Supply Chain Management
Supply Chain Management
Supply Chain Management
a r t i c l e i n f o a b s t r a c t
Article history: In a 2000 article in Industrial Marketing Management, “Issues in Supply Chain Management,” Lambert and Cooper
Received 23 August 2016 presented a framework for Supply Chain Management (SCM) as well as issues related to how it should be imple-
Received in revised form 12 October 2016 mented and directions for future research. The framework was comprised of eight cross-functional, cross-firm
Accepted 1 December 2016
business processes that could be used as a new way to manage relationships with suppliers and customers. It
Available online xxxx
was based on research conducted by a team of academic researchers working with a group of executives from
non-competing firms that had been meeting regularly since 1992 with the objective of improving SCM theory
and practice. The research has continued for the past 16 years and now covers a total of 25 years. In this paper,
we review the progress that has been made in the development and implementation of the proposed SCM frame-
work since 2000 and identify opportunities for further research.
© 2016 Published by Elsevier Inc.
1. Introduction (now part of The American Production and Inventory Control Society),
and the SCM framework described by Lambert and Cooper (2000).
In this journal in 2000, a Supply Chain Management (SCM) frame- While many areas for research still exist, the research team led by
work was presented as a new business model and a way to create com- the first author of the 2000 article has addressed many of the research
petitive advantage by strategically managing relationships with key questions raised in that article. The results of 16 years of research devot-
customers and suppliers (Lambert & Cooper, 2000). It was based on ed to further development of the framework have been reported in a
the idea that organizations do not compete as solely autonomous enti- total of 30 publications including two books, one in the fourth edition.
ties but as members of a network of companies (Anderson, Our purpose in this article is to summarize the progress made, describe
Hakansson, & Johanson, 1994). In fact, it is common that companies pur- how managers can benefit from using the framework and identify op-
chase from many of the same suppliers and sell to the same customers, portunities for further research. In the next section, we provide a sum-
so the organizations that win more often are those that best manage mary of the contributions to SCM made by Lambert and Cooper
these relationships. In order to successfully manage key relationships (2000). This is followed by a description of the research priorities that
across a network of companies, the authors proposed a framework com- the executive members identified since the early days of the research
prised of eight cross-functional, cross-firm processes. Implementation center1 and a timeline of the publications that resulted from the re-
of the processes requires the involvement of all business functions. search. Then, the methodologies used to refine and extend the original
Sixteen years have gone by since the 2000 SCM article in Industrial SCM framework since 2000 are described. Next, we provide the re-
Marketing Management and the terms supply chain and SCM have be- search findings including: an updated definition of SCM; an evaluation
come common in the corporate world and in academic research of the premise that the new basis for competition is supply chain vs.
(Varoutsa & Scapens, 2015). However, there is still not a consensus supply chain; an explanation of why supply chain management is
view of what SCM involves or how it should be implemented (Vallet- about relationship management; a description of two tools that can be
Bellmunt, Martínez-Fernández, & Capó-Vicedo, 2011). Given the used to structure key supply chain relationships; an overview of supply
number of university programs devoted to SCM (many with specialized chain mapping; and, a summary of changes to the original supply chain
research centers on the topic), it is startling there are only two cross- framework described in the 2000 article. This is followed by a section on
functional, cross-firm, process-based frameworks that can be, and the SCM framework in 2016 which includes: a description of the current
have been, implemented in major corporations (Lambert, García- state of the SCM framework; revised process descriptions and figures;
Dastugue, & Croxton, 2005): The Supply Chain Operations Reference guidelines for implementing the SCM processes; findings on value co-
(SCOR) model developed and endorsed by the Supply-Chain Council
1
The research center involves executives from non-competing firms and academics
⁎ Corresponding author. who have been meeting regularly since 1992 with the objective of improving SCM theory
E-mail address: [email protected] (D.M. Lambert). and practice.
http://dx.doi.org/10.1016/j.indmarman.2016.12.002
0019-8501/© 2016 Published by Elsevier Inc.
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
2 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
creation; an explanation of how SCM process performance affects EVA; products, services and information that add value for customers
a description of process assessment tools; and, an updated list of man- and other stakeholders” (Lambert & Cooper, 2000, p. 66).
agement components. Then, the SCM framework is compared with
the Supply Chain Operating Reference (SCOR) model. The paper ends The research conducted with the member companies combined
with opportunities for future research and conclusions. with concepts from the marketing channels literature led to a “concep-
tual framework of supply chain management” (Lambert & Cooper, 2000,
2. The supply chain management framework in 2000 p. 69) that described three major interrelated steps that needed to be
designed and implemented in order to successfully manage a supply
The original article (Lambert & Cooper, 2000) described the out- chain. The first step consisted of identifying the key supply chain mem-
comes of empirical research conducted by a team of academics and ex- bers with whom to link processes.
ecutives who met regularly since 1992 with the goal of developing a The second step consisted of determining what processes needed to
normative SCM framework. The contributions of the article included: be implemented with each of the key supply chain members. In order to
1) a clarification in terminology regarding the differences between lo- successfully achieve cross-firm process integration, the development of
gistics (an organizational function) and SCM (the management of a net- standard supply chain processes was considered necessary because
work of companies); 2) a definition of SCM that focused on the communication problems may occur when firms have different number
integration of eight macro business processes across firms; 3) a require- of processes, different process definitions or different activities included
ment that the eight SCM processes are managed by cross-functional within each process (Lambert & Cooper, 2000; Piercy, 2009). The eight
teams that involve all key business functions; 4) a recognition of the im- key SCM processes identified by the research team are shown in Fig. 1,
portance of managing business relationships within a complex network which comes from the 2000 article and provides a simplified represen-
of companies; 5) a description of methods for mapping the supply chain tation of the eight key SCM processes cutting across functional and in-
network structure and for identifying the supply chain members with tercompany silos.
whom key business processes should be linked (i.e., customer and The third step was to determine the right level of integration and
supplier segmentation); 6) a description of the eight key SCM management to be applied to each process link. The research team iden-
processes that need to be implemented; 7) an explanation of nine tified nine management components that should be considered when
management components to manage each process; 8) a list of implementing the processes. The level of integration of a supply chain
recommendations for implementation; and, 9) a summary of directions process link could be adjusted by increasing or decreasing the number
for future research. and intensity of the components implemented in that link.
The predominant definitions of SCM that existed at the time the Lambert and Cooper (2000, p. 65) stated that: “Thus far, there has
research center began in 1992 resembled the contemporary under- been little guidance from academia, which in general has been following,
standing of logistics management. The nature of logistics and SCM rather than leading, business practice.” In an effort to keep the SCM
as functional silos within companies remained unchallenged, framework relevant for the business community and academics, all of
which created confusion for managers and academics. For many, the elements described in this section have been improved upon or ex-
this confusion continues to exist (Hingley, Lindgreen, & Grant, tended since its publication in Industrial Marketing Management in 2000.
2015). Also, the complexity required to manage all suppliers back In order to reflect these changes, the definition of SCM was updated, the
to the point of origin and all intermediaries to the point of consump- eight key SCM processes were developed in detail (one article was devot-
tion by a single function made the popular definitions of SCM unreal- ed to each process) and complemented with detailed implementation
istic and impracticable at a minimum. The following definition of guidelines and tools. Also, the management components were updated.
SCM, developed with input from the members of the research center, These changes are described in the following sections of this paper.
changed the focus from a functional orientation to one that empha-
sized the management of business processes across companies to 3. Supply chain management research priorities and publications,
create a competitive advantage. 1992 to 2016
“Supply chain management is the integration of key business pro- On April 23 and 24, 1992, executives from six companies met with
cesses from end user through original suppliers that provides the lead author to begin a research center. There were a number of
Fig. 1. The supply chain management framework in 2000 (Source: Lambert & Cooper, 2000).
