Download Benefits, barriers, and bridges to effective supply chain

Research paper
Benefits, barriers, and bridges to effective
supply chain management
Stanley E. Fawcett
Marriott School, Brigham Young University, Provo, Utah, USA
Gregory M. Magnan
Albers School of Business and Economics, Seattle University, Seattle, Washington, USA, and
Matthew W. McCarter
College of Business, University of Illinois, Champaign, Illinois, USA
Abstract
Purpose – The purpose of this article is to provide academics and practitioners a quantitative and qualitative analysis of the benefits, barriers, and
bridges to successful collaboration in strategic supply chains.
Design/methodology/approach – A triangulation method consisting of a literature review, a cross-functional mail survey, and 51 in-depth case
analyses was implemented. Senior managers from purchasing, manufacturing, and logistics were targeted in the mail survey. The break down by
channel category interviews is as follows: 14 retailers, 13 finished goods assemblers, 12 first-tier suppliers, three lower-tier suppliers, and nine service
providers.
Findings – Customer satisfaction and service is perceived as more enduring than cost savings. All managers recognize technology, information, and
measurement systems as major barriers to successful supply chain collaboration. However, the people issues – such as culture, trust, aversion to
change, and willingness to collaborate – are more intractable. People are the key bridge to successful collaborative innovation and should therefore not
be overlooked as companies invest in supply chain enablers such as technology, information, and measurement systems.
Research limitations/implications – The average mail-survey response rate was relatively low: 23.5 percent. The case study analyses were not
consistent in frequency across channel functions. Although the majority of companies interviewed and surveyed were international, all surveys and
interviews were managers based in the US.
Practical implications – This study provides new insight into understanding the success and hindering factors of supply chain management. The
extensive literature review, the cross-channel analysis, and case studies provide academics and managers a macro picture of the goals, challenges, and
strategies for implementing supply chain management.
Originality/value – This paper uses triangulation methodology for examining key issues of supply chain management at multiple levels within the
supply chain.
Keywords Supply chain management, Strategic management, Relationship marketing
Paper type Research paper
these enticing benefits, organizations who partner in strategic
supply chains continue to encounter barriers. These barriers
exist at multiple levels of organization: the organizational,
intra-organizational, inter-organizational levels. For example,
strategic supply chains may encounter performance “glitches”
or the inability to meet customer demand (Hendricks and
Singhal, 2003) from such things as quality and production
problems, employee apprehension to yield up control, and
poor collaborative planning. These glitches can be quite costly
in terms of higher inventory and lower sales growth
(Hendricks and Singhal, 2005).
These potentially costly burdens from failure to meet
customer demand are a strong motivator for supply chain
Introduction
The strategic supply chain continues to be adopted by
organizations as the medium for creating and sustaining a
competitive advantage (Ireland and Webb, 2007). Such a
displacement is understandable considering the potential
benefits of successful supply chain management (SCM).
These benefits include inventory reduction, improved delivery
service, and shorter product development cycles. Despite
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-8546.htm
Supply Chain Management: An International Journal
13/1 (2008) 35– 48
q Emerald Group Publishing Limited [ISSN 1359-8546]
[DOI 10.1108/13598540810850300]
The authors would like to thank CAPS Research for its generous funding
of the authors’ stream of research into achieving world-class supply chain
performance.
35
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
(SC) managers and management scholars to develop bridges
or solutions and strategies to either avoid or remedy the
barriers to strategic SC success. However, despite the growing
interest of SCM and the benefits, barriers, and bridges toward
its success, research that addresses all three issues from a
multi-channel perspective is in need. Knowing and
understanding how, when, and why some supply chains
succeed while others do not would not only be of interest to
SC scholars, but to the managers that daily face the challenge
to making strategic SCM a reality.
The purpose of this paper is to report and review the
potential benefits, barriers, and bridges of strategic SCM. We
argue that for strategic supply chains to be successful
managers and scholars must not focus on one particular
inhibitor or facilitator, but rather consider the barriers and
bridges in combination or holistically. Doing so not only
allows us to separate the trees from the forest but further
allows firms to capitalize on the added benefits of SCM. Our
arguments begin with a review of the salient theory and
literature of SCM in terms of benefits, barriers, and bridges.
A two-part study composed of mail surveys and 51 in-depth
interviews is discussed and their findings shared. We discuss
our findings and their implications, and conclude with some
suggestions for future research.
theory. Force field theory implies that the driving forces
(external threats combined with internal benefits) must
exceed the resisting forces (e.g. culture, structure,
perceptions of how things should be done) so that any
organizational entity – in this case a company within a supply
chain – can change and survive in changing environments.
The ability to scan the environment for the forces driving
SCM, to identify the potential barriers (or resisting forces),
and to implement bridges (so as to over come resistance)
enables members of a supply chain to maintain competitive
success in changing environments and markets and become a
successful strategic supply chain.
Typically, the contingency model is driven by dynamic
technological innovation, management skills across
department and organizational functions, and integration
vertically and horizontally across industry (Stonebraker and
Afifi, 2004; Funk, 1995; Hammer and Champy, 1993;
Lawrence and Lorsch, 1967). These drivers can be
considered driving forces (Lewin, 1951). Although these
drivers push for supply chain collaboration, barriers or
resisting forces push back (Lewin, 1951). Such resisting
forces include lack of member support, inadequate
measurement and information systems, and organizational
culture. Nevertheless, organizations are not powerless in
terms of choices or their ability in attempting to overcome
these barriers. Strategic supply chain partners can create and
implement initiatives that bridge the gap between a supply
chain and a strategic supply chain. Some of these bridges
include people empowerment, information integration, and
alliance design. Thus, strategic supply chains can create value
contingent on their ability to overcome resisting forces
through a various mechanisms. Figure 1 shows a contingency
framework for understanding SCM implementation. The
following subsections outline the main sections of the
framework.
