Masters Course: Supply Chain Theory

Masters Course: Supply Chain Theory GENERAL INFORMATION Course code: ECTS: 8 Period: Fall 2015 (Oct- Dec) Level: Master Pre- requisites: Students must be enrolled to the masters program in Supply Chain Management at Hanken, and completed at least one course in logistics and/or supply chain management at a masters level. As this course builds upon prior knowledge on logistics/scm, exemptions from these requirements will not be granted. Signing up via WebOodi. The examinator shall be notified if a student discontinues the course. The introductory session is mandatory. Examinator: Prof. Arni Halldorsson, arni.halldorsson@gmail.com or arni.halldorsson@hanken.fi Contact hours: Please contact me by e- mail to arrange for a meeting/discussion by phone. Background and aim Supply Chain Theory is an advanced course at masters level for students majoring in logistics and supply chain management. Logistics and supply chain management represent a broad range of managerial challenges and tensions that influence the strategic direction as well as the operational performance of the individual firm that operate in within the wider context of a supply chain. Logistics and supply chain management represent a field that has been criticised for not having an own theory, and theory development as well as borrowing theories from other disciplines remain important in this field. 1

The aim of this course is to further the understanding for the application of different theories to logistics and supply chain management. Focus will be on discussing theoretical frameworks and - concepts relative to particular problems ranging from specific managerial problems to wider societal challenges. The course puts emphasis selection and application of different theories given the particular problem. Upon completing the course students are expected to have an overview of and be able to analyse different theories that have commonly been applied to logistics and supply chain management. They are also expected to be able to argue for their own choices of theories and development of theoretical framework for their dissertation based upon a research/practical problem that has been motivated for that purpose. The core areas of the course are: 1. Strategy and organization of companies in the context of a supply chain 2. Interorganisational relations in a supply chain 3. Work with theoretical principles in relation to different contexts and problems (industry, managerial decisions/societal challenges) The core areas will be addressed by the following objectives: Be familiar with relevant academic journals within the subject area of logistics and supply chain management Independent review of particular literature (articles in academic journals) and provide an overview of contemporary theories and studies in logistics and supply chain management (SCM) that can be used to describe, analyse and explain modern management principles for cooperation, decisions and control of companies in a supply chain, and of those who relate to supply chain design. Discuss and apply a terminology in order to structure and understand the complicated networks that modern companies are part of. Learning outcomes: Subject specific: Understand the background and key elements of, and demonstrate an ability to apply, contemporary theories in business and management that are complementary to supply chain management in general, and in particular how these facilitate development and execution of structures and strategies of purchasing, operations- and logistics management in an inter- organisational context. Students must understand how contextual factors influence the implications of their proposed decisions and solutions. Transferable skills: Develop and motivate relevant research/practical problems that are summarised in a set of questions. Develop awareness and critical mindsets of theories, approaches and models in general, and to appreciate appropriateness - - the importance of contextual factors in the particular situation. Review literature; students must be able to design and 2

conduct review of literature relevant to a particular problem, and to collect relevant secondary evidence to contextualise that knowledge. Team- work and presentation skills, critical but constructive mind- set towards the task. Teaching and learning activities include a combination of lectures, student presentations (groups) and reflective sessions. Students are expected to contribute actively to the in- class discussions and group work. Contact hours: 20-24 contact hours (in- class). Language of Instruction: English Assessment: Course part Min points to pass Max points Mandatory to pass Group work (in class and outside) Individual work take- home exam (24 hrs.) 17,5 35 27,5 55 Individual learning log 5 10 Total 100 Readings: articles from academic journals around the following topics: Characterising theories and research Theories and concepts in logistics and SCM Boundaries of the firm (transaction costs economics) Inter- firm contracting (agency theory) Inter- organisational relationships (network approach) Strategic perspective (resource based view) Emerging context Putting the pieces together Students are expected to access the articles that are compulsory for each session cf. list below (and complementary reading as well) through the on- line databases at Hanken. The journal articles referred to below should be accessed through Hanken on- line databases. A quick way to access the articles is to start the search by the name of the academic journal through Välj e- tidskrift. From this, you can narrow the search by year and volume. 3

