The Global Supply Chain: Challenges and Solutions

Article excerpt


Over the last four decades the logistics discipline has managed two opposing goals: minimize costs of the firm and maximize customer service delivered by the firm. Cutting edge companies such as Dell, Wal-Mart and many others, have managed to do both. Supply chain managers have also designed their supply chains aimed at balancing cost and service. Mentzer (2004) suggests that "customer value is created through There have been a number of books and papers outlining the definition and scope of supply chain management (Mentzer, et al., 2001; Simchi-Levi, Kaminsky, Simchi-Levi, 2003, collaboration and cooperation to improve ef-ficiency (lower cost) or market effectiveness (added benefits) in ways that are most valuable to key customers." The goal has been to minimize cost, while providing the required level of service. The costs are often measured in decreasing cash-to-cash cycle time and the customer service, whether internal or external, is often measured in availability, delivery quality, communication and the like (Emerson and Grimm, 1998).

Wisner, Leong, and Tan, 2004; for example), research studies to examine supply chain metrics (Lambert and Pohlen, 2001), as well as a comparison of two major supply chain frameworks (Lambert, Garcia-Dastugue, and Croxton, 2005), and sources of competitive advantage attributable to supply chain management (Mentzer, 2004). While there have been independent examinations of several of the changes that affect the supply chain (network changes (Chopra and Meindl, 2004), technology implementation (Boyson, Harrington and Corsi, 2004), and the demands of customers (Lambert, Cooper and Pagh, 1998)), to date there has been little in the way of studies that holistically examine the changes facing front line supply chain managers and the solutions they have implemented to address those changes. Supply chain executives have not been inter-viewed in depth to better understand how manufacturing or distribution network changes, technology implementation, corporate restruc-turing and/or increasing customer demands have been addressed in the field. This article attempts to fill that gap. An understanding of the challenges and successes faced by Global 1000 firms as they address these changes should help others in the field to better accomplish supply chain change.

The manuscript is organized as follows. First, the research questions and methodology are presented. Next, the results of the interviews are summarized, followed by a discussion of the results and implications for supply chains. Finally, future research opportunities and conclusions are presented.


To better understand how companies are managing the issues arising from the balance of cost and service, the researchers conducted extensive interviews with thirty-one top-ranking supply chain professionals from diverse indus-tries. The interviews focused on (1) the challenges that global companies face in managing their supply chains; (2) the resolution of these challenges; and (3) the lessons learned from their experiences.

An extensive interview guide was developed to aid in discussions with the supply chain professionals and to be sure that the necessary research questions were covered. A list of twenty possible changes in the supply chain was developed from the literature, from initial discussions with industry professionals, and from topics included in several professional conferences. The interview guide included seven research questions for each of the twenty changes. (See Figure 1 for an example of the interview guide for one change.)

Prior to conducting the interview, the researchers sent each interviewee a set of preliminary research questions for the purpose of determining which of the twenty changes had the highest impact upon the informant's company. (See Table 1 for an example of the Pre-Interview Questionnaire.) The informant's four highest impact changes were the topics of their particular interview. …