Background: benefits, barriers, and bridges
In this section, we review the literature of the benefits,
barriers, and bridges to SCM. This literature review began
first with the authors going back 25 years in the salient SC
journals and trade press. As the search continued, we
broadened our search to other journals and trade press that
discussed benefits, barriers, and bridges in supply chains. The
articles were read and categorized by their primary topic(s)
concerning SCM. We frame our arguments within a
contingency framework, where, for strategic supply chains
to succeed in creating value, their actions (as individual firms
and as a supply chain) must align with the external
environment.
Driving forces of supply chain management
The driving forces of SCM stem from two sources: external
pressures and potential benefits from strategic SC alignment.
External pressures include such forces as advances in
technology and increased customer demand across national
borders (Mehta, 2004); maintaining lower costs while
meeting these diverse needs (Cook and Garver, 2002); and
intensified competition utilizing relationships among vertically
aligned firms (Togar and Ramaswami, 2004). These pressures
have begun shifting the focus of individual firms vying for
market presence and power to supply chains competing
against supply chains (Bhattacharya et al., 1995).
Contingencies and strategic supply chain management
Strategic supply chains are supply chains where the “members
are strategically, operationally, and technologically
integrated” and are anticipated for long-term stable
relationships with the ability to change to the demands of
the environment (Hult et al., 2004, p. 241). In recent years,
numerous theories and paradigms have been used by scholars
to understand why some strategic supply chains succeed in
creating value while others do not. Although perspectives of
and prescription to SCM vary, a common idea among
scholars is that competitive success for a strategic supply
chain is contingent on management’s ability to recognize
changes in the competitive environment and then direct and
coordinate action within and across organizations to utilize
resources effectively and meet the demands of the
environment (Stonebraker and Afifi, 2004; Fawcett and
Magnan, 2001). In short, strategic supply chains as
organizational entities are more likely to succeed when they
are able to adapt and align with the demands of the external
environment (Thompson, 1967).
A second theory that helps explain how strategic supply
chains can mobilize to create value and that goes hand in
hand with contingency theory is Lewin’s (1951) force field
Benefits of strategic supply chain management
The second main driving force entails the potential benefits
from successful SC collaboration (Balsmeier and Voisin,
1996). Table I offers a sample of the SC benefits literature. Of
the discussed benefits, increased inventory turnover,
increased revenue, and cost reduction across the chain are
the most sought after (Daugherty et al., 2005; Attaran, 2004;
Ferdows et al., 2004; Leonard and Cronan, 2002; Fine,
2000). Collaboration not only enables partners to reduce one
another’s costs but also allows inventory to cycle through to
customers faster. The two-fold result is increased revenues
and decreased costs that can be shared across the chain.
Two other core benefits include decreased order cycle times
and greater product availability (Leonard and Cronan, 2002;
Stank et al., 1999a; Sheridan, 1999; van der Vorst and
36
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
Figure 1 A contingency framework for understanding supply chain implementation
Beulens, 1999). To win customer allegiance, firms must have
what customers want when and where they want it. Close
relationships with suppliers leave room for special orders in
unique times of high demand, helping satisfy the customer
expectations. Additional benefits are market responsiveness,
added economic value, capital utilization, decreased product
time to market, and logistics cost reduction (Lee, 2004;
Mentzer et al., 2000; Tyndall, 2000; Christopher and Ryals,
1999). Revenue growth fueled by increased responsiveness
occurring at lower costs using fewer assets translates into
stellar performance. Overall, SCM potentially creates value
for all members in the chain. However, such benefits vary in
importance and degree among partnering chain members
(Agrawal and Pak, 2001). This variance in importance is
further complicated by the potential risks strategic supply
chains place upon aligned firms. In this following sub-section,
we discuss these risks and other barriers in more detail.
opportunities to share with one another concerns,
weaknesses, and best practices.
Other barriers to SCM fall under managerial complexity or
misalignments in allying firms’ processes, structures, and
culture (Park and Ungson, 2001). Under the umbrella of
managerial complexity barriers include information system
and technological incompatibility, inadequate measurement
systems, and conflicting organizational structures and culture
(e.g. Sheridan, 1999; Tyndall et al., 1998; Quinn, 1997a).
Because many firms are comfortable using their systems for
only their own tasks, it is not surprising to see inconsistent
information and technology systems as a barrier. People are
change averse and unwilling to share information for fear of
exposing their weakness and secrets to others. If SCM is to be
implemented across company borders, a revamp in attitude
and thinking is necessary. Cooper et al. commented:
Successful supply chain management requires a change from managing both
individual functions to integrating activities into key supply chain processes
(Cooper et al., 1997, p. 5).
Barriers to effective supply chain management
From the literature in Table II, the potential barriers or
resisting forces are intimidating. The resisting forces to
strategic supply management come both from the nature of
the organization itself and the people that compose the
organization. These barriers can be classified under one of
two headings: “inter-firm rivalry” and “managerial
complexity” (Park and Ungson, 2001). Inter-firm rivalry is
a misalignment of motives and behaviors among allying
partners within the strategic supply chain (Park and Ungson,
2001). Some barriers under this category include internal and
external turf protection, poor collaboration among chain
partners, and lack of partner trust. In short, interfirm rivalry
is the tendency for allying partners to compete rather than
willingly cooperating. Absent a willingness to cooperate, a
supply chain will not be able to attain lower costs and higher
returns on investment. Further, irregular collaborative
meetings among chain partners hinder managers’
Bridges to effective supply chain management
Once the barriers to successful SCM are identified, bridges
can be designed and implemented to attain desired benefits.