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 3
things that made this research center unique at the time, but the two interview guide was used to structure interviews with multiple indi-
most significant were that the members would be executives from viduals on each side of each relationship.
non-competing companies and the executives would determine the re- A case report was developed on each relationship and the members
search agenda. Each company would contribute $20,000 per year and involved were given a copy to discuss within their organizations. It was
two people from each company could attend the meetings. The mission decided that some of these relationships were not partnerships even
was to provide the opportunity for leading practitioners and academics though they were win-win business relationships. It was also recog-
to pursue the critical issues related to achieving excellence in SCM. nized that when relationships were partnerships they were not all the
Membership consisted of representatives of firms recognized as indus- same: there were degrees of partnering. In 1996, the Partnership
try leaders. Balance was maintained both as to the nature of the firms Model, a tool that can be used to determine when a partnership is ap-
and the expertise of their representatives, and the membership was propriate and to structure a relationship to meet the expectations of
targeted at 12 to 15 firms in order to preserve the intimacy provided both parties was published (Lambert, Emmelhainz, & Gardner, 1996a,
by the smaller size. 1996b).
Fig. 2 provides a timeline of the topics addressed by the research Since 1996, the Partnership Model has been used to structure, in a
team and the publications that resulted. The first research project one and one-half day meeting, more than 100 relationships including
funded by the companies was on the topic of partnerships (see Fig. complex relationships such as the one between The Coca-Cola Company
2 and Table 1). The executives were unanimous in their belief that and Cargill and less complex ones such as Wendy's and Tyson Foods
this should be the first research project because the long-term suc- (Lambert & Knemeyer, 2004). An article was published describing a
cess of their organizations would depend on the ability to collaborate partnership between Whirlpool Corporation and ERX, a third-party lo-
with key customers and suppliers, and their companies were not gistics provider (Lambert, Emmelhainz, & Gardner, 1999), and another
good at this. They gave examples of relationships that were called describing 20 relationships that were used to validate the model
partnerships and where there was a great deal of excitement in the (Lambert, Knemeyer, & Gardner, 2004).
beginning but, as one executive explained, “most of these relation- In 1995, with the partnership research coming to completion, effort
ships turned out to be bad marriages that ended in divorce.” The was directed at identifying the next research project and two topics
members identified 18 relationships that were considered to be emerged: measuring and selling value, and SCM. The managers wanted
good partnerships. They believed that if we studied these relation- to focus on the development of a framework to assist them in coordinat-
ships, we would learn what made them successful so they could ing activities across corporate functions and with other key members of
build more relationships like these and have fewer relationships the supply chain. They viewed SCM as a way to achieve a competitive
that failed to meet expectations. Unlike previous partnership re- advantage through the implementation of cross-functional processes
search which was based on surveys to a single informant on one which would achieve the necessary coordination. In 1995, it was decid-
side of the relationship, a multiple case study approach was used in ed that an executive seminar as well as teaching materials needed to be
order to increase the robustness and the managerial meaningfulness developed and the first seminar was offered at the Marriott Sawgrass
of the findings (Baba, 1988; Eisenhardt, 1989). A 45 question Resort in February of 1996. The seminar was structured based on the
to Co-Create Value
31 IMM 2012
32 JMM 2012
34 JBL 2015
35 SCQ 2015
Fig. 2. Research streams that comprise the 2016 supply chain management framework. Note: encircled numbers refer to the citations shown in Table 1 and arrows show how research
areas are connected.
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
4 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
Table 1
Literature published during 25 years of research on partnerships and the supply chain management framework. Note: The numbers shown in the first column reflect the encircled
numbers shown in Fig. 2.
No. Reference
1 Lambert, D. M., Emmelhainz, M. A., & Gardner, J. T. (1996). So You Think You Want a Partner? Marketing Management, 5, 2, 24–41.
2 Lambert, D. M., Emmelhainz, M. A., & Gardner, J. T. (1996a). Developing and Implementing Supply Chain Partnerships. The International Journal of Logistics Management, 7,
2 1–17.
3 Cooper, M. C., Lambert, D. M., & Pagh, J. D. (1997). Supply Chain Management: More Than a New Name for Logistics. The International Journal or Logistics Management, 8, 1,
1–14.
4 Lambert, D. M., Cooper, M. C., & Pagh, J. D. (1998) Supply Chain Management: Implementation Issues and Research Opportunities. The International Journal of Logistics
Management, 9, 2, 1–19.
5 Lambert, D. M., Emmelhainz, M. A., & Gardner, J. T. (1999). Building Successful Logistics Partnerships. Journal of Business Logistics, 20, 1, 165–181.
6 Lambert, D. M., & Cooper, M. C. (2000). Issues in Supply Chain Management. Industrial Marketing Management, 29, 1, 65–83.
7 Lambert, D. M., & Burduroglu, R. (2000). Measuring and Selling the Value of Logistics. The International Journal of Logistics Management, 11, 1, 1–17.
8 Lambert, D. M., & Pohlen, T. L. (2001). Supply Chain Metrics. The International Journal of Logistics Management, 12, 1, 1–19.
9 Croxton K. L., García-Dastugue, S. J., Lambert, D. M., & Rogers, D. S. (2001). The Supply Chain Management Processes. The International Journal of Logistics Management, 12,
2, 13–36.
10 Lambert, D. M. (2001). Supply Chain Management: What Does it Involve? Supply Chain and Logistics Journal, 4, 4, 1–25.
11 Rogers, D. S., Lambert, D. M., Croxton, K. L., & García-Dastugue, S. J. (2002). The Returns Management Process. The International Journal of Logistics Management, 13, 2, 1–18.
12 Croxton, K. L., Lambert, D. M., García-Dastugue, S. J., & Rogers, D. S. (2002). The Demand Management Process. The International Journal of Logistics Management, 13, 2,
51–66.
13 Croxton, K. L. (2003). The Order Fulfillment Process. The International Journal of Logistics Management, 14, 1, 19–32.
14 Bolumole, Y. A., Knemeyer, A. M., & Lambert, D. M. (2003). The Customer Service Management Process. The International Journal of Logistics Management, 14, 2, 15–31.
15 Goldsby, T. J., & García-Dastugue, S. J. (2003). The Manufacturing Flow Management Process. The International Journal of Logistics Management, 12, 2, 33–52.
16 García-Dastugue, S. J., & Lambert, D. M. (2003). Internet-enabled Coordination in the Supply Chain. Industrial Marketing Management, 32, 3, 251–263.
17 Rogers, D. S., Lambert, D. M., & Knemeyer, A. M. (2004). The Product Development and Commercialization Process. The International Journal of Logistics Management, 15, 1,
43–56.
18 Lambert, D. M. (2004). The Eight Essential Supply Chain Management Processes. Supply Chain Management Review, 8, 6, 18–26
19 Lambert, D. M. (2004). Supply Chain Management: Processes, Partnerships, Performance. Sarasota, FL: Supply Chain Management Institute.
20 Lambert, D. M., Knemeyer, A. M. & Gardner, J. T. (2004). Supply Chain Partnerships: Model Validation and Implementation. Journal of Business Logistics, 25, 2, 21–42.
21 Lambert, D. M., & Knemeyer, A. M. (2004). We're In This Together. Harvard Business Review, 82, 12, 114–122.
22 Lambert, D. M., García-Dastugue, S. J., & Croxton, K. L. (2005). An Evaluation of Process-Oriented Supply Chain Management Frameworks. Journal of Business Logistics, 26, 1,
25–54.
23 Lambert, D. M., & García-Dastugue, S. J. (2006). Cross-Functional Processes for the Implementation of Service-Dominant Logic. In R. F. Lusch & S. L. Vargo, (Eds.), The
Service-Dominant Logic of Marketing: Dialog, Debate and Directions. M.E. Sharpe Publishers, 150–165.
