Review of "SCM and Business Strategy"

Abstract

In this review of “Supply chain management: Some reflections to improve its influence in business strategy” (Arrendondo & Alfaro Tanco, 2021) we briefly recount the history of operations management and supply chain management provided therein. We then examine some ways supply chain management (specifically, outsourcing and quality control) are relevant. Next, the qualifications Arrendondo and Alfaro Tanco list as the job requirements of supply chain managers are examined. Finally the organizational structure they recommend is criticized.

Article Summary

In “Supply chain management: Some reflections to improve its influence in business strategy”, Arredondo and Alfaro Tanco trace the evolution of the discipline of supply chain management (SCM) starting from its beginnings in operations management (OM) all the way to SCM as a business management philosophy. In recounting this history, the authors attempt to isolate when SCM became independent of OM.

In doing this they briefly examine the relationship between logistics and SCM, and propose four perspectives for looking at this relationship: traditionalist (SCM is part of logistics), re-labeling (SCM replaces logistics), unionist (logistics is part of SCM), and intersectional (SCM and logistics are related and share certain aspects). They assert that the intersectional perspective is the correct way of viewing this relationship and leads to SCM being of strategic importance to a business. They claim that SCM strategy is a crucial part of business strategy or that they may even be identical.

Because of the importance of SCM to a business, supply chain managers play a particularly vital role in the business. The authors describe what SC managers should do in order to make multi-partner supply chains work. The paper concludes with a description of the personality SC managers should have in order to make this happen, and the business organization that best allows SCM to provide value to a company.

Authors’ Purpose

Arredondo and Alfaro Tanco claim that supply chain management (SCM) plays a pivotal and underappreciated role in business operations. To prove this, they cover the history of operations management (OM) starting from before the industrial revolution up to today, focusing on how SCM emerged as an independent field from OM. Unlike Bayraktar et al (2007), they approach this from a pure business perspective. They also discuss how SCM differentiated itself as an academic discipline from logistics, and caution that equating SCM with logistics weakens the strategic advantages that good SCM can bring to a company. They conclude with a discussion of the characteristics that supply chain managers should possess as well as the ideal organization a company should have in order to benefit the most from good SCM.

Historical Background

Evolution of Operations Management
From Arredondo & Alfaro Tanco (2021)

The authors begin their history of operations management (OM) by claiming that prior to the middle of the 1500s, production was limited to mining, agriculture, and livestock. This changed in 1556 with Georgius Agricola’s “De re metallica” which detailed the processes of mining, refining, and smelting metals. The authors consider this to be the first OM textbook. Fast forward to the industrial revolution, where factory management was the primary concern of business owners.

This changed with Frederick Taylor’s publication of “The Principles of Scientific Management,” where attention shifted from machinery to work and began the phase of industrial management – as well as worker micromanagement. This period included Henry Ford’s moving assembly line.

With the start of World War II, industrial management was replaced by production management. Production management continued to be the predominant theory of business management until it was replaced by operations management and operations research, which was initiated in the late 1950s by a series of academic papers by Holt, Modigliani, Muth, and Simon (HMMS). These papers focused on production planning and forecasting (Singhal & Singhai, 2006) and involved what is today called discrete mathematics.

Operations research gave operations management a theoretical bent, and industrial engineers moved from engineering schools to business schools. OM theorists produced system-wide studies. Material resource planning (MRP) and enterprise resource planning (ERP) became important. Innovative approaches to OM came from Japan where MRP (a push system) was replaced by JIT, which used a pull system. (Arredondo & Alfaro Tanco, 2021, p. 10).

By the 1990s, theoretical OR started to be replaced by empirical studies involving direct observations of business processes. Operations management was still the predominant business management philosophy. The authors end their discussion of OM history there.

When and how did SCM emerge from OM? The authors trace the start of SCM to the HMMS works, noting how they studied integrated systems of managing production. The emergence of SCM was triggered sometime between 1980 and 1990 by the recognition of the importance of the extended supply chain, and that a holistic approach to various management systems – including organizational structure, planning, management control, communications and information, and evaluations and rewards – was needed. Logistics was also extended to issues such as inventories, supply, and distribution.

SCM thus grew to include OM as well as other business concerns (Arredondo & Alfaro Tanco, 2021, p. 13) including finance, marketing, purchasing, research and development, and IT. All this is codified in the 1994 definition of supply chain management supplied by the International Center for Competitive Excellence: “Supply chain management is the integration of business processes from end user through original suppliers that provides products, services and information that add value for customers.”

The strategic importance of SCM doesn’t lie in business operation or in logistics. SCM is really about value chains or value networks, the authors claim.

Application of Relevant SCM Theory

Producing quality goods and services is certainly desirable and becomes particularly important with businesses using the extended supply chain because of the tight integration of customers into SCM. The extended supply chain can both increase and threaten quality (especially product and design quality). Because a business outsources the production of component parts, the quality of those parts is no longer in control of the business. Compensating for this is the possibility of outsourcing the production of component parts to multiple suppliers – if one supplier delivers substandard components, another supplier can be used. This also allows for competition amongst the suppliers.

The production of quality goods is crucial for maintaining customer satisfaction, customer loyalty, and brand reputation. When faulty or substandard products reach the customer, the business incurs external failure costs from product returns, complaint settlements, repairs. (Quigg, 2022, p. 306, 337-338)

Even before reaching the customer, though, the business bears costs related to quality control. Internal failure costs (Quigg, 2022, p. 337) result from having to scrap, salvage, or rework products found to be defective. Determining whether a product is indeed defective entails appraisal costs. Prevention costs (Quigg, 2022, p. 337) are incurred when low quality parts require finding another supplier or even redesigning the product to compensate for the low-quality component parts. (Quigg, 2022, p. 306 – 307).

The ultimate solution to quality control problems is total quality management (TQM). TQM requires a cultural change not only within a business but extends to suppliers and other supply chain partners (Quigg, 2022, p. 340). By the end of this change, businesses should be involved in continuous improvement (Quigg, 2022, p. 340 – 341) as well as statistical analysis of defects (Quigg, 2022, p. 342 – 346).

Managerial Implications

The paper is quite explicit about the characteristics a good supply chain manager should have and the role he or she should play within a company. It also makes some specific recommendations about company organization.

Given the central role that SCM should play in business strategy, SC managers should be given significant roles in business operations. The SC manager is described as the nexus between the business and the stakeholders, and the authors describe the SC manager’s role as akin to the conductor of an orchestra. Overall, the SC manager is “the enabler that makes things happen.” (Arredondo & Alfaro Tanco, 2021, p. 16)

As such, SC managers should hold a staff position within the organization and should have "soft skills instead of hard ones." (Arredondo & Alfaro Tanco, 2021, p. 15). According to this paper, an SC manager should have human management skills plus a holistic view of the entire business, in other words a “systems” view. Technical skills are made secondary. These soft skills should include multicultural knowledge, change management, conflict resolution, interpersonal and communication skills, and ethical awareness. (Arredondo & Alfaro Tanco, 2021, p. 15)

SC managers should be cross-functional, process-oriented, and be included in managing interactions with customers and suppliers. Again, hard skills are not required.

Specific notes are also made about the ideal organization of the company: instead of a functional organization, a matrix-like structure that allows specific skills to flow between teams, thus eliminating “silos.” Not mentioned, however, is that employees in matrix-like structures have more than one manager. The overall business organization should focus on meeting customers’ requirements. The authors recommend “mandatory coordination” (Arredondo & Alfaro Tanco, 2021, p. 16) to make all this happen. This has implications for compensations and incentives as well.

The authors do not specify how the SC manager should fit within this matrix organization. Given the emphasis placed on soft skills, multicultural knowledge, conflict resolution, etc., it is not clear how much responsibility and accountability should be expected from SC managers.

Working across multiple companies – as is stipulated by modern SCM practices – entails a “power differential”: one company would have more “power” over another. This requires not only cooperation and a certain level of trust. The authors believe that a fundamental sense of partnership should be in place. This is the authors’ primary motivation for requiring all the above-listed soft skills.

Conclusion

The authors’ purpose is to highlight the strategic importance of supply chain management in contemporary businesses. They do this by explaining the history of operations management and how SCM evolved from that. They claim that SCM is not about logistics but rater value chains. The argument for the strategic importance of SCM is weakened, however, by the overly-broad conception of that they use: according to them, SCM should encompass all operational aspects of business operation.