However, for such bridges to work, research suggests the need
for management to redesign its approach to problem
resolution – SC collaboration entails “significantly different
business models and thinking styles of management” (Moberg
et al., 2003, p. 37). Table III provides a sample of the salient
bridges to SCM. The top three bridges found in the literature
focus on collaboration among chain partners. These three
bridges are transparent information systems, cross-functional
collaboration, and collaborative planning across the supply
chain (Kulp et al., 2004; Mentzer et al., 2000; Monczka et al.,
1998). If SC managers are expected to make difficult
decisions in dynamic environments, valuable information
must be available at the right place, at the right time, and in
37
£
Increased inventory turnover £
Increased revenues
SCM cost reductions
Product availability
Decreased order cycle time
Responsiveness
Economic value added
Capital utilization
Decreased time to market
Reduced logistics costs
38
£
£
£
3
£
£
£
4
£
5
£
6
£
£
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18
12
11
11
11
7
5
4
4
2
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Total
£
£
£
8
£
£
£
7
Sources: 1 – Agrawal and Pak (2001); 2 – Alber and Walker (1998); 3 – Allnoch (1997); 4 – Attaran (2004); 5 – Balsmeier and Voisin (1996); 6 – Callioni et al. (2005); 7 – Christopher and Ryals (1999); 8 –
Closs et al. (1998); 9 – Cooke (1997); 10 – Daugherty et al. (2005); 11 – Ferdows et al. (2004); 12 – Handfield and Pannesi (1995); 13 – Hult et al. (2004); 14 – Inger et al. (1995); 15 – Jayaram et al. (2004);
16 – Kaas and Ohl (2002); 17 – La Londe and Masters (1994); 18 – Lee (2004); 19 – Leonard and Cronan (2002); 20 – Mentzer et al. (2000); 21 – Metz (1998); 22 – Monczka (1996); 23 – Rajib et al.
(2002); 24 – Sabath and Frentzel (1997); 25 – Sheridan (1999); 26 – Silverstein (2002); 27 – Stank et al. (1999a); 28 – Tan et al. (1998); 29 – Timme and Williams-Timme (2000); 30 – Tyndall (2000); 31 –
van der Vorst and Beulens (1999); 32 – Vergin (1998); 33 – Vokurka (1998); 34 – Waller et al. (2000); 35 – Waller et al. (1999)
£
2
1
Benefits
Table I Literature review benefits to strategic supply chain management
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
39
£
£
£
1
£
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2
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3
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4
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£
5
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6
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7
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8
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£
10
9
8
7
16
10
9
8
7
7
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Total
Sources: 1 – Akkermans and van Doremalen (2004); 2 – Andraski (1998); 3 – Barratt (2004a); 4 – Barratt (2004b); 5 – Bender (2000); 6 – Cox (1999); 7 – Frohlich (2002); 8 – Inger et al. (1995); 9 –
Johnson et al. (2001); 10 – Kilpatrick and Factor (2000); 11 – La Londe (2003); 12 – La Londe and Masters (1994); 13 – Lee (2004); 14 – Lonsdale (1999); 15 – Lummus et al. (1998); 16 – Mentzer et al.
(2000); 17 – Milligan (1999); 18 – Moberg et al. (2003); 19 – Monczka and Morgan (1997); 20 – Monczka and Morgan (1998b); 21 – Monczka and Morgan (1998a); 22 – Morgan (1997); 23 – Neuman and
Samuels (1996); 24 – New (1997); 25 – Pitera (2000); 26 – Quinn (1997a); 27 – Quinn (1999); 28 – Roux et al. (1999); 29 – Sheridan (1999); 30 – Smagalla (2004); 31 – Timme and Williams-Timme (2000);
32 – Tyndall (2000); 33 – Tyndall et al. (1998); 34 – van Hoekm et al. (1998)
Managerial complexity
IS/IT deficiencies
Organizational structure/culture £
Lack SC measurement
Lack alliance guidelines
Interfirm rivalry
Internal and external turf wars
Poor SCM planning
Lack of vision of SCM
Lack of channel trust
Executive commitment
Poor SCM understanding
Benefits
Table II Literature review barriers to strategic supply chain management
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
40
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16
16
15
11
11
11
11
9
8
4
Sources: 1 – Akkermans and van Doremalen (2004); 2 – Akkermans et al. (1999); 3 – Andraski (1998); 4 – Attaran (2004); 5 – Ballou et al. (2000); 6 – Barratt (2004a); 7 – Barratt (2004b); 8 – Bender
(2000); 9 – Bowersox and Closs (1996); 10 – Burnell (1999); 11 – Choy and Lee (2003); 12 – Cooke (2000); 13 – Croom (2001); 14 – Daugherty et al. (2005); 15 – Dyer et al. (1998); 16 – Fawcett and
Magnan (2001); 17 – Frohlich (2002); 18 – Forker and Hershauer (2000); 19 – Handfield and Nichols (2004); 20 – Hult et al. (2004); 21 – Lummus et al. (1998); 22 – Mentzer et al. (2000); 23 – Metz (1998);
24 – Moberg et al. (2003); 25 – Monczka (1996); 26 – Monczka and Morgan (1997); 27 – Monczka et al. (1998); 28 – Pagh and Cooper (1998); 29 – Pitera (2000); 30 – Poirier (1999); 31 – Quinn (1997a);
32 – Quinn (1997b); 33 – Rajib et al. (2002); 34 – Shen et al. (2003); 35 – Sheridan (1999); 36 – Stank et al. (1999a); 37 – Stank et al. (1999b); 38 – Tan et al. (1998); 39 – Tyndall et al. (1998); 40 –
Vokurka (1998); 41 – Vokurka et al. (1998); 42 – Waller et al. (2000)
£
£
£
£
£
£
£ £
£
£ £
£ £
£
£ £
£ £
£
£
£
Information transparency
CFT/CF collaboration
Collaborative planning
IT architecture/internet
Formal performance tracking
Adopt strategic SCM vision
Attention to human factors
Supplier certification/reduction
Target segmented customers
Shared investment/benefits
£
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Total
Bridges
Table III Literature review bridges to strategic supply chain management
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
the right hands of people who approach the problem from
different perspectives and with different styles.
