Supply-Chain Management in theory and practice: A passing fad and a fundamental change in applied marketing

Supply chain management is the management of the flow of goods and services includes all processes that transform raw materials into final products. It encompasses every effort involved in producing and delivering a final product or service, from the supplier to the customer. Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high performing business model. It drives coordination of processes and activities with and across sales, product design, finance, marketing, education, government and information technology.

Supply chain management attempts to centrally control or link the production, shipment, and distribution of a product. By managing the supply chain, companies are able to cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales and the inventories of company vendors. Supply chain management is based on the idea that nearly every product that comes to market results from the efforts of various organizations that make up a supply chain. Although supply chains have existed for ages, most companies have only recently paid attention to them as a value-add to their operations.

Supply chain practice is interrogated through a series of following fundamental questions:
Who was ―managing the supply chain in practice? (That is, which individuals or groups are actually engaged in such practice?)
What type of ―supply chain activities were they managing?
What were the key enablers and inhibitors to this process?
What external factors were driving the strategic imperative of supply chain management? FIGURE: Scope of the six supply chains studied

Since its introduction by management consultants in the early 1980s, the Supply chain management concept has risen to prominence in both academic and commercial circles. A substantial body of academic knowledge has been, and continues to be, developed in the broad Supply chain management domain. Despite a widespread recognition of its potentially positive impact on firm performance, there is significant evidence of divergence between theory and practice in terms of Supply chain management understanding and adoption. For example, Storey et al. (2006) asserted that: While there is an emerging body of theory which ostensibly offers a relatively coherent and compelling prescriptive narrative, predominant practice is at considerable odds with this conceptualisation (p. 755). They also recognized that supply chain theory suggests that the chain should be managed from “end-to-end” but noted that “our research found very few examples of this” (p. 763). This focus on end-to-end thinking is instructive given that integration of supply chain processes and information is a central tenet of contemporary SCM thinking. However, the work of Fabbe-Costes and Jahre (2007) concluded that, at this point in time it seems that we can confirm that integration is more rhetoric than reality, that it might be more difficult in practice than in theory” (p. 848). Their more recent work (Fabbe-Costes and Jahre, 2008) reinforces this view. A number of other authors have raised serious questions about the real impact of Supply chain management in practice. For example, Cousins et al. (2006) suggested that: Supply chain management still appears to suffer from an underlying frustration or perception of being largely ignored; practitioners feel they have a great deal of value to add, but the organisation is not concerned with them (p. 699). More recently, Kotzab et al. (2011, p. 233) noted that “there is a dearth of evidence in relation to the extent to which Supply chain management – as defined in the academic literature – is implemented or even understood in practice”. 3 In short, there is evidence to suggest that there are – as Storey et al. (2006) put it – “substantial gaps between theory and practice” (p. 769). The research described in this paper attempts to provide some insights into this phenomenon and the issues that it raises. In particular, it aims to develop a profile of current levels of understanding and adoption, as well as to identify some of the factors influencing adoption.