References

Arredondo, C. & Alfaro Tanco, J. (2021). “Supply chain management: Some reflections to improve its influence in business strategy.” Innovar 31(81), 7-20. https://doi.org/10.15446/innovar.v31n81.95568

Bayraktar, E., Jothishankar, M., Tatoglu, E. & We, T. (2007). “Evolution of operations management: past, present and future.” Management Research News, ISSN: 0140-9174

Quigg, B. (2022). Supply Chain Management (1st ed). McGraw-Hill Create. https://bookshelf.vitalsource.com/books/9781307866025

Singhal, J. & Singhai, K. (2006). “Holt, Modigliani, Muth, and Simon's work and its role in the renaissance and evolution of operations management.” Journal of Operations Management 25(2), 300-309. https://doi.org/10.1016/j.jom.2006.06.003

Agile Combat Employment (ACE): Concepts and Criticisms

Introduction

The US Air Force Agile Combat Employment (ACE) is an operational approach that relies on distributing forces to reduce threats to the USAF while increasing unpredictability to our adversaries. According to the doctrinal note explaining ACE (AFDN 1-21)[1], the motivations for adopting this approach are the shrinking number of large bases, and the nature of current great power competitors who have the technological ability to convert fixed-location bases into contested areas.

Instead of using fixed-location bases. ACE entails the dispersal of forces into enduring locations (ELs) and contingency locations (CLs). ELs serve as hubs for CL spokes. Forces can move from CL to CL as the situation demands. These CLs are easy to conceal and allow for flexible responses. As described in AFDN 1-21:

“ACE shifts operations from centralized physical infrastructures to a network of smaller, dispersed locations that can complicate adversary planning and provide more options for joint force commanders. Its value is derived from the ability to hold adversary targets at risk from multiple locations that are defensible, sustainable, and relocatable. Airmen should expect to conduct operations at a speed, scope, complexity, and scale exceeding recent campaigns from distributed locations.”

ACE thus reduces the target value of large fixed-location bases, while multiple CLs complicates the planning of our adversaries.

AFDN 1-21 lists three “enablers” that are required for this system: first are Multi-Capable Airmen (MCA), who are able to perform tasks outside their primary occupation (AFSC). Second, MCAs are expected to operate according to mission command, meaning they must rely on their initiative to carry-out their commander’s intention. Finally, there are tailorable force packages that can be rapidly delivered to CLs as needed.

ACE uses a common lexicon with joint partners (posture, command and control, movement and maneuver, protection, sustainment, information, intelligence, and fires). The two most distinctive of these are sustainment, and command and control.

For command and control, it is assumed that there is a robust communication system in place that is adaptive and resilient even in the most challenging of environments.

For sustainment, logistics needs to operate on a push system using predictive modeling; local and regional consumer markets would alleviate stresses to the distribution system.

ACE Compared With 4th Generation Warfare Operations

In many ways, ACE is similar to 4th generation warfare (4GW)[2]. Both expect their individual fighters to possess multiple skills and the ability to improvise, adapt, and overcome. ACE uses mission command, whereas 4GW uses the similar Auftragstaktik (an aggressive form of professionalism and cultural philosophy expected of all members of a force)[3]. ACE logistics relies on a push methodology whereas 4GW uses a combination of push and pull systems. Both use local support to supplement shortcomings in the logistics systems.

The operational methods of both ACE and 4GW forces are described by the DOCA loop[4]: disperse – orient – concentrate – act. Being dispersed, the CLs are, separately, low-value targets. They must concentrate to bring significant force to bear against a target.

ACE is different from 4GW in that the latter does not have ELs. A shared problem both ACE and 4GW forces have is described below.

Logistics Problems

Ackerman[5] finds that the ACE doctrine has unrealistic logistics expectations. Aircraft require tremendous amounts of maintenance, and the needed spare pool size would be large. Cannibalization of aircraft that are not mission capable to ensure others are mission capable would be an option. He states that “ACE employment capability sounds great in a lab or an academic setting; however, many assumptions with logistics and sustainment must occur in order to achieve success.”

Problems identified by the Chinese People’s Liberation Army

Derek Solon provides an overview[6] of a People’s Republic of China analysis of ACE, which the Chinese refer to as the “water lily plan.” The Chinese identify three problems with[7] ACE:

First, fearing counterstrikes, countries may not allow the USAF to use their airfields as CLs. This fear could make even reliable allies unreliable.

Second, ACE will not reduce the AF’s reliance on permanent bases, since the EL hub is still supporting the CL spokes. The EL is still a target, and its elimination will greatly limit the functions of the CLs.

Finally, it is possible for an adversary to “short circuit” ACE by getting inside its OODA loop: “if the opponent deploys sea and air reconnaissance and strike platforms in advance to shorten the kill chain, it is entirely possible to capture the short time window when US aircraft dock at small forward bases and carry out precision strikes.”[8]

Synchronization Issues

In order to be combat-effective, the forces of multiple CLs must concentrate their firepower. Doing this requires these CLs to operate in a synchronized manner, which requires a well-functioning medium-range communication system. This is explicitly listed in AFDN 1-21 as a requirement, but it is a significant point of failure. Even a partial failure of the communication system (only affecting one CL, for example) would still degrade the overall capabilities of the combined EL and its CLs.

Conclusion

As Ackerman would say, ACE looks good on paper, but the logistics and synchronization problems together with the issues found by the People’s Liberation Army would seem to indicate that ACE would not work in practice.

Footnotes

[1] USAF, Air Force Doctrine Note 1-21: Agile Combat Employment.
[2] Lind & Thiele. 4th Generation Warfare Handbook.
[3] Widder, “Auftragstaktik and Innere Führung.”
[4] Lind & Thiele. 4th Generation Warfare Handbook, p. 69.
[5] Ackerman, “Agile Combat Employment: A War-Time Readiness Fallacy.”
[6] Solon, “The PLA’s Critical Assessment of the Agile Combat Employment Concept.”
[7] Yuan Yi, et al. “The US Air Force's "agile combat deployment" is difficult.”
[8] Ibid.

Bibliography

Ackerman, R. “Agile Combat Employment: A War-Time Readiness Fallacy.” Universal Synaptics. 10 October 2022. Retrieved 26 September 2024 from https://www.usynaptics.com/agile-combat-employment-a-war-time-readiness-fallacy/

Lind, W. S. & Thiele, G. A. 4^th Generation Warfare Handbook. Castalia House, 2015. Retrieved 26 September 2024 from https://ia802901.us.archive.org/27/items/4thGenerationWarfareHandbookWilliamS.Lind28129/4th_Generation_Warfare_Handbook_-_William_S._Lind%25281%2529.pdf

Solon, D. “The PLA’s Critical Assessment of the Agile Combat Employment Concept.” China Brief 21(14), 16 July 2021. Retrieved 25 September 2024 from https://jamestown.org/program/the-plas-critical-assessment-of-the-agile-combat-employment-concept/

USAF. Air Force Doctrine Note 1-21: Agile Combat Employment. 23 August 2022. Retrieved 24 September 2024 from https://www.doctrine.af.mil/Portals/61/documents/AFDN_1-21/AFDN%201-21%20ACE.pdf

Widder, W. “Auftragstaktik and Innere Führung: Trademarks of German leadership.” Military Review, September-October 2002. Retrieved 25 September 2024 from https://www.armyupress.army.mil/Portals/7/Hot-Spots/docs/MC/MR-Sep-Oct-2002-Widder.pdf

Yuan Yi, Xu Wenhua, Xu Jinhua. “The US Air Force's "agile combat deployment" is difficult.” China Military Network, Ministry of National Defense Network. 2 July 2020. Retrieved 26 September 2024 from http://www.81.cn/jfjbmap/content/2020-07/02/content_265061.htm

Review of “The Impact of SCM Practices on Supply Chain Agility"

Abstract

In this review of Saa’da et al's 2022 paper “The impact of supply chain management practices on supply chain agility – Empirical study in medical sector”, we define the fundamental concepts used in their paper. Next, we examine some of the ways supply chain management theory is relevant to this topic, focusing on the concepts of postponement and make-to-order production. After that, the managerial applications of that paper are examined. The hypotheses that the authors use to validate their conceptual model are listed, and their most interesting finding is stated. Finally, a problem in their conceptual model is indicated.

Summary of the Paper

Saa’da et al (2022) examines the impact that five supply chain management practices – supplier integration, internal integration, customer integration, information sharing, and postponement - have on a company’s competitive capability, and how that capability influences supply chain agility. Their research is done by analyzing survey responses from 315 employees in Jordan’s medical sector.

The authors investigate the relationship between certain supply chain management (SCM) practices, competitive capability, and supply chain agility. They attempt to demonstrate that the SCM practices being investigated significantly benefit supply chain performance. They show that three types of supply chain integration (supplier, internal, and consumer) is moderated by competitive strength. Supply chain efficiency (or “effectiveness efficiency” as they call it) is caused by internal integration, customer integration, and postponement, but supplier integration and information sharing do not positively impact supply chain effectiveness. Finally, information sharing, customer integration, and supply chain efficiency is moderated by competitive capability.