The remaining bridges include adopting a strategic SC
vision, paying attention to human factors, and supply-base
reduction and certification (Barratt, 2004a; Metz, 1998; Tan
et al., 1998). This spectrum of proposed solutions suggests a
single remedy cannot solve SCM (Table III). Managers must
be able to “think outside of the box” using different
combinations of approaches with different people to remedy
SC problems.
To summarize, external forces drive organizations to align
and form strategic supply chains so as to align SC action with
external environmental demands. By aligning behaviors with
the environment, numerous benefits motive firms to achieve
SC collaboration. However, to attain these benefits, strategic
supply chains must navigate barriers to successful
collaboration using various approaches and strategies that
act as bridges.
Table IV Adjusted sample sizes, completed surveys, and response rates
Pre-test
ISM
CSCMP
APICS
Pre-notification
ISM
CSCMP
APICS
Adjusted
sample size
Completed
surveys
Response rate
(percent)
1,329
1,369
1,351
96
129
109
7.2
9.4
8.1
370
398
328
84
76
94
22.7
19.1
28.7
which the list was adjusted for incorrect numbers and
employees no longer working at the organizations. The
number of managers contacted, the number of surveys
completed, and response rates are listed in Table IV.
Methodology
SCM is a boundary-spanning activity (Bowersox et al., 1999).
Attaining information from different functional managers as
well as channel positions helps paint a macro-picture of how
SCM may be effectively achieved. To develop this picture and
extract “a more robust and generalizable set of findings,” a
triangulation approach was used (Scandura and Williams,
2000, p. 1250; Jick, 1979; Lewis, 1998). This method
included an extensive literature review (Tables I to III), a
cross-functional mail survey, and in-depth cases studies.
Case studies
To explore the “whys” behind our survey findings, a series of
in-depth case studies were conducted (Yin, 1981). Following
suggestions from Eisenhardt (1989), five chain positions were
pre-determined to allow cross-channel analysis. Such a case
variety “fosters the development of a more creative and
generalizable theory” (Lewis, 1998, p. 460). A total of
51 in-depth case studies were conducted. The break down by
channel category is as follows: 14 retailers, 13 finished goods
assemblers, 12 first-tier suppliers, three lower-tier suppliers,
and nine service providers.
Data collection for these case studies came from two
sources. The first source of data consisted of annual reports
and other company documents pertinent to SC operations for
each firm. These data were our secondary source of
information as some companies were public while others
were not and therefore were more open about sharing their
archived information with the researchers.
The second and primary source of data source consisted of
51 interviews with SC managers at the companies. Case study
participants were senior-level managers initially identified
based on their participation at annual meetings of leading
professional associations where they were presenting cuttingedge findings in SCM. Such a non-randomized selection
method allows us to “transparently observe” extreme chainmember practices and shed light as to why some firms
succeed in supply management while others do not
(Pettigrew, 1990, p. 275). In most instances, the interview
was conducted with multiple managers from the host
organization (the number of company representatives ranged
from one to eight). The average interview lasted over four
hours with the shortest interview lasting a little over an hour
and the longest taking over ten hours.
All interviews were conducted face-to-face and promised
confidentiality to facilitate candid responses. During each
interview, a semi-structured interview guide was used. The
guide was divided into general questions, questions on
collaboration among the interviewee’s company customers
and suppliers, and key practices with particular chain
members. The guide consisted of both open ended or rating
scale questions, enabling a clearer perspective of each
interviewee’s responses (Spradley, 1979). To become
Cross-functional mail survey
The purpose of the mail surveys was to capture how
functional managers view the benefits, barriers, and bridges
to SCM. Three different groups of managers were identified:
manufacturing, purchasers, and logistician managers. Based
on literature as well as a series of pre-survey interviews, a
four-page instrument was developed. The initial survey was
reviewed by several practitioners and academics that served as
the study’s advisory board. Their feedback was used to modify
the survey instrument. A large-scale pre-test was conducted.
Three mailing lists of approximately 1,500 middle- and
senior-level managers were complied from membership
rosters from the Institute of Supply Management (ISM), the
Council of Supply Chain Management Professionals
(CSCMP), and APICS.
The survey process followed Dillman’s (1978) total design
method, including three mailings of a cover letter, an
instruction sheet, and the survey instrument. The adjusted
sample size, number of respondents, and response rate are
listed in Table IV. Approximately 100 non-respondents from
each group were randomly selected, telephoned, and asked
basic demographic data so that respondents and nonrespondent profiles could be compared. No differences
between the groups were found. From the 100 managers
who chose not to participate, the three most common answers
were: the manager was to busy; the manager was inundated by
surveys and no longer participated in survey studies; and the
manager’s organization had yet to adopt a SC philosophy.
