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Purpose The purpose of this paper is to explore the impact of configuration on supply network
capability. It was believed that a configuration perspective might provide new insights on the
capability and performance of supply networks, a gap in the literature, and provide a basis for the
development of tools to aid their analysis and design.
Design/methodology/approach The methodology involved the development of a configuration
definition and mapping approach extending established strategic and firm level constructs to the
network operational level. The resulting tools were tested and refined in a series of case studies across
a range of sectors and value chain models. Supply network capability assessments, from the
perspective of the focal firm, were then compared with their configuration profiles.
Findings The configuration mapping tools were found to give new insights into the structure of
supply networks and allow comparisons to be made across sectors and business models through the
use of consistent and quantitative methods and common presentation. They provide the foundations
for linking configuration to capability and performance, and contribute to supply network design and
development by highlighting the intrinsic capabilities associated with different configurations.
Research limitations/implications Although multiple case networks have been investigated,
the configuration exemplars remain suggestive models. The research suggests that a re-evaluation of
operational process excellence models is needed, where the link between process maturity and
performance may require a configuration context.
Practical implications Advantages of particular configurations have been identified with
implications for supply network development and industrial policy.
Originality/value The paper seeks to develop established strategic management configuration
concepts to the analysis and design of supply networks by providing a robust operational definition of
supply network configuration and novel tools for their mapping and assessment.
Keywords Supply, Network operating systems, Configuration management, Supply chain management
Paper type Research paper
Introduction
The traditional competing firms model (e.g. Porters Five Forces) has been
complemented in recent years by a competing supply networks perspective
(Cunningham, 1990; Harland, 1996; Lambert and Cooper, 2000; Poirer and Bauer, 2001).
This reflects the changing structure and dynamics of national and international
manufacturing systems and highlights the need for concepts and tools to assess
capability and performance of the supply network. The capturing of relevant
capability-influencing attributes of the supply network, or in basic terms its supply
network configuration, is the focus of this paper building on the established concepts of
configuration developed by authors in the strategic management field (Mintzberg,
1979; Miller, 1986; Mintzberg et al., 1998).
Objective
The principal objective in this research was to assess the impact of configuration on
supply network capability and performance, taking an operational and focal firm
perspective, addressing a recognised gap in the supply network operations
management literature (Neher, 2005; Srai and Gregory, 2005; Srai et al., 2006).
The approach involved extending established firm-based configuration concepts
from the strategic management literature and integrating relevant elements from the
supply network and operations management fields. A key enabling goal in the research
was the development of an operational definition for supply network configuration, one
that captures key elements of network configuration (from a capability relevant
perspective) and lends itself to the creation of practical mapping tools to capture these
complex, dynamic, international structures. These tools were then utilised to capture
supply network configurations across a range of supply networks, and used to explore
their relationship with network capability and performance. (The assessment of the
capability dimension utilises existing tools previously developed by the authors (Srai
and Gregory, 2005) (using process-based maturity models), with performance captured
using metrics used by the focal firm).
Building on the principal objective, the paper also explores the capture and mapping
of supply network configuration profiles and whether particular configurations have
intrinsic capabilities. The potential implications of supply network configuration on
generic process-based improvement approaches widely used in industry (that largely
exclude the configuration context) are then discussed.
The paper is presented in the following sections, addressing each of the research
themes:
(1) Configuration concepts in the strategic management literature are discussed
and relevant contributions from operations management identified.
(2) An operational definition of supply network configuration is presented drawing
on these strategic management concepts and integrating operational attributes
of supply networks.
(3) Supply network configuration mapping techniques are developed that provide a
mechanism for their capture, visual representation and subsequent analysis.
(4) The fieldwork research approach is set out in order to assess the influence of
supply network configuration on capability and performance including:
.
the use of the multiple case study method;
.
the application of existing supply network capability assessment techniques;
and
.
comparing these with supply network performance measures used by the
focal-firm.