In order to do all this, they evaluate and confirm the following hypotheses:

H₁ Supply Chain Management Practices are positively related to Competitive Capability.
H_1a Supplier Integration is positively related to Competitive Capability.
H_1b Internal Integration is positively related to Competitive Capability.
H_1c Customer Integration is positively related to Competitive Capability.
H_1d Information Sharing is positively related to Competitive Capability.
H_1e Postponement is positively related to Competitive Capability.
H₂ Competitive Capability is positively related to Supply Chain Agility.
H₃ Environmental Uncertainty mediates the relationship between Competitive Capability and Supply Chain Agility. (Saa’da et al, 2002, pp. 6-7)

From this, they validate a conceptual model where the five SCM practices positively impact competitive capability, where competitive capability positively impacts supply chain agility, and where environmental uncertainty mediates the relationship between competitive capability and supply chain agility.

Conceptual Model of SCM Practices
Figure 1 from Saa’da et al, 2022. - maybe needs correction?

There are several interesting findings, the most important being that consumer integration and knowledge exchange have an outsized benefit to competitive capability. (Saa’da et al, 2022, p. 12). As such, visibility into supply chain integration results not only in increased competitive capability but also improved supply chain agility.

Background

To understand this paper, it is necessary to define the terms being used: supplier integration, internal integration, customer integration, information sharing, postponement, supply chain agility, competitive capability, and environmental uncertainty.

Supplier integration is an SCM strategy that involves a company collaborating with its suppliers to improve the flow of data and communication between them. This gives the company visibility into the ability of the supplier to fulfill orders, and it gives the supplier insight into the company’s expected demands.

Internal integration, also called horizontal integration, is the process of connecting different departments within a company. This allows for collaboration and results in the elimination of duplicative efforts and “silos.”

Customer integration is the process of involving customers into the supply chain for purposes of gathering quality information, helping the company to better understand customer preferences.

Information sharing is the “comprehensive incorporation of all business procedures within and outside the organization so as to enable the exchange of information, as well as movement of products, money, and services” (Saa’da et al, 2022, p. 4). This allows stakeholders to view the entire business, not just the supply chain.

Postponement is a "deliberate action through which the final manufacturing or distribution of products or services are delayed until the receipt of customer’s order" (Saa’da et al, 2022, p. 4). This reduces risk by preventing wrong manufacturing or incorrect inventory deployment (Saa’da et al, 2022, pp. 4-5). Postponement, if not already in place, can involve significant reconfiguration of the supply chain, but can be considered valuable in some circumstances (Van Hoek et al, 1998, pp. 33-35).

Supply chain agility is the capability of a company to effectively respond rapidly to changes in consumer demand as well as market changes.

Competitive capability is a company’s ability to satisfy customer expectations relative to its competitors.

Environmental uncertainty is the degree of unpredictability of a company’s external environment relevant to that company’s operations. The causes of environmental uncertainties include unpredictable actions by competitors, changing customer preferences, and technological advancements.

Application of Relevant Supply Chain Management Theory

The authors discuss postponement as a supply chain management principle and present it as an unlimited good. Postponement is a strategy where certain final decisions are made as late as possible. In terms of manufacturing, this means delaying final assembly or customization of a product until the last possible moment. The obvious benefit is that companies are responsive to changing customer demands. According to Quigg (2022, p. 122), "risk is minimized because customized packaging is not performed in anticipation of customer orders or to accommodate a forecast." A second benefit described by Quigg (2022, p. 122) is that "total inventory can be reduced by using inventory of the base product to aggregate demand across multiple customers’ requirements." This second benefit is both debatable as well as ambiguous.

Quigg is assuming the company in question purely performs final inventory or customization. In this idealized model, the company maintains absolutely no inventory of component parts to assemble or generic items to customize. Are there any companies that operate in this manner?

There is an ambiguity in the statement that total inventory is reduced: reduced for whom? Even if a company exclusively performs final inventory or customization, stock must be maintained by suppliers and distributors must also keep some level of stock. In that situation, inventory and the associated costs are merely shuffled around.

Postponement is somewhat similar to make-to-order (MTO): both are production strategies that are highly responsive to customer demand. MTO is triggered only in response to customer orders and allows for extreme levels of customization (Quigg, 2022, p. 60). Postponement requires that products be kept generic until the last possible moment. All of this contrasts with make-to-stock (MTS) production, where levels of production are determined by estimated customer demands (Quigg, 2022, pp. 60-63).

While storage costs may not be minimized, obsolescence costs can be reduced. An inventory incurs obsolescence costs when the products in that inventory lose value over time – a good example of that being the change in asking price of a car for this year’s model vs last year’s model. (Mellal, 2020, p. 1-2). By delaying final customization, the risk of dealerships holding undesirable stock is thus reduced.

Even in an idealized world where a company can be devoted exclusively to customization or final assembly, there are disadvantages to postponement. For example, unforeseen logistical bottlenecks caused by strikes, shipping delays, problems in port operations, etc. are more disruptive because there is reduced buffer stock. This results in price increases, delivery delays, or both.

Managerial Implications

Supplier integration, internal integration, customer integration, information sharing, and postponement (in an idealized form) are shown to improve overall supply chain efficiency. This is especially crucial in the medical industry - the context for this study - where the timely supply of goods and services translates into the health and well-being of patients.

As indicated by the authors, organizations and companies no longer operate as isolated entities, but rather fulfill customer demands through supply chains that require multiple organizations working in cooperation. As such, “the core competencies of organizations lie in their ability to design and as well as manage their supply chain process.” (Saa’da et al, 2022, p. 2). Various qualities ascribed to supply chains (resilience, efficiency, reliability, etc.) are thus as important for the survival of a company as is the quality of the products they make or the services they deliver.

In terms of healthcare, supply chain efficiency translates primarily into cost savings, and supply chain resilience translates into ongoing availability of medical services in the event of natural or manmade disasters, radical market changes, pandemics, etc. Thus, a successful company in the healthcare industry must not only be able to produce high-quality goods and services, but it must also be able to deliver them in a way that is made possible through well-operating supply chains.

While postponement does not necessarily minimize inventory, reducing inventory build-up is certainly desirable. In the context of the healthcare industry, large inventories are problematic for products or medications that have an expiration date (such as hemostatic dressings and epinephrine pens) as well as vaccines that are reformulated on an annual basis.

The benefits conferred by well-run supply chains are by no means unique to the healthcare industry: any company can benefit from efficient, reliable, and resilient supply chains. Efficient supply chains streamline operations by eliminating excess inventory, reducing transportation costs, minimizing delivery times, and so on. Reliable supply chains minimize interruptions and “smooth out” cost variations by ensuring that multiple competing suppliers are used. Finally, resilient supply chains ensure continuity of company operations (and continuity of product delivery) against serious disruptions that can happen through any number of causes.

Conclusion

This paper reinforces the importance of good SCM practices to the competitive capability of a company as well as that company’s supply chain agility. As the authors note, “[c]ompetition among firms is no longer considered an issue in the contemporary world but rivalry between supply chains.” (Saa’da et al, 2022, p. 5). It is interesting to note, however, that the authors may have reversed the causal relationship between competitive capability and supply chain agility: their conceptual model implies that competitive capability benefits supply chain agility and not the other way around.

Corrected Conceptual Model of SCM Practices
Based on Figure 1 from Saa’da et al, 2022.

 

References

Mellal, M. (2020). “Obsolescence – A review of the literature.” Technology in Society 63, 1-6. https://doi.org/10.1016/j.techsoc.2020.101347

Quigg, B. (2022). Supply Chain Management (1st ed). McGraw-Hill Create. https://bookshelf.vitalsource.com/books/9781307866025

Saa'da, R.J., Al-Nsour, M., Altarawneh, A., Suifan, T.S., Sweis, R., Akhorshaideh, A., & Al-Lozi, K. (2021). "The impact of supply chain management practices on supply chain agility - Empirical study in medical sector." Academy of Strategic Management Journal, 21(1), 1-15. Retrieved 22 September 2024 from https://www.abacademies.org/articles/The-impact-of-supply-chain-management-practices-on-supply-chain-agility-empirical-study-in-medical-sector-1939-6104-21-1-111.pdf

Van Hoek, R., Commandeur, H., & Vos, B. (1998). “Reconfiguring logistics systems through postponement strategies.” Journal of Business Logistics 19(1), 33-54. Retrieved 22 September 2024 from https://togarsim.tripod.com/post/vanhoek_com.pdf

Strategic Planning Aspects of Joshua’s Conquest of Canaan

Introduction

Do modern strategic planning principles apply to historical battles, or is the application of those principles nothing but “retconning”? This is tested out on Joshua’s conquest of Canaan as described in the Bible.