The pre-test results were reviewed and the survey was
modified accordingly. New mailing lists of 500 were complied
from the three professional associations. Each manager was
then telephoned and asked to participate in the study, during
41
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
intimately familiar with each case, structured case study writeups were created to allow further analysis. Such an approach
is central to avoiding “data asphyxiation” where enormous
volumes of data overwhelm the analysis process (Pettigrew,
1990). We also became familiar with each case as a “standalone entity,” allowing for unique patterns from each case to
become visible and for, if possible, generalizable patterns from
cross-case comparisons to be derived (Eisenhardt, 1989).
collaboration by the interviewed companies was cost
reduction. All but one of the companies interviewed
emphasized cost savings as an expected and realized benefit
of enhanced SC cooperation. It must be noted, however, that
customer satisfaction was the second most mentioned benefit
resulting from SC collaboration. This mixed ranking brings
up the question of “where is the focus being aimed for the
primary benefits of SCM?”
While some caveats are visible, the overall view is quite
attractive. Even so, managers should carefully analyze their
company’s specific position to verify that the benefits
discussed can be achieved. No single benefit was obtained
by more than 62 percent of the respondent organizations,
implying that many companies have yet to be able to devise
and implement a winning SC strategy.
Results and discussion
Mean score for each mail survey question was compiled and
ranked from highest to lowest in importance regarding the
benefits, barriers, and bridges of supply management.
Rankings were then ordered by function within the chain.
Response rankings were then listed by the percent of
respondents that ranked survey items a five or above. The
mean scores, rankings, and percentages of scores five or
greater are listed in Table V. The data gathered from the
interviews allowed for us to understand in greater detail the
ranked items from the surveys. Table VI summaries the
benefits, barriers, and bridges synthesized from the mail
surveys and interviews in this study.
Barriers to effective supply chain management
Conceptually, strategic supply chains seem to succeed or fail
on the degree of resource sharing among partners (e.g.
information, knowledge, skills) and the partners’ ability to use
these resources effectively in changing environments. In this
section, we highlight some of the main causes for why SC
partners are unable to successfully share resources and
effectively use those resources (even when they were shared).
The main causes for supply chains being unable to share
resources and utilize those resources may be divided into two
broad categories congruent with Park and Ungson’s (2001)
dichotomy that we discussed earlier: inter-firm rivalry and
managerial complexity. The three groups of functional
managers were very consistent in their evaluations of the
barriers to effective SCM. There were only two instances
where the rankings varied by three places. Manufacturing
managers ranked “non-aligned performance measures” as the
fifth most serious barrier to integration while both purchasers
and logisticians ranked it lower at number eight.
Manufacturing managers tend to be frustrated by conflicting
measures such as end-of-quarter sales goals that can create
havoc on the production floor. Similarly, logisticians ranked
“a lack of willingness to share information” as the fifth most
critical impediment compared to a ranking of eight for
manufacturing managers. Given their boundary-spanning
position, logistics managers are sensitized to the need to share
information. Missing or incorrect information often creates a
demand for expensive expediting.
The single greatest barrier from the mail surveys is
inadequate information systems. This barrier was the only
variable to receive an average score of five or greater. Since
collaboration is intrinsically information driven, inadequate or
incompatible information systems are a critical barrier to
collaboration. Inadequate or incompatible information
systems present a twofold dilemma. First, managing
complicated SC networks requires collection and analysis of
large amounts of data. Although, technology advances have
yielded great use of data warehouses that collect and store
information, analyzing the data correctly as to allow people to
make decisions remains a difficult and complex task. Second,
data only becomes valuable information when it is in the
hands of the right people at the right time. If all the
participants of a chain cannot access needed information,
opportunities for value savings cannot be evaluated and full
benefits of integration will be difficult to attain. In short, these
types of barriers fall under the concept of managerial
complexity.
Benefits of effective supply chain management
Before investing money, time, and other resources into
difficult implementations, most managers want to know if the
results are worth the effort. Identifying and quantifying the
expected benefits is a critical part of any cost/benefit analysis.
The functional ratings of SC benefits vary widely. Each
functional area identified a different top-rated benefit (Table
V). Nearly 72 percent of purchasers scored “cost of purchased
items” a five or higher (mean ¼ 4:98). Logisticians identified
“on-time delivery/due-data performance” as the greatest
benefit of SCM (67 percent, mean ¼ 4:83), and
manufacturing respondents scored “reduced order
fulfillment lead times” as the most pervasive benefit (51
percent, mean ¼ 4:69). Overall, the most prevalent benefits
identified by one functional group were viewed by the other
functional areas as relatively less important. Thus, managers
valued the purposes of SCM differently contingent on their
position within the chain. This divergence in values suggests a
two-edged sword facing SC managers. While moderate
divergence of values can lead to superior group decisions
and outcomes (in this case SC team decisions and outcomes)
via positive conflict over the nature of the task (e.g. purpose of
SCM), too much (or high) value divergence can be
detrimental to group decision making performance via
negative conflict (Jehn et al., 1999).
The interviews further offer the suggestion of quantifying
the benefits of strategic SCM. A common saying at one of the
interviewed company’s is “if you don’t have the numbers, it’s
just your opinion.” However, the interviewees also revealed a
caveat that the ability to track and quantify benefits from SC
initiatives is extremely difficult. The interviews were replete
with “soft” anecdotal evidence that SCM reduces costs and
better satisfies the end customer. In contrast the “hard”
numbers were rare. Many of the companies interviewed are
working diligently to develop better metrics to help them
evaluate and justify SC initiatives.