(5) Case studies are summarised in tabular form to facilitate cross-case comparison,
with example case studies included that illustrate the nature of data collection
and analysis.
This paper concludes with the results and findings emerging from the case studies, a
discussion on implications, key conclusions and future areas for research.
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Figure 1.
Chandlers life cycles: firm
evolution
(2)
(3)
(4)
resource acquisition
functional
new markets
divisionalisation
channel development
structures
related categories
vertical integration
along product lines (Rumelt, 1974)). These studies identified the need to classify firm
configurations and understand their peculiarities with respect to their capability and
performance.
More recently, configuration was regarded as part of strategy formation and
perhaps may be seen as a state rather than a process of transformation. It provides
an integrating mechanism giving an organisation both coherence and stability.
The concept of configuration as a state is shown in Figure 2 (developed from concepts
put forward by Mintzberg et al., 1998).
In this way, configurations may be viewed as a state, and rather differently than
the complexities of managing the change processes involved in business
transformation which are discussed later.
In contrast to the strategic management literature, a comprehensive perspective of
supply network configuration has not been addressed in the operations management
field (Neher, 2005; Srai and Gregory, 2005; Srai et al., 2006). However, particular supply
network dimensions have been usefully considered that may contribute to the
development of supply network configuration theory. For example, the influence of
product characteristics on supply network dynamics is considered by several authors
covering aspects such as the functional or innovative nature of products (Fisher, 1997),
and the impact of product variety (Christopher, 2000) and product complexity
(Lamming et al., 2000). The influence on supply network operation of demand
characteristics and supply characteristics (e.g. decoupling point (Mason-Jones et al.,
2000), supply uncertainty (Lee, 2002), etc.) introduce the dimensions of upstream and
downstream network structure. The impact of product-price-stability (Srai and Mills,
2005) suggest product-life-cycle and the balance between supply-demand are relevant
supply network configuration dimensions. Fisher (1997), Lamming et al. (2000), Lee
(2002) and others (Klass, 2003; Srai and Mills, 2005) introduce supply network
management approaches that address these particular operational dimensions. These
contributions from the operations management field provide useful insights to some of
the dimensions to consider in the development of supply network configuration
concepts. The operations management approaches in particular point to the emergence
of particular supply network profiles (akin to the strategic management types) and
the need to capture coherent sets of supply network configuration attributes.
Related literature on operational configuration includes the work on manufacturing
strategy configurations (Bozarth and McDermott, 1998; Oltra et al., 2005) that also focus
partly on product type, but mainly plant processes and roles, and the configuration
item based literature described in ISO10007 that focuses on product specification
defining the product or service and then effectively controlling changes to the definition.
These operational inputs are considered later in the capture of analogous supply
network configuration attributes.
Configuration 1
Configuration 2
coherence
coherence
stability
a state
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stability
a new state
Figure 2.
Configuration as a state
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Types of configuration
Types of configurations in the strategic management literature have been represented
in various ways. For example, as ten archetypes, or standard forms of organizations
observed by Miller in the mid-1970s grouped as successful (dominant, entrepreneurial,
innovator, . . .) or failed (stagnant bureaucracy, headless giant, aftermath, . . .). In his
later work, Miller put forward the assertion that quantum changes were necessary in
any transition rather than incremental development (Miller, 1986).
Following a review of four industry sectors (publishing, electronics, food processing
and health-care), Miles and Snow (1978) identified four behaviour-based configurations
exhibiting contrasting characters as summarized in Table I.
An alternative taxonomy was presented by Mintzbergs (1979) work on
organisational structure, and later on the power relationships within organisations
(Mintzberg, 1983) describing seven forms of organisation, categorised as:
(1) entrepreneurial;
(2) machine;
(3) professional;
(4) diversified;
(5) adhocracy;
(6) missionary; and
(7) political (Mintzberg, 1979, 1983; Mintzberg et al., 1998).
