Matching Product and Supply Chain Characteristics

Topics: Supply chain management, Management, Supply chain Pages: 21 (6795 words) Published: October 5, 2012
University of Southern Denmark Campus Odense M.Sc. in Economics and Business Administration – Strategy and Organization

MATCHING PRODUCT AND SUPPLY CHAIN CHARACTERISTICS A Literature Review on Theory, Models and the Implications of Coordination Mechanisms

by Student name: CPR. nr.: Eksamens nr.: Bastian Baisch 271186-3829 311348


Advanced Strategy and Organization Theory

ABSTRACT Supply chain management has become one of the most popular approaches to enhance the competitiveness of business corporations today. A critical aspect in this setting is finding the most suitable supply chain for a particular product. Fisher’s Framework, the DWV^3-Model and the Product-Life-Cycle Model are the three most widely accepted models used to match supply chain characteristics to product characteristics. The determining factor in all three models is the product’s demand pattern, which ultimately has to be matched by the supply chain’s characteristics. The match between the supply chain characteristics and the product characteristics is achieved through the appropriate placement of the order-penetration-point. Depending on the order-penetration-points placement distinct process interdependencies occur which have to be matched by particular coordination mechanisms. A causal chain and correlations between product characteristics, supply chain characteristics and the use of particular coordination mechanisms is visualized and demonstrated.

INTRODUCTION Corporations are seeking to accomplish the best possible performance from their supply chains through many different means such as outsourcing, off-shoring, replenishment and information sharing systems (Selldin and Olhager, 2007). Never before in history has so much technology and cognitive capacity been used to improve the performance of a corporations’ supply chains. Nevertheless, before any such concrete measures and actions can be taken, the design of the basic supply chain has to be scrutinized. The existing literature in the field of supply chain design & supply chain characteristics differentiates between three key determinants of the supply chain, of which each individual determinant represents an individual research stream. Ward et al. (1996), Ward and Duray (2000) and Morash (2001) argue that business strategy and corporate strategy are the major determinants of the supply chain design. They argue that the supply chain design should reflect the strategic decisions, such as the choice of a particular generic strategy as introduced by Porter (1980). Chow et al. (1995), Narasimhan and Kim (2002) and Yusuf and Adeleye (2002) support the research stream that the environmental uncertainty is a key determinant of the supply chain design. The third research stream follows the product and its characteristics as the key determinants for the supply chain design. Fisher (1997), Huang et al. (2002), Selldin and Olhanger (2007) and Qi (2009) are strong supporter of this particular research stream. This literature review focuses on the research stream arguing that a product and its characteristics are the key determinants for the supply chain design. Since the arrival of the Toyota Production System (TPS) in the “Western World” (Western Europe and North America) in the 1970s and 1980s the main focus in supply chain design has been on cost reduction. New concepts such as lean manufacturing, make-to-stock (Pull) production, Kanban systems and quick response offer ideas and models for applying the new technology to improve the firm’s performance, by reducing costs. Nonetheless, the performance of many supply chains has never been worse (Fisher, 1997). By having such a strong focus on cost reductions and efficiency gains, many corporations do not consider their final product, which the supply chain is ultimately supposed to produce later, when designing the supply chain. The key problem is that many corporations believe that they have to reduce the costs under all circumstances...

