Focus of the Center for Supply Networks

The delivery of a product or service to a final customer involves the interaction of hundreds or thousands of companies, yet almost nothing is known about the behavior of such complex systems. There is growing realization that these supply networks (a firm's suppliers, its supplier's suppliers, etc.) are critical to the success of companies, but they lack the science needed to understand and manage them.

Traditional management methods that depend on assumptions of control have little normative value in such environments because the span of control for any particular company covers only a small portion of the supply networks in which it participates. Whereas supply chain research has traditionally emphasized the basic buyer-supplier dyad, we take a systemic view and examine the complexity of the larger supply and distribution networks that are a more realistic model of what actually happens in the real world. Such supply network research is promising but is still nascent, lacking the theoretical frameworks, constructs and research methods needed to advance the science. The Center for Supply Networks will become the focal point for researchers at ASU and around the world in addressing this research field.

New Models are Necessary

In an era of rapidly reduced product life cycles and increased supply chain coordination, we will need to develop models to allow quick and accurate analysis of environmental impacts and risks. With increased reuse and recycling, we will actually need to develop supply loop models and coordination mechanisms. Life cycle analysis will become a common ingredient to product idea generation, product design, product development, first unit production, and full production and distribution.

Global operations already have changed the nature of many supply networks, but environmental issues and demands now require a complete trans-disciplinary and inter-organizational approach to strategies and decisions throughout supply networks. With the emphasis on sustainability and life cycle analysis, we can no longer view supply chains in narrow dyadic terms. Supply network sustainability teams will become trans-disciplinary and will include as members engineers, environmental science experts, environmental law experts, process experts, operative workers, suppliers, non-governmental organizations and customers. We need complex adaptive system models to support these supply network sustainability teams in practice.

Complex Adaptive Systems

The management paradigm on which the center is built is that a supply network behaves as a complex adaptive system. Center Directors Thomas Choi and Kevin Dooley have conducted preliminary research that established this paradigm as a fruitful way to address supply networks. No one company, no matter how powerful, can orchestrate the activities of the whole network. Instead, a supply network is a self-organizing, emergent system that obeys local rules and co-evolves with other supply networks. Therefore, we view complexity theory as providing the foundational theoretical perspective for advanced research in supply chain management and sustainable supply chains.

When managers make supply network-related decisions, they must consider the part of the network that the firm can “visibly” design (e.g. supplier selection) and the part of the network that is “invisible” to the firm whose design simply emerges (e.g. a supplier selecting its suppliers). Clearly, there is tension between what can and cannot be controlled by any single firm. The center will focus on this area of tension, which we believe will be highly productive both from a research perspective and from the perspective of providing new management concepts of value to supply chain managers.

Key Focus Areas

There are key areas of research where this tension is most salient. The center will have three focus areas, each of which also draws from core strengths in the supply chain department, the business school, the university and our extended research network. The focus areas are:

  • Triads in Supply Networks
  • Sustainable Supply Networks
  • Information Technology as Enabler
  • Service Supply Chain as Complex Adaptive System

Triads in Supply Networks

One area of emerging research interest is to regard “triads” as the most basic unit of supply networks. A triad is the smallest network unit where we can observe how a link affects a link or a node affects a link either directly or indirectly connected—the quintessential network dynamics that a dyad by itself cannot capture.

Triads are more than a collection of two dyads (three nodes and two links) or three dyads (three nodes and three links). Networks, for that matter, are more than a collection of dyads. If a triad or network is a sum of dyads, then it is a complicated entity rather than a complex entity. In fact, triads take us into this realm of control versus emergence because while one firm (i.e. buyer) may try to control the other two firms it is connected to in a triad (i.e. suppliers), these two firms can make their own volitional choices when it comes to establishing a relationship between them. Focusing on triads will prepare us to study the emergent nature of supply networks.

Sustainable Supply Networks

Sustainability issues are in fact supply network issues. According to Charles Redman, director of ASU's Global Institute of Sustainability, sustainability has to do with connectivity, environment and innovation. In this context, there is a constant tension between a firm as member of a supply network seeking profit maximization and the supply network itself as a collective body of these firms and their environment that has a larger social responsibility.

Many scholars have traditionally addressed this issue as a closed-loop supply chain process that requires control through deviation-correcting feedback. However, there is a growing body of work that views sustainability in supply networks as an open-loop process that requires deviation-amplifying feedback that promotes innovation and learning. The supply network operates as a complex adaptive system in the latter case, and we believe there is ample potential to advance our thinking in this regard.

Information Technology as Enabler

Information technology has long been recognized as the key enabler of effective supply chain management. During the early days of enterprise resources planning, IT was posed as the enabler of a supply network as a close-loop process that would permit a manager to control its supply network from “cradle to grave.” However, the results in practice have been less than completely successful, and now many scholars are arguing against such claims.

Instead, the emerging thinking is on how IT in fact enables adaptation of firms in supply networks in a more localized fashion rather than in a globally overarching schema. Scholars at the Massachusetts Institute of Technology have argued that IT needs to view supply networks as complex adaptive systems and to find its role within the scope of this recognition.

Service Supply Chain as Complex Adaptive System

The concept of service supply chain is still emerging as an active research area within supply chain management. Many scholars and companies are still addressing how to define what a service supply chain is and how it functions. One common characteristic that all seem to agree on is that service delivery occurs in real time and obeys local rules allowing for an emergent process. To us, service supply chains also need to be viewed as complex adaptive systems, and it is our belief that the infusion of this perspective will move the field forward.