the area of internal

collaboration should focus on exploring the following:

 The governance structures that can be developed, implemented, and leveraged to account
for the disparate views and motivations of various entities within the internal supply
chain;
 The leadership orientation required to efficiently and effectively manage horizontal
processes that cross functional boundaries;
 The performance metrics that appropriately incent behavior across functional areas to
maximize value for end customers as well as for shareholders of the focal organization;
 The appropriate guidelines for allocation of strategic resources when demand for
resources exceeds resource capacity; and
 How internal social networks allow individuals, groups, and functional units to
collaborate.

External Collaboration

The fourth pillar of supply chain excellence, external collaboration, consists of suppliers

and customers working together to achieve mutual improvement. True collaboration across

supply chain firm boundaries is very difficult to achieve. For the minority of firms that do

collaborate successfully, there are three clear stages in their evolving relationships. Stage One

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starts with the simple recognition by both suppliers and customers of the potential power of

collaboration, which requires some supply chain sophistication on both sides. Senior executive

support and encouragement also is a common factor in early collaborative relationships.

Additionally, success in getting the collaborative venture started depends on the

acknowledgement by both parties that it will involve considerable time and effort. Companies

that have advanced to Stage Two have already developed a supply chain strategy that includes

collaboration as one of its core elements. The partners to a Stage Two collaboration have worked

together enough to develop the trust to openly share data and strategies with their partner, and

furthermore, they have a mutual plan to sustain the collaborative effort as people inevitably

change jobs over time. In Stage Three, the parties mutually develop key performance indicators

and jointly measure success as a common group. In this final stage of maturity, they agree to

equitably share the savings from their joint improvement efforts. Companies that reach stage

three often experience higher fill rates, lower inventories, and lower cost than they had

previously, and thus enjoy higher economic profit.

OfficeMax and their supplier Avery Dennison are two firms that have reached Stage

Three in their collaborative relationship. Executives at both companies say there were some

major lessons learned, and agreed on six valuable requirements that resulted in a successful

collaboration between their two firms, including: existence of a sophisticated supply chain

function at both firms; investment in additional people to make the collaboration work; the trust

and willingness to share data openly; mutually developed and shared key performance indicators;

a shared vision for improvement (lean in this case); and a plan to sustain the progress.

Collaborating externally with suppliers and customers represents a huge challenge for

companies, and has begun to attract significant attention from academic researchers seeking to

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better understand the perils, benefits, facilitators, and inhibitors of collaborative ventures.

Though collaboration was mentioned as long ago as 1990, when Ellram and Cooper noted it to

be a driving force behind successful supply chain management, only in more recent years have

researchers truly begun to explore the contingent aspects of collaboration across firm boundaries.

Though the list of studies related to this subject is rapidly growing, three in particular have had a

significant impact on the ways supply chain professionals should view and approach the

collaboration task. The study by Min et al. (2005) presented an initial qualitative model of the

dimensions, antecedents, and outcomes of interfirm collaboration efforts, providing structure to

the notion that joint information, resources, planning, and performance measurement are thought

by managers to lead to multiple positive outcomes, and are themselves linked to the

organization’s strategic orientations, investments, and goals. Subsequently, Cao et al. (2010)

added additional dimensionality to the (external) supply chain collaboration construct,

discovering empirical evidence supporting decision synchronization and incentive alignment as

additional primary success factors. Cao and Zhang’s (2010) concurrent study sought to define

the elements of a “collaborative advantage” – the specific capabilities that serve to link external

collaboration to desired performance outcomes – finding that synergy between the collaborating

businesses (among other aspects) is particularly important in achieving collaboration-related

goals that are difficult for competitors to match. Yet, despite this significant research, an

abundance of supply chain collaboration-related questions remain unanswered. Future research

into the following external collaboration issues, therefore, is warranted:

 The dashboard metrics needed to effectively create shareholder value while meeting
appropriate performance objectives for each organization in the supply chain remain a hot
issue in interfirm collaboration;
 The “life cycles” or other longitudinal structures inherent in supply chain collaborations
between firms;

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  How declining collaboration attempts can be effectively “restarted” so that they continue
to yield valuable and interesting outcomes;
 Identifying the operational parameters surrounding multi-firm (i.e., three or more)
collaborations;
 Governing collaborative ventures so that outcomes are optimized in the correct
proportions for the venture to prosper; and
 Negative impacts of getting too close to partner firms and the role of safeguarding.

Managing Supply Chain Change

The fifth and last pillar of supply chain excellence involves managing change.

Transforming the supply chain to achieve excellence and drive shareholder value requires careful

attention to project and change management. Supply chain professionals often find themselves

ill equipped to accomplish the task. This partly stems from a lack of disciplined application of

project and change management principles and partly from simply being too busy to have the

time to do the right things.

