Faruk Hasanspahic, International Burch University
Global trade and its consequences have brought new considerations into business and its activities. One of the outcomes is clearly about the changes in supply chain related concerns. Since, there is a continuously changing business and technological environment; it may be hard to identify the most important ones among them. Therefore, the main objective of this research is to distinguish the top rated factors related to operations and supply chain management by evaluating the articles of one of the journals named "Operations and Supply Chain Management" in the considered area. The research analysed the keywords of the articles from the beginning of 2005 till the end of 2012. According to the results, in the analysed period, the focus points of the articles are identified. Those focus points associated with supply chain (management) are reviewed in the related literature. Therefore, the research provides beneficial information for every manager on the ways of improving their Supply Chain efficiency, realization of the importance of transportation and logistics, embracing information technologies in their supply chain management, etc.
Although this study has limitations, it is expected that it will be useful for future studies and the industry by identifying the hot and top rated factors related to supply chain and operations management.
Keywords: Keyword analysis, Supply Chain, Journal
The importance of Supply Chains starting from the initial buying operations till providing the services and products to the customers has been increasingly growing in today's fast market. The future and the challenges of Supply Chain Management (SCM) have been taken the interest of scholars and companies. Determination of influencing factors and variables of supply chain decision making process is just one of the useful sides and benefits of this research paper. The objective of the paper is to key points important to the researchers and company managers involved in SCM. This research hopes to be useful in that it evaluates the last period of a scientific journal specific to supply chain management by employing a keyword analysis. Therefore, especially researchers in this field and the decision makers in the government and companies can get benefit by considering the supply chain research trends and the important points in SCM.
The paper starts with this introduction section and continues with the literature review about the development of Supply Chain idea. The next section includes the methodology and the results. The results are discussed in detail and the research is concluded.
SCM includes the management of interconnected businesses starting from storing raw materials, processing them and producing a finished product/service for the customers. Despite SCM is may be as old as the age of commerce, Cooper (1999) reported that SCM research started to appear about 1980's. On the other hand, the background of SCM is based on the research about managing inter-organizational operations (channels research and systems integration research about 1960's).
According to Ratliff (2007), logistics has become much popular with the start of Enterprise Resource Planning (ERP) systems in the 1990s. These systems were motivated by successful results of Material Requirements Planning systems in the 1970s and 1980s and were used to integrate the multiple data bases. Despite having some problems with the ERP systems, large companies have adopted ERP systems. This extremely enhanced the availability and accuracy of information. Therefore, the need for better planning and integration among logistics components has appeared and new technologic tools have been developed such as an optimization-based (APS) software "Advanced Planning and Scheduling (APS)" by Georgia Tech. Georgia Tech aims to provide technological solutions for integration problems among logistics components.
Globalization and Supply Chains
The term supply chain has appeared as a result of the globalization of manufacturing since the mid 1990s (Ratliff, 2007). The institute also stated the importance of logistics strategies related to complex networks of multiple members as a result of globalization. The institute moreover differentiated logistics and supply chain that the term supply chain refers to strategic issues however logistics refers to tactical and operational issues. According to Council of Supply Chain Management Professionals (2011), Logistics plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements as a part of the supply chain processes, however, Supply Chain Management systematically and strategically coordinates traditional business functions inside a company and through the supply chain in order to enhance the long-term performance of the individual companies and the overall supply chain.
Ratliff (2007) reported that the communication capabilities changed our considerations about communications and sharing information while supply chain and logistics planning is dependent on the distributed models. He also stated that these technologies can enhance supply chain and logistics areas such as warehousing and distribution, transportation, and manufacturing logistics while there are also many non-traditional areas such as health care logistics and humanitarian logistics.
Methodology and Results
This research hopes to be useful in that it evaluates the last period of a scientific journal specific to operations and supply chain management entitled "Operations and Supply Chain Management" by employing a keyword analysis. Therefore, one of the popular and powerful journals regarding to SCM is chosen to be studied. The journal has three issues per year. The journal is observed to be related to business and everyday operations.
The journal’s abstracts from the beginning of 2005 to the end of 2012 (including last eight years) are collected. The keywords of the articles are ordered and grouped under the categories by considering their similarities. The categories are then named according to supply chain terminology. Finally, the frequency distribution of the categories is calculated (Table 1).
