An Appropriate Supply Chain Model for a Firm - Research Proposal Example

RESEARCH PROPOSAL: Investigating how selecting an appropriate supply chain model might give superior competitive advantages for a firm BY YOU YOUR SCHOOL INFO HERE DATE HERE 1.0 Background The supply chain is one of the most critical components of a business model, underpinning the capacity and capability to ensure timely and efficient production according to forecasted output requirements. The supply chain is an inter-linked system of human activity, tangible resources, and information capable of distributing a product or service to the customer. Activities within the supply chain include transformation of procured resources and raw products into a finished good which is ultimately conveyed to the final customer and is directly linked to the firm’s value chain (Nagurney 2006). There are many different models that have been introduced as viable supply chain ideologies, all designed to be cross-functional, address downstream and upstream components, and maximise operational efficiencies. All of these different supply chain models are intended to build firm resilience, or the capability of the supply chain to adapt and respond to change (Wieland and Wallenburg 2013); especially for firms maintaining a customer-centric business model where evolution is constant and a legitimate business requirement to ensure an elongated industry life cycle. In today’s industries in which a firm maintains substantial competition in a competitively-saturated market, the aforementioned resilience can theoretically provide a firm with competitive advantages if the firm’s chosen model of supply chain provides cost advantages and improves total organisational efficiency. Randall, Morgan and Morton (2003) assert that this competitive advantage can be achieved for companies with superior supply chain responsiveness underpinning adaptability for unpredictable demand and achieve the ability to triumph over market uncertainty at a cost lower than competitors. However, the idea of supply chain responsiveness is still conceptual, supported by very little existing empirical research addressing adaptability and responsiveness and their relationship to competitive advantage (Sukati, et al. 2012). With such a significant gap in research literature, achieving malleability and responsiveness makes it difficult for a firm to determine which specific supply chain model would be most appropriate for achieving competitive advantages. Hence, this proposed research study intends to explore two different models of supply chain, an agile system and a vertical integration model, to determine whether these models may potentially provide a firm with competitive advantages and improve responsiveness and adaptability concurrently. With no empirical research recommending a particular model in this capacity, this research study can close the gap in existing research and provide new, fundamental knowledge as to whether agile systems and vertical integration should be recommended to a firm seeking a competitive advantage. 1.1 Research question and objectives The study’s key research question is, “can the agile model or vertical integration improve adaptability and responsiveness whilst also providing a firm with competitive advantages”? To answer this question, the study has three specific objectives: Explore the concept of the agile model and its potential benefits toward adaptability and responsiveness. Investigate what constitutes vertical integration and how this model might improve adaptability and responsiveness. Examine supply-chain related competitive advantage through investigation of two different organisations utilising the agile model and the vertical integration model to identify whether responsiveness and adaptability are components of the firms’ competitive advantages. 2.0 Literature review An agile supply chain is a model that provides a firm with the capability to respond quickly to changes in the market environment, in terms of variety and volume, which is especially important in environments with volatile or unpredictable demand (Christopher 2011). Agile supply chains are most effective in a make-to-order environment, where quick replenishment is required to meet customer demand, and where production execution is aligned with fluctuating demand with difficulty forecasting (Christopher and Towill 2001). Shereshiy, Karwowsky and Layer (2007) describe an agile supply chain as a model that must integrate a culture of change, focus on high quality and customisation of products, be capable of mobilising its core competencies, and where customer-centric cooperation is critical as a best practice. Maintaining close and cooperative relationships with vendors are also critical to ensure that the vendor is capable of responding, quickly, to demand shifts with little lead time. An agile system requires creative problem-solving by vendor and firm, the selection process of required shippers, and maintaining close examination of order fulfilment systems to minimise the amount of time required to conform to changing customer expectations (Goldman, Nagel and Preiss 1995). Firms, using the agile model, achieve advantages by the creation of a de-coupling point, only holding inventories in lean form and only schedule production activities when the actual customer requirements are learned, a common strategy with PC manufacturers such as Dell and Hewlett-Packard. De-coupling is a postponement, utilising lean strategies until actual demand is quantified and then using agile methods after this point (Christopher 2011). Blending lean ideology with agile systems in this capacity provides opportunities for a firm using the agile model to enable products to be customised in a timeframe much closer to actual demand circumstances (Christopher and Towill 2000). The agile model, merged with short-term lean procurement strategies, controls costs in the supply chain and enhances responsiveness, giving a firm competitive advantages necessary to maintain a customer-centric business reputation. The vertical integration model is where a firm develops a strategy where the company owns the majority of all aspects of the supply chain and in situations where traditional, bilateral vendor/firm relationships are not feasible (Christopher 2011). Reasons to vertically integrate include increasing