Reaction to “The Supply Chain Becomes the Demand Chain”

• DOI: http://doi.org/10.1111/jbl.12047
• Published date: 01 June 2014
• Author: Scott Saunders
• Date: 01 June 2014

Reaction to “The Supply Chain Becomes the Demand Chain”

Scott Saunders

HAVI Global Solutions

I applaud the authors for bringing needed attention to the idea

that driving business value in today’s complex marketplace

requires a cross-functional perspective. The silo mentality that

characterizes many business schools is similarly a challenge in

organizations that have conflicting or differing internal and/or

extended supply chain performance objectives. I can offer two

examples of where industry has overcome this silo mentality.

•First, some organizations align compensation for a majority of

employees. Metrics for profitability and working capital are

aligned and consistent across all functions and the shared ser-

vices of these organizations. These common goals drive col-

laborative behavior.

•Second, organizations that follow a disciplined approach to

Sales and Operations Planning or Integrated Business Planning

(IBP) processes where cross-functional senior leadership is

accountable and aligned on the same metrics demonstrate

overall better business performance and aligned decision mak-

ing.

How can academia learn from these successes?

SILOS, THE ACADEMY, AND PRACTICE

The world is changing, it is complex, and if we spend all our

time focused on the words we use (supply chain vs. demand

chain) will we be better enabled to address these challenges? I

urge academic researchers to get to the root of the problem and

send out a call to action to fix it! However, I worry that the

existing performance metrics and rewards systems in academia

do not foster changing this type of silo behavior. The learning

from successful businesses who have achieved mature levels of

IBP processes is that aligned objectives across disciplines/depart-

ments foster collaborative approaches. Publishing and research in

the so-called “right journals”that many business leaders are

unaware of or lack inclination to read regularly is an archaic

practice and does not create the type of thought leadership that

academia should be providing. We must work together to change

this educational model to create the right forums and venues for

practitioners and academics to cocreate initiatives that drive

tangible results. My experience over the past 10 years working

on projects with the researchers at The Global Supply Chain

Forum has shown me that this can be achieved.

There continues to be opportunities for academic research to

provide thought leadership and drive innovation in business

practices. But, we must not lose sight of the need to provide

value to society through implementation and application of these

ideas. Businesses find that when presented with difficult supply

chain problems, we often utilize consulting companies instead of

academic institutions because consultants have formalized meth-

odology and implementation approaches in place. The opportu-

nity for academia to integrate with corporations by

demonstrating not only how the “theory”works or how the

“math”should be done but also how to implement along with

the change management implications could be both financially

advantageous and provide better preparation for the students who

will become our future business leaders.

I also found it encouraging that the Cranfield School of Man-

agement is integrating their Marketing and Logistics teaching

groups in the business community. With the war on talent for

supply chain/demand chain/marketing ... ... talent whatever we

call it, companies need to have a supply of students coming out

of universities with an understanding of the entire value chain.

University programs should strive to provide managerial educa-

tion that integrates across functions the same way industries are

being forced to manage extended supply chains. Extended supply

chains/companies that are not customer centric will fail. Addi-

tionally, we must align demand fulfillment and demand creation

to gain competitive advantage in the marketplace. The growth,

margin improvement, value cocreation, and continuous improve-

ments provided by this change in perspective are key to business

success.

RESEARCH INTO ACTION

After reviewing the potential research agenda identified by

Christopher and Ryals (2014), I wish there would have been a

more extensive call to action. What needs to take place to get

things going? What are the obstacles? Some points, however,

resonate strongly:

•The topics of IBP and value cocreation are critical consider-

ations. It is important to not only identify these ideas but also

to provide a roadmap to implement.

•Creating models for performance measurements that drive

aligned behavior across functions could be of great benefitto

companies. If students are educated in environments character-

ized by functional boundaries, this silo perspective will be car-

ried on into their careers.

•Academic research needs to move beyond describing and

developing platforms of why these things are important.

Researchers must demonstrate that their recommendations are

implementable. Creating methodologies for implementation

would engage greater business involvement.

Corresponding author:

Scott Saunders, Supply Chain Integration, HAVI Global Solutions,

Downers Grove, IL, USA; E-mail: ssaunders@havigs.com

Journal of Business Logistics, 2014, 35(2): 153–154

© Council of Supply Chain Management Professionals