In looking back at survey rankings as a whole, it is
noteworthy that “satisfying customer needs” is the primary
benefit. Interestingly, the most cited benefit of SC
42
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
Table V Combined and channel rankings of benefits, barriers, and bridges
Mean
Combined
Rank % 5-7
Mean
Purchasing
Rank % 5-7
Mean
Logistics
Rank % 5-7
Manufacturing
Mean Rank % 5-7
Panel 1: Benefitsa
Respond to customer requests
On-time delivery
Customer satisfaction
Order fulfillment lead times
Cost of purchased items
Firm profitability
Handle unexpected challenges
Inventory costs
Overall product costs
Productivity
Overall product quality
Transportation costs
Market penetration
Product innovation lead times
Cost of new product development
4.69
4.65
4.62
4.59
4.58
4.51
4.49
4.48
4.38
4.31
4.16
3.88
3.85
3.75
3.43
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
62.0
61.0
59.4
54.5
59.7
53.7
59.2
53.0
51.0
52.0
44.3
37.9
34.2
31.3
24.2
4.75
4.63
4.67
4.49
4.98
4.75
4.52
4.56
4.71
4.46
4.43
3.94
3.89
3.98
3.70
3
6
5
9
1
2
8
7
4
10
11
13
14
12
15
62.7
57.3
59.9
53.2
71.7
63.7
61.8
55.1
61.3
57.3
54.1
62.0
38.8
35.2
30.3
4.65
4.83
4.72
4.56
4.49
4.47
4.43
4.52
4.37
4.42
3.97
4.29
4.00
3.75
3.37
3
1
2
4
6
7
8
5
10
9
13
11
12
14
15
62.9
67.0
64.7
59.1
59.0
55.1
59.6
53.0
50.8
56.5
38.7
54.0
36.9
31.2
21.8
4.67
4.49
4.49
4.69
4.34
4.34
4.53
4.37
4.11
4.09
4.11
3.43
3.66
3.56
3.26
2
5
4
1
8
7
3
6
10
11
9
14
12
13
15
62.9
67.0
64.7
59.1
59.0
55.1
59.6
53.0
50.8
56.5
38.7
54.0
36.9
31.2
21.8
Panel 2: Barriersb
Inadequate information systems
Lack clear alliance guidelines
Inconsistent operating goals
Lack shared risks and rewards
Processes poorly costed
Non-aligned measures
Lack willingness to share information
Organizational boundaries
Measuring SC contribution
Measuring customer demands
Lack employee empowerment
Lack resources for SCM
5.19
4.87
4.84
4.83
4.61
4.56
4.56
4.49
4.32
4.26
3.8
3.73
1
2
3
4
5
6
7
8
9
10
11
12
71.2
62.4
64.0
65.6
56.4
55.5
56.1
52.4
49.2
49.9
34.8
38.5
5.07
4.74
4.75
4.73
4.63
4.39
4.56
4.42
4.31
4.12
4.08
3.76
1
3
2
4
5
8
6
7
9
10
11
12
69.4
59.3
58.2
61.1
58.4
50.6
54.0
52.4
50.3
43.4
43.8
38.8
5.48
4.97
4.94
4.97
4.71
4.66
4.74
4.67
4.44
4.30
3.76
4.05
1
2
4
3
6
8
5
7
9
10
12
11
78.4
68.5
66.8
64.0
61.5
56.7
64.5
56.1
50.8
50.3
33.7
45.3
5.00
4.87
4.83
4.76
4.49
4.61
4.36
4.37
4.21
4.35
3.60
3.36
1
2
3
4
6
5
8
7
10
9
11
12
65.3
63.6
65.8
66.3
49.2
58.4
49.5
48.3
47.0
54.8
28.4
31.2
Panel 3: Bridges
Frequent communication
A willingness to share information
Use of cross-functional teams
Shared expertise w/suppliers
Common goals
Supply base reduction
Senior management interaction
Cross-functional processes
Shared expertise w/customers
Customer selectivity
Increase SC training
Use of SC measures
Use of consistent measures
EDI linkages
Clear selection guidelines
Vendor managed inventories
Use of total cost analysis
Sharing risks and rewards
Shared mission statement
Clear alliance management guidelines
Common operating procedures
Use ERP/SCM software
Use supply chain teams
Use of activity based costing
4.64
4.59
4.37
4.32
4.31
4.21
4.21
4.21
4.14
4.11
4.09
4.08
4.05
4.02
3.97
3.86
3.85
3.83
3.80
3.76
3.74
3.36
3.31
3.08
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
54.2
55.0
47.2
46.0
45.7
42.8
46.0
43.4
41.6
43.5
39.4
42.3
39.8
43.2
38.2
36.2
47.5
35.6
36.3
32.0
27.5
25.3
224.8
20.2
4.50
4.58
4.34
4.46
4.42
4.50
4.10
4.03
4.14
3.89
3.87
4.03
4.06
3.53
4.05
4.13
4.14
3.99
3.99
3.81
3.70
3.03
3.31
3.17
3
1
6
4
5
2
10
14
7
17
18
13
11
21
12
9
8
15
16
19
20
24
22
23
55.5
57.0
48.4
55.8
53.2
58.4
49.3
43.0
44.6
38.6
39.8
42.9
43.5
35.1
45.5
45.2
49.4
44.0
45.4
35.9
28.8
21.4
27.0
22.2
4.82
4.77
4.64
4.20
4.35
4.25
4.57
4.54
4.16
4.39
4.36
4.28
4.21
4.62
4.19
3.72
4.04
3.90
3.97
4.03
3.94
3.73
3.59
3.47
1
2
3
13
9
11
5
6
15
7
8
10
12
4
14
22
16
20
18
17
19
21
23
24
64.4
66.8
60.6
45.3
51.9
47.3
61.5
56.6
49.5
55.0
48.9
54.8
50.1
58.7
47.9
38.0
48.9
43.7
43.1
45.5
38.1
35.3
34.1
29.0
4.57
4.41
4.12
4.35
4.17
3.93
3.94
4.03
4.12
4.01
4.01
3.93
3.87
3.83
3.69
3.78
3.42
3.63
3.47
3.43
3.56
3.26
3.03
2.60
1
2
5
3
4
11
10
7
6
9
8
12
13
14
16
15
21
17
19
20
18
22
23
24
56.1
54.8
45.0
50.0
44.5
37.7
38.9
41.7
41.7
47.1
40.1
40.1
37.1
44.5
33.4
35.9
27.0
29.6
31.0
23.6
23.1
26.0
20.6
14.9
Notes: a To what extent has SC integration improved your firm’s performance? (1 ¼ not Improved, 7 ¼ greatly improved); b To what extent do the items act as
barriers to supply chain integration? (1 ¼ not a barrier, 7 ¼ serious barrier); To what extent have each of the items below facilitated increased inter-firm
coordination? (1 ¼ not a facilitator, 7 ¼ effective facilitator)
43
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
Table VI Top ten benefits, barriers, and bridges to strategic supply chain management
Benefits
Barriers
Bridges
Customer focus
Increased customer responsiveness
More consistent on-time delivery
Customer satisfaction
Shorter order fulfillment lead times
Interfirm rivalry
Inadequate information sharing
Inconsistent operating goals
