Say goodbye to "supply chain" and hello to "value network"?
The focus of supply chain management is shifting, moving away from "upstream," or the supply side, to "downstream," or the demand side. This trend appears to be so firmly entrenched, in fact, that supply chain managers who participated in a recent study suggested that that the term "supply chain management" should be replaced by a more appropriate term.
Those findings were reported in "Supply Chain Management 2010 and Beyond: Mapping the Future of the Supply Chain," by Steven Melnyk of Michigan State University, Rhonda Lummus of Iowa State University, and Robert Vokurka of Texas A&M University. The researchers conducted a Delphi study of 40 mid- and upperlevel managers. Delphi studies collect knowledge and opinions from a group of experts through a series of questionnaires interspersed with interviews.
The study found that a shift is underway in supply chain thinking. In the past, supply chain executives focused to a large degree on purchasing. Five years from now, they'll concentrate on managing relationships.
Participants in the study said they believe that the objectives and the organizational structure of supply chains are also changing. Today's supply chain is order-oriented, cost-driven, and execution-focused, and it often is jointly managed by purchasing, logistics, and operations management. However, supply chains are evolving to a model that is strategically focused, design-oriented, and driven by multiple objectives. Moreover, many companies are switching to a system that draws on the capabilities of all functions, including accounting, engineering, and marketing.
In light of those changes, participants said, the term "supply chain management" encourages three major misconceptions. First, it implies that the focus rests on the supply base. Second, it emphasizes management rather than design. And third, it implies linear relationships. Which terms would better describe the discipline? Suggestions included "supply network optimization," "value network optimization," and "value network systems."
[Source: "Supply Chain Management 2010 and Beyond: Mapping the Future of the Supply Chain." S. Melnyk, R. Lummus, and R. Vokurka. November 2006.]