Table 1 Frequency Distribution of Keyword Categories
Supply Chain Management
Marketing and Sales
Supply Chain Strategies
Transportation and Logistics
Transportation and Logistics
The priority of the published articles in the journal is identified to be "Transportation and Logistics" issue. The term, logistics, was firstly developed in military context, incorporating the supply, movement and quartering of troops in a set, in the late 18th and early 19th centuries and it started with the military logistics of World War II (BTRE, 2001). However, it has become one of the important concerns of research and business activities in today’s world (BTRE, 2001). Chang (1998) divided the development of logistics into four periods: (1) Dormant years (-1950s, Production was the main concern), (2) Development Years (the 1960s and 1970s, application of new business administration ideas), (3) Take-off Years (the 1980s and 1990s, more logistics applications and researches, slow growth of market, pressure of high stagflation, release of transportation control, and global competitions), and (4) the 21st century logistics alliance (Third Party Logistics (TPL) and global logistics). In the last period, Logistics circulation has become necessary in business activities and sustainable competitiveness by forming alliances among international industries and specializing in logistics (Tseng, Yue, & Taylor, 2005).
However, a successful logistics system cannot be considered without well developed transportation systems involving the contribution of both public and private sectors. Therefore, a well-operated logistics system can enhance the competitiveness of both government and enterprises (Tseng, Yue, & Taylor, 2005).
Research Methodologies in SCM
Seuring et al. (2005) examine the role and importance of Survey Research in the Field of Supply Chain Management, by analyzing the papers published in the Journal of Business Logistics between 1993 and 2003 in order to identify the typical research design and weaknesses of articles such as the employed questionnaire or missing sample size. Grant, Teller & Teller (2005) discuss developing new data collection methods in their paper about Web-Based Surveys by outlining and showing the advantages of using internet in data collection. Since specific techniques and their application in supply chain research have become popular, Giménez, Large & Ventura (2005) suggest using Structural Equation Modeling and outline the fundamentals and applications of structural equation modeling.
Seuring et al. (2005) suggested strengthening the methodology by using mix methods such as interviews for case studies. McCarthy & Golicic (2005) presented three cases on a focal firm in order to support their developed conceptual framework for interfirm demand integration. Koulikoff-Souviron & Harrison performed a meta-analysis of nine case study papers published in the Journal of Operations Management between 2002 and 2004 and offered some solutions about the appeared problems during their research on inter- and intra-firm supply relationships.
Industry Specific Supply Chains
Tiwari (2005) explores the aerospace industry and Rolls Royce Aircraft Engine manufacturer through an exploratory study by providing case study examples tracking down the implementation level of Supply Chain initiatives. He also explores Supply Chain (SC) efficiency, and examines the major factors in order to enhance SC effectiveness. He finds aerospace industry as interesting and unique in terms of supply chain concept, since there is a high interdependence between the supplier and manufacturer. He therefore reported that SC has helped a lot to aerospace industry by reducing costs. Deregulation according to Tiwari is the main factor on SC, because since then the focus of aerospace industry has changed from functionality and technology to affordability of acquiring and operating a plane. Tiwari (2005) states that aerospace industry is driven by a few major companies like Airbus and Boeing. He ordered their success factors as: reduced operational costs, very high collaboration and closeness between the supplier and manufacturer. He reported that aerospace industry suppliers are categorized into three tiers: General Electric Aircraft Engines (GEAE), Rolls-Royce, Honeywell and Pratt & Whitney are included in the first tier which depends on the other two tiers which buy and sell from each other on a regular basis. He therefore described the industry by collaborative programs and equity cross holdings between aircraft manufacturers (Boeing and Airbus) and its tier 1 suppliers. At the remaining tiers, there is a huge and diversified manufacturing base (Tiwari, 2005).
Tiwari (2005) lists slower growth, industry consolidation and maturing market as the top challenges for the industry by influencing the industry in that the manufacturers should balance and further reduce their operational costs to see profits. He suggests that the manufacturers should stay efficient to survive or gain market share while being cost effective.
Tiwari (2005) reports that Rolls Royce has a tiered supply chain including 900 suppliers in 2002 and 765 in 2003. He also states that cost reduction and increased collaboration between the supplier and manufacturer are the vital elements in survival or gaining market share. Tiwari (2005) moreover states that Rolls Royce focuses on SC flexibility by adapting to market conditions and negotiating flexible terms with its workforce.