Lack of willingness shared risks and rewards
Lack of willingness to share information
Operations, process, and supply management
Accurate comprehensive measures
Supplier alignment and rationization
Effective use of pilot projects
Process documentation and ownership
Company focus
Reduced purchasing costs
Better asset utilization
Ability to handle unexpected events
Reduced inventory costs
Firm productivity
Reduced overall product cost
Managerial complexity
Lack of alliance guidelines
Processes poorly appraised in terms of costs
Non-aligned measures
Organizational boundaries
Measuring supply chain contribution
Measuring customer demand
People management
Managerial and employee support
Open information sharing
Trust-based alliances
Cross-trained experienced managers
Supply chain education and training
Using chain advisory councils
themselves. However, the ability for firms to utilize shared
resources is a direct function of the amount and quality of
resource shared. For example, interorganizational information
systems are only as profitable as a function of the quality and
quantity of information they store and share – if not enough
information shared or the information that is shared is of little
value, strategic supply chains may fall short of creating value
(cf. Kumar and van Diesel, 1996). The surveys reveal that
strategic supply chains suffer from inadequate information
sharing, and the interviews go deeper suggesting one of the
main reasons for inadequate information is not that
companies lack ability but lack desire and willingness. Interfirm rivalry creates vulnerability and impedes information
sharing.
The interviews fleshed out management concerns regarding
SCM such that the barriers appeared to be stemming from
quite a different source. According to the interviewees,
human nature is the primary barrier to successful SC
collaboration. Most people are change averse and prefer to
stick to the status quo. Managers noted repeatedly that people
throughout their organizations were suspicious of the types of
change instigated by SCM and avoid such changes whenever
possible. Management also noted that most individuals do not
have a clear perception of what SCM means in relation to
their tasks. Several managers stated that top management
either lacks a clear vision of SC integration or fails to
articulate a vision that other employees can relate to. Indeed,
based on interviewee commentary, SCM vision remains fuzzy
at most organizations. This lack of vision can lead to poor
understanding of what SCM is in practice. The natural result
of unclear potential and uncertainty is resistance to change,
and even efforts to forestall any meaningful adoption of SC
practices.
Other substantive barriers to SCM were highlighted
throughout the interviews. Human behavior was found at
the root of nearly all of them (i.e. organizational culture and
structure, functional conflicts, lack of managerial
commitment, conflicting and non-transparent processes,
policies, and procedures, performance measurement,
information sharing, lack of trust, resource constraints, and
complexity of SC networks). These interview findings are
rather revealing, since the survey data posited that
inconsistent information technology, alliance guidelines, and
operating goals were the prime barriers to SCM. The
interview data remind us that it is people that gather, process,
share, and interpret the information, write and uphold the
alliance guidelines, and determine and adhere to the goals of
their operations. These findings reflect a recent comment
made during a SCM forum:
Bridges to effective supply chain management
The barriers to effective SC implementation are considerable.
Reviewing the SCM literature together with the
implementation literature for other cross-functional and
resource-intensive strategic initiatives, numerous tools or
“bridges” were identified regarding their impact on SCM
implementation (Table V). Note that none of the 25 practices
chosen in Table V appears to have a remarkably positive
impact on SC collaboration (means range from 3.08 to 4.64).
Possible reasons for such low means could be none of the
practices are truly effective in bridging barriers to effective
SCM or organizations are not sufficiently advanced in
adopting the practices to make SCM a reality. The
interviews suggest that the second explanation underlies the
survey results. Moreover, interviewees noted that SC
collaboration is a complex undertaking. No single practice
or group of practices can close the cultural, emotional,
physical, and strategic gaps preventing collaboration.
From the survey data, logistics managers viewed 17 of the
24 practices as more effective bridges than the purchasing and
manufacturing managers (Table V). Likewise, purchasers
rated 17 of the 24 practices more highly than their
counterparts. Manufacturing managers consistently
evaluated the various practices as less effective enablers than
the other two groups. The greatest agreement found is that
frequent and open communication is vital to effective SCM.