Fall of the Walls of Jericho
Fresco at the Vatican by Raphael or his School, c. 1519

Summary of the Base Text

Prior to the start of the Book of Joshua, Moses and his people have been wandering the desert for 40 years. Joshua was about to become Moses’ successor.

Now that Moses is dead, God tells Joshua to take the people into the Promised Land, a land flowing with milk and honey. He states that they must get ready to cross the Jordan River, and He describes the extent of the land. He tells Joshua to be strong and not to be afraid, and that the people Joshua will lead must follow Moses' commandments.

Joshua then orders the leaders of the people to get ready for the journey and that in 3 days they'll cross the Jordan River. Once across, they'll take the land - God is ready to give it to them. Joshua states how the land will be divvied-up: 2.5 tribes will have east side of the Jordan River but must send troops to support the upcoming fighting. Those troops will be returned once the other tribes are safe. The people promise to follow Joshua as they did Moses.

Joshua sends two spies ahead to look at the city of Jericho. When they arrive there, they are taken in by a woman (prostitute?) named Rahab. The king of Jericho wants the spies, but Rahab protects them by hiding them on the roof of her house.

After the king's men went a-searching for the spies outside the walls of the city, Rahab informs the spies that the city is afraid. She makes the spies promise that Joshua will not kill her family. She helps them escape the city, telling the spies to hide in the hills for 3 days and then go back to their people. The departing spies tell her to tie a red string to the window and to get her family into the house where they'll be safe.

The spies return and report to Joshua.

The next morning, Joshua and all the Israelites leave Shittim and set camp next to the Jordan River. Three days later the tribal leaders go to every tent and tell them to follow the Covenant Box carried by the Levite priests. Joshua tells the priests to carry the Box at the front.

God tells Joshua to send the priests to the riverbank and wait. God then halts the water and allows the Israelites to cross. They commemorate the crossing by laying heaps of stone in the river and on the shore. They pitch their tents near the east side of Jericho.

The crossing proves to the people that God has Joshua's back!

God commanded Joshua to circumcise the Israelite men. They stayed at Gilgal until they were strong again. They ate the Passover meal, and the next day they ate food that came from Canaan. They never ate manna again.

God tells Joshua what he and his men must do in order to win the city of Jericho: they must march around it one time each day for 6 days, the priests blowing their trumpets. On the 7th day they must march around it 7 times while the priests blow their horns. The priests will blow their horns once more and the soldiers must give a loud shout. The city walls will fall, and the army will go into the city.

They did this, and on the 7th day the walls fell. The soldiers capture the city. Joshua has his two spies go to Rahab's house and bring out her family who were then taken to the Israelites' tents. The soldiers saved the precious metals, then burned the city to the ground. Joshua makes a promise: if anyone tries to rebuild the city, their children will die.

One of the Israelites took some of the precious metals for himself, and God became angry.

Joshua sent some men to reconnoiter the city of Ai. They returned, letting him know that 3000 men should be able to take it. Those men were all killed in their attempt to take Ai.

Joshua prayed in front of the Covenant Box. God tells him why he allowed Ai's soldiers to be victorious: some of his men had taken the precious metals.

The next morning, Joshua has all the tribes stand before God. God picksout Achan, who then tells everybody what he did. Joshua sends men to collect all the items Achan had hidden for himself. They also remove Achan's sons, daughters, and cows, sheep, and donkeys. They take all of them to the Achor valley where the Israelites stoned them to death.

God ceased being angry with his people.

God tells Joshua to take the city of Ai, but this time they can keep the animals and other valuables.

Joshua places 30,000 men to the west of Ai. In the morning, Joshua had his other men attack from the north. They feigned retreat, the Ai chased them, leaving the city undefended. The men who were waiting to the west then attacked the city, setting it ablaze. The Israelites who had been running away saw the smoke then turned to fight the men of Ai.

The Israelites who took the city went out to fight the Ai, so the Ai was trapped between two groups. Only the king of Ai survived. The king was captured and brought to Joshua. He was hung, then buried.

Following this, Joshua builds an altar on Ebal mountain. He carves Moses' laws into stones, then reads them to the Israelites as well as the foreign people among them.

Some people from the city of Gibeon approach Joshua, convincing him not to attack them if they became his servants. Joshua and the Israelite leaders agreed not to attack Gibeon. Three days after making this agreement, Joshua learns that the Gibeonites lived near them, but due to the promise Joshua made, they did not take the city.

The king of Jerusalem, King Adoni-Zedek, convinces four other kings to band together to form the Amorites and then proceed to attack the Gibeonites. The Gibeonites ask Joshua (currently at Gilgal) for help. Joshua and his army march from Gilgal and attack the Amorites. The Amorites withdrew from Gibeon, in part because of the Israelite army, in part because the Lord sent large hailstones down upon them. Joshua asks God that the sun stand still over Gibeon city and the moon stand still over Aijalon valley, allowing the Israelites to punish their enemies.

Their armies routed, the five Amorite kings take refuge in a cave. Joshua orders the cave to be sealed until they finish fighting the enemy armies. The Israelites did defeat them but allowed some members of the Amorite armies to make it back to their cities to tell the people of the events. The five kings are released from the caves and are then killed and buried in that cave.

Joshua and the Israelites then attack the other cities, cities that were far from Gilgal in one long fight. After this they returned to Gilgal.

Several kings from the north band together in an attempt to kill the Israelites, but Joshua and his armies defeat them. Fighting in this way, Joshua takes the whole land. After that, the people do not have to fight anymore. Thus the Canaanites were driven out - Joshua captured their territory, but the people remained.

In the end, Joshua and the Israelites took the land of 31 kings in 6 years.

Strategic Planning

As described in Joshua 1-12[1], Joshua incorporated many principles of strategic planning into this campaign. In particular, the balancing of ends, ways, means, and risk - identified by Lykke[2] as crucial to strategic planning - was displayed. (Note: since the Book of Joshua is told in third-person omniscient, we have no way of knowing if Joshua was considering this balance.)

The desired end was to capture Canaan for later division amongst the twelve tribes. Joshua did capture the territory, eliminating many of the cities it contained, but the Canaanite people did survive. The way this goal was accomplished was through two broad campaigns supported by HUMINT, one to the south (described in Joshua 10) followed by a northern campaign (Joshua 11) where Joshua and the Israelites defeated 6 Canaanite areas and 31 kings in 6 years. Joshua did this with the means of the Israelite army and his leadership over that army, his campaign planning, along with some supernatural help at each stage. Because of divine assistance, the risk was low.

Lykke[3] would call this a "balanced strategy" in that the selected way (the campaigns) is capable of and has sufficient means (Israelite army + planning + divine assistance) to obtain the desired end (capture Canaan).

Various center of gravity (COG) considerations should be considered. Eikmeier[4] describes the following concepts:

Center of gravity is the primary source of strength, power, or resistance, which can be either physical or moral. In the case of the Conquest of the Land of Canaan, this would be the large Israelite army (physical strength) plus the belief that they had divine protection (moral strength).

Critical capabilities are the abilities the COG has in order to make it the central player in the given scenario. In this situation, this would be the fighting abilities of the Israelite army.

Critical requirements are the resources and means for the critical capability to be operational. In order for the Israelite army to be operative, there are some means of logistic support, Joshua's leadership, and a leadership structure. This latter is hinted at in the source text - Joshua commands the leaders of the 12 tribes, and the tribal leaders command their armies.

Critical vulnerabilities are the "critical requirements or components thereof which are either deficient or vulnerable to neutralization, interdiction, or attack (moral/physical harm) in a manner that achieves decisive results." There are two vulnerabilities, one explicitly mentioned in the Book of Joshua, the other implicit. Explicitly mentioned is the possibility that one of the men may disobey the Lord's commandments - this is demonstrated in how Achan's looting caused God to remove His favor, resulting in Joshua's defeat in his first attempt to take the city of Ai. A second source could be disunity amongst the 12 tribes. Joshua addressed this with the stoppage of the Jordan River, the sun and moon standing still, etc.

Eikmeier[5] describes how to connect the strategic framework with the COG in several steps.

Step 1: identify desired goal - capture and control the territory of Canaan.

Step 2: Identify ways to achieve that goal - cross the Jordan River, eliminate the two cities closest to the crossing point (thus establishing a toehold), and then expand control through southern and northern campaigns.

Step 3: List the means required to enable and implement the critical capability (the way) - the Israelite army would be the way, supported by the information Joshua's spies returned. There is only one non-military way mentioned in the source text: the assimilation of the Gibeonites.

Step 4: Choose the most consequential entity from the list of means, and this will be the center of gravity. In this example, the critical capability would be the skillful use of the Israelite army.