According to Tiwari (2005), Rolls Royce's SC advantage is enhancing the cost efficiency of its every manufacturing facility by serving business units of Civil Aerospace, Defense Aerospace, Marine and Energy. He reports that Supply Chain in Rolls Royce initially starts with (1) Supplier selection and segmentation in order to reduce the number of suppliers, (2) Collaborative product development with the contribution of its suppliers by reducing the costs and the risk, (3) Procurement by recording the update demand for the suppliers, online payment system and distinguishing by classifying them into classes and measurement control of parts and (4) Supplier Management and Development by establishing a council in order to call up the meetings and discuss/proposes supply chain improvements to reduce costs and improve efficiency.
Chima (2007), in his article, investigates the role of supply chain in the gas and oil industry by using two case studies and suggests the improvements of supply chain in the gas and oil industry in terms of efficiency. According to Chima (2007), gas and oil reserves are becoming scarce resources, but using new technology limitation of lack of resources can be reduced. He moreover states that the main challenge for supply chain in this industry is producing output and delivering the product to the customers in order to reduce costs, because the industry tends to have a be cost efficient supply chain. He furthermore ordered the major steps in supply chain in the gas and oil industry as Exploration, Production, Refining, Marketing, and Consumer. According to him, tendency of the suppliers to act for their own interest and thus maximize profit as much as possible is one of the disadvantages to supply chain in this specific industry. Chima (2007) asserts that coordination from the perspective of each company involves (1) ensuring supplier effectiveness in cost, timeliness and quality, (2) setting appropriate targets for inventory, capacity, and lead time, (3) monitoring demand and supply conditions and (4) communicating market and performance results to customers and suppliers.
Chima (2007) moreover suggests that the gas and oil industry supply chains should develop better and faster customer service; globalized supply chains; IT incorporated SC systems; and vertically integrated companies.
Supply Chain Strategies
According to Happek (2005), the term supply chain strategy is frequently confused with supply chain management. She suggested the use of supply chain strategy in a broader sense such as determination of the ways of supply chain operations for competitiveness. She distinguishes supply chain strategy from business strategy in that supply chain strategy is an iterative process of evaluating the cost benefit trade-offs of operational components while Business strategy is determined to leverage the core organizational competencies in order to reach pre-determined high-level objectives. She also stated that supply chain strategy includes the activities involved in decision-making process by providing information about (1) what (types of products and services), (2) when (timing, business cycles, etc), and (3) where (markets and segments). Supply chain strategy is so important in order to operationalize and support the business strategy and to establish the way of working with supply chain partners, including suppliers, distributors, customers, and even your customers’ customers and therefore creating value for the organization (Happek, 2005).
Benefits of Supply Chains
The structures and the understanding of supply chains are rapidly changing. Companies seek to have cost effective systems and improved efficiency for their integrated supply chains. According to Chu (2004), supply chain management systems enhance better tracking of resources from the ordering to manufacturing, monitoring costs and labor force performance, while potential flaws and problems can be easily spotted and corrected. Chu (2004) proposes that optimized stock levels as one of the major inventory advantages of integrated supply chain management. He finally suggests integrated supply chains to the industry in order to reduce transportation, warehousing, and distribution costs.
IT, Mobile Systems, Social Networks and SCM
The beginning discussion made it clear that SCM systems improved by the help of IT enabled systems in coordinating the SCM functions by facilitating higher service levels and lower inventory and supply chain costs. Furthermore, IT restructures the SCM system by making it more efficient and responsive.
IT related keywords not only include the PCs, but also data recognition and data flow equipment, automation equipment, communication technologies and other various hardware and software. These are related with efficient customer service, fast and reliable information flow to allow business in order to reduce the dependency factor of human resources; to enhance the responsiveness level by facilitating supply chain activities and to increase managerial decision making quality and capability.
Ryan (2012) reported that social media has been used by most of the companies in order to enhance the interaction with their customers and keep new trends. He strongly suggested that it is the best way of using new technology for globally sourced corporations. Therefore, the real-time integration of advanced software can allow the coordination of entire logistics network by easily processing internal reports with dramatic precision and facilitating the communication of the company with external players in supply and warehousing (Ryan, 2012).
Technology and SCM
Ghorban (2011) stated that SCM technologies are developed step by step, beginning with electronic invoicing, computerized shipping and tracking and automated notifications. The technologies at the beginning aimed to enhance business-to-business interactions and furthermore they could provide tracking and accountability to consumers. It has been clear that it is important to notify everyone along the chain. The companies instead of adapting to new technology, "they were born into the arms of it" (Ghorban, 2011).