24 Lambert, D. M. (2006). Supply Chain Management: Processes, Partnerships, Performance (2nd ed.). Sarasota, FL: Supply Chain Management Institute.
25 García-Dastugue, S. J., & Lambert, D. M. (2007). Interorganizational Time-Based Postponent in the Supply Chain. Journal of Business Logistics, 28, 1, 57–81.
26 Lambert, D. M. (2008). Supply Chain Management: Processes, Partnerships, Performance (3rd ed.). Sarasota, FL: Supply Chain Management Institute.
27 Lambert, D. M., García-Dastugue, J. M., & Croxton, K. L. (2008). The Role of Logistics Managers in the Cross-functional Implementation of Supply Chain Management.
Journal of Business Logistics, 29, 1, 113–132.
28 Lambert, D. M. (2010). Customer Relationship Management as a Business Process. Journal of Business and Industrial Marketing, 25, 1, 4–17.
29 Lambert D. M, Knemeyer A. M., & Gardner, J. T. (2010). Building High Performance Business Relationships. Sarasota, FL: Supply Chain Management Institute.
30 Lambert, D. M., & Schwieterman, M. A. (2012). Supplier Relationship Management as a Macro Business Process. Supply Chain Management: An International Journal, 17,
3337–352.
31 Enz, M. G., & Lambert D. M. (2012). Using Cross-functional, Cross-firm Teams to Co-create Value: The Role of Financial Measures. Industrial Marketing Management, 41, 3,
495–507.
32 Lambert, D. M., & Enz, M. G. (2012). Managing and Measuring Value Co-creation in Business-to-Business Relationships. Journal of Marketing Management, 28, 13–14,
1588–1625.
33 Lambert, D. M. (2014). Supply Chain Management: Processes, Partnerships, Performance (4th ed.). Sarasota, FL: Supply Chain Management Institute.
34 Enz, M. G., & Lambert, D. M. (2015). Measuring the Financial Benefits of Cross-Functional Integration Influences Management's Behavior. Journal of Business Logistics, 36,1,
25–48.
35 Lambert, D. M., & Enz, M. G. (2015). Co-creating Value: The Next Level in Customer-supplier Relationships. CSCMP's Supply Chain Quarterly, 9, 3, 22–28.
SCM framework which at the time included seven processes. An eighth formed the links in the chain. Performance at each link would be
process, returns management, was added prior to the second seminar measured as the impact of the relationship on each organization's in-
held in April 1997. The framework and a definition of SCM were pub- cremental profitability. Also in 2001, an article was published that
lished in 1997 (Cooper, Lambert, & Pagh, 1997) based on the contents described the strategic and operational sub-processes for each of
of the seminars and research (See Fig. 2 and Table 1). The framework the eight SCM processes (Croxton, García-Dastugue, Lambert, &
was further developed as the research continued and follow-up articles Rogers, 2001).
were published in 1998 (Lambert, Cooper, & Pagh, 1998) and 2000 Publications based on our continuing research provided details on
(Lambert & Cooper, 2000). Also, an article summarizing the research each process: the returns management process (Rogers, Lambert,
on measuring and selling value was published (Lambert & Burduroglu, Croxton, & García-Dastugue, 2002), the demand management process
2000). (Croxton, Lambert, García-Dastugue, & Rogers, 2002), the order fulfill-
In 2000, an MBA course on SCM based on the framework was of- ment process (Croxton, 2003), the customer service management pro-
fered for the first time at The Ohio State University. In 2001, an article cess (Bolumole, Knemeyer, & Lambert, 2003), the manufacturing flow
was published on supply chain metrics research (Lambert & Pohlen, management process (Goldsby & García-Dastugue, 2003), the product
2001) in which process performance was tied to EVA® (Economic development and commercialization process (Rogers, Lambert, &
Value Added) and it was concluded that there were no end-to-end fi- Knemeyer, 2004), the customer relationship management process,
nancial measures possible for the entire supply chain. Rather, SCM (Lambert, 2004, 2010), and the supplier relationship management pro-
was really about relationship management, and the customer rela- cess (Lambert, 2004; Lambert & Schwieterman, 2012). In 2004, the first
tionship management process of the seller organization and the sup- edition of Supply Chain Management: Processes, Partnerships, Perfor-
plier relationship management process of the customer organization mance (Lambert, 2004) was published.
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 5
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
6 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
Fig. 3. Typically competitors buy from the same suppliers and sell to the same customers (Source: Lambert, 2014).
management and the Partnership Model provides a structure for devel- the relationship. Align expectations involves mutually establishing
oping key relationships. The Partnership Model separates the drivers, goals for the relationship based on the two organizations presenting
the facilitators, the components and the outcomes of partnership into their firm's drivers to each other and deciding what can be accepted
four separate areas for attention. Drivers are the compelling reasons to as joint goals. Develop action plan includes prioritizing initiatives,
partner and must be assessed independently by each organization in assigning responsibilities, establishing time lines, and agreeing on the
order to arrive at a common vision of the business benefits associated appropriate metrics. The PSA is a written summary of the rules of en-
with building more closeness into the relationship. Then, the managers gagement and the action plan. It is necessary to regularly review perfor-
from each organization present their drivers to the other organization in mance to ensure that each firm has achieved its drivers. The teams
order to set expectations. Facilitators are characteristics of the two firms should reexamine the drivers every 18 to 24 months.
that will help or hinder the partnership development process and they The collaboration meeting is a one-day session in which expecta-
are assessed by the two groups together. Drivers and facilitators deter- tions are set, action plans are developed, and responsibilities are
mine the potential for partnership: Type I, Type II or Type III (Lambert assigned. The meetings are enhanced by the presence of individuals
et al., 1996a). Components are the managerially controllable elements from multiple levels within the organizations who represent diverse
that should be implemented at a prescribed level depending on the functional expertise. The make-up of the group sends a message to
type of partnership. Outcomes measure the extent to which each firm those in the other firm about the importance of the relationship. It is im-
achieves its drivers. portant to involve the highest-level executives possible. The more levels
Using the Partnership Model to tailor a relationship requires a one of management above the people in the meeting, the more difficult it
and one-half day session. The correct team from each firm must be iden- may be to achieve the commitments made. If key executives are not
tified and committed to a meeting time. These teams should include top present and significant resource commitments are being made, then
managers, middle managers, operations personnel and staff personnel. these executives should be briefed as soon as possible and their com-
A broad mix, both in terms of the management level and functional mitment obtained (Lambert & Enz, 2012).
expertise, is required in order to ensure that all perspectives are consid- As part of the ongoing research, we have developed tools and meth-
ered. The process is not about whether to have a business relationship; odologies for supply chain mapping (Lambert, 2014). As supply chain
it is about the style of the relationship. network structures become more complex and geographically dis-
The Collaboration Framework was developed in 2008 (first pub- persed, management can benefit from developing a relationship-based
lished in Lambert, Knemeyer, & Gardner, 2010) and is appropriate map of their company's supply chain (Holmen, Aune, & Pedersen,
when one of two conditions are met. First, the relationship is new and 2013). The visual representation and analysis of the complexities in a
individuals in the two organizations do not have enough information firm's direct and indirect supply chain relationships serves as a starting
about each other and/or their joint business opportunities to score the point for increasing the cross-functional and cross-firm communication
drivers and facilitators in a full partnership meeting, but significant po- that is necessary for implementation of the SCM processes (Henneberg,
tential from collaboration exists. Second, the two organizations have Naudé, & Mouzas, 2010). The mapping effort enables management to
significant joint business at stake and managers want to develop a identify the critical relationship linkages that must be closely managed
joint plan for the next 18 to 24 months. The Collaboration Framework and internal and external improvement opportunities. Also, the supply
provides a structure for developing and implementing product and ser- chain map can be used to support risk mitigation and sustainability
vice agreements (PSAs) with key customers and suppliers that are part goals. Once a relationship-based map is developed, a wide variety of ac-
of implementing the customer relationship management and supplier tivity-based mapping techniques can be used to identify and realize im-
relationship management processes. provement opportunities across the network of companies that
The Collaboration Framework is comprised of six activities: 1) assess constitute the supply chain (Lambert, 2014).