Eikmeier then describes the "Does/Uses Test" as a way to validate the cogency of the analysis: the COG does the action and uses resources to accomplish it. In this scenario, the Israelite army does the action (conquering the Canaanite territory) and uses resources (supplies) to do it. Thus we have selected the proper COG as the .

Conclusion

Based on the strategic framework outlined in JP 5-0[6] and expanded by Lykke and Eikmeier, strategic planning does appear to be in action in the capture of Canaanite territory.

Footnotes

[1] Source text used here is from https://www.biblegateway.com/passage/?search=Joshua+1-12&version=NIV&interface=print
[2] Lykke, "Defining Military Strategy."
[3] Ibid.
[4] Eikmeier, "A Logical Method for Center-of-Gravity Analysis."
[5] Ibid.
[6] JCS, Joint Planning, Ch. IV, especially p. IV-5

Bibliography

Eikmeier, D. "A Logical Method for Center-of-Gravity Analysis". Military Review, September-October 2007. Retrieved 19 September 2024 from https://www.armyupress.army.mil/Portals/7/military-review/Archives/English/MilitaryReview_20071031_art009.pdf

Joint Chiefs of Staff. JP 5-0 Joint Planning. 16 June 2017.

Lykke, A. "Defining Military Strategy" Military Review, January-February 1997. Retrieved 19 September 2024 from https://www.armyupress.army.mil/Portals/7/military-review/Archives/English/75th-Anniversary/75th-PDF/75th-Lykke.pdf

JPP Applied to Rising Military Suicide Rates

Introduction

This paper uses the Joint Planning Process (JPP)[1] to address a hypothetical situation related to rising suicide rates of military personnel. The situation is described in the following problem:

You are the Commanding Officer of a squadron/battalion/destroyer who has experienced a significant increase in suicides over the past two years. Your immediate superior asks you to utilize the model of the Joint Planning Process with your leadership team to develop a course(s) of action to address the problem. How would you approach the issue? How would you define the problem? What courses of action would you propose? What criteria would you establish to grade your courses of action? How would you measure success?

For this paper, the recommendations are for a USMC or Army battalion. Unfortunately, the described course of action won’t transfer to squadrons or destroyers.

Marine Corps Community Services: How to Talk Openly About Suicide

Each of the seven steps of the JPP will be used. As specified in JP 5-0[2], the steps are:

1. Planning Initiation
2. Mission Analysis
3. COA Development
4. COA Analysis and Wargaming
5. COA Comparison
6. COA Approval
7. Plan or Order Development

Overall, this paper makes minimal assumptions about the causes of military suicides. It is assumed that such suicides are related to harrowing missions or rapid operational tempo. The choice for these factors was motivated by the observation that “the average warrior saw 40 days of combat during World War II and 240 days during the Vietnam War” and that “something changes inside a warrior the first time they take another's life or watch a comrade fall on the battlefield… Warriors feel rage and anger and want payback; but they also feel a sense of loneliness they have never experienced before.”[3]

All courses of action (COA) presented here propose collecting information on family history of mental health issues, prior symptoms of PTSD, etc. Focusing on family history is nothing new, as some research has performed statistical analyses only on demographic factors[4].

Research has compared suicide rates amongst the warfighters in different wars, and it is generally assumed that the suicide rates for World War II are lower than all wars from the Korean War to the GWOT[5] [6]. Additional studies have specialized in suicides only from the GWOT[7]. The study by Smith et al seemed to show that “War does not historically appear to increase suicide rates in active-duty U.S. Army soldiers or U.S. civilians.”[8] If this is true, veteran suicides are more common than active-duty suicides.

Step 1: Planning Initiation

Planning begins when the order to investigate the sudden increase in suicide rate of a particular battalion, and to use the JPP to devise a course of action that addresses this problem.

Step 2: Mission Analysis

Staff estimates: The battalion commander will have the following personnel available:

• The executive officer (XO) (a major)
• 4 company commanders, including HQ company (captains)
• 4 company XOs (first lieutenants)
• 1 battalion sergeant major
• 4 first sergeants, the company-level senior NCOs
• 1 or 2 medical specialists.

The enlisted personnel would be best at gathering information on those who committed suicide. Both officers and enlisted personnel should be involved in determining what changed two years ago. Finally, the XO will be charged with organizing the information that was collected.

Mission statement: The battalion experienced a substantial increase in the rate of suicides over the past two years. The mission is to reduce that rate to where it stood prior to two years ago, at least. These rates will be measured in terms of the percentage of the battalion lost in a single month.

Commander’s critical information requirements (CCIR): To determine the success of the mission, we must know the suicide rates prior to two years ago. It would be worth reviewing records as far back as possible, at least from five years ago.

The fundamental question that must be answered is: what changed approximately 2 years ago? Rates of suicide increased significantly starting two years ago, and that change must be understood. This is one part of the CCIR.

Another CCIR that can be collected prior to the implementation of the chosen COA are profiles of the troops who committed suicide over the previous two years. Information collected should include family life, family history of mental health issues, prior symptoms of PTSD, CPTSD, or TBI[9].

Information on suicides must be collected while the chosen COA is ongoing. This will allow the effectiveness of the COA to be measured. The implementation plan for the COA can be continually adjusted as needed.

Impact on other operations: The impact on other operations, either ongoing or future will depend on the chosen COA. At bare minimum, there would be minor personnel additions that should not change ongoing or future operations. Another COA could require significant changes to both ongoing and future operations.

Step 3 COA Development

COA 1: Reproduce techniques that were used in historical situations to reduce rates of suicide. For example, during the Battle of Verdun[10], Marshal Philippe Pétain rotated French troops after two weeks on the front lines. This was called the “noria system,” and the Germans practiced something similar. One consequence of this was that a larger number of troops gained combat experience. It is not clear what effect this system had on troop suicide, if any.

It may be worthwhile to examine historical techniques that resulted in increased suicide rates – and for us to do the opposite.

COA 2: Move psychological support closer to the battalion. This would allow troops to get help in a timely manner and can be done either permanently or on an as-needed basis.

COA 3: Determine what changed starting two years ago that could cause the increased suicide rates – and reverse it. Likely causes can include personnel changes, change in mission, and change in operational tempo. Retraining or reassigning personnel can fix the first cause. Changes in mission or operational tempo will require more substantial changes, say by using Pétain’s noria system.

Step 4 COA Analysis

COA 1: The initial stage of this COA is primarily historical research. It must be conducted by historians, and so by someone external to the battalion. If the pace of research is slow, this will delay implementation. If historical methods to reduce suicides are found, the implementation of the methods could involve major operational changes.

COA 2: This COA requires either that a psychiatrist or a medic with some appropriate training be added to the battalion. Psychiatrists are usually located at the division level or higher and are in short supply.

The assignment need not be permanent: it may make sense to assign a psychiatrist temporarily to the battalion depending on recent or upcoming harrowing activities. This can provide an immediate solution, at least in some cases.

COA 3: The goal of this COA is to make changes to the battalion based on the answer(s) to the “what changed” question. If the relevant difference was a personnel change, it will be necessary to investigate whether increased suicide rates happened at the previous locations where the personnel were assigned, then retrain or reassign the personnel.

If the increased suicide rate was caused by either a change in mission or a change in operation tempo, these hypotheses should be verified by examining other battalions in similar situations. Either of these two causes may significantly impact current or future operations.

Changes in personnel, mission, or operational tempo are not the only potential causes of the increase in suicide rates. Other potential causes include an interruption in family communications, or various changes that could be described as code of conduct or HR actions, etc. For those changes, it should be simple to reverse them with no impact on current or future operations.

Step 5 COA Comparison

COA 1 will require some research, and the required data may not be available. For example, the noria system was implemented to ensure fresh troops were available for the battle, not to minimize suicide rates, and there is a lack of data regarding such rates.

It may not be possible to execute COA 1 as historical data may not be available. If multiple historical methods are found, then they must be evaluated and compared, and the one(s) that show the most promise should then be implemented.

COA 2 may not be a practical solution depending on the level of hostility to those that have thoughts of suicide within the battalion. If the level is high, a troop experiencing suicidal thoughts may be too ashamed to seek help.

COA 3 is the most practical plan of action, in part because the scope of action is so limited in comparison to COA 1 and COA 2. Even if it is found that a change in mission or a change in battle tempo was the underlying cause, these can be corrected.

Both COA 3 and COA 1 can involve operational changes, and COA 1 might require the most such changes, depending on the historical approach used.

For COA 3, the staff size and their assigned roles will be the same as described in Step 2.

Using the “Course of Action Comparison” found in JP 5-0, a plus/minus/neutral comparison would be most appropriate[11].