Each of these forms could be analyzed by time period; development stages, stability,
adaptation, struggle, and revolution. Four patterns of change were observed; periodic
bumps, oscillating shifts, life-cycles, and regular progress, although there remains
much debate on whether change is incremental or revolutionary. Some of these
behaviour-based forms favourably compare with the caricatures in Table I (e.g.
machine with defender and adhocracy with prospector).
In the operations management literature, supply network profiles have emerged
based on alternative supply network management approaches. Key examples include
alternative approaches to; managing complexity by differentiating competitive
priorities (Lamming et al., 2000), managing supply uncertainty (Lee, 2002), enabling
logistics processes (Klass, 2003), and supply-demand dynamics (Srai and Mills,
2005), with each providing some elements of supply network configuration. The
emphasis is however on selective dimensions of interest rather than a comprehensive
configurational analysis linking strategy, context, structure and capability.
Table I.
Organisational
behaviour-based
configurations
Defender
Prospector
Analyser
Reactor
Efficiency
Cost/quality
Narrow segment
Tight organisation
Innovation
New products
New segments
Flexible organisation
Minimise risk
Profit
Balanced
Hybrid of D/P
Reactive
No strategy
(Residual)
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Figure 3.
Configuration research
interrogation approach
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infrastructure (e.g. IT) and network dynamics (e.g. replenishment modes). Furthermore,
within a supply network, there may be more than one supply model dynamic. In these
cases, product segmentation is also considered in terms of how the various configuration
elements are orchestrated to consistently achieve specific capabilities or operational goals
for a particular product family.
Building and extending from the classical firm level configuration concepts
discussed earlier, and introducing the supply network and operational considerations
identified above, allows the development of a configuration definition suitable for the
research into exploring the influence of configuration form on supply network
capabilities.
Configuration in this supply network context may therefore be defined as:
[. . .] that particular arrangement or permutation, of the supply networks key elements
including, the network structure of the various operations within the supply network and
their integrating mechanisms, the flow of materials and information between and within key
unit operations the role, inter-relationships, and governance between key network
partners, and the value structure of the product or service delivered.
The aforementioned attributes, or key elements can be defined in terms of their main
dimensions:
.
Supply network structure; network tier structure and shape, composition,
ownership, levels of vertical and horizontal integration, location, co-ordination,
manufacturing processes, optimum sequence, complexity, flexibility, etc.
.
The flow of material and information between and within key unit operations;
value and non-value adding activities, process steps, optimum sequence, levels of
flexibility, network dynamics (e.g. replenishment modes), infrastructure, and
enabling IT systems.
.
The role, inter-relationships, and governance between key network partners; the
nature of these interactions or transactions, number, complexity, partner roles,
governance and trust.
.
Value-structure of the product or service; composition and product-structure
(including components, sub-assembly, platforms, modularity), product
replenishment mode (e.g. is the product make-to-stock, make-to-order,
configure-to-order?), SKUs, products as spares, and through-life support and
services.
The derivation of a supply network configuration definition also allows the
development of the concept of re-configurability.
Re-configurability in this supply network context then becomes the ability to
rearrange key elements of the supply network, as an alternative permutation from
the current state, to enable improvements in the supply or development (cost, quality,
flexibility, dependability, speed) of the product or service (e.g. alternative network
structures, changes to the flow of material and information between unit operations,
changes to the role, inter-relationships and governance (responsibilities) of partners,
and/or changes to the value structure or composition of the product or service).
The dynamic nature, enabling processes and technologies, the ease of, and the scope of
this change process determine the potential for re-configuration.
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Objective
Process mapping
Network structure
Supplier process map
Activities, mechanics
Network shape
Through life management
Value added/lost
Descriptive
Component flow
Directional flows
Strategy mapping
Network flow/logic
Organisation network
Geographical spread
Functional map
Tier 1 and 2 players
Tier 1/2 suppliers
Process flows
Product shape
Service
Value stream maps
Full-S-chain
Lean Mfg map
Reverse logs/service
Strategy charting
Geometry
Organisational
Geographic
Table II.