Many supply chain executives concede that they don’t have time to do things right the

first time, and therefore spend their days in a vicious cycle trying to fix problems that could have

been avoided. In addition, managers often do not stay in their jobs long in today’s dynamic

business environment. The constant turnover and turmoil it causes raises tremendous barriers to

getting things done. This means that successful execution of a supply chain excellence strategy

requires more than just a competent supply chain executive—it requires the involvement and

support of the entire senior management team.

With supply chain projects especially, it is important to make sure the root cause issues

are being addressed, that project size (scope) is being contained properly, and that risk is

addressed more rigorously than many senior executives may assume necessary. Supply chain

excellence plans must recognize the broad scope of the 21st century supply chain and embrace

the organizational and change management issues that will make or break change efforts.

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 Very little structured research on change management has appeared in supply chain

management related outlets. One notable exception to this is research by Greer and Ford (2009)

who employed concepts from academic disciplines outside of supply chain management

(including strategic management, organizational behavior, and general management) to better

understand how supply chain management change differs from other types of change. They

hypothesized that differences in change processes used to implement supply chain as opposed to

non-supply chain change yielded different levels of success. Supply chain management change

initiatives, characterized as being far broader in scope than other types of organizational change,

are often more difficult to implement and thus the degree of success realized from implementing

them tends to lag that of non-supply chain change initiatives as well (Kotter and Schleisinger

1979; Nadler and Tushman, 1989; Simons 1995). Broad supply chain change initiatives often

cross functional and organizational boundaries and are therefore coupled with forces of inter-

functional and inter-organizational power and influence to provide a difficult context for

executing change. In particular, the research identified that there is less management control

involved in complex supply chain change processes as compared to non-supply chain change

processes, leading to less implementation success as management control activities have been

found to have a direct relationship with favorable implementation outcomes. The research

interestingly revealed that there were no significant differences between supply chain and non-

supply chain change initiatives on other key change process elements, including problem

analysis, action planning, skill development and behavior management.

Future research should build upon these results, exploring other theoretical elements

associated with supply chain change. In particular, future research should provide deeper

understanding of the following change-related issues:

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  Identify other managerial control elements that might be employed to help better
implement supply chain change initiatives;
 Explore how information systems may be better utilized to improve monitoring and
enable corrective actions during implementation;
 Identify performance metrics that incent greater levels of compliance in less-directly
controlled processes;
 Understand and mitigate impediments to successful supply chain change initiatives; and
 Explore the role of the supply chain manager in enacting change across organizational
boundaries.

An Agenda For Academic Research

The five pillars of supply chain strategy highlighted in The New Supply Chain Agenda

present a broad canvas on which supply chain professionals should focus their efforts to drive

radical, innovative change throughout their organizations. As the previous narrative indicates,

some organizations are beginning to make significant progress along the five pillars to foster

increased economic profit and shareholder value. These efforts, however, will not become a

broadly accepted trend until academic researchers partner with innovative practitioners to more

deeply understand the concepts represented in the five pillars as well as to demonstrate their

impact on economic profit. The areas for future research identified above provide avenues in

which theoretical grounding and scientific rigor may be applied to each pillar of The New Supply

Chain Agenda to deepen understanding of the complexities and interrelationships prevalent

among the five pillars and help identify new ways to drive heightened performance impact of

supply chain management initiatives. We implore researchers to aggressively pursue these

topics.

A related issue for academic researchers relates to the methods used to explore the issues

identified in The New Supply Chain Agenda. The issues reflect a need to move beyond the scope

of traditional logistics and supply chain research. Supply chain academics have made

tremendous strides in developing and defining the domain of supply chain management and the

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roles and activities of logistics within a supply chain environment. Traditional tools such as

survey techniques used to collect data from key industry informants have proven highly effective

in establishing the “what” of supply chain management and logistics. Survey methods are highly

relevant to research that seeks to identify phenomena that are broadly generalizable across

multiple scenarios (McGrath 1982). They have served well in this regard. As Frankel, Naslund,

and Bolumole (2005, p. 204) point out, however, “It is important that in an evolving and applied

field such as logistics that we utilize multiple kinds of good research.” The issues identified in

this paper require different methods to facilitate scholarly investigation that enhances

understanding of the “how’s” and “why’s” of supply chain management. These methods also

should enable investigation of concepts that cross multiple functions and organizations within a

supply chain.

To truly impact practice, academics must be able to provide insight into the

interrelationships among various complex and multi-dimensional concepts of supply chain

management. In addition, the moderating scenarios that may impact relational strengths must be

explored further. Key informant survey research is not appropriate for such endeavors. Rather,

supply chain academics must become more adept at experimental methods that facilitate

precision and control. Dynamic simulation modeling, physical simulation exercises, controlled

scenario-based experiments, etc., are tools that should enjoy broader exposure in the supply

chain management and logistics literature in order to provide scientifically based understanding

of the challenging issues that face supply chain practitioners today and in the future.

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