The Best Practices In Supply Chain Management


Corporations in the 21st century are adjusting to the changes that occurred during the 1980s and 1990s. These changes have contributed to a highly competitive global economy (Ireland & Hitt, 2005). Those corporations that will survive in this globally competitive environment are those that continue to push the boundaries of improving performance. Identifying what is "best in class" or "process best practices" is an area of growing interest. Corporations and organizations are not only faced with challenges of correcting deficiencies and inefficiencies, competition is forcing firms to pursue improved practices or lose competitive position (Blanchard, 2007).

Of specific corporate concern is the area of supply chain management which encompasses executing the activities of design, make, deliver in producing products or services (Hugos, 2006). In 2005, $500 billion U.S. dollars were outsourced, leading many corporations to develop core competencies that include the ability to manage this chain of product and or service supply (Merrifield, 2006). Companies with supply chain disruptions experience shareholder value declines in the ranges of 51% in process, 42% in retail and 27% in the high tech industries. Associated incomes in the large business sector are reported to drop as much as 86% when the supply chain continues to malfunction (Blanchard, 2007).

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Best practices are viewed as a systematic approach to improving performance and competitiveness through operating targets that are based on best practices found in the industry (Camp, 1989). Human Performance Technology (HPT) is an approach for studying and measuring human behavior and the environmental impact on behavior (Gilbert, 1996). This is contrary to popular improvement approaches and techniques based solely on interventions of rewarding expected behavior. HPT is focused on the human contribution to performance (Gilley & Maycunich, 2000).

Literature Review

Supply chain management "represents the philosophy of managing technology and processes in such a way that the enterprise optimizes the delivery of goods, services and information" (Gartner, 2000, p. 1). Supply chain management has increasingly become a strategic necessity for corporations. In recent years the validity and necessity of a robust and effective supply chain methodology has become evident with announcements of major schedule delays by aerospace companies due to unknown and unforeseen supplier and internal inefficiencies and unacceptable performance. All leverage and cost gains are being lost in alternate work strategies driven by schedule delays and the demands of customers or consideration. Interest in any and all performance improvement techniques and methodologies to address these performance and oversight issues are being pursued.

Background of Supply Chain Management

Supply chain management has roots in the focus on lean and efficient manufacturing. These lean efficiencies were driven by corporations initiating cost saving changes to the business process. Supply chain management is seen as a process-driven approach to streamlining the business (Henderson, 2008). High-tech industries streamline by moving facilities closer to the customer, automotive manufactures developed just-in-time delivery, while the consumer industry achieves supply chain efficiencies through demand driven networking, (Henderson, 2008).

Pope (2008) sums up the current plight in the industry stating that, Never before has there been a greater need to become more agile and responsive to customers that are demanding more variety and increased quality, delivered with less waste and in shorter lead times. Combine the current financial climate with the resulting uncertainty and caution that this creates in the marketplace, adding the unrelenting pressure from overseas competition. (p.36).

Trends in Supply Chain Management

For the last three decades, supply chain related strategies have been on the increase in aerospace companies. While methods and procurement strategies for outsourcing non-core competencies have increased and improved procurement strategies, this has not been paralleled in supply chain management. Improving the performance of the supply chain requires that the organization increase its sphere of influence over the functions along the supply chain (Lapide, 2006).

Critical Concepts in Supply Chain Management

The goal of supply chain management is improving or maximizing an organizations effectiveness, timeliness, cycle-time and quality. These overarching measures when managed correctly contribute to a corporation's competitive advantage (Bay, et al., 2004; Drake & Schlachter, 2007). Each corporation's supply chain must be responsive and efficient as indicated by these measure (Hugos, 2006). The supply chain typically includes the functions or organizations of: planning, supplier management, operations, logistics and material control.

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Supply Chain Management in the Firm

The firm's supply chain model included all of the elements noted above and explained below:

Planning-is the process that analyzes demand and supply, developing actions to meet the best procurement, production and delivery requirements.

Supplier Management-more commonly known as procurement, are those processes used to procure goods and services to meet planned or emergent demand.

Operations-specifically the roles involving producing a product whether through purchased or on-site manufactured parts to satisfy planned and emergent demands.

Logistics-includes delivery of product to production and/or final delivery to the customer. It also includes the return process from the customer, production, and inventory stores.

Material Control-includes those activities which involve storing and internal movement of parts, material and finished goods.

The research study explores these functional areas to determine how best practices could be systematically identified and validated and what specific practices were being used in these areas that could be described as "best practice." The five areas described above; planning, supplier management, operations, logistics and material control, are described as "performance drivers that can be managed to produce the capabilities needed for a given supply chain" (Hugos, 2006, p. 10). Key to successfully managing these drivers is identifying and replicating successful best practices in each of these functional areas.

Purpose of the Study

The goal of this study is to examine practices in supply chain management in a real life context with specific interest in the perspective of job performers in the functions related to supply chain management. The study will identify best practices and documented how best practices are identified and validated and to provide procedural and policy recommendations. This is an empirical case study that, through the theoretical perspective of human performance technology described the real-world experiences of an aerospace companies engaged in supply chain management activities, focused on identifying supply chain management best practices and determined to what extent practices used by the firm were best practices.

Research Questions

The goal of the study is to identify similar best practices that are used across the various operating locations in a diversified firm for supply chain management. Contributions of this research will include improving data, resources, and motivation as well as providing a foundation for future research into causal relationships or predictive measures and processes. The specific research questions addressed in the current study were

How can best practices in supply chain management be systematically identified and validated?

To what extent are the practices used by the firm in the Supply Chain Management Organization "best practices"?

An empirical case study will be used to examine the research questions and to describe the real world experiences of a diversified firm engaged in supply chain management. The focus of the study is to define and then identify SCM best practices in the firm using the theoretical perspective of human performance technology.


The purpose of the case study research strategy is to describe best practices in supply chain management. In this qualitative case study the researcher will describe the perceptions of subject matter experts and employees in their functional roles. Data will be collected for this study using extant data analysis, interviews and observations of a firm's facility locations.

The analysis and synthesis will be conducted on the information collected to generate conclusions and recommendations about best practice use and identification in supply chain management. The literature review will expose a limited amount of data and information both internally and externally concerning best practices in supply chain management. It is anticipated that the findings would be relevant to the supplier management organizations in general, and specifically to the firm and the field of Training & Performance Improvement.

Research Sample

The research study will be conducted using purposeful sampling design which is described as "a strategy in which particular settings, persons, or events are selected deliberately in order to provide important information that cannot be gotten from other choices" (Maxwell, 1996, p. 70). The research study will explore job performer's perceptions of best practices in the supply chain management organization. Subject matter experts in this organization are chosen as the participants in the study. Subject matter experts are defined as those who meet the following criteria:

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A minimum of 5 years of experience in their current functional position.

Are recognized by the company as senior, or expert in their area as designated by the classification of "level 4" or higher as indicated by the company's job classification system.

Considered the Process Owner or identified by the process owner for the process under review.

A letter of introduction will be distributed to the potential candidates via intra-company e-mail. For those that respond favorably, a consent form will also be distributed. Confidentiality shall be maintained by the researcher through various methods including removal of any and all personally identifying identification through coding of information and expurgation from documentation.