Key topics o Theories and frameworks: What is theory and how do we use theoretical framework in producing new knowledge (e.g. in master thesis) and for improved decision- making (practitioner s point of view). Borrowing- context- theorize. o The discipline: Logistics and supply chain management overview, definitions, critical assessment of assumptions, problem- owners. o Frameworks within the discipline: Introduction to: Business models and management models, identifying and discussing relevant models in logistics and supply chain management. o Boundaries of the firm: Defining the most efficient boundaries of the firm (outsourcing, insourcing, etc.). Transaction cost economics, and it s application for make- or- buy and total- cost- of- ownership. o Inter- firm contracting: Types of contracts, motivating suppliers to act in favour of the customer. Behavioral based vs. outcome based contracts. Asymmetric information vs. transparency in buyer- supplier relationship. Reflection & application: monitoring and control in buyer- supplier relationships. Are all firms snakes? o Buyer- supplier relationships: dependency, uncertainty, trust, developing and managing relationships. o A strategic perspective - resources: Introduction to the resource- based view competitive advantage through SCM; The supply chain as a bundle of inter- connected resources and capabilities. o A strategic perspective relationship advantage: Resources and capabilities a dynamic and inter- organisational perspective. o Role of context ( contingency theory ) and emerging areas of application: Examples include energy, information technology and social networking, risk, social responsibility, environmental sustainability, food supply chains, high- tech supply chains, global vs. local sourcing. Other issues: Group work will be done in class. While attendance is not mandatory, note that you may miss out on points if not being there. There are no compensations for in- class group work in case you are absent. Follow the notes on the course website and messages sent to students by e- mail - - this is the prime way of communicating any upcoming issues, changes, etc. A note on plagiarism: Your take home exam will be submitted to a programme that checks for plagiarism (TurnItIn). You ll get more instructions later. Generally, make sure you follow all rules of academic writing. Hanken has some guidelines, but Harvard referencing generally helps. Check the quality of your sources (i.e. no Wikipedia etc.). If plagiarising turns out to be a problem in any of your assignments you are automatically excluded from the course and all necessary further steps will be taken. 4

The syllabus can be subject of modification. 2015 dates 1. Monday November 2 2. Tuesday November 3 3. Thursday November 19 th 4. Friday November 20 th 5. Wednesday December 2 nd 6. Thursday December 3 rd 8.30 10.00 10.15 11.45 8:30-10:00 10:15-11:45 8.30 10.00 10.15 11.45 8.30 10.00 10.15 11.45 8:30-10:00 10:15-11:45 8:30-10:00 10:15-11:45 Day 1 and 2 1. Introduction and course outline Theory: what, why Course outline and expectations Characterising theories and research in logistics and SCM Assessment Student exercise / reflective session: a) identify models, concepts, theories, etc. of SCM from your prior course units (cf. prerequisites above). b) societal challenges, technological development and industrial leadership. Stock, J. R., Boyer, S. L and Harmon, T. (2010), Research opportunities in supply chain management, Journal of the Academy of Marketing Science, 38, pp. 32-41. Sutton, Robert I. and Staw, Barry M. (1995): What Theory is Not, Administrative Science Quarterly, Volume 40, No. 3 (Sep., 1995), pp. 371-384 Read Exhibit I p. 111 in: Kraljic, P. (1983): Purchasing must become supply management, Harvard Business Review, September- October. Read Figure 1, p. 67 in: Lambert, D. and Cooper, M. (2000): Issues in Supply Chain Management, Industrial Marketing Management, Vol. 29, pp. 65-83. 5

