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Sophie DAmours
Universit Laval, Quebec City, Canada
Mikael Rnnqvist
Universit Laval, Quebec City, Canada
Supply chain processes-oriented frameworks are of great importance for academics and
practitioners since they play a central role in responding to the challenge of helping different
elements of a supply chain become more integrated toward common objectives. In this context,
the objective of this article is twofold: first we contribute to the discussion on objectives,
development approaches, and applications of process-oriented supply chain models. Second, we
propose an alternative reference model based on a rigorous conception phase. Through this
approach, knowledge concerning different taxonomies for supply chain processes has been
analysed, the existing models have then been evaluated in the light of these definitions, and
finally, the model has been developed based on a content analysis of 184 articles. Proposing this
new model aims to define a central element of an overarching SCM perspective which combines
business processes and management competencies.
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Rodrigo Cambiaghi Azevedo, Sophie D Amours, Mikael Rnnqvist
A New Reference Model for Core Supply Chain Processes
Supply Chain Council (2012) and GSCF definitions created hurdles to the continuous
(Global Supply Chain Forum). evolution of certain processes domains in the
In spite of the proposition and SCM literature. A sound reference model
dissemination of the SCOR and GSCF models, should assist in improving this situation.
three main facts have been observed and they Therefore, this article aims to highlight
sustain the debate in this article. First, both the importance of having an overarching
models diverge according to certain understanding of different kinds of supply
fundamental characteristics (Lambert et al., chain processes as well as more scientific
2005). While the SCOR model is primarily foundations when developing and debating
focussed on defining the core activities of an reference models. To do so, a summary of the
organisation as a set of interrelated entities, the state of the art on different business processes
primary focus of the GSCF model is on the classifications is presented, allowing us to
management aspects of these activities compare the SCOR and GSCF models within
towards higher organisational performance. this context. Based on this comparison, the
Second, along with their divergence in terms authors have identified the conditions for
of focus, these models have not yet been proposing an alternative reference model for
compared through a complementary core supply chain processes. The model
perspective. When presenting the GSCF proposed was developed from the content
model, Lambert et al. (2005) compare it to the analysis of 184 articles available in the
SCOR model according to four main literature. Structured around seven core
dimensions: scope, intra-company processes, the model contributes to further
connectedness, inter-company connectedness, advances in the practical and academic fields.
and drivers of value generation. The authors It does so essentially by restructuring core
conclude that when implementing supply activities and decisions which need to be
chain processes, managers will have to decide carried out to successfully operate a supply
which framework best meets the needs of their chain as well as by making it possible to link
firms supply chain. However, for the progress core processes with competence theory
of this essential knowledge domain, further elements such as organisational and individual
analyses of both models (independently or capabilities, skills and knowledge as well as
comparatively) as well as new models with contingent elements of a firm such as its
propositions will certainly be required. market condition and pursued strategies as
A third fact, which in a certain way is well as organisational culture and leadership
an outcome of the first ones, is that the SCM profiles.
literature still does not present any sign of In the following section, we summarise
convergence regarding supply chain processes the literature concerning business processes
nomenclatures and scopes. Consulting classifications and we debate the SCOR and
publications in five major international SCM GSCF models in the light of these
journals between 1996 and 2007, we identified classifications. Next, the proposed reference
142 different processes nomenclatures. Within model for supply chain core processes is
this sample, different process scopes were presented together with a description of the
frequently found for the same nomenclature at methodology applied and a debate regarding
the same time that a variety of names was the implications and contributions of the
usually correlated to a unique process. The model. Finally, the article concludes by
same divergent profile is still found when outlining its main findings as well as calling
more recent publications are analysed. In fact, for further research on this essential business
this unrestricted proliferation of processes subject.
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A New Reference Model for Core Supply Chain Processes
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A New Reference Model for Core Supply Chain Processes
purely emergent, as argued by Markus et al. corroborates this perspective when affirming
(2002), disregards all prior knowledge about that the term management process is, in a
existing logics for these processes. certain way, an oxymoron.
