External Fit and Supply Network State as Determinants of Sequences of SCM Practices

Although implementation and effects of Supply Chain Management (SCM) initiatives have been widely investigated, the issue of sequences of SCM initiatives companies undertake to improve their performance has not been studied in sufficient depth. The aim of the current study is to develop an understanding of the decisional process that leads a company, at a given point of time, to choose the subsequent SCM initiative to be implemented. Specifically, it addresses how the state of supply network integration and configuration, and the fit between actual supply network performances and those required to compete in the market (external fit) affect the adoption of the following SCM initiatives. Four supply networks, whose central firms are leading pharmaceutical companies, have been investigated. Our observations suggest that, when deciding the SCM initiative(s) to be implemented, external fit and the state of supply network configuration and integration are both important, but for different reasons. In particular, lack of external fit triggers the implementation of SCM initiatives. These are then selected by considering the current state of supply network configuration and integration, and the performance dimensions (such as quality, cost, speed) that managers intend to improve to realise the external fit. Sequences of SCM initiatives are the result of a series of successive decisional situations, where the external fit and state of supply network configuration and integration vary each time a new SCM initiative is implemented. Initial findings are promising. However, further research is required to develop a generalisable theory