Criteria	COA 1	COA 2	COA 3
Time to Implement	-	+	+
Personnel Changes	+	-	0
Mission Changes	-	+	+
Operational Tempo Changes	-	+	+

Step 6 COA Approval

The plan of action will be sent to the division commander for review and approval.

Step 7 Plan or Order Development

The steps needed to execute COA 3 are as follows:

1. Obtain records going back at least 3 - 5 years.
2. Look for changes in personnel, mission, and/or battle tempo immediately prior to the period of increased suicide.
3. For any of the changes, selectively examine similar changes in other battalions.
4. Once the change has been identified, reverse it when possible – see notes below on how to accomplish this.
5. Gather statistics.
6. Compare new state (post COA 2 implementation) with prior state (pre-COA 2). Was there a difference in suicide rate?
7. Repeat as needed, adjusting plans when desired results are not achieved.

Each of the three changes listed above (personnel, mission, and tempo) can be addressed.

1. One example of personnel change is as follows: suppose LT X transferred into the battalion prior to the increase in suicide rate. Was LT X’s prior assignment marked with increased suicide rate, and did that rate plummet after his departure? If so, LT X should be sent for additional leadership training.
2. Another situation is when LT X is good, but the LT he replaced was much better. Again, additional training and mentorship should fix this problem.
3. Suppose there was a change in mission, say from building roads to participating in a humanitarian rescue following a tsunami. The two-week rotation plan used by Marshal Pétain mentioned above should be effective in reducing stress levels and so result in a lower suicide rate.
4. Finally, a change in operational tempo can also be addressed by the two-week rotation plan.
Note: experimentation usually involves a control group. Depending on the comparison being made, it may be unethical to require a control group.

Conclusion

The goal of this planning document was to apply the Joint Planning Process to correct an increase in suicide rates for a battalion. The goal is to reduce the suicide rates in the battalion to the rate from two years ago. The COA proposed here can be implemented with minimal effect on mission or operational tempo, and results are measurable. The success or failure of the COA can be accessed, and it can be modified as needed. The COA (either in original or modified form) can be considered a success if suicide rates were reduced to the level prior to the increase, at least.

Footnotes

[1] Joint Chiefs of Staff, Joint Publication 5-0
[2] Ibid, Ch V.
[3] Fisher, “Vietnam vet shares coping skills with combat warriors.”
[4] Ramchand, The War Within, pp. 19-25.
[5] Smith, “A historical comparison of U.S. Army & U.S. civilian suicide rates, 1900–2020.”
[6] This hypothesis is debated in Pollock, “Estimating the number of suicides among Vietnam veterans.”
[7] Suitt, “High Suicide Rates among United States Service Members and Veterans of the Post9/11 Wars.”
[8] Smith, “A historical comparison of U.S. Army & U.S. civilian suicide rates, 1900–2020.”
[9] Ramchand, The War Within.
[10] Wikart, “Memories of Verdun.”
[11] Joint Chiefs of Staff, Joint Publication 5-0, Appendix G.

Bibliography

Fisher, D. “Vietnam vet shares coping skills with combat warriors.” U.S. Army. 15 May 2009. Retrieved 13 September 2024 from https://www.army.mil/article/21185/vietnam_vet_shares_coping_skills_with_combat_warriors

Joint Chiefs of Staff. Joint Publication 5-0, Joint Planning. 16 June 2017. Retrieved 15 September 2024 from https://www.airforcespecialtactics.af.mil/Portals/80/prototype/assets/joint-pub-jpub-5-0-joint-planning.pdf

Pollock, D., Rhodes, P., Boyle, C., Decoufle, P., & McGee, D. “Estimating the number of suicides among Vietnam veterans.” Am J Psychiatry 147, no. 6 (June 1990). https://doi:10.1176/ajp.147.6.772

Ramchand, R., Acosta, J., Burns, R., Jaycox, L., & Pernin, C. The War Within: Preventing Suicide in the U.S. Military. RAND Corporation (2011). Retrieved 9 September 2024 from https://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG953.pdf

Smith, J., Doidge, M., Hanoa, R., & Frueh. “A historical comparison of U.S. Army & U.S. civilian suicide rates, 1900–2020.” Psychiatry Research 323 (May 2023). https://doi.org/10.1016/j.psychres.2023.115182

Suitt, T. “High Suicide Rates among United States Service Members and Veterans of the Post9/11 Wars.” Watson Institute for International and Public Affairs (21 June 2021). Retrieved 15 September 2024 from https://watson.brown.edu/costsofwar/files/cow/imce/papers/2021/Suitt_Suicides_Costs%20of%20War_June%2021%202021.pdf

Wikart, F. “Memories of Verdun.” Western Front Association. (2020). Retrieved 15 September 2024 from https://www.westernfrontassociation.com/world-war-i-articles/memories-of-verdun-by-francois-wikart/

Cloud- Based Hosting and Supply Chain Reliability

One technology that plays a crucial role in supply chain management (SCM) is cloud-based supply chain management systems. As will be described, cloud-based SCM systems can both mitigate and cause supply chain disruptions.

Cloud-based SCM systems can be either self-hosted by a company or are hosted by a cloud service provider. The primary advantage of self-hosting is data privacy: data is stored on the company’s own servers. The disadvantages are costs as well as vulnerability to physical disruptions (Temjanovski et al., 2021, pp. 28-30).

Hosting by a cloud service provider is the usual way companies host their SCM systems. While the company no longer “owns” their data, the problems of scaling and of IT and security maintenance are transferred to the cloud service provider. This is usually less expensive than self-hosting. In addition, supply chain visibility is generally available to supply chain partners (Temjanovski et al., 2021, p. 30).

The largest cloud service provider is Amazon Web Services (AWS). They provide services to most parts of the world, the major exceptions include Russia, Iran, and North Korea.

Within the United States, AWS has servers located in four regions (large geographic areas) for private or commercial use plus two separate regions dedicated to government use (AWS Documentation, n.d.). Each region has anywhere from two to four availability zones (distinct locations within a region), and within those availability zones are one or more data centers. AWS documentation notes that each datacenter has “redundant power, networking, and connectivity, and housed in separate facilities” (AWS Documentation, n.d.). At each level (region, AZ, datacenter), a failure at one level is isolated from other levels. Data is mirrored between the different AZs in a region, ensuring redundancy.

Because of all this, data loss is extremely rare. Permanent service outages are even rarer, requiring the serious faults at geographically dispersed locations. Service interruptions are possible, however, even with AWS’ level of redundancy and fault tolerance.

For example, an outage in US-EAST-1 Region on 30 July 2024 made Ring home security cameras and doorbells unusable. Numerous web services went down, including Goodreads. This outage wasn’t limited to online services: Whole Foods registers were down, and Amazon delivery drivers couldn’t complete their routes because the app they use when delivering packages was unavailable (Harris, 2024).

Cloud-based SCM software is certainly cost effective, permits visibility to supply chain partners, and data loss is avoided through periodic backups as well as redundant storage. Service outages do occur, and the 30 July 2024 outage shows that these outages have grave consequences to both online and real-world services.

References

AWS Documentation. (n.d.). “Regions and Availability Zones.” Retrieved 15 September 2024 from https://aws.amazon.com/about-aws/global-infrastructure/regions_az/

Harris, D. (2024). “AWS outage hits Amazon services, Ring, Whole Foods, Alexa.” CRN. Retrieved 15 September 2024 from https://www.crn.com/news/cloud/2024/aws-outage-hits-amazon-services-ring-whole-foods-alexa

Temjanovski, R., Bezovski, Z., & Apasieva, T. J. (2021). Cloud computing in logistic and supply chain management environment. Journal of Economics, 6(1), 23-32. Retrieved 15 September 2024 from https://eprints.ugd.edu.mk/27861/2/4191-Article%20Text-6939-1-10-20210224.pdf

Supply Chain Disruptions: Boycotts

Concept

A supply chain disruption is an unexpected interruption in the flow of goods or services. Supply chain disruptions can be caused by demand volatility, transportation issues, supplier issues, talent shortages, political instability, pandemics, and various other reasons. For each of these categories, there are several specific types of causes. For example, demand volatility can be caused by seasonal demand variations, competitor actions, etc.

A source of demand volatility is through consumer boycotting. One can easily predict the effects a boycott would have on the targeted company: loss of revenue, tarnishing of corporate reputation, and erosion of customer loyalty. With the latter, the customer will consider using competing goods and services. The practical consequence of this is that if the customer happens to like the competitor better, that customer is potentially lost forever to the boycotted company. These are the immediate effects of a boycott. What are the consequences to the targeted company’s supply chain?