The three groups of managers also tended to agree in their
evaluations of the least effective enablers. A pattern emerges
where managers to rank practices that they deal with on a
Despite years of process breakthroughs and elegant technological solutions,
an agile, adaptive supply chain remains an elusive goal. Maybe it’s the people
who are getting in the way (Harvard Business Review, 2003, p. 64; italics
added)?
As a form of strategic alliance (Monczka et al., 1998),
strategic supply chains succeed and fail by their ability to
utilize their collective resources. After all, the purpose of any
alliance (in this case a strategic supply chain) is to mobilize
resources to attain goals that no individual can attain
44
Benefits, barriers, and bridges to effective supply chain management
Supply Chain Management: An International Journal
Stanley E. Fawcett, Gregory M. Magnan and Matthew W. McCarter
Volume 13 · Number 1 · 2008 · 35 –48
Conclusion and implications
frequent basis higher than their counterparts who only hear
about them from meetings, in-house newsletters, and “lunchroom” conversations. The more experience a manager has
with a particular practice the more weight the manager places
on that practice in terms of perceived importance. While this
is neither not surprising nor new, it does suggest that a degree
of fragmentation exists among the different functional
managers. The divergence in how to deal with these
integration barriers suggests that this may be a barrier in
and of itself to SCM. Such insight suggests a need for more
effective training regarding the applicability and impact of
different facilitating practices, more extensive communication
of program results, and more frequent use of cross-functional
teams.
The managers interviewed support this suggestion. Almost
half of the managers identified training as one of the
requirements for successful long-term SC implementation.
SC education generates organizational member buy-in for SC
proposals and provides context from which senior
management establishes priorities and allocates resources.
Managers who possess expertise in a chosen field while able to
communicate effectively with diverse functional colleagues are
considered ideal managers.
Several SC companies established SC steering committees
composed of senior-level managers to increase crossfunctional interaction and establish buy-in from specific
initiatives within their own company. While specific roles and
responsibilities of steering committees can vary substantially,
committee members typically meet to consider and evaluate
proposals. At these meetings, the benefits and burdens of SC
initiatives discussed openly so that viable proposals can be
more fully understood, refined, and subsequently promoted.
Also, most managers interviewed were convinced that SC
programs would not sell themselves without targeted pilot
programs that can be used to document the value of SCM.
These success stories are needed to generate momentum and
to justify further investment in SC efforts. The combination
of success stories and experience makes well-crafted pilot
programs a vital bridge to SC accomplishment.
The use of advisory councils is not confined to in-house
use. Active SC companies institute supplier councils for
specific commodities or technologies and use them as
sounding boards for new ideas. Customer advisory boards
are also utilized this way. Representatives from key customers
are invited to take part as active members of boards that meets
together at least annually to provide feedback into how the
company can better meet their needs as customers. None of
the companies interviewed have instituted advisory councils
from all three entities – the company, its suppliers, and its
customers.
The main message communicated via both the survey and
interview data is that people management through increased
communication, inter-team collaboration, and cooperation
will not only bridge the current gaps encountered in SCM but
allow middle- and senior-managers to improve their current
success and reap greater rewards of SC collaboration. While
SCM is enabled by modern information technology, SCM
success is founded on people. Indeed, our findings are
summed best by one interviewed director of SCM, “People
are the bridge or the barrier to SC collaboration.”
The potential benefits for integrating supply chains are
compelling. However, barriers to success can be daunting.
Understanding these barriers can lead to designing bridges to
allow companies obtain SC benefits (see Table VI for a review
of the benefits, barriers, and bridges). Managers must keep in
mind the following three points regarding the benefits,
barriers, and bridges:
1 Although cost reduction is a prime motivator to strategic
SC collaboration, customer satisfaction and service is
perceived as more enduring by managers, and should
therefore be brought to the fore as the leading goal for SC
managers. Such a goal is difficult considering pressures
from shareholders for individual firms to produce shortterm gains that can lead to long-term losses in value from
strategic SCM.
2 All managers recognize technology, information, and
measurement systems as major barriers to successful SC
collaboration. However, the people issues – such as
culture, trust, aversion to change, and willingness to
collaborate – are more intractable. One potential reason
for this may be that misalignments in technology,
information
systems,
and
measurement
have
demonstrably correct solutions;, e.g. either system A
aligns with system B or it does not, and either all partners
use the same metric or they do not and you solve either
problem by using the same system or metric. However,
when dealing with human barriers – such as lack of trust,
unwillingness to relinquish control, and opportunism –
solutions become more of a judgment call rather than an
unsolved problem. Managers should not overlook this
point when designing remedies to SC problems such as
organizational culture and structure, and management
styles.
3 People are the key to successful collaborative innovation.
Companies continue to invest in technology, information,
and measurement systems. However, managers must not
overlook the training, educating, and bringing together of
right people to use those systems and to interact with one
another. Forming the right teams for the right tasks will
then result in well-defined pilot projects and success
stories that will help create buy-in from other
organizations members and thus increase their
commitment to SC collaboration.
Regardless of function or channel position, managers believe
that SCM can help their companies thrive in today’s intensely
competitive marketplace. However, running parallel to
optimism regarding SCM must be the realistic view of the
challenges found embedded in the very human and
mechanical links of the supply chain. Only then can proper
bridges be designed to leverage collaboration and attain
strategic SC success.
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Corresponding author
Matthew W. McCarter can be contacted at: mmccart6@
uiuc.edu
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