Supply Chain Design and Integration: Why Complex Collaborative Systems Are Easy To Talk About But Hard To Do

• Published date: 01 September 2015
• Date: 01 September 2015
• DOI: http://doi.org/10.1111/jbl.12093

Dialogue

Supply Chain Design and Integration: Why Complex Collaborative

Systems Are Easy To Talk About But Hard To Do

A. Michael Knemeyer

1

and Stanley E. Fawcett

2

1

The Ohio State University

2

Weber State University

What is wrong with extant research on supply chain integration (SCI)? Autry

et al. (2014) posit it is built on a faulty foundation. The logic underlying SCI

—that firms with complementary competencies can leverage them through

integration to obtain relational rents—is so compelling that SCI is perceived

as a no brainer. Empirical research, however, does not support such a conclu-

sion. Rather, empirics show SCI is easier to talk about than to do. The prob-

lem: In their Dialogue articles, Autry et al. (2014) argue that confounded

conceptualization and Fawcett et al. (2014) maintain that disjointed theoriza-

tion hinders operationalization, yielding meager managerial insight. To influ-

ence practice, rather than repeatedly asking whether a positive integration to

performance linkage exists, we need to answer Table 1’swhy,when, and

how questions.

THE METAPHOR OF THE METEOROLOGIST

Ask yourself, “If your meteorologist forecasts that three out of four days the

sun shines and temperatures will be hot, but two-thirds of the time couldn’t

tell you why, would you continue to tune in?”Regrettably, Mackelprang

et al. (2014)—who started this Dialogue—find that this is the current level of

insight academic research provides with respect to the SCI-performance link-

age. We must do better if we want to produce research that impacts practice!

SCI AS DESIGN

SCI is a design phenomenon. Successful outcomes depend on mixing (which

elements to use) and meshing (how these elements fit together) design ele-

ments to obtain desired outcomes. Thus, the language, “form follows func-

tion”denotes that intended operational purpose (value creation) should

dictate structure (design of SCI). These principles should guide all design ini-

tiatives—that is, a skyscraper, a product, or an integrated supply chain.

Consider Boeing’s development of the 787 Dreamliner. To reduce the esti-

mated $10 billion up-front development costs, Boeing invited supply partners

to invest their own money to design and manufacture major components.

Vought manufactured the rear fuselage section at a facility in South Carolina;

Alenia the middle fuselage and horizontal stabilizers in Italy. The goal: Suppli-

ers would deliver fully assembled components to Boeing’s Everett assembly

facility where Boeing would “snap”them together like a model plane. What

happened? The pieces didn’tfit, costing Boeing approximately $30 billion and

three years of first mover advantage vis-

a-vis rival Airbus. After multiple

delays and cost overruns, Boeing executives concluded they took SCI too far.

A close examination; however, indicates that Boeing did not know why,when,

or how to integrate effectively? Boeing lacked robust blueprints for SCI.

BLUEPRINTS FOR SCI SUCCESS

SCI research reveals that complex, quasi-intractable problems emerge when

“partners”possess differing interests, practices, or cultures. Ineffective infor-

mation sharing, distrust, and inadequate measurement are just a few “barriers”

that befuddled Boeing. To help companies avoid high SCI failure costs, we

need to develop SCI blueprints that show which design elements to employ

in specific conditions as well as how they fit together to deliver desired func-

tionality. The systems design literature provides key insights for ideating rich

research questions.

•Systems Thinking. Companies are value-added systems that consist of

structures, cultures, people, technologies, and processes. They are ration-

ally designed but may behave irrationally to perpetuate survival.

•Complex Adaptive Systems. Value-added systems adapt over time to the

complexity of the environments in which they operate. Interaction with

other systems influences adaptation.

•Systems of Systems. Multiple independent systems across complex net-

works must “connect”to create value (i.e., to enable form to follow func-

tion). The design process is dynamic, meaning that changes in one system

may affect the inclusion and role of other systems.

Thus, our SCI blueprints must create the visibility to (1) see how distinct

elements fit and interact, (2) foresee how system functionality and distinct

system elements must evolve over time, and (3) dynamically mix and mesh

independent systems to take advantage of equifinality in design.

IF YOU BUILD IT, WILL THEY COME?

Application of an “form follows function”approach toward SCI requires we

examine the specific“whys”behind integrative efforts to avoid applying SCI

erroneously—for example, to avoid needed investment instead of to create

distinctive value. Demarcating the “whens”(i.e., boundary conditions) is like-

wise needed to assess feasibility. Once motivation is articulated and boundary

conditions are defined, companies can address the “hows”—that is, build the

right relational architecture for their circumstances. With this in mind, let’s

explore how Table 1 can motivate more influential research.

Why SCI?

As a strategy—and a tool—SCI exists to create distinctive value. Yet, not all

relationships offer meaningful value co-creation potential. Nor is all value co-

creation homogeneous. SCI is employed to (1) take costs out of processes,

(2) develop unique products, and (3) create unique services. Disparate SCI

initiatives require unique mixing and meshing of design elements. This reality

invites research to address new propositions.

Proposition 1: Supplier selection/measurement processes don’t sys-

tematically evaluate value co-creation potential before delimiting rela-

tionship intensity and scope.

Corresponding author:

A. Michael Knemeyer, Fisher College of Business, The Ohio State

University, 2100 Neil Avenue, Columbus, OH 43210, USA; E-mail:

knemeyer.4@osu.edu

Journal of Business Logistics, 2015, 36(3): 301–302 doi: 10.1111/jbl.12093

© Council of Supply Chain Management Professionals