Related configuration
mapping approaches
Type
Examples
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Tier 2
RDCs
supply sites
Tier 1
25
398
>
500
>
300
a global %
b regional %
c local %
75
50
+
xx
minor
Multiregional
%COGS
p% raw
q% 1ry pack
r % 2rypack
s% others
Tactical
Map 2 : Flow of material and information between and within key unit operations
buying
pre-blend
Raws
w/h
Process
ing
% Raw
Returns
% PKG
Returns
primary
Replenishment model
Fill
2ndry
packing
FG w/h
RDC
Pack
Mtls w/h
P
D
S
H
Z
totals
Figure 4.
Schematics of the four
configuration mapping
tools
Innovation churn
New variant/extension
New product form
2 3 yrs
4 5 yrs
Offering
Aggregate level:
+ 10% ; 3 months out
SKU level (wt avg): + 20 -25% ; 3 months out
Supply to stock; 3 months rolling order
Supply to stock/forecast: 3 month rolling/call-off
10te/TEU
yy%
Euros/tonne /
Tonnes/TEU
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Project overview
Supply Network
Configuration
Mapping
Supply Network
Capability
Mapping
OUTPUTS
Capabilities profile
Gap analysis
Excellence models
Benchmarks
Opportunities
Trade-offs
399
OUTPUTS
Supply Network Map
Network configuration
discriminators
Benchmarks
Opportunities
Trade-offs
New Processes
Configuration facilitators
Company
Sector
Region
Market position
EU/NA/Aus
Top 3 global
Global
No. 1 global
Industrial motors
Textiles (fables manufacture)
Part-VI house-furnishings
Electrical goods/TV mfr
Cons electronics/batteries
FMCG/detergents and p-care
Global
China
Global
Global
Regional
Regional/China
Top 5 global
Top 1 China
Global top 3
Global No. 1
Major local
Top 3 China
Packaging/intl trading
Elecl components/magnets
West Africa
Global
Top s-region
Top 1 global
The approach and tools (configuration mapping tools refined in terms of more effective
industry engagement through improved definition) were then applied in a further ten
cases in-depth (Table IV), to assess capability profile and dimension-maturity in detail,
and the extensive mapping of network configuration. Focal-firm discussions focused
on capturing process-maturity across the supply network capability dimensions, and
capturing supply network configuration attributes using the configuration mapping
tools. The in-depth cases allowed the exploration (with respondents from the
focal-firm) of any emerging linkages between configuration and supply network
capability and extending discussions to explore potential opportunities through
reconfiguration.
Figure 5.
Case study investigation
approach
Table III.
Exploratory studies (10)
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Table IV.
In-depth studies (10)
Company
Sector
Region
Market position
FMCG beverages
FMCG
Pharma
Pharma
FMCG
Textiles (vertically
integrated)
Market/retail
Telecoms
Home appliance mfr
Equipment/service
provider
Global
Africa M-East
Multi-regional
Global
Europe
China exports
No. 1 global
Top 3 region
Top 2 global
Top 2 global
Top 3 global
Top 5 global
Global
Global
China exports
UK/US
No. 1 trader
Top 5 global
No.1 global
Top 3 global
Yi Wu Trade City
ZTE
Midea
Aerospace & Defence
Conglomeratea
The case study supply networks sectors included consumer goods, pharmaceuticals,
textiles, electronics, telecoms, home appliance, equipment and component manufacturers.
The businesses were of global scale (volume and turnover) and included both established
(mainly western) based organisations and examples from the developing world. This
allowed the tools to be assessed across a wide range of application environments.
The cases reflect alternative value chain models (traditional OEMs, contract
manufacturing service providers, vertically integrated manufacturers, fabless
manufacturing, a manufacturing and retail cluster, and an equipment manufacturer
and through life service provider). The geographical spread of these businesses reflected
different network evolutions (e.g. multi-domestic, regional, and centralised global scale
players).
