Richard D. Wilding

The supply chain complexity triangle: Uncertainty generation in the supply chain

Since the late 1950s it has been recognised that the systems used internally within supply chains can lead to oscillations in demand and inventory as orders pass through the system. The uncertainty generated by these oscillations can result in late deliveries, order cancellations and an increased reliance on inventory to buffer these effects. Despite the best efforts of organisations to stabilise the dynamics generated, industry still experiences a high degree of uncertainty from this source. The “supply chain complexity triangle” describes the interaction of deterministic chaos, parallel interactions and demand amplification. It provides a framework for understanding the generation of uncertainty within supply chains. The implications for supply chain strategy and manufacturing logistics are discussed.

Customer perceptions on logistics outsourcing in the European consumer goods industry

This paper investigates customer perceptions on three key logistics outsourcing decisions: why to outsource, what to outsource and how to manage satisfaction within third party logistics providers (3PLs) partnerships. In addition to an analysis of the current literature, a Europe‐wide postal and telephone survey revealed that outsourcing in the consumer good industry is heavily service driven and focused on the traditional logistics functions. The key findings of the work are that cost aspects play a smaller role for outsourcing in the consumer goods industry than anticipated, and that performance measurement systems will require increased sophistication over the coming years. It was found that a considerable number of consumer goods companies admitting that soft issues, such as cultural incompatibility and poor communication, may lead to the failure of the 3PL partnership.

Managers in supply chain management, the critical dimension

Attracting and educating the right supply chain managers are a critical challenge to the realization of most supply chain objectives irrespective of the state of the economy (shortage of personnel several months ago or increasing lay‐offs currently). This is because of the richness of capabilities required to do the job well. Much of our teaching in logistics and supply chain management focuses on the technical aspects of the role. However, the importance and criticality of the human aspects are becoming increasingly apparent. A new approach to the people dimension is called for. This paper uncovers a set of emotional capabilities, which, if combined with the technical capability that is undoubtedly needed as well, would transform the industry. One emotional capability, the ability to influence, is examined by way of illustrating what we mean by emotional capability. Suggestions are offered for furthering managerial capabilities in supply chain management.

Nestlé Nespresso AAA sustainable quality program: an investigation into the governance dynamics in a multi‐stakeholder supply chain network

Purpose – Within the context of a sustainable supply chain, the purpose of this paper is to report on empirical longitudinal research on supply chain network evolution and dynamics of governance in a multi‐stakeholder supply chain sustainability initiative led by Nespresso, the speciality coffee division of Nestle.Design/methodology/approach – The paper proposes a framework to study the creation and evolution of governance mechanisms over a five‐year period. Data from 48 semi‐structured interviews and 15 recent and historic documents were also analysed. The interviews were conducted among current and past representatives of all the organisations concerned including coffee traders, NGOs and farmers.Findings – In contrast with literature on the subject, governance mechanisms initially relied mostly on informal mechanisms. Formal governance mechanisms were incorporated into the relationships to enable the supply chain network to grow and to provide clarity to all actors. Relational quality processes that inc...

Chaos Theory: Implications for Supply Chain Management

Since the late 1950s it has been recognized that the systems used internally within supply chains can lead to oscillations in demand and inventory as orders pass through the system. The uncertainty generated can result in late deliveries, order cancellations and an increased reliance on inventory to buffer these effects. Despite the best efforts of organizations to stabilize the dynamics generated, industry still experiences a high degree of uncertainty. The failure to significantly reduce uncertainty through traditional approaches may in part be explained by chaos theory. This paper defines deterministic chaos and demonstrates that supply chains can display some of the key characteristics of chaotic systems, namely: chaos exhibits sensitivity to initial conditions; it has Islands of Stability; generates patterns; invalidates the reductionist view; and, undermines computer accuracy. The implications for the management and design of supply chains are discussed.