Research into the effects of boycotts on supply chain logistics crosses many academic lines including marketing, politics, and business management. A quick scholarly literature review on the effects of boycotts on supply chains frequently also include the effects of sanctions. These published texts tend to focus on multinational supply chains and evaluate the boycotts and sanctions through the criteria of DEI, ESG, corporate social advocacy, circular supply chains, and sustainability using the attendant leftist political philosophy. The overall thrust of this research is: "first world company boycotted - third world hardest hit."

A typical example of the effects of sanctions and boycotts is the research by Shalpegin and Kumar (2023). They do not supply concrete definitions of “sanctions” and “boycotts”, though they do differentiate them by stating that sanctions are mandated by authorities (governments, multinational organizations, or NGOs) whereas boycotts are implemented voluntarily. It is interesting to note that they do not consider the consequences to the boycotted company and its “local” supply chain but instead focus on the consequences to offshore suppliers that participate in the company's supply chain.

Shalpegin and Kumar (2023, pp. 3-5) state that suppliers are impacted through direct relationship with the targeted company (meaning that suppliers may also be boycotted or sanctioned). In addition, the suppliers may be unable to access foreign markets or certain forms of technology, as the supplier relied on the targeted company for access. Finally, there may be logistics failures for the supplier in the forms of bottlenecks and reduced capacity (See discussion in Quigg (2022, pp. 59-77)). These are the ways sanctions and boycotts travel among supply chain members, “jeopardizing the principles of diversity, equity, and inclusion in supply chains.” (Shalpegin & Kumar, 2023, p. 1).

One of the solutions to the problems (real or imaginary) that Shalpegin and Kumar (2023, p. 5) identify is to shorten the supply chains, i.e., to use local sourcing. Local sourcing is not a complete solution, however. The ultimate form of local sourcing, nationalism, will obviously impact multinational enterprises (MNEs). Charpin (2021, p. 4) finds that “nationalism could engender supply chain disruptions via discriminatory practices toward all foreign MNEs and how national animosity may generate additional risks for the MNEs of nations in conflict with one another.” Charpin (2021, p. 8) is apparently comfortable with the concept of corporate nationality, but notes that this option is not legally supported. The solution Charpin (2021, p. 8) proposes is for MNEs to relocate their supply chain activities from offshore locations to home country locations. This activity protects a company from sanctions but still leaves them open to boycotts.

How damaging are boycotts to companies? King (2017) holds that “[w]hile boycotts rarely hurt revenues, they can threaten a company’s reputation, especially by generating negative media coverage.” Meanwhile, there seems to be no uniform agreement on the average duration of consumer boycotts. Levesque & Nam (2019) note that a boycott of Nestle lasted for seven years, while a boycott of Star-Kist lasted “almost no time at all.” Lasarov, Hoffman, and Orth (2023) also do not predict the duration of consumer boycotts, but they do note that during what they call the “heat-up phase” of a boycott, there is a sharp decrease of interest after two weeks. King (2017) notes that “we can’t pay attention to any single controversy for very long.” King recommended that “targeted companies might do better to simply “wait it out” rather than taking action in response to a boycott that might be in the news one day and out the next.”

Combining these two lines of research, one can conclude that boycotts – regardless of duration – have a minor negative impact on corporate revenue, and that “waiting it out” is a viable strategy. Thus, the consequences to the targeted company’s supply chain are negligible. Is this really the case?

Applications and Examples

With this as background, we examine two recent examples of boycotts. These boycotts show that “customer satisfaction” is more complicated than presented in Quigg (2022, pp. 103 – 110).

The first case we consider is the 2020 boycott of Goya, a large Latin food brand with markets in North America and Europe. Goya CEO and co-owner Robert Unanue praised President Donald Trump’s Hispanic Prosperity Initiative in July of 2020. Several Latino politicians and artists, most notably Alexandria Ocasio-Cortez and Julian Castro, called for a boycott of the brand. Almost immediately a counter-boycott or “buycott” was started by supporters of Trump and Goya. At the end of 2020, Unanue sarcastically named Ocasio-Cortez as “employee of the month,” claiming that the boycott/buycott expanded Goya’s customer base resulting in a sales spike and prompted the opening of a new food production facility in Texas to meet increased demand.

Research by Liaukonytė et al (2022) pegged the sales spike at 22% overall, with an increase of 56.4% in Republican counties and no decrease in Democrat counties. In addition, there was no sales decrease among Goya’s core customer base. The sales spike dissipated within three weeks. Liaukonytė et al (2022) provide no information on the effects of the buycott on Goya’s supply chain, unfortunately.

The second boycott we consider is the 2023 boycott of Bud Light, which was caused by two events. The first event was the widespread recognition of comments by Alissa Heinerscheid, Bud Light’s vice president of marketing, stating the need to “evolve and elevate” the brand to be inclusive, stating that existing marketing was “fratty and [used] out-of-touch humor.”

The second event was the decision to use “trans-influencer” Dylan Mulvaney as a representative of this brave new inclusive world. At the time, Mulvaney was participating in a self-promotion campaign called “365 Days of Girlhood” which of course did not sit well with conservatives as well as members of the “LGB without the TQ” and “trans-exclusionary radical feminists” groups.

The resulting backlash was a boycott of Bud Light products (but not all AMBev products). Three months after the boycott began, Bud Light sales had decreased 28% compared to the same time in previous years. Analysis by Liaukonytė et al (2024) (the same researchers who investigated the Goya boycott) found that sales decreased 32% in Republican counties and 22% in Democrat counties.

Bud Light went silent on the issue, and the boycott continued. In the summer of 2023, the Human Rights Campaign excoriated Anheuser-Busch (Bud Light’s owner) stating that:

In this moment, it is absolutely critical for Anheuser-Busch to stand in solidarity with Dylan and the trans community. However, when faced with anti-LGBTQ+ and transphobic criticism, Anheuser-Busch’s actions demonstrate a profound lack of fortitude in upholding its values of diversity, equity, and inclusion.

This started a secondary boycott that may have resulted in the above-noted sales decrease in Democrat counties.

According to Liaukonytė et al (2024), sales of Bud Light were persistently down for at least eight months, with sales down by 32% in Q4 2023. Heinerscheid and other members of the marketing team left the company, though the exact dates and details of their departures have not been made public.

Liaukonytė et al (2024) did consider the effects this boycott had on Bud Light’s supply chain, stating that the ongoing decline resulted in:

retailers and distributors reducing shelf space for Bud Light, illustrating how boycotts can lead to a negative feedback loop. What started as a consumer-led boycott generated downstream adjustments from retailers and distributors. These supply-side adjustments hurt the brand’s visibility and further exacerbated the negative impact on Bud Light’s performance.

These two examples – the Goya boycott/buycott and the Bud Light boycott – fly in the face of the “conventional wisdom” on boycotts: they need not be the short-term affairs, the effects on company profits is not always negative and negligible, and it is not always best to “wait it out”.

 

References

Charpin, R. (2022). “The resurgence of nationalism and its implications for supply chain risk management.” International Journal of Physical Distribution & Logistics Management. 5(1), 4-28. https:// 10.1108/IJPDLM-01-2021-0019

King, B. (2017). “Do Boycotts Work?” Northwestern Institute for Policy Research. Retrieved 12 September 2024 from https://www.ipr.northwestern.edu/news/2017/king-corporate-boycotts.html

Lasarov, W., Hoffmann, S., & Orth, U. (2023). Vanishing Boycott Impetus: Why and How Consumer Participation in a Boycott Decreases Over Time. Journal of Business Ethics 182(4), 1129–1154. https://doi.org/10.1007/s10551-021-04997-9

Levesque, A. & Nam, J. (2019). “The Effect of Consumer Boycotting on the Stock Market.” https://digitalcommons.pace.edu/honorscollege_theses

Liaukonytė, J., Tuchman, A. & Zhu, X. (2022, August 11). “Spilling the Beans on Political Consumerism: Do Social Media Boycotts and Buycotts Translate to Real Sales Impact?” Marketing Science 42(1), 11-25. https://doi.org/10.1287/mksc.2022.1386

Liaukonytė, J., Tuchman, A. & Zhu, X. (2024, March 20). “Lessons from the Bud Light Boycott, One Year Later.” Harvard Business Review. Retrieved 12 September 2024 from https://hbr.org/2024/03/lessons-from-the-bud-light-boycott-one-year-later

Quigg, B. (2022). Supply Chain Management (1st ed). McGraw-Hill Create. https://bookshelf.vitalsource.com/books/9781307866025

Shalpegin, T. & Kimar, A. (2023). "Undiversity, inequity, and exclusion in supply chains: The unintended fallout of economic sanctions and consumer boycotts." Production and Operations Management, 00, 1–7. https://doi.org/10.1111/poms.14001

Review of “Exploring the Potentials of Automation"

Abstract

This is a review of Nitsche’s “Exploring the Potentials of Automation in Logistics and Supply Chain Management: Paving the Way for Autonomous Supply Chains.” The article is the introduction to a special issue of the journal Logistics devoted to the automation of logistics and supply chain management. It describes the motivations for doing so and the particular areas of logistics most amiable to automation. The article then describes five levels of automation that are available for supply chain managers, then concludes with brief summaries of the other papers in this special issue.