Mentzer et al. (2007) have revamped As a result, management competences
the discussion on business processes act through core processes activities and
classification. In a more comprehensive and assume two important responsibilities: first, to
emphatic approach, the authors propose three assure the deployment of competence elements
main process categories: (i) core processes among the different core processes acting as
that are needed to attain business goals by coordination and control mechanisms with
enabling goods and services to reach an each other; second, by explicitly addressing
external customer; (ii) support processes that issues such as organisational and individual
are needed to make the core processes work as knowledge, to facilitate learning and
well as possible, but which are not critical to continuous improvement for core and support
the success of the company; (iii) management processes. This combination of core processes
processes which are broader knowledge and management competences is supported by
domains used to control and coordinate the the coordination theory proposed by Malone
core and support processes. and Crowston (1994). According to the
In following the presented line of authors, this theory attempts to address the
evolution for business processes classification, growing interest in questions about how the
it becomes commonly understood that while activities of complex systems can be
core processes demonstrate structured and coordinated. The theory is founded on the idea
predictable patterns of performance, of conceptual separation of two types of
management processes are considered broad activity that are present within any process:
knowledge domains with activities that are not activity that directly contributes to the output
always executed in definite order. Besides its of the process (business goals) and additional
activities-performance pattern, when activities called coordination mechanisms,
meticulously analysed, the definition of which must be carried out in order to manage
management process presented by Mentzer et various interdependencies among activities
al. (2007) and also the explanation of EKPs and resources.
defended by Markus et al. (2002), approximate As an interdisciplinary area, the study
the concept of managing firms competences. of coordination draws on a variety of
The term competence is defined as the ability disciplines including computer science,
to sustain the coordinated deployment of assets organisation theory, management science,
in ways that help a firm achieve its goals economics, linguistics, and psychology
(Sanchez, 2004). According to Harmsen and (Malone and Crowston, 1994). Consequently,
Jensen (2004) its study relies on the it underpins the proposal that management
investigation of the association between a competences are less adequate when
companys internal characteristics (e.g. developing reference models since their
activities, assets, capabilities, skills as well as existence in firms relies on several different
organisational and individual knowledge) and business aspects including company culture,
market value creation. From this perspective, organisational structures, leadership profiles,
even though an exhaustive debate about personnel performance evaluation and reward
terminologies is beyond the scope of this systems among others (Worley and Lawler,
article, it is more appropriate to use the term 2006; Gattorna, 2006).
management competence instead of Figure 1 illustrates the overarching
management process. Davenport (1993) SCM framework where the supply chain
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A New Reference Model for Core Supply Chain Processes
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In addition, in spite of the fact of being literature is related to the mature stage of the
complementary, the addition of the SCOR and SCM body of knowledge which allows
GSCF models presents a certain level of delineating sustainable propositions. With the
overlap. For instance, activities related to introduction of the concept in the early 1980s
customer order entry (e.g. filling orders and (Oliver and Webber, 1992), SCM literature has
checking product availability) are seen within rapidly increased in size during the 1990s
the deliver process of the SCOR model as well (Carter and Ellram, 2003) and during the first
as within the order fulfilment process of the decade of the 2000s (Burgess et al., 2006).
GSCF. This phenomenon might be related to Next the methodology applied to
the fact that both models were developed construct the model is detailed, followed by
based on consensus analysis of SCM the introduction of the model itself and finally,
professionals without a prior debate on an evaluation of the resulting model is
different types of business processes. Thus, provided.
this article presents a first attempt in the
literature to apply an innovative scientific 3.1. Methodology
approach to elaborate a reference model for
supply chain processes. The model, described In order to build up a reference model
in the sequence, sets its focus exclusively on essentially from the literature review, a content
the identification of supply chain core analysis method was centrally applied. Content
processes which will hopefully engender analysis is defined as a technique for making
additional debate in terms of supply chain reliable inferences by systematically and
process-oriented models as well as enable objectively identifying special characteristics
further research on supply chain management of messages such as texts, audios, etc. (Berg,
competences. 1998). It is considered an appropriate method
for comprehensive literature reviews
III. New Supply Chain Core Processes (Cullinane and Toy, 2000), and thus
Framework considered appropriate to investigate implicit
core process characteristics alongside explicit
This section proposes an alternative process descriptions in articles.