References: Abdelkafi, Nizar (2008), “Variety Induced Complexity in Mass Customization: Concepts and Management”, Erich Schmidt Verlag GmbH, Berlin, 1st Edition Ahmad, S. and Schroeder, R.G. (2002), “Refining the product-process matrix”, International Journal of Organizations & Production Management, 20(1): 103-124 Aitken, J. et al. (2002), “Understanding, implementing and exploiting agility and leaness”, International Journal of Logistics: Research and Application. 5(1): 59-74 Aitken, J. et al. (2003), “The impact of product life cycle on supply chain strategy”, International Journal of Production Economics. 85(2): 127-140 Albrecht, Martin (2009), “Supply Chain Coordination Mechanisms: New Approaches for Collaborative Planning”, Springer Verlag, Berlin, 1st Edition Amit, R. and Livnat, J. (1988), “Diversification and the risk-return trade-off”, Academy of Management Journal. 31: 154-166. Bernstein, F. and Federgruen, A. (2007), “Coordination Mechanisms for Supply Chains Under Price and Service Competition”, Journal for Operations Management. 9(3): 242262 Bruce, M. et al. (2004), “Lean or Agile – A Solution for Supply Chain Management in the Textile and Clothing Industry”, International Journal of Organizations and Production Management. 24(2): 151-170 Cavinato, J. (1987), “Product life cycle: logistics rides the roller coaster”, Journal of Distribution. (9): 12-20 Childerhouse, P. et al. (2002), “Analysis and design of focused demand Chains”, Journal of Operations Management. 20(6): 675-689 Chow, G. et al. (1995), “Strategy, structure and performance: A framework for logistics research”, Logistics and Transportation Review. 31(4): 285-308 Christiansen, K. et al. (2010), “Living Twice: How a Product Goes through Multiple Life Cycles”, Journal of Product Innovation Management. 27(6): 797-827 Christopher, M. and Towill, D.R. (2000), “Marrying lean and agile paradigms”, Proceedings of EUROMA. Ghent, Belgium, pp. 114-121 Christopher, Martin (2000), “The agile Supply Chain: Competing in Volatile Markets”, Industrial Marketing Management. 29(1): 37-44 Cigolini, r. et al. (2004), “A new framework for supply chain management – Conceptual model and empirical test”, International Journal Of Operations & Production Management. 24(1): 7-41
Cochan, G. and Fisher, M. (1997), “Campell Soup’s continuous replenishment program: evaluation and enhanced inventory decision rules”, Production and operations Management. 6(3): 266-276 Crownston, Kevin (2011), “A Taxonomy of Organizational Dependencies and Coordination Mechanisms”, Unknown, 1st Edition Day, George S. (1981), “ The product life cycle: Analysis and applications issues”, Journal of Marketing. 45(3): 60-67 Delfmann, Werner (2008), “Strategic Supply Chain Design: Theory, Concepts and Applications”, Kölner Wissenschaftsverlag, 1st Edition Dubois, F.L. and Oliff, M.D. (1992), “International manufacturing configurations and competitive priorities”, Voss, C.A. (Ed.), Manufacturing Strategy Process and Content, Chapman & Hill, London. Pp. 239-257 Fine, Charles H. (1998), “Clookspeed: winning industry control in the age of temporary advantage”, Perseus Books, 1st Edition Fine, Charles H. (2000), “Clockspeed-based strategies for supply chain design”, Production and Operations Management. 9(3): 213-221 Fisher, K.L. (1997), “What is the Right Supply Chain for Your Product”, Harvard Business Review. 75(2): 105-116. Fuller, J.B., O’Conor, J. and Rawlinson, R. (1993), “Tailored logistics: the next advantage”, Harvard Business Review. 71(3): 87-98 George, Michael L. (2002), “Lean Six Sigma – Combining Six Sigma Quality with Lean Production Speed”, McGraw-Hill, 1st Edition Harrison, A. (1997), “Investigating the sources and causes of schedule instability”, International Journal of Logistics Management. 8(2): 75-82 Harrison, T.P. et al. (2005), “The Practice of Supply Chain Management: Where Theory and Application Concerge”, Springer Verlag, Band 62 von International Series in Operations Research & Management Science Hayes, R.H. and Wheelwright, S.C. (1979a), “Link manufacturing process and product life cycles”, Harvard Business Review. 57(1): 133-140 Hayes, R.H. and Wheelwright, S.C. (1979b),”The dynamics of process-product life cycles”, Harvard Business Review. 57(2): 127-136 Hayes, R.H. and Wheelwright, S.C. (1984), “Restoring Our Competitive Edge: Competing Through Manufacturing”, Wiley, New York, NY Hill, T. (2000), “Operations Management”, MacMillan Press, London Hopp, W. and Spearman, M. (2000), “Factory Physics”, McGraw-Hill/Irwin, 2nd Edition
Hopp, W.J. and Spearman, M.L. (2004), “To Pull or Not to Pull: What is the Question”, Manufacturing & Service Operations Management. 6(2): 133-148 Hopp, Wallace J. (2007), “Supply Chain Science”, McGraw-Hill/Irwin, 1st Edition Huang, S.H. et al. (2002), “A product driven approach to manufacturing supply chain selection”, Supply Chain Management: An International Journal. 7(4): 189-199 Johansson, S. et al. (1993), “Business process reengineering breakpoint strategies for market dominance”, Wiley, Chichester, 1st Edition Kotler, Philip (1994), “Marketing Management”, Prentice-Hall, London, 8th Edition Lamming, R. et al. (2000), “An initial classification of supply networks”, International Journal Of Operations & Production Management. 20(6): 675-691 Lee, H. and Billington, C. (1993), “Material management in decentralized supply chains”, Journal of Operations Management. 