drivers for each company; 2) align expectations; 3) develop action A number of refinements also have been made to Fig. 1 from the
plans; 4) develop product and service agreement; 5) review perfor- Lambert and Cooper (2000) article. First, the arrowheads were dropped
mance; and, 6) reexamine drivers. Assess drivers requires that each from the chart because people interpreted this as arrows shooting
firm's representatives independently identify their business goals for through the corporate silos when what we meant to convey was that
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 7
the processes were focused on the customer (except returns which in- • Customer Service Management
dicated a reverse flow). While some processes such as demand manage- • Demand Management
ment may involve the firm, key customers and suppliers, the links in the • Order Fulfillment (referred to as Customer Order Fulfillment in
chain are formed by the customer relationship management process of Lambert & Cooper, 2000)
the seller organization and the supplier relationship management pro- • Manufacturing Flow Management
cess of the buyer organization. • Product Development and Commercialization
Second, two processes were renamed. The procurement process was • Returns Management (referred to as Returns in Lambert & Cooper,
changed to supplier relationship management and moved up under 2000)
customer relationship management in the figure. And, returns which
tends to be viewed as reverse logistics was renamed returns manage-
ment to reflect our broader conceptualization of the process. A brief description of each of the eight processes updated based on
Third, the term “consumer/end customer” was changed to “end cus- our research since 2000 follows.
tomer” in order to incorporate learnings from the service-dominant
logic of marketing (Vargo & Lusch, 2004, 2011), which states that 6.1. Customer relationship management
value is not consumed but co-created during the usage of the product
or service and the customer is a co-creator of value (See Fig. 4). Increasingly, Customer Relationship Management is being viewed as
In the next section, we describe the updated SCM framework. strategic, process-oriented, cross-functional, value-creating for buyer
and seller, and a means of achieving financial performance (Ehret,
6. The supply chain management framework in 2016 2004; Keramati, Mehrabi, & Mojir, 2010; Payne & Frow, 2006; Zablah,
Bellenger, & Johnston, 2005). The customer relationship management
In our research, executives believed that competitiveness and profit- process provides the structure for how relationships with customers
ability would increase if a firms' internal business functions were coor- will be developed and maintained (Lambert, 2004). Management iden-
dinated using business processes and managed across multiple tifies customer groups to be targeted as part of the firm's corporate and
companies. Thus, “corporate success requires a change from managing marketing strategies and determines how customers within each group
individual functions to integrating activities into supply chain manage- will be segmented. These decisions are made by the leadership team of
ment processes” (Blackstock, 2005). Several authors (e.g., Davenport, the enterprise and the owner of the strategic process should be the CEO.
1993; Hammer & Champy, 1993) have suggested implementing busi- The goal is to segment customers based on their value over time and in-
ness processes in the context of SCM, but there is not yet an “industry crease the loyalty of target customers by providing customized products
standard” for what these processes should be. The value of having stan- and services (Freytag & Højbjerg Clarke, 2001; Seibold, 2001). Partner-
dard business processes is that managers from organizations across the ships are developed with a small group of key customers. Cross-func-
supply chain can use a common language which facilitates linking their tional customer teams tailor Product and Service Agreements (PSAs)
firms' processes and IT systems with those of other members of the sup- to meet the needs of key accounts while achieving the firm's profit
ply chain. The processes shown in Fig. 4 were identified by Lambert and goals. For other customers, teams develop PSAs that provide value for
Cooper (2000) and each one has been described in detail in an article a segment of customers and meet the firm's profit goals. In this case,
based on the research conducted since 2000. The eight SCM processes the PSAs are not negotiable and are delivered by a salesperson to a
are: buyer. The PSAs specify levels of performance. The teams work with
key customers to improve processes and reduce non-value-added activ-
• Customer Relationship Management ities. Performance reports are designed to measure the profitability of
• Supplier Relationship Management (referred to as Procurement in individual customers as well as the firm's impact on the financial perfor-
Lambert & Cooper, 2000) mance of the customer (Lambert & Pohlen, 2001).
Fig. 4. The supply chain management framework in 2016 (Source: Lambert, 2014).
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
8 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
The supplier relationship management process provides the struc- Manufacturing flow management is the SCM process that includes
ture for how relationships with suppliers will be developed and main- all activities necessary to obtain, implement and manage flexibility in
tained (Lambert, 2004; Lambert & Schwieterman, 2012). As the name the supply chain and to move products into, through and out of the
suggests, this process is very similar to customer relationship manage- plants (Goldsby & García-Dastugue, 2003). A cross-functional team
ment. Suppliers are segmented based on their importance to the evaluates the current and desired flexibility of strategic resources such
company's long-term success. Just as a company needs to develop as manufacturing plants, suppliers, distribution channels, IT, and
close relationships with its key customers, it also needs to foster such re- human resources. Manufacturing flow planning and execution must ex-
lationships with its key suppliers (Forkmann, Henneberg, Naudé, & tend beyond the four walls of the manufacturer to other members of the
Mitrega, 2016; Gadde & Snehota, 2000). Close relationships are devel- supply chain. The most convenient decoupling points in the supply
oped with a small subset of suppliers based on the value that they pro- chain are determined considering the impact on customer service levels
vide to the organization over time, and more traditional relationships and total supply chain costs. Depending on the requirements of differ-
are maintained with the others. Cross-functional teams negotiate a ent customer segments, the implementation of more than one supply
PSA with each key supplier that defines the terms of the relationship. chain configuration might be necessary. For example, a lean supply
For each segment of less critical suppliers, a standard PSA is provided chain configuration, in which the focus is on efficiencies, waste elimina-
to the supplier salesperson by a buyer and it is not negotiable. Partner- tion and variability reduction is suitable for products with stable de-
ships are developed with a small core group of suppliers (Lambert & mand patterns (e.g., products that are manufactured in large volumes
Knemeyer, 2004). The desired outcome is a win-win relationship or that are in the maturity of their life cycles). An agile supply chain con-
where both parties benefit. figuration is focused on increasing responsiveness to uncertain demand,
reacting quickly to supply chain risks and implementing mass-custom-
6.3. Customer service management ization, SMED, and postponement techniques, which is desirable for
products with volatile demand patterns (e.g., innovative products and
Customer service management is the SCM process that deals with those that are in the early phases of their life cycles. At the operational
the administration of the PSAs developed by customer teams as part level, the production plans are developed and executed.
of the customer relationship management process (Bolumole et al.,
2003). Customer service managers monitor the PSAs and proactively in- 6.7. Product development and commercialization
tervene on the customer's behalf if they detect a risk that can interfere
with keeping the promises that have been made. This requires that trig- In many major corporations, the supply chain network is being
gers and signals be operationalized to identify and solve problems be- viewed as an enabler of innovations and their commercialization
fore they affect a customer. Customer service managers interface with (Aarikka-Stenroos, Sandberg, & Lehtimäki, 2014; Skippari, Laukkanen,
other process teams, such as supplier relationship management, & Salo, in press). Product development and commercialization is the
manufacturing flow management and order fulfillment to ensure that SCM process that provides the structure for developing and bringing
promises made in the PSA's are delivered as planned. to market products jointly with customers and suppliers (Rogers et al.,
2004). Effective implementation of the process not only enables man-
6.4. Demand management agement to coordinate the efficient flow of new products across the
supply chain, but assists other members of the supply chain with the
Demand management is the SCM process that balances the cus- ramp-up of manufacturing, logistics, marketing and other activities nec-
tomers' demand with the capabilities of the supply chain (Croxton et essary to support the commercialization of the product (Ostendorf,
al., 2002). With the right process in place, management can match sup- Mouzas, & Chakrabarti, 2014). The product development and commer-
ply with demand proactively and execute the plan with minimal disrup- cialization process team must coordinate with the customer relation-
tions. The process is not limited to forecasting. It includes synchronizing ship management process teams to identify customer articulated and
supply and demand, reducing variability and increasing flexibility. For unarticulated needs; select materials and suppliers in conjunction
example, it involves managing all of the organization's practices that in- with the supplier relationship management process teams; and, work
crease demand variability, such as end-of-quarter loading and terms of with the manufacturing flow management process team to develop
sale which encourage volume buys. The right amount of supply chain production technology or capabilities to manufacture and implement
flexibility should be developed in order to cope effectively with unex- the best product flow for the product/market combination.
