Strategies for Effective Worldwide Supply Chains

Strategies for Effective Worldwide Supply Chains

Reza Aboutalebi (University of London, UK)
Copyright: © 2016 |Pages: 14
DOI: 10.4018/978-1-4666-9639-6.ch001
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Abstract

In this study, after analyzing hundreds of papers and books by using a meta-analysis technique, it was revealed that supply chain management suffers from a lack of strategies for many aspects of real-world supply chain activity. Existing supply-related strategies are very primitive and incomplete. Real-world activities in modern supply chains are complicated and multidimensional; consequently, supply chain strategies should reflect and manage these realities. This study aims to reduce the existing shortcomings in current supply chain strategies by proposing the taxonomy of supply chain strategies.
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Background

The supply chain has been an inseparable part of doing business in all sectors since trade began a few thousand years ago. The ‘Silk Road’ is an example of a trade and supply chain between three continents (Asia, Europe, and Africa) more than 2000 years ago. Therefore, conducting business by relying on a worldwide supply chain is nothing new. However, the necessity of having well-developed and appropriate strategies for modern supply chains is relatively new (Sultan & Saurabh, 2013). Modern supply chains, either at the national or international level, require proper supply chain strategies due to the high volume, speed, and variety of merchandise and coverage of modern supply chains compared to traditional or historic ones.

There is consensus among scholars regarding the importance of supply chain management (Felea & Albastroiu, 2013; Oliveira & Gimeno, 2014; Sher & Kim, 2014). Such an essential business activity deserves to have its own dedicated strategies (Ellram & Cooper, 2014), financial systems (Blackman, Holland, & Westcott, 2013) and well-trained staff (Partida, 2013; Swart, Hall, & Chen, 2012). The impact of a good supply chain is not limited to operations management (Frederico & Martins, 2014). As stated by Cordon and his co-authors (2013), “The supply chain poses the most immediate opportunity for significant improvements.” (p.42). The study by Lo and Power (2010) revealed that “The way organizations treat their trading partners is affected by the strategy(s) they choose in order to compete.” (p. 142). That is to say, a problematic and over-complicated supply chain with unsuitable strategies can create difficulties not only for the operations department but for the whole organization (Cordon, Seifert, & Lang, 2013). Thus, supply chain management and its strategies should be taken seriously in any organization.

Strategic supply chain management is an underdeveloped field with few or no strategies for modern supply chain management. There have been a few but insufficient attempts to develop strategic aspects of supply chains (Singh & Mishra, 2014). Porter’s value chain model is the most widely known theoretical framework in supply chains, though this model focuses only on identifying primary and secondary activities in supply chains with no reference to any supply chain strategies. Real-world activities in modern supply chains are complicated and multidimensional; consequently, supply chain strategies should reflect and manage these realities.

Key Terms in this Chapter

Collaboration Strategy: A strategy for doing business with other supply-chain-related but ownership-independent organizations.

Integration Strategy: A strategy for doing trade with those supply-chain-related organizations that are partly or fully owned.

Upward Vertical: A strategy for collaborating or integrating with suppliers.

Forward Horizontal: A strategy for collaboration or integration with substitute option.

Domestic Supply Chain: A supply chain inside one country.

Foreign Supply Chain: An international supply chain outside a country.

Backward Horizontal: A strategy for collaborating or integrating with other similar options.

Downward Vertical: A strategy for collaboration or integration with producers, distributors or retailers.

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