reference model for core supply chain It is important to emphasise that, when
processes. The conception of the model was defining a process-oriented framework, one
first elaborated on explicit knowledge important issue is related to the companys
available in the literature and then validated locus along the value chain. As for SCOR and
through tacit knowledge of SCM GSCF, we focus our model on the
professionals. The justification for this manufacturing industry, especially for
approach is twofold: first of all, as previously companies which add value to incoming raw
mentioned, the SCOR and GSCF models were materials and commercialise finished products
developed based strictly on consensus analysis on a business-to-business model. Later in this
of SCM professionals (tacit knowledge) and text, we discuss the opportunity to apply the
there is still no evidence of consensus in the proposed framework as a meta-model in the
literature on the adoption of their processes development of industry-specific reference
nomenclatures and scopes. Therefore, we aim models (i.e. aerospace, automotive, brewing or
to contribute to minimising this gap by chemical). Due to its focus, the proposed
fundamentally raising a literature-based supply model might not be completely applicable for
chain core processes model. A second central retailers, wholesalers and purely extractive or
motivation to search for core processes in the general service businesses. This limitation will
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interview format and book reviews, our objective relies upon the former.
162 articles were kept for the Second, the description of the analysed
nomenclatures search analysis. By process should present enough
analysing all 162 articles, 142 different evidence that the process is executed
business process nomenclatures were based on complementary expertise
found. Out of 142 nomenclatures, 102 from different parts of a supply chain.
appeared in a single article. As Third, core processes must be focussed
previously mentioned, similar profile is on external customers by dealing with
found today with more recent their information or transactions. This
publications. characteristic is aligned with the prima
Specification of supply chain core facie case mentioned by Srivastava et
processes characteristics a phase al. (1999).
concurrent with the identification of Supply Chain Processes Literature
business process nomenclatures Search and Literature Analysis the
specified supply chain core process previous steps supplied initial evidence
characteristics that should be on how to search for core processes in
considered in the literature content the literature and, from this stage on,
analysis. In an analogous effort, the research applied an iterative-
Srivastava et al. (1999) used four exploratory approach. First of all, for
criteria selecting core business each of the 142 process nomenclatures
processes using a marketing previously found, a subsequent
perspective: (i) a core process should literature search was performed. This
address fundamental but common activity aimed to find articles
business tasks that are critical to the containing process descriptions which
achievement of the organisations goal; could be analysed in the light of the
(ii) each core process should manifest a supply chain core processes
prima facie case that contributes to characteristics. At this stage, all
customer value creation; (iii) each academic and non-academic peer-
process should be more macro than reviewed English language periodicals
micro-level; (iv) the core processes were considered for analysis. This
should manifest clear (macro and periodical sampling was chosen due to
micro) interactions and the fact that allowing the search on
interrelationships. Based on the work other periodicals outside the SCM
of Srivastava et al. (1999) and the domain would potentially bring in
general SCM and business process different perceptions of processes and
literatures (previously debated), we processes inter-relationships from
identified three main characteristics for different business domains;
a supply chain core process. First, a contributing in this way to the multi-
core process, from a macro- disciplinary approach contemplated by
perspective, must be represented as a the SCM concept. In addition, keeping
set of structured and continuous inter- a broader approach for possible
related activities, events, and resources. periodicals would make it possible for
By searching for structured and us to include important literatures
continuous process characteristics, we dedicated to certain domains such as
intend to differentiate core processes general business administration as well
from management competences since as business process management
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(BPM). Making use again of the round of literature search, where some
ABI/Inform Global Proquest academic new process nomenclatures retrieved
database and considering the same time from the initial 51 articles were added
boundaries previously adopted, the to the initial list of nomenclatures, as
search looked for the exact process well as additional publications for
nomenclature in the document title certain specific nomenclatures being
combined with the search for the exact required in order to collect further
term business process in the evidence about process characteristics.
document text. The main reason for While for the additional
combining these two parameters in the nomenclatures, the literature searching
searching mechanism was the mechanism was applied with the same
expectation of a higher probability of degree of rigour as previously, for the
selecting articles focussed on the existing nomenclatures, different
description of core process searching mechanisms were tested (i.e.
characteristics. This initial procedure it was allowed to search process
resulted in 51 articles, which were then nomenclature throughout the document
analysed. For each of these initial text, instead of only in its title). Finally,
articles, a meticulous content analysis a total of 184 articles were identified
was performed to identify evidence for and analysed. Table 1 illustrates the
each of the three characteristics of a five journals with the highest presence
core supply chain process previously of articles analysed. A list of the
described. In addition, the analysis of articles included can be obtained from
these initial articles led to a second the authors upon a written request.
