AN EVALUATION OF PROCESS-ORIENTED SUPPLY CHAIN MANAGEMENT FRAMEWORKS

Journal of Business Logistics, 2005 by Lambert, Douglas M, Garc�a-Dastugue, Sebasti�n J, Croxton, Keely L

Supply chain management (SCM) is implemented by integrating corporate functions using business processes within and across companies (Council of Logistics Management 2003). Supply chain management encompasses more than the activities of any individual corporate function. However, frequently it is seen as a synonym for logistics (Simchi-Levi, Kaminsky, and Simchi-Levi 2000), operations management (APICS 2001), procurement (Monczka, Trent, and Handfield 1998), or a combination of the three (Wisner, Leong, and Tan 2004). Many regard the "supply chain" as being composed of inbound materials, raw material inventories, manufacturing, finished goods inventories and distribution and view these activities within the purview of a single firm; others view the supply chain as these activities from point-of-origin to point-of-consumption. Another perspective of supply chain management is based on the management of relationships both between corporate functions and across companies (Ellram and Cooper 1993).

Given that a supply chain is the network of companies, or independent business units, from original supplier to end-customers, management of this network is a broad and challenging task. Increasingly, one goal of managers is to implement cross-functional business processes and integrate them with other key members of the supply chain. A business process is a structured set of activities with specified business outcomes for customers (Davenport and Beers 1995). Initially, business processes were viewed as a means to integrate corporate functions within the firm. Now, business processes are used to structure the activities between members of a supply chain. Hammer (2001) asserts that it is in the integration of business processes across firms in the supply chain where the real "gold" can be found (Quinn 2001). It is key in the realm of supply chain management that these business processes are cross-functional. Firms that seek to be market-driven need to implement cross-functional business processes (Day 1997).

In this article, we identify five supply chain management frameworks that recognize the need to implement business processes across corporate functions and across firms. From the five, we select two for evaluation because they are the only frameworks with processes that are described in sufficient detail to be implemented, and therefore can be thoroughly evaluated. One objective in evaluating these frameworks is to provide managers interested in implementation with an understanding of the strengths and weaknesses of each approach. A second objective is to provide educators with a better understanding of process-oriented supply chain management frameworks and to identify opportunities for further research.

The article is organized as follows. First, a brief literature review on business process management is provided. second, the five supply chain management frameworks identified in the literature are presented and two are selected for comparison. Third, criteria are identified to compare the frameworks. Fourth, the frameworks are evaluated using the selected criteria. Fifth, strengths and weaknesses are identified. Finally, opportunities for future research and conclusions are presented.

BUSINESS PROCESS MANAGEMENT

The concept of organizing the activities of a firm as business processes was introduced in the late 1980s (Davenport, Hammer, and Metsisto 1989; Hammer and Mangurian 1987) and became popular in the early 1990s, after the publication of books by Hammer and Champy (1993), and Davenport (1993). The motivation for implementing business processes within and across members of the supply chain might be to make transactions efficient and effective, or to structure inter-firm relationships in the supply chain. Both approaches to implementing business processes are customer oriented. The first focuses on meeting the customer's expectations for each transaction, the other on achieving longer term mutual fulfillment of promises.

The transactional view of business process management is rooted in advances in information and communication technology which enabled time compression and availability of information throughout the organization (Hammer and Mangurian 1987). This transactional view of business processes refers to the workflows within and between organizations (Davenport and Short 1990) and is based on Taylor's principles of scientific management which aim to increase organizational efficiency and effectiveness using engineering principles from manufacturing operations (Taylor 1911).

Combining business process (workflow) thinking with information and communication technology leads to cost reduction, time reduction, output quality (uniformity, variability, or no defects), and empowerment by enabling individuals to have greater control over their output (Davenport and Short 1990). The focus is not on automating the established business processes, but on redesigning businesses to improve outcomes for customers by making transactions more efficient and accurate (Hammer 1990; Hammer and Mangurian 1987).