VIRTUAL TEAMING IN THE AGILE SUPPLY CHAIN

This paper describes the information flows in the supply chain, and identifies knowledge and expertise as richer more capable entities for its management than data or information. It briefly explores how the structure of the automotive supply chain is changing due to the pressures of increasing complexity and urgency. Then it highlights the inevitability of instability in the supply chain, through an evaluation of turbulence. Agility is identified as a response for coping with this uncertainty. The tool identified for introducing agility in the supply chain is Virtual Teaming. It achieves this by forming collaborative supply chain partnerships, unconstrained by geography that can quickly apply knowledge and expertise as corrective and preventive mechanisms. A survey of the suppliers to a major automotive manufacturer has highlighted the need for this form of working.

Understanding collaborative supply chain relationships through the application of the Williamson organisational failure framework

Purpose – Within the supply chain the need for much closer, long‐term relationships is increasing due to supplier rationalisation and globalisation and more information about these interactions is required. The research specifically tested the well‐accepted Williamsons economic organisations failure framework as a theoretical model through which long‐term collaborative relationships can be viewed.Design/methodology/approach – An exploratory research project was designed and carried out on a self‐selected census of 54 monopolistic relationships representing £575.8 m annual spend on equipment and associated services within the UK defence procurement organisation (a 10 per cent sample). Its aims were to understand the relationship dynamics within long‐term, sustained monopolies and to determine if generic success factors could be found to assist managers to break out of the essentially negative situation. A triangulated data capture approach was employed using both quantitative and qualitative methods from ...

Blood Inventory Management: Hospital Best Practice

Blood is a perishable product, and hence good management of inventories is crucial. Blood inventory management is a trade-off between shortage and wastage. The challenge is to keep enough stock to ensure a 100% supply of blood while keeping time expiry losses at a minimum. This article focuses on inventory management of red blood cells in hospital transfusion laboratories to derive principles of best practice and makes recommendations that will ensure losses due to time expiry are kept to a minimum. The literature was reviewed to identify available models for perishable inventory management. Historical data from the UK blood supply chain was analyzed to identify hospitals with good inventory management practice and low wastage levels. Transfusion laboratory managers in the selected hospitals were interviewed in 7 case studies with the aim of identifying drivers for low wastage and good inventory management practice. The findings from the case studies were compared with the literature. The extant literature asserts that the drivers for good inventory performance are the use of complex inventory models and algorithms. This study has found this not to be the case. Instead, good performance is driven by the quality of transfusion laboratory staff, who must be skilled, regularly trained, and experienced. Electronic crossmatching, transparency of the inventory, and simple management procedures also facilitate good performance.

Long Term Collaborative Business Relationships: The Impact of Trust and C3Behaviour

Long-term, collaborative business relationships are like marriages where tolerance, forbearance and some reduction of freedom as well as innovation are necessary to ensure success. Trust and co-operative behaviours are known to be essential ingredients in securing an environment of continuous improvement but, how they are correlated has yet to be tested. The paper describes a research project within a sample of long-term monopoly businesses as a novel approach to bringing trust and cooperation, co-ordination and collaboration (C3 Behaviour) into sharper focus without competitive distractions. It was found that a correlation between trust and C3 Behaviour and the success of the collaborative relationship exists.

What drives perishable inventory management performance? Lessons learnt from the UK blood supply chain

Purpose – Managing perishable inventories is a trade‐off of shortages and lost sales against wastage. This paper aims to identify what drives good management of perishables within the supply chain using the example of blood inventory management in hospitals.Design/methodology/approach – Seven case studies with hospital transfusion laboratories in the UK blood supply chain were carried out in order to explore how perishable inventories are managed. The case studies identify drivers for good performance in perishable inventories.Findings – Six recommendations are developed for how managers can improve perishable inventory performance. These are based around simple management procedures implemented by experienced staff. The case studies develop three propositions that recommend how inventory theory should be embedded in practice.Research limitations/implications – This research demonstrates that managerial changes and training issues have a significant impact on waste reduction and inventory management perfo...