Paradigm shift in supply chain management (SCM)

Abstract

In today's world, the way we do business is not the only changing phenomenon but also the pace of change is changing. The business is global, highly competitive, technology-intense, prices are market driven with shorter product life cycles, integrated processes starving to collaboration. Within this context, supply chain management (SCM) has earned its right place in the strategic management arena. Technology became the enabler for SCM development, making visibility, transparency and integrity possible among the SC partners. This leads the transformation of SC's from dyadic, material management oriented relationships into complex, collaborative, networked, web-enabled, extended architectures. With multiple, global actors and complex dependencies, enterprise borders vanish and enterprise-centric strategy development becomes insufficient. What defines success in such an environment is a network-centric, collaborative and holistic approach characterized by network level strategy development and decision making based on business intelligence with the partners. Integration of multi-function and multi-agent systems will be the main key performance index (KPI) for the SCM development. This is a radical paradigm shift in which collaborative long-term partnerships reign, managerial borders extend, and network-level results dominate the enterprise-centric results. Thus, this study provides a comprehensive discussion of this paradigm shift in SCM from organizational, technological, and managerial perspectives. Following the "leagile" philosophy, capabilities and advantages of lean and agile SCM can be achieved. In this paradigm, network level performance and risk management is the key for chain-level managerial control and trust among partners is the vital binding glue keeping the partnerships alive.