41(5): 835-847 Lee, H. (2002), “Aligning supply chain strategies with product uncertainty”, California Management Review. 44(3): 105-119 Lummus, R. et al. (2006), “The product-process matrix revisited: integrating supply chain trade-offs”, SAM Advanced Management Journal. 71(2): 4-10 Mason-Jones, R. and Towill, D.R. (1997), “Information enrichment: designing the supply chain for competitive adventage”, Supply Chain Management. 2(4): 137-148 Mason-Jones, R. et al. (2000), “Engineering the leagile supply chain”, International Journal of Agile Manufacturing Systems. 2(1) McDermott, C.M. et al. (1997), “The diminishing utility of the product/process matrix – a study of the US power tool industry”, International Journal of Operations & Production Management. 17(1): 65-84 Mintzberg, Henry (1979), “The Structuring of Organizations”, Englewood Cliffs: PrenticeHall, New Jersey, 1st Edition Mintzberg, Henry (1981), “Organization design: fashion or fit?”, Harvard Business Review. 59(1): 103-116 Morash, Ed A. (2001), “Supply chain strategies, capabilities, and performance”, Transportation Journal. 41(1): 37-54 Narasimhan, R. and Kim, S.W. (2002), “Information system and utilization in supply chain integration efforts”, International Journal of Production Research. 40(18): 4585-4609 Naylor, J.B. et al. (1999), “Leagility: interfacing the lean and agile manufacturing paradigms in the total supply chain”, International Journal of Production Economics, 62(1): 107118
Ohno, Taiichi (1988), “Toyota Production System: Beyond Large-Scale Production”, Productivity Press, 1st Edition Olhager, Jan (2003), “Strategic positioning of the order penetration point”, International Journal of Production Economics. 85(3): 319-329 Pagh, J.D. and Cooper, M.L. (1998), “Supply chain postponement and speculation strategy: how to choose the right strategy”, Journal of Business Logistics. 19(2): 13-33 Parnaby, Jonathan (1993), “Business process system engineering”, Proceedings of the Business Process Re-engineering Conference. Chairman’s address, London Porter , Michael E. (1980), “Competitive strategy: techniques for analysing industries and competitors”, Free Press, 1st Edition Porter, Michael E. (1985), “Competitive Advantage”, The Free Press, New York, 1st Edition Qi, Y. et al. (2009), “Supply Chain Strategy, Product Characteristics and Performance Impact: Evidence from Chinese Manufacturers”, Decision Science. 40(4): 667-695 Ramdas, K. and Speckman, R.E. (2000), “Chain or shackles: understanding what drives supply-chain performance”, Interfaces. 30(4): 3-21 Sääksvuori, A. and Immonen, A. (2008), “Product Lifecycle Management”, Springer, 3rd Edition Safizadeg, M.H. et al. (1996), “An empirical analysis of the product-process matrix”, Management Science. 42(11): 1576-1591 Selldin, R. and Olhanger, J. (2007), “Linking Products with Supply Chain: testing Fisher’s model”, Supply Chain Management: An international Journal. 12(1): 42-51 Skinner, Wickham (1974), “The focused factory”, Harvard Business Review. 53(3): 113-121 Spencer, M.S. and Cos, J.F. III (1995), “An analysis of the product process matrix and repetitive manufacturing”, International Journal of Production Research. 33(5): 12751294 Stavrulaki, E. and Davis, M. (2010), “Aligning Products with Supply Chain Processes and Strategy”, The International Journal of Logistics Management. 21(1): 127-151 Thompson, James D. (1967), “Organization in Action – Social Science Bases of Administrative Theory”, Transaction Publishers, New York, 1st Edition Tian, Yu (2009), “Two stage competition and supply chain coordination in a distribution system”, Control and Decision Conference (CCDC ’09), Conference Publications, pp. 849-854 Vernon, Raymond (1979), “The Product Cycle Hypothesis in a New International Environment”, Oxford Bulletin of Economics and Statistics. 41(4): 255-267
Wang, G. et al. (2004), “Product-driven supply chain selection using integrated multi-criteria decision-making methodology”, International Journal of Production Economics. 91(1): 1-15 Ward, P.T. et al. (1996), “Configurations of manufacturing strategy, business strategy, environment and structure”, Journal of Management. 22(4): 597-626 Ward, P.T. and Duray, R. (2000), “Manufacturing strategy in context: environment, competitive strategy and manufacturing strategy”, Journal of Operations Management. 18(2): 123-138 Watson, George H. (1994), “Business Process Engineering”, Wiley, New York, 1st Edition Womack, J.P. and Jones, D.T. (1996), “Lean Thinking”, Simon and Schuster, New York, 1st Edition Xu, L. and Beamon, B.M. (2006), “Supply Chain Coordination and Cooperation Mechanisms: An Attribute-Based Approach”, Journal of Supply Chain Management. 42(1): online publication Yusuf, Y.Y. and Adeleye, E.O. (2002), “A comparative study of lean and agile manufacturing with a related survey of current practice in the UK”, International Journal of Production Research. 40(17): 4545-4562
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on supply chain
  • supply chain Essay
  • Essay on supply chain
  • Essay about Supply Chain Management of Product
  • Essay on Supply Chain strategies
  • Essay on supply chain management of Walmart
  • Supply chain Management Essay
  • Zara's supply chain: Case Study Essay

Become a StudyMode Member

Sign Up - It's Free