pected supply or demand conditions. Marketing requirements and pro-
duction plans should be coordinated on an enterprise-wide basis. 6.8. Returns management
6.5. Order fulfillment Returns management is the SCM process by which activities associ-
ated with returns, reverse logistics, gatekeeping, and avoidance are
The order fulfillment process includes all activities necessary to de- managed within the firm and across key members of the supply chain
sign a network and enable a firm to meet customer requests while max- (Rogers et al., 2002). The correct implementation of this process enables
imizing its profitability (Croxton, 2003). In the case of global companies, management not only to make the reverse product flow efficient, but to
it is necessary at the strategic level to determine which countries should identify opportunities to reduce unwanted returns (avoidance) and to
be used to service the needs of various customers by evaluating consid- control reusable assets such as containers. While significant opportuni-
erations such as service requirements; labor, materials, transportation ties to reduce costs are possible through better management of reverse
and utilities costs; tax rates and where profits should be earned to legal- logistics, even greater potential to reduce costs and increase revenue are
ly minimize tax liability; and, import and export regulations. While possible by avoiding management practices (e.g., end-of-quarter load-
much of the actual work at the operational level will be performed by ing of customers, product freshness issues and returns policies that are
the logistics function, at the strategic level the process needs to be de- too liberal) and performance failures (e.g., quality problems, order pick-
signed cross-functionally and with input from key suppliers and cus- ing errors and product damaged in transit) that cause returns. There are
tomers. The objective is to develop a seamless process from the many types of returns that need to be managed within this process in-
various customer segments to the organization and then on to its cluding: customer returns, marketing returns, asset returns, product re-
suppliers. calls, damage returns, material reclamation returns and environmental
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 9
Fig. 5. CRM and SRM form the links in the supply chain (Source: Lambert, 2014).
returns (for a description of each type of return see Lambert, 2014, pp. Each process team is comprised of managers from all business func-
162–165). tions, including: marketing, sales, finance, production, purchasing, lo-
Supply chain management is about relationship management and gistics and, research and development. The functions included in Fig. 4
the supply chain is managed link by link. The Customer Relationship are not meant to be all-inclusive, they represent the typical business
Management (CRM) and Supplier Relationship Management (SRM) functions. If there is any activity with a vice president in charge, some-
processes form the links in the supply chain and the other processes one from that organization should be included on each cross-functional
are implemented through that CRM and SRM linkage (see Fig. 5). team. For example, in the chemical industry, there may be a vice presi-
In the individual articles describing each of the eight processes, de- dent responsible for environmental health and safety. At Sainbury's, the
tailed descriptions are provided for the strategic and operational sub- UK retailer with over 1300 locations, there is a person with director (i.e.,
processes which can be used to guide academics in research and execu- vice president) responsibility leading the “20-by-20 plan”, a corporate
tives in implementation. As an example, the strategic and operational sustainability program. Such organizational functions should be includ-
sub-processes of the CRM process and the connections to other SCM ed on each cross-functional team to ensure that their perspectives and
processes are shown in Fig. 6. The strategic sub-processes provide the concerns are considered. Teams are responsible for developing the pro-
structure for how the process will be implemented and the operational cedures at the strategic level and for managing implementation at the
sub-processes provide the specific steps for execution of the day-to-day operational level.
activities. Fig. 6 identifies the interfaces between CRM and the other The research on value co-creation was designed to evaluate the im-
seven processes. Interfaces with each of the business functions are ac- portance of using cross-functional teams for managing key supply chain
complished by each function being represented on the cross-functional relationships and to explore how managers change how they make de-
business team. cisions when they are provided with financial measurements of the
Fig. 6. The customer relationship management strategic and operational sub-processes and connections to other SCM processes (Source: Lambert, 2014).
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
10 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
value co-created with a customer or a supplier (Enz & Lambert, 2015). have been tracked over the years (Lambert & Enz, 2015b). After five
Value co-creation takes place through mutually beneficial interactions years, in 2016, the profit improvements before taxes for the two compa-
across actors within business networks (Kohtamäki & Rajala, 2016). nies exceeded $40 million.
Our findings indicated that the collaborative initiatives conducted with- As an outcome of our research on supply chain metrics (Lambert &
in cross-functional relationships led to higher profit contribution than Pohlen, 2001), we determined that the performance of each process
relationships managed with a traditional salesperson-to-buyer ap- should be measured in terms of the impact on EVA®. “EVA is arguably
proach. In an example, with two suppliers from whom a similar volume the purest metric for determining a company's effectiveness in turning
of purchases was made, a customer interacted cross-functionally with one dollar of input (capital) into a dollar of output (profits)”
one of the suppliers and the benefit was a profit improvement of (Cendrowski, 2013). Fig. 7 shows how the customer relationship man-
$25.9 million from their joint initiatives. In the other relationship, agement process can affect the firm's financial performance as mea-
where only the salesperson and the buyer interacted, the profit im- sured by EVA®. It illustrates how customer relationship management
provement was $0.4 million (Enz & Lambert, 2012). The findings can impact sales, cost of goods sold, total expenses, inventory invest-
convinced management of the importance of cross-functional ment, other current assets, and the investment in fixed assets. For exam-
involvement, value co-creation and measuring relationship profitability ple, customer relationship management can lead to higher sales volume
in a holistic way. The relationships described in the example were mon- as a result of strengthening relationships with profitable customers,
itored for the next six years, and we found that purchases from the sup- selling higher margin products, increasing the firm's share of the
plier with no cross-functional involvement had been reduced by more customer's expenditures for the products/services sold, and/or improv-
than 90% and the volume was transferred to other suppliers where ing the mix, that is, aligning services and the costs to serve (Keramati et
management had “the willingness and capability to think in terms of al., 2010). A similar figure was developed for each of the eight SCM pro-
value co-creation and work in cross-functional teams” (Enz & cesses to illustrate how the process affects EVA®.
Lambert, 2012, p. 506). Management should implement processes that increase the profit-
Based on the experience described above, management of the cus- ability of the supply chain, not just the profitability of a single firm.
tomer firm decided to issue a request for proposal (RFP) for distribution Key supply chain members should share equitably in the risks and the
to its restaurants and included potential to co-create value as a decision rewards. If the management team of a firm makes a decision that posi-
criterion. After the bidding process was complete, management selected tively affects that firm's EVA® at the expense of the EVA® of customers
four finalists and each one would save money over the current multi- or suppliers, every effort should be made to share the benefits in a man-
distributor network. Two firms were cheaper than the one selected, ner that improves the financial performance of each firm involved and
and the cost premium over the distributor that quoted the lowest thus give each one an incentive to improve overall supply chain
price was $2.7 million. The restaurant chain's management believed performance.
that the $2.7 million would be offset by working with the distributor For each of the eight SCM processes, an assessment tool was devel-
to co-create value. Six months after the contract was awarded little oped to help managers with implementation (Lambert, 2006). Comple-
progress was being made in terms of value co-creation. Therefore, the tion of an assessment enables management to achieve consensus
Collaboration Framework was used to identify joint initiatives on among managers from different functions about the performance and
which to collaborate. During the first full year after the day-long collab- importance of specific activities, to identify opportunities to improve
oration meeting, cross-functional, cross-firm teams were deployed to performance, to prioritize improvement opportunities, and to develop
work on the initiatives and the combined before taxes profit impact corrective actions. The assessment requires broad cross-functional in-
was $4,365,799, of which the restaurant company received $3,334,390 volvement as well as participants from different levels of the organiza-
and the distributor received $1,031,409. The value co-creation results tion. The assessment tool, which is comprised of questions related to
Fig. 7. How customer relationship management affects Economic Value Added, EVA® (Source: Lambert, 2014).
