REFRAMING SUPPLY CHAIN MANAGEMENT: A SERVICE‐DOMINANT LOGIC PERSPECTIVE

• Published date: 01 January 2011
• Date: 01 January 2011
• DOI: http://doi.org/10.1111/j.1745-493X.2010.03211.x
• Author: ROBERT F. LUSCH

REFRAMING SUPPLY CHAIN MANAGEMENT:

A SERVICE-DOMINANT LOGIC PERSPECTIVE

ROBERT F. LUSCH

University of Arizona

Shifting the dominant thinking of supply chain management toward the

concepts of service, value cocreation, value propositions, operant resources,

networks, service ecosystems and learning opens up many research opportu-

nities and strategies for improved organizational performance. The emerging

thought world of service-dominant logic is presented as a means to reframe

supply chain scholarship and practice for increased relevance and impact.

Keywords: service-dominant logic; systems; networks; value

INTRODUCTION

Recently a variety of scholars and practitioners have

begun to reexamine the fundamental purpose, processes,

and functions of supply chains and also how to best

characterize them in a global competitive and supply

environment (Chen and Paulraj 2004; Larson, Poist and

Halldorsson 2007). A view is emerging that is refocusing

SCM on partnerships, relationships, networks, value

creation and value constellations (Spekman, Kamouff

and Myhr 1998; Bovet and Martha 2000; Hoyt and Huq

2000; Gunasekaran and Ngai 2004; Min, Mentzer and

Ladd 2007; Lusch, Vargo and Tanniru 2010).

Within the marketing literature a rapidly developing

and integrated body of thought centered on service-

dominant logic (S-D logic) has particular relevance to

SCM as it seeks a more transcending perspective (Vargo

and Lusch 2004a,b, 2008; Lusch and Vargo 2006; Lusch,

Vargoand O’Brien 2007). S-D logic is alignedwith Metz’s

observation (1998) that SCM is moving into a ‘‘super’’

role, which integrates the functions of marketing, prod-

uct development and customer service.

Services have historically been defined in termsof what

goods were not. Goods-related industries included ex-

tractive industries such as agriculture, mining, forestry

and fishing andmanufacturing industries suchas durable

and nondurable goods industries. The residual was

defined as services and included education, health care,

distribution, retailing, entertainment, legal and many

other industries largely focused on nontangible offerings

or alternatively services were nongoods. S-D logic, how-

ever, looks at the very nature of service and accordingly

defines service as a process or as the use of one’s resources or

competences for the benefit of another entity (Vargo and

Lusch 2004a). S-Dlogic argues that service is the basis of

economic activity. S-D logic focuses on the process of

service versusa goods-dominant (G-D) or manufacturing

logic that focuses on the production and provision of

outputs. For instance, computers, forklifts, pallets and

transportation equipment are all appliances for service

provision. What customers want is access to the flow of

service that these goods facilitate and not necessarily the

output or product that firms produce. It can be argued

that the movement from G-D logic to S-D logic is the

move from viewing business as focused on things

(nouns) to actions and processes (verbs).

A more complete understanding and appreciation of

S-D logic requires serious reading of the work of Lusch

and Vargoover the last half dozen years (see:http://www.

sdlogic.net). However, as an introduction to S-D logic

consider that it is woven together with ten foundational

premises.

FP1: Service is the fundamental basis of exchange.

FP2: Indirect exchange masks the fundamental basis of

exchange.

FP3: Goods are a distribution mechanism for service

provision.

FP4: Operant resources are the fundamental source of

competitive advantage.

FP5: All economies are service economies.

FP6: The customer is always a cocreator of value.

FP7: The enterprise cannot deliver value, but only offer

value proposition s.

FP8: A service-centered view is inherently customer

oriented and relational.

FP9: All social and economic actors are resource inte-

grators.

FP10: Value is always uniquely and phenomenologi-

cally determined by the beneficiary.

Note: Much of the material and ideas presented in this essay has

been discussed previously in over a dozen articles with Stephen L.

Vargoand other authors (see: http://www.sdlogic.net)but especially

Vargo and Lusch (2004a, 2008) and Lusch, Vargo and Tanniru

(2010).

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