barriers to competitive market entry, when competing companies have much more market power than the firm, or when market conditions are risky or unpredictable (Stucky and White 1993). Yet another reason why firms choose vertical integration is a situation known as a hold-up scenario, where two parties under a traditional vendor/firm relationship have opportunities to work cooperatively, but abstain from this cooperative option due to concerns that one of the parties might achieve greater bargaining power, thus reducing profitability (Hart 1995). Hence, in unpredictable markets requiring responsiveness and adaptability, vendors refraining from maintaining a close, cooperative relationship could jeopardise effectively meeting volatile customer demands. Maintaining control over the majority of the supply chain gives a firm opportunity to more efficiently utilise common supply resources and create synergies within the bundle of different businesses involved in supply (Monsur and Yoshi 2012). This control can greatly enhance responsiveness in the vertical integration model, further enhancing competitive advantages in volatile demand markets (Richardson 1996). Vertical integration, in some instances, can create monopoly power in an industry and raises competitor costs in order to achieve the same level of responsiveness and adaptability, providing a competitive advantage for a firm. 3.0 Research methodology Both the agile model and vertical integration in supply chain appear to have substantial benefits for competitive advantages when incorporated into a firm’s business model. The preliminary research conducted in this proposal’s literature review did not identify any compelling evidence that agile systems and vertical integration maintain competitive disadvantage to a firm. Hence, the study moves forward under the following hypotheses: H1: The agile or agile-lean supply chain models will improve responsiveness and adaptability and will lead to customer-related and cost-based competitive advantages. H2: Vertical integration improves adaptability and responsiveness capabilities of a firm and will lead to cost-related competitive advantages and customer-related competitive advantages. The study’s key research question, “can the agile model or vertical integration improve adaptability and responsiveness whilst also providing a firm with competitive advantages?”, will be addressed by delving deeper into real-world case studies of firms that have adopted the agile model and chosen vertical integration strategy; a qualitative methodology. The case study approach provides opportunities for the researcher to collect diverse data from multiple sources which allow for in-depth exploration of a phenomenon (Creswell 2007). This proposal’s review of literature identified that there could be a diversity of potential benefits for implementing an agile system and vertical integration, including human relationships (desisting from cooperation in a traditional vendor/firm relationship), implicating a potential socio-psychological dimension (attitudes) that might influence the decision to seek a vertical integration strategy. Henerson, et al. (1987) assert that attitudes cannot be measured directly due to their multi-faceted implications and some degree of inference is required to determine causal relationships between attitude and a resultant phenomenon. Therefore, not all aspects of what influences agile system adoption or vertical integration can be quantified mathematically. Hence, the study rejected using a quantitative approach as this approach ignores social influences of a phenomenon and is incapable of providing superior understanding for what is driving relationship-oriented behaviour (Denzin and Lincoln 2011). The study further proposed that maintaining customer-centricity is the goal of adaptability and responsiveness, relationship-based dynamics not quantifiable through statistical instruments such as a survey. With the assumption that both supply chain models being investigated in this study are implemented to improve customer-based competitive advantage, how this advantage is achieved through both models is critical to building understanding of the potential benefits of both models, requiring a more deductive approach to research. The case study approach will involve procuring industry reports and relevant research journals related to two real-world firms that have been alleged to have gained competitive advantages through the implementation of an agile system and vertical integration. Once the appropriate firms are identified and selected, the researcher will recruit four experts in supply chain management (two from each firm) to participate in qualitative interviews, describing responsiveness, adaptability, cost-based advantage, the role of customer-centricity and how their relevant supply chain models (agile and vertical integration) have achieved competitive advantages or why these models were ineffective in this achievement. Interviews will be scheduled on appointment basis and set for 60 minute sessions with the four participants, using a semi-structured interview template to facilitate discourse between researcher and the sample group. Interviews will be transcribed utilising basic Microsoft Office Software upon which comparisons will be made to various participant responses to identify potential correlations or discrepancies to theory, industry sentiment, and other data achieved through the case study data collection efforts. Analysis of findings from the interviews will be supplemented with exhaustive secondary research (utilising textbooks and relevant journals) which provide in-depth knowledge of agile systems and vertical integration, including potential disadvantages and positive benefits in achieving competitive advantage. The researcher’s current level of competency in analysis deductive findings will require supplementary knowledge in the domains of sociology, psychology, procurement and finance to improve the soundness and legitimacy of the conclusions drawn from interviews. Quantifiable metrics procured from industry reports about the two selected firms will enhance the validity of the study, ensuring that what is intended to be measured is measured effectively and competently. Stenbacka (2001) asserts that reliability, with its concern over measurement, is not relevant in qualitative research. Lincoln and Guba (1985) support this assertion, suggesting that credibility of the researcher ensures reliability in qualitative investigations. Therefore, supplementing the researcher’s competency and knowledge in multiple domains of study to effectively measure the influence of vendor/supplier relationships, customer relationships, economics and procurement theory improves the reliability of the study. This knowledge builds researcher credibility toward making analytical determinations of data findings from the case study without creating reader trepidation of researcher fitness in making inferred conclusions. 