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 11
each activity included in the strategic and operational sub-processes, is 7.1. The supply-chain operations reference (SCOR®) framework
completed by each participant individually (for more information on
the assessment tools and a chapter devoted to conducting the assess- In 1996, the Supply-Chain Council (SCC), a nonprofit organization
ments, see Lambert, 2014). For each of the items in the assessment founded by Pittiglio, Rabin, Todd & McGrath (PRTM), a consulting com-
tool, respondents choose a score from 1 to 5 for the description that pany, and AMR Research began work on the SCOR® model (Supply-
best represents the company's current situation. Also, the perceived im- Chain Council, 1996). Initially, SCOR® included four business processes:
portance of each item is evaluated on a scale from 1 to 3. The tool in- plan, source, make, and deliver, to be implemented within the firm and
cludes a ‘Don't know’ option in case the respondent is not familiar eventually connected across firms in the supply chain. Return, the fifth
with the topic of the question, and space to write a brief justification process, was added in 2001 (Supply-Chain Council, 2001). In 2012, a
for the respondent's choice. The individual assessments are summarized sixth process, enable, was added to SCOR®. The SCOR® framework
and a four-hour consensus-building meeting is conducted in order to has four components: processes, performance metrics, practices, and
have the team agree on a score for each item and its importance. The people. The six SCOR® processes are (Bolstorff & Rosenbaum, 2007;
main benefit is the discussion that occurs among participants with dif- Supply-Chain Council, 2012) (see Fig. 9):
ferent organizational backgrounds. Once the meeting is over, the con-
sensus scores, importance scores and any relevant ideas discussed • Plan: includes the gathering of requirements, gathering of information
during the meeting are summarized with action items and priorities. on available resources, balancing requirements and resources to de-
The management components described by Lambert and Cooper termine planned capabilities and gaps in demand or resources, and
(2000) were updated as the research team learned about the factors identifying actions to correct these gaps.
that determine the successful integration of the supply chain processes • Source: includes the issuance of purchase orders, scheduling deliver-
within a firm and across firms. The “physical and technical management ies, receiving, validation and storage of goods, and accepting the in-
components” were renamed “structural management components” and voice from the supplier.
the “managerial and behavioral management components” were • Make: describes the activities associated with the conversion of mate-
renamed “behavioral management components.” In structural manage- rials or the creation of the content for services.
ment components, the planning and control methods were separated • Deliver: describes the activities associated with the creation, mainte-
into a planning component and a control methods component to nance and fulfillment of customer orders, including the receipt, vali-
more properly reflect the importance of these two categories. Commu- dation and creation of customer orders, scheduling order delivery,
nication and information flow facility structure was broken into two pick, pack and shipment, and invoicing the customer.
categories: knowledge management and communication structure. It • Return: describes the activities associated with the reverse flow of
was decided that product flow facility structure was not a management goods, including the identification of the need to return, the disposi-
component, and trust and commitment was added as a behavioral man- tion decision making, the scheduling of the return, and the shipment
agement component (Lambert, 2014). Fig. 8 shows the updated list of and receipt of the returned goods.
supply chain management components. • Enable: describes the activities associated with the management of
the supply chain, including management of business rules,
performance management, data management, resource manage-
7. Comparing the supply chain management framework and the ment, facilities management, contract management, supply chain
supply chain operating reference (SCOR) model network management, managing regulatory compliance and risk
management.
As pointed in the introduction to this article, only two cross-func-
tional, cross-firm, process-based SCM frameworks exist: The SCM
framework (Lambert & Cooper, 2000) and The Supply Chain Operations For each of these level-1 processes, three or more differentiating
Reference (SCOR) model. First, we will describe the SCOR model and level-2 process categorizations are defined. Each level-2 process con-
then we will compare it to the SCM framework. tains level-3 process elements which provide implementation details.
Fig. 8. The management components of supply chain management (Source: Lambert, 2014).
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
12 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
Fig. 9. The Supply Chain Operating Reference (SCOR) model (Source: Supply-Chain Council, 2012).
7.2. Strengths and weaknesses of the two frameworks marketing (demand generation), product development, research and
technology development and some elements of post-delivery customer
Each framework has strengths and weaknesses (Lambert et al., support” (Supply-Chain Council, 2012). The activities that are included
2005). SCOR® focuses on transactional efficiency, while the SCM frame- are those related to the forward and backward movement of the prod-
work described in this article is focused on relationship management. ucts, and the planning required to efficiently manage these flows.
While managers need to achieve transactional efficiency, failure to rec- SCOR® and the SCM framework are similar in that they both advo-
ognize the value of a relationship orientation will limit supply chain cate cross-functional involvement and recognize that business process-
efficiency. es will not replace corporate functions. However, the number of
Each of the SCM framework processes is informed by the corporate corporate functions included in each framework is different and the
strategy and the appropriate functional strategies, which is needed in type of cross-functional involvement differs as well. Fig. 10 shows ex-
order to assure alignment and make functional activities responsive to amples of how each functional area provides input to each business pro-
the market. SCOR® processes are developed based on the operations cess in the SCM framework.
strategy (Bolstorff & Rosenbaum, 2007). While the operations strategy In the case of SCOR®, the cross-functional involvement is pursued
should be developed based on the corporate strategy and be aligned primarily within three functions: logistics, production and purchasing.
with the other functional strategies, SCOR® does not explicitly consider Fig. 11 shows the input each function provides into the SCOR® process-
this connection. es (Bolstorff & Rosenbaum, 2007; Supply-Chain Council, 2012). While
The SCM framework is broad in its scope, including activities such as SCOR® includes enable as a process, the activities included resemble
product development, demand generation, relationship management the management components of the SCM framework. Focusing on just
and returns avoidance. This breadth is why participation of all the func- three functions might make SCOR® easier to implement but manage-
tional areas is critical in the SCM framework. The activities included in ment is attempting to manage the supply chain without critical input
the eight processes will touch all aspects of managing the business. In from marketing, finance, and research and development. Failure to in-
contrast, the scope of the SCOR® framework is limited. As stated in clude all functions has a cost. Those left out have the potential to mali-
the SCOR® literature, “It does not attempt to describe every business ciously or inadvertently undermine the initiatives. Using the SCM
process or activity. Specifically, the model does not address sales and framework increases the likelihood of success because all functions
Fig. 10. Functional involvement in the supply chain management processes (Source: Lambert, 2014).