Journal # of Articles
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A New Reference Model for Core Supply Chain Processes
Additionally, through our experience in parts of the model. It is important to state that
management consulting, the the descriptions presented below do not intend
application of this model has been to demonstrate all possible activities existing
discussed with several global in each core process. Some main activities are
companies in different industries that highlighted along the text with the aim of
are undergoing substantial supply chain supporting the definition of the process scope.
transformation initiatives. The recommendations for further research will
Finally, along with clear raise the need for more detailed analyses in
processes boundaries, nomenclatures terms of possible sub-processes and activities
for each process were determined within each process domain.
based on two straightforward criteria:
applying the same taxonomy in case of 3.2.1. Strategic Planning Process (SPP)
high level of nomenclature
standardisation in the literature (i.e. Johnson and Scholes (1997) define
strategic planning, S&OP, order strategic planning as the direction and scope of
fulfilment, inventory replenishment an organisation over the long term which
and product return); or defining a new achieves advantages for the organisation
taxonomy in case of the existence of through its configuration of resources within a
recent and considerable trends on the changing environment to meet the needs of
process emphasis or due to the lack of markets and fulfil stakeholder expectations.
consensus in the literature. The Consequently, the strategic planning process
previously mentioned ad-hoc relates to the mechanisms for the development
validations with SCM professionals of the strategic plan and its subsequent
also supported the definition of the deployment (e.g., ORegan and Ghobadian,
final nomenclatures applied in the 2002, Dibrell et al., 2014).
proposed model. According to Larsen et al. (2000),
strategic planning is a cyclical process which
3.2. Core Supply Chain Processes normally takes place once a year with
Framework revisions during the year. The planning
horizon spans from twelve months to ten years
This section presents the reference depending on conditions such as market
model developed. Its construction resulted in a complexity (Jennings and Disney, 2006;
proposition of seven inter-related core supply Larsen et al., 2000) and company growth rate
chain processes. They are: strategic planning (Larsen et al., 2000).
process, sales and operations planning process, Jennings and Disney (2006) affirm that
value commitment process, order fulfilment there appears to be general agreement among
process, inventory replenishment process, strategic planning researchers that the strategic
product return process, and value development planning process consists of three major
process. Figure 2 illustrates the proposed components: (i) formulation (including setting
model and the following subsections present objectives and assessing the external and
each process. Instead of presenting the entire internal environments, evaluating and
theoretical discussion found in the literature of selecting strategic alternatives); (ii)
each process, we focus on presenting the implementation; and (iii) control.
process definitions, objectives and main
activities found in the literature analysed as 3.2.2. Sales & Operations Planning Process
well as their connections with the remaining (S&OP)
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A New Reference Model for Core Supply Chain Processes
Olhager et al. (2001) define the sales exact value expected by individual customers
and operations planning process as the forum (Gattorna, 2006). On the other hand, concepts
where different functional strategies meet to such as revenue management have been
establish an operations plan that economically presented as the counterpart knowledge
serves the needs of the market, while required for protecting value for selling
supporting both the strategic and financial organisations (Talluri and Van Ryzin, 2005).