Exploratory case studies allowed testing of the configuration mapping prototype
tools, their further development, and overall refinement of the case-study industry
engagement process. In all cases, studies involved senior supply chain management
(SCM) of the corporations in reviewing their firm/inter-firm supply network processes,
and process maturity as part of capability assessment (a process that involved the
capture of enabling operational processes across a set of pre-defined dimensions in the
capability assessment tool), the capture of quantitative supply chain performance data,
and the detailed mapping of supply network configuration using the tools developed in
this research. However, some limitations on time, site visits and data triangulation
restricted the application of these exploratory studies to prototyping although, through
their variety and contribution to the research, these cases add to the robustness of the
findings and are not solely in support of tool development activities.
For each of the full case studies, the configuration mapping tools were used to
capture detailed configuration maps; an in-depth process involving the senior
management of the focal firm, site visits, discussions with the most senior supply chain
role in the organization, and covering the full set of attributes identified in the literature
review. The configuration mapping tools benefited from the refinements made to them
in the exploratory studies in terms of attribute definition, and more effective industry
engagement mechanisms. The in-depth cases conducted were, all global scale
(in volume and turnover) whether single or multi-country source operations or MNCs.
Individually the cases were suitable test sites, and collectively they met the criteria set
out by the research methodology (i.e. collectively they span a range of products, cover
different international geographies, and utilise alternative supply network structures).
Likewise, SCM processes were captured using the process-based maturity model
tools previously developed. This involved the assessment of individual capability
dimensions (against a set maturity statements identifying increasing levels of process
evolution and formality) with senior management involved in the management of
operations. The performance dimensions critical to supporting the various business
models were readily available, being a preoccupation of these management teams,
although some exploration in terms of choice of measure and its supply network
context was required. The capability assessments and performance data, that adopt a
focal firm perspective of the supply network, were used in the analysis with the
outputs from the configuration mapping tools.
Four specific cases, two exploratory and two in-depth are presented in summary
form below (Table V) to demonstrate the nature of the data-collection. In these four
examples, the five stage engagement method, the nature of the data collected and
analysis approach are set out, namely:
.
The company (or product category) supply network under study, is briefly
described.
.
Key informants that participated in the supply network configuration analysis
(Stage 1).
.
The strategic priorities of the OEM are identified against which subsequent
capability and performance assessments are made (Stage 2).
.
A summary of supply network process maturity from the perspective of the
OEM is made, supported by commentary on the five main capability clusters
(Srai and Gregory, 2005) that are included in the capability assessment (Stage 3).
.
The capture of key elements of configuration, in summary text form, by
extracting data from the configuration mapping process (as depicted in the
schematic charts, Figure 4) (Stage 4).
.
Finally, the capture of key performance dimensions used by the OEM to support
their strategic priorities (Stage 5).
The four case-study examples set out in Table V illustrates the fieldwork approach
used across the different supply networks studied. These illustrative cases correlate
with Table VI which sets out the findings at a summary level and across the full case
study set.
Results summary
The results and examples set out above demonstrate that the new supply network
configuration mapping and maturity methods proposed can offer new insights to both
practitioners and researchers. Practitioners can observe with much greater clarity the
architecture and operational effectiveness of their systems. Researchers have a rich tool to
support comparative study of networks. More work is needed to provide reliable means of
measuring and assessing performance but some preliminary findings are worth
highlighting. They are concerned with the characteristics of different configurations and
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Network connectivity
Network design
Strategic priorities
capture
Stage 2
Introduction of h. quality
product enhancements with
rapid cross-regional roll-out.
Ability to supply within 48
hours mass-customised
products
Network Leadership
through product design and
mfr, key component mfr,
centralised distribution, and
brand
Engagement
Stage 1
European-based
manufacturer of h. value,
mass-customised
make-to-order medical
device products supplied to
individual consumers
within 48 hours of order
placement
Principal informants
include global CEO, supply
chain VP/director,
Company description
Table V.