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 13
Fig. 11. Functions involved in implementing the SCOR model (Source: Lambert, 2014).
are involved in the planning and implementation of the initiative. How- Finally, the two frameworks use different approaches to measuring
ever, top management has to commit to the vision and reward team ac- how SCM creates value. In the SCM framework, operational measures
tivities in order to successfully achieve the cross-functional involvement are tied to the firm's EVA® and to profitability reports for customers
necessary for the SCM framework. and suppliers. The goal is not only to measure cost reduction and in-
The processes that form the linkages in the supply chain are very creased asset utilization but also to identify the revenue implications
different in the SCOR® model and the SCM framework. In the SCOR® from closely managing relationships with key suppliers and customers.
model, the links are the ‘deliver’ process of the supplier (activities as- For example, including customers and suppliers in the product develop-
sociated with the creation, maintenance and fulfillment of customer ment and commercialization process should shorten time to market and
orders, including the receipt, validation and creation of customer or- yield products that better meet customer requirements, generating
ders, scheduling order delivery, pick, pack and shipment, and invoic- more profit.
ing the customer) and the ‘source’ process of the buyer (includes the Because the objective of SCOR® is operational efficiency, the drivers
issuance of purchase orders, scheduling deliveries, receiving, valida- of value creation are focused on cost reductions and improvements in
tion and storage of goods, and accepting the invoice from the suppli- asset utilization. Generally, it is easier to measure how much will be
er). That is, the linkage only involves the placing of orders, invoicing saved by a particular program than to estimate how a segment of cus-
and the associated logistics activities. Supplier evaluation criteria tomers will respond to a service improvement, a new marketing effort,
should include more than logistics performance indicators and or a new product. The SCM framework has the advantage of considering
sourcing decisions should encompass much more than placing and revenue generation as well as cost reduction. For long-term financial
receiving orders as important as these activities may be. In contrast, success, it is necessary to focus on revenue enhancement because cost
the links in the SCM framework are the CRM process of the seller and savings opportunities tend to diminish as improvements are made.
the SRM process of the buyer which comprise all activities that en- In summary, while the SCM framework and SCOR® framework both
able maximization of the profitability of buyer-seller relationships focus on the implementation of cross-functional processes in the supply
including joint development of new products, collaboration to mini- chain, the SCM framework is more inclusive since all business functions
mize waste, and coordinated planning of supply chain activities that are involved and a broader set of activities is included. In addition, the
grow the business. SCM framework assures alignment between corporate and functional
A perceived strength of SCOR® is a set of benchmarking tools. strategies and provides a mechanism for considering revenue genera-
There are two types of benchmarking: performance and process tion, rather than focusing only on cost reductions. We believe this
benchmarking. Performance benchmarking is about learning how com- more holistic approach focused on relationship management has far
petitors or firms in comparable industries are performing on key opera- more opportunity to create value and competitive advantage for organi-
tional metrics such as inventory turns or fill rates, while process zations that use it.
benchmarking, or what SCOR® calls best-practice analysis, is concerned
with learning about and duplicating best practices. SCOR® also offers 8. Opportunities for future research
best-practice analysis which includes tools primarily aimed at improv-
ing transactional efficiency in the supply chain, such as activity-based Lambert and Cooper (2000) suggested eight areas for future re-
costing, advanced-shipping notification, Kanban and supplier certifica- search and provided a list of specific research questions for each of
tion programs. these areas. In this article, we summarized the outcomes of research
A drawback to benchmarking best practices is a lack of creativity and conducted to address some of these gaps, but a subset of the original re-
the possibility of missing an opportunity to differentiate the firm from search questions remain unanswered: 1) how to obtain buy-in from the
competition. The strength of the SCM framework is that it starts with functional areas in order to implement a process approach within the
the corporate strategy and the related functional strategies. To perform firm; 2) how to identify the appropriate team members that should par-
process benchmarking using the SCM framework, management can rely ticipate in each supply chain process and ensure that functional owners
on the assessment tools that have been developed for each of the eight see the value of sharing their most valuable resources to the cross-func-
SCM processes to find improvement opportunities by exchanging and tional teams; 3) how to compensate the employees working both in a
leveraging ideas among individuals with a variety of functional back- functional role and on one or more SCM process teams so that they do
grounds. The SCM processes represent the combined knowledge of not treat the work on the cross-functional teams as an extra-curricular
the executives and academics that participated in the Forum's meetings activity; 4) how to the share the costs and the benefits of SCM process
over 25 years. In other words, the sub-processes and activities are the improvements among the various firms that participate in the effort
best practices to successfully manage a business and develop sustained when the outcomes are not viewed to be equitable; 5) how to measure
competitive advantages. the value created for the end customer of the supply chain; and, 6) how
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
14 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
to take a map of the existing supply chain and modify it to obtain the benefits to be gained by the marketing function as a result of this
best supply chain given the desired outputs. involvement.
The research center members continue to be focused on the original 7) Dynamic capabilities are strategic organizational processes like
goal “to develop a normative model that can guide managers in their ef- product development, alliancing, and strategic decision making
forts to develop and manage their supply chains. It is much easier to that manipulate resources into new value-creating strategies
write a definition for SCM than it is to implement” (Lambert & Cooper, (Eisenhardt & Martin, 2000; Storbacka, 2011). If properly imple-
2000, p. 80). Based on the work conducted as of 2016, the executives mented, the eight SCM processes represent capabilities. Since the
and academics who participate in the research center have identified SCM processes rely on the resources that reside in the business func-
the following additional research opportunities: 1) how implementing tions, the processes can be strengthened by further developing capa-
the SCM framework mitigates risk in the supply chain; 2) how sustain- bilities in each business function. Capabilities that reside in supplier
ability efforts are supported by the SCM framework; 3) how to measure and customer organizations will influence the successful implemen-
the financial benefits of implementing the SCM processes; 4) how the tation of SRM and CRM. Research is required to identify deficiencies
SCM framework supports product lifecycle management; 5) how sup- in the capabilities of each function as well as in the customer and
ply chain finance affects key relationships in the supply chain; 6) how supplier networks in order to develop capabilities that support the
the marketing function contributes to successful implementation of implementation of the SCM framework and the on-going manage-
the SCM framework; 7) how to identify deficiencies in each function ment of the supply chain.
as well as the customer and supplier networks in order to develop capa- 8) In the detailed descriptions of the eight SCM processes, the first sub-
bilities that support the implementation and the on-going management process at the strategic level deals with reviewing and understand-
of the processes; and, 8) the interaction between SCM and corporate ing the corporate strategy (for example see Fig. 6). However, the ca-
strategy. Descriptions of these new research opportunities follow: pabilities represented by the SCM processes also should be
considered when developing the corporate strategy. The interaction
between the SCM processes and corporate strategy represents an
1) When the SCM framework is successfully implemented in compa- opportunity for research.
nies, close cross-functional relationships are developed within the
firm and with key members of the supply chain. As a result, man-
agers in these companies should be better prepared to identify and 9. Conclusions
mitigate risks, and overcome unexpected disruptions (Kaufmann,
Carter, & Rauer, 2016). Research is necessary to document how In 2000, a cross-functional, cross-firm SCM framework was present-
supply chain risks can be mitigated by implementing the SCM ed as a new business model that would overcome the silo mentality
framework. within the firm and lead to the integration of key members of the supply
2) Sustainability has become a major concern for many executives chain (Lambert & Cooper, 2000). It was suggested that the ultimate suc-
(Lacoste, 2016). In cases such as Sainsbury's, the UK retailer which cess of a single organization would depend upon management's ability
has a major corporate sustainability initiative with a senior execu- to ventilate functional and corporate silos through cross-functional and
tive responsible, someone from the sustainability organization cross-firm processes. In 2016, the framework remains one of two cross-
should be included on each of the cross-functional teams. Research functional, cross-firm process frameworks that can be and have been
is needed to identify the benefits of embedding individuals from successfully implemented in major corporations. The other model,
the sustainability organization into each process as compared to SCOR, does not include key business functions such as marketing, fi-
having sustainability efforts centralized in a single function. nance, and R&D.