This review begins with an outline of the major concepts used in the paper, then examines how supply chain management theory applies to these concepts. The managerial implications of this paper are explored, and the article is summarized. Finally, the coverage of the issues surrounding automation is appraised.

Author’s Purpose

The purpose of "Exploring the Potentials of Automation in Logistics and Supply Chain Management: Paving the Way for Autonomous Supply Chains" (Nitsche, 2021) is to serve as an introduction to a special edition of the Logistics journal devoted to how and why logistics and supply chain management systems should be automated. As it is an introduction, it defines some of the concepts used in the other six papers in the special issue. Based on these six papers, the author derives a five-level system describing the degree of automation present in any logistics or supply chain management system. This five-level system is sequential, meaning that it describes a progression pointing to the ultimate state of automation, which the author believes to be completely autonomous self-directed systems. The author completes this introduction by providing brief summaries of the other papers contained in the special issue.

Background of the Issue

Logistics and supply chain automation is defined as “the partial or full replacement or support of a human-performed physical or informational process by a machine. This includes tasks to plan, control or execute the physical flow of goods as well as the corresponding informational and financial flows within the focal firm and with supply chain partners.” (Nitsche et al., 2021, p. 225).

Prior to the COVID-19 pandemic, the motivations for automating logistics and supply chain systems were to improve supply chain responsiveness and resilience while minimizing operating costs. COVID-19 provided another motivation: eliminate the dependency on human control and input. COVID-19 thus moved the goalpost from automation to being fully autonomous. (Wuest et al., 2020, p. 6-7)

Automation comes in many forms, and Nitsche (2021, p. 5) defines five levels of automation. Ranking these from most amount of human involvement to least, these levels are:

Remote control – this is the least amount of automation necessary for remote work; humans are involved with every decision.

Systems for assisting the user – all steps in the process being automated are predefined; there is no ability to adapt to unforeseen circumstances.

Semi-automated systems with no self-learning – the ability to manage new situations is through “if-then” decisions, but the decisions themselves are predefined.

Semi-automated systems with self-learning - human intervention is only necessary in complex situations, and intervention becomes less frequent the longer the system is online.

Autonomous systems - human intervention is extremely rare; the system is self-learning, and is integrated into other relevant systems.

The author notes that fully autonomous systems are best able to overcome situations such as the COVID-19 pandemic, since fully autonomous systems remove the impact that ill employees had on supply chain responsiveness and resilience.

Application of Relevant Supply Chain Management Theory

There are several goals for automating logistics and supply chain management. Of course, there are the desires to minimize costs and increase productivity. This latter desire is expressed through the concepts of supply chain resilience and supply chain responsiveness.

Supply chain resilience is the ability of the supply chain to “heal from disruptions.” The company must be able to respond to various types of disruptions and to quickly return to pre-disruption levels of throughput. One way of doing this is to use multiple suppliers and to trace dependencies among these suppliers – in other words, use a contemporary supply chain which involves multiple partners.

For an automated supply chain to be resilient, the company must have insight into the activities of its supply chain partners. This can hinder the conversion to automation, for it requires the company’s logistics automation system to work with those of its supply chain partners. This problem is not addressed in (Nitsche, 2021).

Supply chain responsiveness is the speed at which a supply chain can deliver demand. It can be calculated as the time needed to fulfill orders. In a sense, resilience is the opposite of responsiveness: responsiveness is the speed at which a supply chain operates under normal circumstances whereas resilience is the speed at which the supply chain recovers from abnormal circumstances.

There are numerous ways an automated supply chain furthers the goal of responsiveness. For example, the automated system can track items as they move through the supply chain. When a bottleneck occurs (Quigg, 2022, p. 59), depending on the level of automation the system can alert workers or interface with the appropriate supply chain partner’s supply chain system, thus resolving the bottleneck before this responsiveness issue becomes a resilience issue.

Responsiveness is a process performance metric (Quigg, 2022, p. 63), and automated supply chain systems should be able to calculate this metric since, again, it tracks items as they proceed through the supply chain. This is done by barcodes, RFID tags, etc. The automated system should present this information in the forms of dashboards or reports.

Managerial Implications of Article Findings

There are several important lessons a manager can extract from this paper. The paper includes a comprehensive definition of logistics and supply chain management automation, and a list of the advantages that automation can bring to the supply chain is provided (improved responsiveness, improved resilience, and minimized costs). All these advantages are the results of the successful completion of an automation process, but where to start the process?

For companies that have not yet begun logistics automation, the paper includes a wealth of information. While the paper does not include a step-by-step explanation of the process, it does describe the portions of logistics systems that are most amenable to automation (fulfillment, data exchange, and management). These are places to start. Automating a supply chain can be a lengthy process, and the process is described by various levels of automation (remote control, user assistance, semi-automated systems without self-learning, semi-automated systems with self-learning, and ending with fully autonomous systems). While the author recommends targeting a fully autonomous system, many benefits can be achieved at an earlier level.

The article explains some of the ways to measure the qualities of a proposed automation solution (technical maturity, system interoperability, data security, and quality). Finally, the article lists the people whose commitment is essential for the successful automation of their logistics system (top management, affected employees, and other stakeholders).

None of the disadvantages of automation are addressed in this paper. There are no estimates of either the total cost of ownership, or the financial benefits that come with automation, or the completion time. Also left unmentioned are the advantages and disadvantages to performing the automation using internal resources (software engineers, etc.) versus external contractors.

Given that modern supply chains consist of multiple partner companies acting in concert, the automation systems of the partner companies must be compatible. If not, human intervention is required for data entry or software engineers must develop “adapters.” Finally, there is no discussion of the need to thoroughly evaluate automation solutions before they go into production. Such systems are prone to hysteresis (feedback loops), which is the bane of many automated financial trading systems.

Finally, the paper makes a serious assumption about the abilities of fully autonomous systems. Can a fully autonomous system really anticipate black swan events and respond appropriately? We cannot expect fully autonomous systems to be omniscient, nor would we want them to be.

Summary of the Article and its Context

This article serves as the introduction to a special issue of Logistics devoted to logistics and supply chain management automation. The motivation for logistics automation lies in the need to reduce costs while increasing supply chain resiliency and responsiveness. The COVID-19 pandemic only increased the desire to not only automate logistics systems but to make them fully autonomous.

While automation can be applied throughout logistics, there are three fundamental dimensions that show the most improvement in operational effectiveness: fulfillment, data exchange, and management. For a company with no logistics automation, these three areas are considered the best places to start.

The article then lists five levels of automation (remote control, user assistance, semi-automated systems - no self-learning, semi-automated systems - with self-learning, and autonomous systems) with decreasing levels of human interaction. It is the last stage, fully autonomous systems, which provides the most durability against situations like the COVID-19 pandemic.

As mentioned above, this article is the introduction of a special issue of Logistics devoted to logistics automation, and there are six other papers in that special issue that address a wide range of subjects, from the impact of cloud storage and the internet of things on automation to the use of autonomous trucks for last mile delivery. This article concludes with brief summaries of those other six papers.

Conclusion

Nitsche’s paper (Nitsche, 2021) includes valuable information about logistics automation, most importantly on the various levels of automation. The paper is one sided in that it covers the advantages of automation while glossing-over the disadvantages. The lack of discussion on the drawbacks of automated systems, especially fully autonomous systems, is troubling, and thus this paper cannot be recommended as a reliable source of information for supply chain managers considering automation.

References

Nitsche, B. (2021). Exploring the potentials of automation in logistics and supply chain management: Paving the way for autonomous supply chains. Logistics 5(51), 1–9. https://doi.org/10.3390/logistics5030051

Nitsche, B., Straube, F., & Wirth, M. (2021). Application areas and antecedents of automation in logistics and supply chain management: A conceptual framework. Supply Chain Forum Int. J. 22(3), 223–239. https://doi.org/10.1080/16258312.2021.1934106

Quigg, B. (2022). Supply Chain Management (1st ed). McGraw-Hill Create. https://bookshelf.vitalsource.com/books/9781307866025

Wuest, T., Kusiak, A., Dai, T., & Tayur, S.R. (2020, May 5). Impact of COVID-19 on manufacturing and supply networks—The case for AI-inspired digital transformation. SSRN Electron. J. 2020. https://dx.doi.org/10.2139/ssrn.3593540