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Abstract
Literature on supply chain management (SCM) covers several disciplines and is growing rapidly. This paper firstly
aims at extracting the essence of SCM and advanced planning in the form of two conceptual frameworks: The house of
SCM and the supply chain planning matrix. As an illustration, contributions to this feature issue will then be assigned
to the building blocks of the house of SCM or to the modules covering the supply chain planning matrix.
Secondly, focusing on software for advanced planning, we outline its main shortcomings and present latest research
results for their resolution.
Ó 2004 Elsevier B.V. All rights reserved.
0377-2217/$ - see front matter Ó 2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.ejor.2004.03.001
Material compilado con fines académicos, se prohíbe su reproducción total o parcial sin la autorización de cada autor.
576 H. Stadtler / European Journal of Operational Research 163 (2005) 575–588
Secondly we are concerned with the future of ucts and services in the hand of the ultimate con-
APS. Therefore, we will highlight deficiencies of sumer.’ This definition stresses that all the
APS, which may give rise to future research. Three activities along a SC should be designed according
areas for improvements are proposed: Improve- to the needs of the customers to be served. Con-
ments which are possible within the modules of sequently, the (ultimate) consumer is at best an
today’s APS, issues which challenge the premises integral part of a SC. The main focus is on the
of today’s APS, and last but not least two business order fulfilment process(es) and corresponding
functions are identified which should be better material, financial and information flows.
integrated with APS. In case the organizational units belong to one
The structure of the paper is as follows. In single enterprise an intra-organizational SC is gi-
Section 2 the term SCM is defined and its ven. Here, hierarchical coordination is possible
building blocks are described. Section 3 intro- and prevailing. While hierarchical coordination
duces the architecture and modules of today’s in globally operating enterprises is already a
APS. Issues and challenges of APS are presented demanding task, the real challenge arises in an
in Section 4. A few comments conclude this paper inter-organizational SC where hierarchical coor-
(Section 5). dination is no longer possible.
Although there is a coherent view of what a SC
represents, there are numerous definitions of the
2. Essence and scope of supply chain management term SCM (see Otto and Kotzab, 1999). The def-
inition proposed here is not totally new but tries to
2.1. The house of supply chain management extract the essence of existing proposals: Supply
chain management (SCM) is the task of integrat-
Following the proposal of Christopher (1998, p. ing organizational units along a SC and coordi-
15) a supply chain (SC) ‘. . .is a network of orga- nating materials, information and financial flows
nizations that are involved, through upstream and in order to fulfil (ultimate) customer demands with
downstream linkages in the different processes and the aim of improving competitiveness of the SC as
activities that produce value in the form of prod- a whole. This definition is best visualized by the
house of SCM (Fig. 1) and will be described in acquisitions extensively advocates a thorough
greater detail below. analysis of potential partners along several
dimensions. These dimensions comprise the core
2.1.1. Competitiveness and customer service competencies, trust, culture, strategy, organiza-
The roof of the house of SCM depicts the ulti- tional structure and financial situation (for a
mate aim of SCM, namely improving competi- complete checklist see Ries, 2001, p. 337).
tiveness of a SC as a whole. This is achieved by In contrast to a ‘virtual company’, which is
directing the SC in a sustainable, strategic position often formed for just fulfilling a single customer
compared to its competitors (this is in line with the order, a SC partnership is created in the medium-
ideas of Porter (1998, p. 55) for a single company). term, e.g. the lifetime of a product. This allows
An important means to achieve this aim is cus- greater investments in close partnerships across the
tomer satisfaction (see Christopher (1998, p. 35) SC. The cooperation between partners in a SC
for a detailed description). Excellent examples of should be such that each partner benefits––at least
how to focus SC processes on customers are given on a medium-term (so-called win–win situation).
by two case studies (Berry et al., 1999; Childer- From a financial perspective this requires to adapt
house et al., 2002), which––based on the work transfer prices negotiated within the SC and
of Skinner (1974)––show how to analyse the potentially to render compensation to partners,
strengths and weaknesses of a SC in a competitive if asked to give up locally optimal decisions in
market. Concentrating on order qualifiers and favour of the SC as a whole.
order winners, a methodology is proposed for
market segmentation followed by the re-engineer- 2.1.3. Network of organizations
ing of a specific order fulfilment process for each A SC can be regarded as a network of organi-
market segment. zations with some common goals. The challenge in
The roof of the house of SCM rests on two controlling such a network stems from the nature
pillars, ‘integration of organizational units’ and of relationships between SC partners. They are
‘coordination of flows’. Of the many facets of neither part of a single hierarchy nor loosely cou-
SCM we will outline three building blocks in each pled by market relations. Hence, control mecha-
‘pillar’, which we believe play an important and nisms for a hybrid between market and hierarchy
innovative role in SCM. are looked for (e.g. Sydow, 1999). Also, a SC
partnership always runs the risk of either sepa-
2.1.2. Choice of partners rating (establishing e.g. market relations, if there
Starting with the integration of organizational are greater opportunities in short-term contracts)
units we have to design the SC first, i.e. find those or being integrated into a hierarchy as a result of a
partners with the best fit to the existing SC and take over. The latter may occur in case the SC runs
the needs of the customers to be served. At the the risk of losing a crucial partner. Based on a
very beginning the SC may consist of a single literature review Spekman et al. (1998) argue that
company taking the initiative. Due to the large the misfit of goals and strategies are frequent
efforts necessary to form a working SC usually causes for the disintegration of networks (see also
only a small subset of all companies involved in Skjøtt-Larsen, 1999).
the creation of a product or service for the ulti- A partnership between organizational units
mate consumer form a SC. Obviously geogra- rests on daily decisions by employees and man-
phical aspects will play an important role, the agement. Although this statement is easy to make
capabilities of potential partners––like product it is rather difficult to accomplish, considering that
and process know how––as well as the financial partners formerly may have experienced market
position to name only a few. The fit might also be relationships with information hiding, mistrust
tested in the form of a due diligence (Berens and and perhaps even cheating. This is where the social
Strauch, 1999). This concept originates from sciences come into play, e.g. by analyzing how
public accounting and being used in mergers and bonds can be created between interacting
578 H. Stadtler / European Journal of Operational Research 163 (2005) 575–588