3) In our research, we have been able to document in financial terms In this article, we reported on the 16 years of continuing research to
the value co-created in cross-functional business relationships. further develop the SCM framework. We described the research priori-
However, there is an opportunity to measure the costs and benefits ties that drove the research center's agenda and the articles published
in financial terms of implementing one or more of the SCM processes on each topic; the methodologies used to conduct the research and to
and sustaining the process(es) over time. develop the tools that managers required to successfully implement
4) Research on product lifecycle management should identify how the framework; the main research findings and how the SCM frame-
product portfolio decisions affect the balance between a firm's inno- work has been refined and extended; the differences between the
vativeness and business complexity costs in different stages of a SCM framework and the SCOR model; the research opportunities iden-
product's lifecycle (Gottfredson & Aspinall, 2005). A contribution in tified by Lambert and Cooper (2000) that still need to be addressed;
this area would be to explain how the various organizational func- and, new research priorities that executives have helped us identify.
tions should interact with key customers and suppliers to make de- The updated set of guidelines and tools described in this article pro-
cisions that maximize the long-term profitability of the firm and the vide guidance for managers who want to implement the SCM frame-
key supply chain members. work. In particular, our research can help marketing and sales
5) The current research on supply chain finance is really misnamed in managers keep their functions relevant within the organization. Using
the sense that it is all about improving the financial performance of their unique knowledge and capabilities they can contribute to the
the focal firm (for example see Rogers, Leuschner, & Choi, 2016). Fu- cross-functional teams implementing the eight SCM processes that are
ture research should address how improving financial measures the basis for long-term competitiveness. Academics can benefit from
such as cash-to-cash cycle affects similar metrics for key customers the description of the 25 year evolution of one of the two cross-func-
and suppliers. The emphasis should be on actions that improve the tional, cross-firm, process-based SCM frameworks and the research
long-term performance of the focal firm and its key customers and methods used to develop it. Like most companies, business schools are
suppliers. highly compartmentalized. Academics in the various departments
6) Lambert and Cooper (2000, p. 29) stated that “successful SCM re- have little incentive to interact with each other because they are
quires a cross-functional approach and marketing must play a criti- rewarded for publications in their own field's specialized journals, so
cal role.” Managers and academics would benefit from research cross-disciplinary research is rare (Lambert & Enz, 2015; Podolny,
that explains how representatives from the marketing function can 2009). The way the research center has been managed since its incep-
contribute to the successful implementation of each SCM process, tion can be replicated in other academic institutions to conduct research
how companies benefit from having marketing representatives ac- with relevant contributions for theory and practice. Researchers inter-
tively involved on the cross-functional process teams, and the ested in supply chain management can use the suggestions for future
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx 15
research to focus their work on topics that executives have identified as Enz, M. G., & Lambert, D. M. (2015). Measuring the financial benefits of cross-functional
integration influences management's behavior. Journal of Business Logistics, 36(1),
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ness networks - some observations, considerations, and a research agenda. Industrial
The authors would like to acknowledge the contributions of the Marketing Management, 39(3), 355–360.
Hingley, M., Lindgreen, M., & Grant, D. B. (2015). Intermediaries in power-laden retail
members of The Global Supply Chain Forum (formerly known as supply chains: An opportunity to improve buyer–supplier relationships and collabo-
The International Center for Competitive Excellence) whose practice, ration. Industrial Marketing Management, 50(7), 78–84.
insight, ideas, and comments have contributed significantly to the Holmen, E., Aune, T. B., & Pedersen, A. (2013). Network pictures for managing key suppli-
er relationships. Industrial Marketing Management, 2(2), 139–151.
research. At various times over a period of 25 years, executives from Kaufmann, L., Carter, C. R., & Rauer, J. (2016). The coevolution of relationship dominant
the following organizations have guided the research and the devel- logic and supply risk mitigation strategies. Journal of Business Logistics, 37(2), 87–106.
opment of the material summarized in this article: 3M; Aramark; Keramati, A., Mehrabi, H., & Mojir, N. (2010). A process-oriented perspective on customer
relationship management and organizational performance: An empirical investiga-
Bob Evans Farms, LLC; Callaway Golf Company; Campbell's Soup tion. Industrial Marketing Management, 39(7), 1170–1185.
Company; Cardinal Health; Cargill; Cemex; The Coca-Cola Company; Kohtamäki, M., & Rajala, R. (2016). Theory and practice of value co-creation in B2B sys-
Colgate-Palmolive Company; Defense Logistics Agency; Dow Chem- tems. Industrial Marketing Management, 56, 4–13.
Krueger, R. A., & Casey, M. A. (2000). Focus groups: A practical guide for applied research.
ical Company; Fletcher Challenge; The Goodyear Tire & Rubber Com- Thousand Oaks, CA: Sage Publications.
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Lambert, D. M. (2004). Supply chain management: Processes, partnerships, performance.
Lucent Technologies; Masterfoods USA; McDonald's; Moen Incorpo-
Sarasota, FL: Supply Chain Management Institute.
rated; S.C. Johnson and Sons, Inc.; Shell Global Solutions Internation- Lambert, D. M. (2006). Supply chain management: Processes, partnerships, performance
al B.V.; TaylorMade-adidas Golf Company; Wendy's; and, Whirlpool (2nd ed.). Sarasota, FL: Supply Chain Management Institute.
Corporation. Lambert, D. M. (2010). Customer relationship management as a business process. Journal
of Business and Industrial Marketing, 25(1), 4–17.
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ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002
16 D.M. Lambert, M.G. Enz / Industrial Marketing Management xxx (2016) xxx–xxx
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Douglas M. Lambert (PhD The Ohio State University) holds the Raymond E. Mason Chair,
zation. Inside Supply Management Magazine, 27(2), 28–29.
is Professor of Marketing and Logistics, and Director of The Global Supply Chain Forum,
Seibold, P. B. (2001). Get inside the lives of your customers. Harvard Business Review,
Fisher College of Business, at The Ohio State University. His research interests include sup-
78(5), 81–89.
ply chain management, the role of partnerships in achieving a competitive advantage, and
Skippari, M., Laukkanen, M., & Salo, J. (2016). Cognitive barriers to collaborative innova-
collaborating to co-create value. He has published more than 100 articles in numerous
tion generation in supply chain relationships. Industrial Marketing Management (in
journals including Harvard Business Review, Industrial Marketing Management, Journal of
press, Corrected Proof, Available online 25 August 2016).
Business Logistics, and Journal of Retailing, and is editor of Supply Chain Management: Pro-
Storbacka, K. (2011). A solution business model: Capabilities and management practices
cesses, Partnerships, Performance, which is in its 4th edition.
for integrated solutions. Industrial Marketing Management, 40(5), 699–711.
Stringer, E. T. (2007). Action research. Thousand Oaks, CA: Sage.
Matias G. Enz (PhD The Ohio State University) is an Assistant Professor in Supply Chain
Supply-Chain Council (1996). Supply-chain operations reference-model. Overview of SCOR.
Management at Universidad Nacional de Rosario (Argentina), and a member of the re-
Supply-Chain Council (2001). Supply-chain operations reference-model. Overview of SCOR
search team. The Global Supply Chain Forum at The Ohio State University. His research in-
version 5.
terests are in the areas of supply chain management, business relationships, and inter-
Supply-Chain Council (2012). Supply-chain operations reference-model. Overview of SCOR
organizational collaboration. He has published in Industrial Marketing Management, Journal
version 11.
of Business Logistics and Journal of Marketing Management. In addition to his PhD in Busi-
Vallet-Bellmunt, T., Martínez-Fernández, M. T., & Capó-Vicedo, J. (2011). Supply chain
ness Logistics he also holds an Industrial Engineering degree from Universidad Nacional
management: A multidisciplinary content analysis of vertical relations between com-
de Rosario (Argentina).
panies, 1997–2006. Industrial Marketing Management, 40(8), 13.
Vargo, S. L., & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal
of Marketing, 68(1), 1–17.
Vargo, S. L., & Lusch, R. F. (2011). It's all B2B…and beyond: Toward a systems perspective
of the market. Industrial Marketing Management, 40(2), 181–187.
Please cite this article as: Lambert, D.M., & Enz, M.G., Issues in Supply Chain Management: Progress and potential, Industrial Marketing Manage-
ment (2016), http://dx.doi.org/10.1016/j.indmarman.2016.12.002