plans of the firm. In other words, the goal of Based on the literature (Bramham et
the sales and operations planning process is to al., 2005; Daniel et al., 2003; Hvam et al.,
continuously balance demand, supply, 2006), we present four sub-processes
distribution, and financial plans to achieve commonly present in the value commitment
corporate objectives (Whisenant, 2006). With process literature:
the planning horizon varying from three
months to over three years (Grimson and Pike, Initiate dialogue the dialogue with an
2007), the S&OP process usually takes place individual customer might begin with
in monthly cycles with a rigid process agenda. either party (Daniel et al., 2003). It
Sub-processes involved in the S&OP may be conducted through any of the
process usually include: demand plan selling channels a company has
generation; generation of an operations plan available (e.g., Internet, direct sales,
reflecting the foreseen demand as well as its telesales, etc.);
financial consequences; S&OP meetings for Develop quotation this stage involves
plans alignment and validation; and, finally, steps such as assessing the feasibility
communication of the decisions taken and of product construction according to
generation of plans accountability (Bower, the customers required configuration,
2006; Wallace, 2006; Grimson and Pyke, analysing standard options and
2007, Tuomikangas and Kaipia, 2014). required modifications (Bramham et
al., 2005), determining material lists
3.2.3. Value Commitment Process (VCP) and estimating product prices (Hvam et
al., 2006);
The value commitment process is in Negotiate / Tailor this sub-process
charge of conducting the mutual discussion starts by presenting the initial quotation
and arrangement of terms of a sales order. To to the customer followed by an
accomplish this, it spans from the initial iterative process, which may involve
dialogue between the company and the the seller modifying its offer in order to
customer when dealing with a requirement, up meet the customers needs better
to the moment when the customer inquiry is (Daniel et al., 2003). In this stage,
converted into an order for the vendor. We aspects such as product characteristics,
named the process value commitment as it is price and payment conditions as well
during this set of activities that values are as operational (e.g. delivery lead-time
agreed upon between both parties in a and order flexibility) and product
negotiation, the customer and the selling related services (e.g. warranty and
company. In this context, value can be return policies) are discussed. The
understood to be a combination of product negotiation of operational services is
characteristics, price and customer services. In usually supported by concepts such as
the last years literature has intensively available-to-promise (ATP) and
addressed reasons and methods as to how to capable-to-promise (CTP) which aim
identify, promise, and consequently deliver the to provide realistic information when
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A New Reference Model for Core Supply Chain Processes
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transmitting order from point of sales the inventory level, examples of key
to upstream member (Croxton, 2003). performance indicators to measure its
Short-term Plan and Execute Sourcing efficiency might be inventory turnover and
and Manufacturing comprises number of stock-out per period of time
activities such as Master Production (Jammernegg and Reiner, 2007).
Scheduling (MPS), Rough Cut Therefore, we list three major sub-
Capacity Planning (RCCP), Materials processes found in the literature about the
Requirement Planning (MRP), process:
Capacity Requirement Planning (CRP),
purchasing and manufacturing orders Update Forecasting / Inventory
release as well as its consequent Consumption involves activities such
execution and control (Amaro et al., as the deployment of the sales plan
1999; Kritchanchai and MacCarthy, coming from the S&OP process to the
1999; Stevenson et al., 2005; Wikner stock-keeping units (SKUs) level, the
and Rudberg, 2005). As previously update of forecast data based on recent
mentioned, this set of activities is demand behaviours as well as the
elective depending on the location of update of sales quotas for example per
the order decoupling point. region, customer type, or customer.
Deliver involves tasks such as The concept of Distribution
delivery scheduling, vehicle Requirements Planning (DRP) might
preparation (e.g. loading), outbound be applied to translate forecast data
transportation and when necessary, into inventory requirements for a
tasks related to product installation and certain location. In pull-based
set-up (Kritchanchai and MacCarthy, environments, the consumption of the
1999). inventory by the customer is
Billing and Collect while billing transmitted, normally automated, to
involves tasks related to sending the sellers, starting up the inventory
order invoice to the customer (Croxton, replenishment process;
2003), cash collect tasks are related to Short-term Plan and Execute Sourcing
invoice payment by the customer and Manufacturing this activity was
(Kallio et al., 2000). debated previously within the scope of
the order fulfilment process. Its
3.2.5. Inventory Replenishment Process execution under the order fulfilment or
(IRP) inventory replenishment process
depends on location of the order
Figure 3 presents the inventory decoupling point (Figure 3);
replenishment process as the counterpart of the Distribute Inventory involves all the
order fulfilment process. Its responsibilities steps required after manufacturing (e.g.
span from the update of the forecast as well as transportation preparation, orders
inventory consumption along the value chain consolidation, transport load and
network up to the moment when the material is execution) up to the moment the
replaced in its exact inventory position. Since product is placed in its final inventory
the focus of the process is the replenishment of location;
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3.2.6. Product Return Process (PRP) 3.2.7. Value Development Process (VDP)
The sixth supply chain core process is Activities related to the value
the product return process. The process begins development process were found in the
when a customer decides to return one or more literature under a series of nomenclatures (e.g.