Read Figure on p. 109 in: Fisher, M. (1997), What is the right supply chain for your product, Harvard Business Review, March- April, pp. 105-116. Stock, J. (1997). Applying theories from other disciplines to logistics, International Journal of Physical Distribution and Logistics Management, Vol. 27, No.9/10, pp. 515-539. Halldorsson, A, Hsuan, J. and Kotzab, H. (2015): "Complementary theories to supply chain management revisited from borrowing theories to theorizing", Supply Chain Management: An International Journal, Vol. 20 Iss 6 pp. 574 586. Watch this video: https://www.youtube.com/watch?v=pjyzfakoxny 2. Logistics theories and concepts background and outline Some cornerstones of SCM Issues in implementation of SCM Introduction to: Business models and management models Reflection: Why the cornerstones matter, and how? Klaus, Peter (2009), Logistics research: a 50 years march of ideas Review paper, Logist. Res. (2009) 1:53 65. Halldorsson, Arni, Larson, Paul D. and Poist, Richard F. (2008): Supply Chain Management: A Comparison of Scandinavian and American Perspectives, International Journal of Physical Distribution & Logistics Management, Vol. 38, Issue 2, pp. 126-142. o http://www.emeraldinsight.com/10.1108/09600030810861206 Complementary reading: Defee, C.C., Wiliams, B., Randall, W. S and Thomas, R. (2010): An inventory of theory in logistics and SCM research, International Journal of Logistics Management, Vol. 10, No. 3, pp. 404-489. Giannakis, Mihalis and Croom, Simon (2004): Toward the Development of a Supply Chain Management Paradigm: A Conceptual Framework, The Journal of Supply Chain Management, Spring, pp. 27-37. Chen, I.J. and Paulraj, A. (2004): Towards a theory of supply chain management: constructs and measurements, Journal of Operations Management, Vol. 22, pp. 119-150. 3. Boundaries of the firm (transaction costs economics) Efficient boundaries of the firm 6

Introduction to key concepts of TCE (bounded rationality, asset specificity, opportunism, safeguards) Critical assessment of the assumption of TCE Application: make- or- buy; total cost of ownership Assignment: find examples of applications in logistics/scm journals. Choi, T. and Linton, T (2011): Don t Let Your Supply Chain Control Your Business, Harvard Business Review, December, pp. 112-117. Skjott- Larsen, T. (2000). Third Party Logistics - From an Interorganizational Point of View, International Journal of Physical Distribution and Logisitcs Management, Vol 30, Iss. 2, pp. 112-127 (in particular the part presenting the elements of the transaction cost economics). den Butter, F. A. G. and Linse, K. A. (2008): Rethinking procurement in the Era of Globalization, MIT Sloan Management Review, Vol. 50, No. 1, pp. 76-80. Halldórsson, A. and Skjøtt- Larsen, T. (2006): "Dynamics of relationship governance in TPL arrangements a dyadic perspective", International Journal of Physical Distribution & Logistics Management, Volume 36, Issue 7, pp.490 506. http://www.emeraldinsight.com/doi/full/10.1108/09600030610684944 Complementary reading: Williamson, O. E. (2008). Outsourcing: Transaction cost Economics and Supply Chain Management, Journal of Supply Chain Management, pp. 5 16. Noorderhaven, Niels G. (1995): Transaction, interaction, institutionalization: Toward a Dynamic Theory of Hybrid Governance, Scandinavian Journal of Management, Vol. 11, No. 1., pp. 43-55. Dyer, Jeffery, H. (1997): Effective Interfirm Collaboration: How Firms Minimize Transaction Costs and Maxmize Transaction Value, Strategic Management Journal, Vol. 18:7, pp. 535-556 Day 3 and 4 4. Inter- firm contracting (agency theory) Behavioral based vs. outcome based contracts Asymmetric information vs. transparency in buyer- supplier relationship Reflection & application: monitoring and control in buyer- supplier relationships Exploring this in a context : The horse- meat scandal in the food supply chain. Logan, Mary S. (2000). Using Agency Theory to Design Successful Outsourcing Relationships, International Journal Logistics Management, Vol. 2, pp. 21-32 7

Ciliberti, F., de Groot, G., de Haan, J., and Pontrandolfo, P. (2009) "Codes to coordinate supply chains: SMEs' experiences with SA8000", Supply Chain Management: An International Journal, Vol. 14 Issue 2, pp.117 127. Lamming, Richard C., Nigel D. Caldwell, Deborah A. Harrison and Wendy Philips (2001): Transparency in Supply Relationships: Concept and Practice, The Journal of Supply Chain Management, Fall, pp. 4-10. 5. Relationship management Buyer- supplier relationships Paradoxes and strategic aspects in industrial networks: actors, resources, activities Are all firms snakes? Håkansson, Håkan and David Ford (2002): How should companies interact in business networks?, Journal of Business Research (55), pp. 133-139. Cousins, Paul D. (2002): A conceptual model for managing long- term inter- organisational relationships, European Journal of Purchasing & Supply Management, Vol. 8, pp. 71-82. Anderson, E. and Jap, S. (2005): The dark side of close relationships, Sloan Management Review, Spring. Araujo, L., Dubois, A., Gadde, L.- E., (1999), Managing interfaces with suppliers, Industrial Marketing Management, Vol. 28, pp. 497-506 6. Emerging areas of application Energy use and - efficiency Environmental sustainability Information technology, including social networking Risk in global supply chains Social responsibility Halldorsson, A., Kotzab, H. and Skjoett- Larsen, T. (2009): Supply Chain Management on the Cross- road to Sustainability: A Blessing or a Curse?, Logistics Research, Vol. 1, No. 2, pp. 83-94. 8

