Introduction

The supply chain connects the buyer and seller at various levels. The buy and sell activity within the supply chain is well established in most of the organizations. Every user is a buyer and the other end being seller. For instance, the production department indenting raw materials is a buyer and the procurement department is a seller. It is not necessary that monetary transaction alone determines a buying and selling activity. 

As for any organization, the supply chain is very critical to the construction industry I belong to. However, the supply chain management in a construction industry is underdeveloped and has different dimensions when compared to other organized industries. A more decentralized and project centric approach makes SCM unique to this industry. The quantities are fixed in the form of Bill of Quantities (BoQ) and supply lines are clearly established before the start of every project. Hence, I would like to call the material flow activity within a project is a closed loop supply chain.

SCM Leadership

SCM is to be looked through the prism of process management. Where an organization implements and executes process management capabilities effectively, the business leadership is clearly established. Moving from traditional concept of focusing on strategic assets such as investments, volume, brand etc to more effective capabilities such as accumulated knowledge and skills through process management would make significant leadership change in the long term.

When we discuss supply chain leadership, it comprehensively encapsulates various elements within and outside of the value chain. Since supply chain is a combination of actors involved from source to deliver, the leadership capacities at every level of these actors need a great amount of energy. A very clear and transparent information flow across and within the chain is one of the important factors in a successful chain. Similarly, the trust levels between the stakeholders makes a significant contribution in making a successful supply chain. A clear and broad highly integrated network does not emerge in the short run. A mature supply chain evolves over a period and through a series of integration processes among partners in the value chain.

Hence a mature supply chain creates a value chain. A successful value chain thus leads to a comprehensive leadership edge to the organization.

In supply chain context, leadership is a partnership. Hence collaborative supply management is a necessary strategy in next generation SCM – Do companies forecast this development within and outside of their industry? Strategic partnerships can enhance the business model. Increase in collaborative levels between businesses and within domains creates substantial leadership potential.

For this to happen, top management support to SCM is a critical and vital component of corporate strategy. However, SCM as a process or a subset of business process lacks dedicated support systems and lifelines strategically and tactically. It is also perceived and poorly understood; very little strategic time is spent understanding or investigating supply mark-ups – self delivery vs sub-contracting becoming an issue again as margins become tighter.

Enterprise Resource Planning (ERP) systems are maturing from IT lead solutions to BPM lead solutions whereby SCM does play a primary role. To be agile and flexible, the business process needs to be understood by senior management.

Aggressive or Assertive

Aggressiveness and assertiveness are two different dimensions of marketing management. An assertive organization constantly proves to be a passive market leader in its own industry. While an aggressive market leader would better be called an active leader.

Supply chain management needs more assertiveness given the complex relationship between various stakeholders. Aggressiveness may result in more procedural intricacies since not all partners would be equally positioned in terms of assets. The aggressiveness in this case can only flow from the end customer while assertiveness could flow down the supply chain. In the long term a more assertive leadership could only overcome complex business challenges.

However, this is purely a perception and opportunities the organizations tread in emerging complex global business scenarios would need more prudent analysis of business requirements.

SCM or SPM

The authors would like to substantially support the theory of process management within supply chain management. Supply chain is all about removing functional silos and focusing on building relationships among stake holders. Extensive coverage has been done academically and professionally by organizations interested in SCM on relationship and information flow and collaborative structure where it thrives. When functional boundaries are eliminated in a supply chain, it becomes more of a value chain. A value chain does necessarily become a process-oriented methodology.

Industry specific strategic alignment within and outside organizations that are part of their value adding networks, are happening, and determining factor in industry leadership. This is a relatively new business approach where many organizations view processes as strategic assets. This results in the combination of highly integrated processes. The organizations who are more successful in better relationship management through combination of processes such as information sharing, aligning their resources, equitable profit sharing etc find the integration process more effective.

Additionally, processes are now viewed as assets requiring investment and development as they mature. Thus, the concept of process maturity is becoming increasingly important in the realms of supply chain management.

Many scholars such as Deming and Davonport etc. have supported the process management theory in business orientation during the nineties. This is called Business Process Orientation. The software industry has developed and is using process maturity models developed by SEI. Project management has significant process control tools, courtesy PMI. Similarly, supply chain management has just about started to work on the lines of process management.

The supply chain management in its present form is more manufacturing industry oriented, thanks to various concepts introduced by Japanese automotive manufacturers. The process management approach would lead to a next generation supply chain which may aptly be called Supply Process Management (SPM).

Supply Chain Standards

An important but interesting development is taking place in giving a definite shape to various practices within supply chain management. It is like between organized and unorganized industry sectors. While construction in India is second most jobs generating industry, it is still seen as an unorganized industrial sector. Agriculture is the largest employment generator still but is not seen in the list of core industries. Hence, SCM as a management concept has seen little penetration in these industries.

Even in mature industries such as manufacturing, retail etc, there are no specific standards spread across the domain in the realm of supply chain management. Many dedicated institutes are working hard in the SCM arena such as Supply Chain Council (SCC), Chartered Institute of Purchasing & Supply (CIPS), Chartered Institute of Logistics & Transport (CILT) of UK etc to develop models and or standardization of process within a given domain. SCOR (Supply Chain Operations Reference) model of SCC and NOS (National Occupational Standards) in SCM by CIPS & CILT are a few to name.

But many more is required to be done. One way of ensuring a higher research participation at graduate and post graduate level in universities and dedicated research centers such as Indian Institute of Materials Management (IIMM), Institute of Supply Management etc.

Supply Chain profits

Another evolving area in the domain of supply chain management is Supply Chain Profits. The supply chain process within an organization is normally seen as a spending arm of the business albeit the fact remains that buying is a push activity for selling. Contrary to these scholars such as Chopra and Meindll have developed the theory of supply chain profits with the chain. The authors fully subscribe to the concept of independent business unit or project management approach to the supply chain activity were independent of spending activity, profits can also be shown in the process.

SCM Education

SCM has its roots in operations management in the realm of academic literature. With more complex and super specialization happening within SCM, can SCM education become an independent management subject on the lines of HR / Finance / Marketing etc.

India has one of the highest spending for logistics in GDP terms – 14 to 18% when compared to the developed nations. The authors can even argue that the notion that emerging economies differ from developed economies in the west and some in the east with regard to development of supply chain, hence supply chain development is integrated with development of economies. It is however dangerous to assume that supply chain development is region specific. India has the vast potential to become leader in supply chain education.

Recognizing IIMM on the lines of Institute of Company Secretaries of India (ICSI) or Institute of Chartered Accountants of India (ICAI) through an act of Parliament would go a long way in making this domain very relevant and important for the organizations.

Supply chain education must start from graduate level studies. More emphasis on development of research content needs to be done at postgraduate and doctoral levels.

Conclusion

The growth of the supply chain in the last few decades has been phenomenal in terms of size and complexity. More systems within the SCM are evolving and more research is being conducted in the development of theories and concepts. The issues discussed above are part of these widespread efforts in shaping India’s supply chain management model on the lines of process management which would give effective business leadership.