Supply chain management program first- and second-order effects model: a new strategic tool

Abstract

Utilisation of supply chain management (SCM) strategies have an implicit objective of gaining an advantage over one’s business arena partners, whether they be competition or supply chain partners; an SCM-derived competitive advantage. A literature review accentuated four bases of strategic competition (cost-based, resource-based, time-based and knowledge-based), upon which, such an SCM-derived competitive advantage might be built. A Monash University qualitative research study found that the majority of small- to medium-sized firms have found this to be a risky and unprofitable endeavour. In response, this paper explores the four bases of strategic competition through an exemplary success case found within the Australian textiles, clothing and footwear (TCF) industry. The research raised a proposition stated as “effective supply chain management increases shareholder value (SHV).” An effective SCM program influences key success drivers (e.g. expenses, asset utilisation and process cycle time) available to it in a manner that maximises the firm’s competitive position, given its chosen strategy. This paper presents a first- to second-order SCM effects matrix model as a small step towards the mainstream achievement of current world-wide best SCM practice. The matrix can be utilised by individuals planning supply chain change processes or teams evaluating potential change initiatives within their supply chain operations. The substructure of the matrix is examination by isolating just the time-based strategic key success drivers, as found in the literature. The matrix’s utilisation methodology is detailed to enable its application by practitioners.