products to the seller (Amini et al., 2005). It product development process, product design
ends with the disposal of the product by the process, product introduction process, etc.). By
seller and the provision of a solution for the performing content analysis, we identified that
customer. these processes descriptions available in the
Some descriptions found in the literature present a high level of evidence of
literature reflect characteristics related to the analysed core supply chain process
retail sector (Autry et al., 2007; Bernon et al., characteristics. We denominated the process
2013). However, in terms of the manufacturing value development due to contributions in
industry, Guide Jr. and Wassenhove (2006) the literature that emphasise the dynamic
affirm that there are three primary groups of environment companies are currently facing,
elements in every return case: (i) the product driven by competition for value generation in
return execution (receive, sort, analyse the terms of products and associated services for
quality of the returned product, disposal, customers (Hughes and Chafin, 1996; Hart et
respond to the customer, etc.), (ii) al., 1999; Gattorna, 2006).
remanufacturing operational strategies, (3) Thus, the value development process
remanufactured products market development. involves the whole series of steps from the
The two latter groups give evidence of the generation of an idea or an opportunity,
interactions existing between the product through the project proposal, prototyping and
return process and other core processes such as testing to the launching and post-launch
the S&OP, value commitment, order review of a product/service (or a combination
fulfilment and inventory replenishment. of both) that adds value to end users, the
company and the value chain (Hughes and
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Chafin, 1996; Sroufe et al., 2000). In addition, require a greater level of dependence on
the process is the only core process to present aspects such as organisational culture and
a structured and continuous behaviour where desired strategic positioning.
activities are deployed from a strategic Another implication brought up by this
perspective to an operational level inside a paper is related to the method applied for the
single process (Holmes and Campbell Jr., investigation of the set of core processes most
2004; Dooley and Johnson, 2001). commonly required in manufacturing
environments. The method was designed to
IV. IMPLICATIONS AND simultaneously explore scientific and applied
LIMITATIONS OF THE PROPOSED as well as tacit and implicit knowledge
MODEL available in the SCM arena. Traditional
frameworks have basically relied on tacit
This section analyses the main knowledge of SCM professionals without
implications of the proposed model for comprehensively exploring the knowledge
practical and scientific contexts and identifies available in the vast SCM literature. By
its limitations which should drive future employing this method, this article supports
advances in this important knowledge domain. the argument that more scientifically relevant
First of all, the discussion regarding methods are required when developing robust
different classifications of supply chain processes-oriented supply chain models.
processes presented prior to the development Nevertheless, the main limitations of the
of the core processes model improves the method here applied rely first on the lack of
theoretical ground for processes-oriented statistical inferences when sampling the
supply chain models. The advocated articles for the content analysis. Second,
classification, which combines core and different methods of defining processes
support processes with management nomenclatures and searching mechanisms
competences, provides a framework to support could be also applied and statistically tested. In
a clear definition of focus and expected addition, the ad-hoc validations with SCM
contributions for reference models. Following professionals used during the framework
this perspective, core processes propositions development should next evolve to survey-
should focus on defining a logically-related set based methods in order to increase the
of activities that draws on multiple exposure of the model to different professional
departmental skills which enable goods and profiles. Finally, the use of research methods
services to reach their marketplace. In such as case studies, where the proposed
complement, the study of management model could be investigated in depth in
processes should investigate competence- specific settings, is also considered a
based elements to be embedded in the firms subsequent step of this research.
coordination and control mechanisms in order In addition, three main implications
to attain its strategic positioning. can be found with the introduction of the new
Through the understanding of supply framework: first, when compared to the
chain processes classification, we found equivalent SCOR model, the proposed model
opportunities for improvement of the current presents improved propositions in terms of
state of the art for core processes reference supply chain comprehensiveness as well as a
models. However, a further advance of this more evident business process perspective. By
research should investigate the feasibility of denominating the processes around functional
proposing reference models for supply chain responsibilities (e.g. source, make and
management competences since they seem to delivery), the SCOR model still lacks
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Rodrigo Cambiaghi Azevedo, Sophie D Amours, Mikael Rnnqvist
A New Reference Model for Core Supply Chain Processes
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A New Reference Model for Core Supply Chain Processes
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