Example case studies
engagement approach,
tool deployment and
findings
Medical devices
Medical equipment
Focus on Collaborative
capability (supply side) and
Network Integration. Low
inventory reduces risk of
price variance and
obsolescence
Impressive levels of supplier
integration
Centralised base provides
internal integration
Vertically Integrated
business model focused on
network integration
through part-ownership of
multiple tiers with focus on
garment design
Vice-gen. manager
responsible for operations
and vice-director
informations systems
Part-vertically integrated
manufacturer of h. value
male garments based in
China; includes base
material and garment mfr
and own retain outlets
Youngor
Textiles
(continued)
22
Network design is simple and
effective based on single site
assembly operations and supply
side local cluster
In-depth
Midea
Home-appliances
402
Company
Sector
Exploratory
Johnson Electric
Electric motors
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Stage 5
Product structure
Network relationships
Stage 4
Network structure
Company
Sector
Rapid product supply
routines robust quality
systems cycle-time
compression
Manufacturing core
processes supply core
components and final
products
Exploratory
Johnson Electric
Electric motors
Network role
Leader
Network relationships Strong, integrated
Network governance
Leadership
Product demand
Innovation and customisn
characteristic
led
Product SKU
Mass customisation
variety/profile
Product SKU SC driver V. high value
Analysis against performance
Key performance
Product technology and
discriminator
innovation, supply
responsiveness
Medium value
Principal supplier
Strong supply side, transactional
Closely coupled upstr
Consignment orders
Prod. specific
In-depth
Midea
Home-appliances
Youngor
Textiles
Customised
Leader
Strong, transactional
Supply cluster
Make-to-spec
Integrated manufacturing
facilities
New product development
Responsiveness to late
Product/service
enhancement
and rapid roll-out capability product specification
changes; prototyping
capabilities
Configuration capture key discriminators
Upstream/downstream Few focused sites
Single-site mfg cluster
Geographical spread
Multi-regional
Global supply
Type of unit ops
Unique-item production
Supply cluster; cellular mfg
Process flow dynamic Make-to-order
Make-to-order
SC processes
Network efficiency
Medical devices
Medical equipment
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Table V.
Table VI.
Configuration,
performance
discriminators and
network capability
Exploratory case
Medical Devices
Personal Care
Johnson Electric
Meters Bonwe
IKEA
TCL
GP Electronics
China Detergents
Poly Group
H-Magnetics
Full case
Beverages Global
Foods/Consumables
Regional Pharma
New Prod Pharma
PepsiCo lntl
Youngor Group
Yi Wu Trade City
ZTE Telecoms
Midea Microwave
Aerospace Defence
Case
NPD/responsiveness
New product introduction
Responsiveness, low cost
Innovation/supply cost
Low-cost product supply
Cost/quality
None/balanced
OTIF supply
Local service/lead-time
Low cost
OTIF service/innovation
Responsiveness
OTIF service/balanced
New product introduction
Franchised third party supply
Innovation/quality/cost
Volume/SKU flex/cost
Responsiveness
Low cost
Prod. design/service cost
Performance discriminator
Configuration descriptor
22
/
2
22
2
/
Practice maturity
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the relationship between configuration and process maturity the latter being a popular
focus for supply chain improvement initiatives.
From sector to sector, findings from the case studies and configuration maps, suggest
that these network configurations vary greatly between form, structure and capability.
Table VI outlines the key configuration discriminators and the capability focus of the
network and to what extent they are supported by advanced SCM practices.
In Table VI, for the specific capabilities identified as critical to the performance of
the supply model, the evaluation of SCM practices utilises the maturity model
definitions developed previously. For simplicity these are summarised in the Table in
terms of the following, where:
.
denotes advanced SCM practices ( denoting leading edge processes).
.