Some of the useful technologies in supply chain activities are e-commerce, bar coding and scanning, ERP systems, etc. E-commerce can together with the Data Interchange system help business to perform over the internet and to automate the document flow. Bar coding and scanning is used to track the exact quantity, pricing, and other specifications of the products through the stages of supply chain (IBM, 2009). ERP systems as stated above are integrated systems which are employed to sustain the financial, processing and customer order activities (IBM, 2009).
All these systems together with social networks and mobile systems and other technologies of IT enhance the SCM system in faster data and document flow, efficient data feedback, reduced paper work, reduced human labor, reduced inventory costs, reduced dependency on human resources and skills, automated processes, traceability of the products, improved strategic planning, gaining competitive advantage over rivals, cost efficiency and improved distribution system (B2C, 2013).
The Future Challenges of SCM
Carroll (2010), after conducting IBM’s Global Chief Supply Chain Officer Study by employing face-to-face interviews with almost 400 senior supply chain executives from 25 countries and 29 different industries, identified that supply chain executives are struggling with five fundamental challenges: (1) Supply chain visibility (70%), (2) Risk management (60%), (3) Increasing customer demands (56%), (4) Cost containment (55%), and (5) Globalization (43%).
Visibility: IBM’s study reported that supply chain executives prefer focusing more on strategy alignment, continuous process improvement and cost reduction instead of the visibility of supply chain. Organizational silos are selected to be the biggest barrier in preventing the visibility. Many of the executives are observed that they do not believe the importance of collaborative decision making with suppliers and vendor-managed inventory (VMI). However, IBM suggested collaborating more to improve visibility of supply chains.
Risk: Executives agree on the importance of risk management in terms of customer demands and high costs but not the current economic environment. The companies are observed to mainly (69%) monitor the risk and the remaining seems to manage performance and risk together. They reported that the lack of standardized processes, insufficient data and inadequate technologies are the main barriers for effective risk management.
Customer intimacy: Much of the companies seem to struggle in accurately identifying customer needs. However, it is suggested that supply chains cannot afford the excess inventory, lost sales and missed innovation opportunities because of poor customer collaboration.
Cost containment: The survey reports that conservative supply chain strategies and design techniques can’t follow the fast changes in costs and other operational fundamentals. Therefore, new designs become outdated before executives can implement them.
Globalization: IBM’s survey identifies that many companies are not comfortable with global sourcing, including unreliable delivery, longer lead times and poor quality. However, the globalization of markets and operations brings also some financial advantages including improved margins and high profits.
Therefore, Carroll (2010) suggested that the companies need to have more efficient (even smarter) supply chains including three key characteristics in order to effectively overcome these challenges. Therefore, they need to be (1) instrumented, (2) interconnected and (3) intelligent.
Instrumented companies can gain greater visibility across the network, mitigate risk, reduce cost and manage rising complexity by using sensors and "smart" devices.
Interconnected companies can share information, make decisions collaboratively and have real-time management by integrating the entire supply chain.
Intelligent companies can evaluate increasingly complex and dynamic risks and constraints and act on better insight by employing advanced analytics, simulation and modeling tools.
The world is getting smaller and smaller as a result of Globalization with the improvements and development of technologies. Therefore, it becomes essential to adapt emerged new business environment for the companies in order to be competitive and make profit. Gaining competitive advantage over the rivals is one the essential keys to success. The path to this success lays in efficient data flow and feedback, improved SCM system, cost efficiency and responsiveness.
This paper is useful in that it takes and analyses a specific time frame of the journal "Operations and Supply Chain Management" as one of the leading journals in the considered area. According to the results, in the analysed period, the focus points of the articles are identified. Those focus points associated with supply chain (management) are reviewed in the related literature. Therefore, the research provides beneficial information for every manager on the ways of improving their Supply Chain efficiency, realization of the importance of transportation and logistics, embracing information technologies in their supply chain management, etc.
This study has limitations in that it only considers a specific time interval and one specific journal. Future studies may involve longer time intervals in order to see the evolution of supply chain idea through the timeline. Additionally, including more journals into analyses may be much representative. However, this research is useful in that future studies may employ the appeared factors in their studies and empirically test them. The industry can also consider the results of this study and employ new competitive strategies in their supply chains.