Halldorsson, A. and Svanberg, M. (2013): "Energy resources: trajectories for supply chain management", Supply Chain Management: An International Journal, Vol. 18 Iss: 1, pp.66 73. o Link: http://www.emeraldinsight.com/journals.htm?articleid=17068865 This is a working session. Groups will work on particular topics and reflect upon these in a SCM context, for then to relate to key problems and questions the theories complementary to SCM (the theories presented and discussed during day 1-3). The aim is to develop a critical but constructive approach to the subject matter, and to develop the ability to work with logistics and SCM in a particular context. Day 5 and 6 7. A strategic perspective (resource based view) Introduction to the resource- based view Supply chain as a bundle of inter- connected resources and capabilities SCM and competitive advantage Make- or- buy Reflection: What do we mean by strategic in logistics/scm? Grant, Robert M. (1991): The Resource- Based Theory of Competitive Advantage: Implications for Strategy Formulation. California Management Review, Vol. 33, Nr. 3, pp. 114-135. Barney, Jay B. (1999): How a Firm s Capabilities Affect Boundary Decision, Sloan Management Review, Spring99 Vol. 40 Issue 3. Ketchen, David J. and Guinipero, Larry C. (2004): The intersection of strategic management and supply chain management, Industrial Marketing Management, 33, pp. 51-56. 8. Strategic perspective (relationship advantage) Resources and capabilities a dynamic and inter- organisational perspective Logistics- related capabilities; relationship capabilities Dyer, Jeffrey H. and Harbir Singh (1998): The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage, Academy of Management Review, Vol. 23, No. 4, pp. 660-679. 9

Halldórsson, Árni and Tage Skjøtt- Larsen (2004): Developing Logistics Competencies Through Third- Party Logistics Relationships, International Journal of Operations and Production Management. 9. Working session: group presentations A more detailed content and format of this session will be discussed on day 4. Comparing the complementary theories to supply chain management. Group presentation and discussion. Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett- Larsen, T. (2007): Complementary theories to supply chain management, Supply Chain Management: An International Journal, Volume 12 Issue 4, 284-296. 10. Synthesising our thoughts What is the challenge of using the myriads of SCM- related concepts (for researchers and managers!) Key components of a theory of business and a management model Preparing for the 24 hrs. exam Fawcett, S.E. and Waller, M.A. (2011): "Making Sense Out of Chaos: Why Theory is Relevant to Supply Chain Research." Journal of Business Logistics, 32(1): 1-5. Mintzberg, H. (1996: Musings on management. Ten ideas designed to rile everyone who cares about management., Harvard Business Review, July- August, 74 (4), pp. 61-7. Complementary reading: Birkinshaw, Julian and Goddard, Jules (2009): What is Your Management Model, MIT Sloan Management Review, Winter, pp. 81-90. 10

o http://search.ebscohost.com.proxy.shh.fi/login.aspx?direct=true&db= bth&an=36182935&site=ehost- live Drucker, Peter (1994): The Theory of the Business, Harvard Business Review, Sep/Oct94, Volume 72, Issue 5, pp. 95-104. o http://search.ebscohost.com.proxy.shh.fi/login.aspx?direct=true&db= bth&an=9409230321&site=ehost- live Ramsay, John and Caldwell, Nigel (2004): If all you have is a hammer, everything looks like a nail: the risks of casual trope usage in purchasing discourse, Journal of Purchasing & Supply Management, Vol. 10, pp. 79-87. 11