/ denotes mid-point SCM practices observed.
.
2 denotes SCM practices are regressed ( most basic level processes).
Findings
The key findings from the case study results and research are:
(1) Network configurations are very different from firm to firm with four key
elements of supply network configuration identified:
.
tier structure, shape and location (including key information/material flows);
.
principal unit operations and their internal manufacturing processes;
.
roles and relationships between key network partners; and
.
product structure, complexity and composition.
(2) Supply network configurations require mapping to understand potential
transferability of processes and meaningful cross-sector peer review; the
configuration context appears to be significant in process capability
development and performance terms.
(3) The supply network configuration mapping tools developed can be practically
applied and provide a necessary context (and consistent language) for both
process and performance review. The tools were found to give new insights into
the structure of supply networks and allow comparisons to be made across
sectors and business models through the use of consistent and quantitative
methods and common presentation.
(4) Configuration profiles observed have specific intrinsic capabilities and require
different levels of operational maturity; network configuration is a key enabler
of supply chain capability and may impact the operational process maturity
required to achieve target performance levels.
(5) Supply network re-configurability concepts emerging from the research provide
potential routes to network transformation; beyond the strategic and
organisational concepts of previous work and with particular elements of
configuration having different reconfiguration potential.
(6) Advanced performance does not always correlate with advanced SCM
processes. In many cases, simpler processes (i.e. less advanced in a maturity
model sense) appear to be more effective benefiting from the network
configuration they use.
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Network configuration profiles have been mapped and show the diversity of network
tier structure, production processes (unit operations), and relationship modalities
across the supply network together with the complexities of very different product
structures. The tools provide the foundations for linking configuration to capability
and performance, and contribute to supply network design and development by
highlighting the intrinsic capabilities associated with these different configurations.
Illustrating the impact of configuration and its various elements (as captured in
Table VI in textual summary form) is the apparent disconnect between operational
process maturity and performance when considering a broad range of a supply
network configuration profiles. Key examples that demonstrate the point include:
.
The medical devices case generates outstanding responsiveness and supply of
innovative products with mature rather than exceptional supply chain processes
in this area. This mass customisation configuration model benefits from digital
codification of customer specific requirements, complex in-house key component
supply, but supported by very basic final assembly and modest operational
management processes. Nevertheless, the operation supports an impressive
industry leading customer specific order to delivery cycle.
.
Similarly, the J-Electric case is an example of exceptional make-to-order
responsiveness and cost performance; its manufacturing operations are mature
but performance is essentially based around a very effective supply-side cluster
operation affording kanban operation without requiring advanced planning
systems.
.
Highly networked systems can be achieved through alternative means, through
vertical integration (Youngor), or through the systems integrator role as in the
case of the fabless operation case (Meters Bonwe). In each case their network
capabilities are similar suggesting rather than single route prescriptive
solutions, that in the case of highly networked systems, multiple solutions are
possible. This finding is consistent with the principal of equifinality.
.
The ZTE case provides a supply responsiveness that is perhaps unmatched in its
sector but has modest capabilities in supply planning and manufacturing; its
ability to support this capability is largely achieved through its supplier base in
supporting contract bids through effective risk pooling.
.
Midea excels in low-cost supply but practice maturity in manufacturing core
processes, and supply management are below what might be expected by the
number 2 global volume producer. This contract manufacturer supply network
model exhibits a highly responsive, low cost supply model enabling competitive
international product supply, despite the absence of advanced planning systems
or advanced operations management practice.
The implications for the design of supply network improvement initiatives are
substantial, suggesting that configuration may be at least as important as process
maturity and that major investments in process maturity without full consideration of
configuration may prove disappointing.
In several cases the hybrid concept of a supply network cluster has emerged, a
single product-category specific cluster of unit operations that is geographically
concentrated and forms part of an interconnected supply network. The operational
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Corresponding author
Jagjit Singh Srai can be contacted at: jss46@cam.ac.uk
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