3.1 Ethical concerns Since the study will utilise human participants, the researcher will construct a consent form that will be distributed to the participants indicating anonymity of responses upon final project publication and that no compensation will be afforded for agreeing to be recruited as a participant. The researcher will also ensure utilising strategies for maintaining a non-biased and impartial approach to facilitating interview-based discourse to avoid leading respondents or creating other incentives for recruited participants to provide responses with predisposition toward certain discussion topics. Outside of partiality on behalf of the researcher and ensuring that recruited participants recognise non-compensatory participation and anonymity, no further ethical concerns are relevant to this study. 3.2 Limitations The main limitation to the study is that recruitment of a much larger sample of industry experts could enhance knowledge of how the agile supply model and vertical integration operate within different markets and industries. However, researcher capability to recruit a larger sample, using stratified sampling techniques, is not achievable due to timeframe limitations and resource availability. A larger sample might be more representative of the majority of sentiment and attitude in a broader international population. 4.0 Resource requirements and timeline Preliminary investigation of secondary literature and appropriate industry reports will require approximately four weeks to ensure quality of investigation and build a framework by which to construct the semi-structured interview instrument. Selection of relevant expert professionals in the two chosen organisations utilising the agile model and vertical integration model and gaining administrative support for recruiting participants will require three weeks, allowing for additional time in the event of participatory refusal or other barriers to scheduling these interviews. Analysis of data findings will require an additional four weeks, making comparative analyses to relevant theory in socio-psychological aspects of human behaviour, finance and economics, as well as procurement theory. Once compiled, conclusions drawn from all sources of data collection will underpin initial construction of a final project draft, subject to feedback and assessment, requiring four weeks to begin construction. In total, all activities related to the research will require approximately 16 weeks from the date of the study proposal’s approval to conduct a primary study in order to produce a competent final project. There are no significant concerns over resources, which include basic word processing software, general office supplies, and appropriate field notes which are within the researcher’s current financial capacity to procure effectively. The researcher will require access to relevant university and private library resources, both electronic and in the bricks-and-mortar environment, a capability already feasible through existing researcher credentials and authorisations. 5.0 References Christopher, M. (2011). Logistics and supply chain management, 4th edn. FT Prentice Hall. Christopher, M. and Towill, D. (2001). An integrated model for the design of agile supply chains, International Journal of Physical Distribution & Logistics Management, 31(4), pp.235-246. Christopher, M. and Towill, D.R. (2000). Supply chain migration from lean and functional to agile and customised, International Journal of Supply Chain Management, 5(4), pp.206-213. Creswell, J.W. (2007). Qualitative inquiry and research design: choosing among five approaches, 2nd edn. Sage Publications. Denzin, N.K. and Lincoln, Y.S. (2011). The SAGE handbook of quantitative research, 4th edn. London: Sage. Goldman, S., Nagel, R. and Preiss, K. (1995). Agile competitors and virtual organizations: strategies for enriching the customer. New York: Van Nostrand Reinhold. Hart, O. (1995). Firms, contracts and financial structure. Oxford: Oxford University Press. Henerson, M.E., Morris, L.L. and Fitz-Gibbon, C.T. (1987). How to Measure Attitudes. London: Sage Publications. Lincoln, Y. and Guba, E. (1985). Naturalistic inquiry. London: Sage. Monsur, S. and Yoshi, T. (2012). Improvement of firm performance by achieving competitive advantages through vertical integration in the apparel industry of Bangladesh, Asian Economic and Financial Review, 2(6), pp.687-712. Nagurney, A. (2006). Supply chain network economics: dynamics of prices, flows and profits. Cheltenham: Edward Elgar. Randall, T., Morgan, R. and Morton, A.R. (2003). Efficient versus responsive supply chain choice: an empirical examination of influential factors, Journal of Product Innovation Management, 20(6), pp.430-443. Richardson, J. (1996). Vertical integration and rapid response in fashion apparel, Organization Science, 7(4), pp.400-412. Shereshiy, B., Karwowsky, W. and Layer, J.K. (2007). A review of enterprise agility: concepts, frameworks, and attributes, International Journal of Industrial Economics, 37(5), pp.445-460. Stenbacka, C. (2001). Qualitative research requires quality concepts of its own, Management Decision, 39(7), pp.551-555. Stucky, J. and White, D. (1993). When and when not to vertically integrate, Sloan Management Review, Spring, pp.71-83. Sukati, I., Hamid, A., Baharun, R., Alifiah, M. and Annuar, M. (2012). Competitive advantage through supply chain responsiveness and supply chain integration, International Journal of Business and Commerce, 1(7), pp.1-11. Wieland, A. and Wallenburg, C. (2013). The influence of relational competencies on supply chain resilience: a relational view, International Journal of Physical Distribution & Logistics Management, 43(4), pp.300-319. Read More