Supply chain myopia and overlapping supply chains

Abstract

Purpose

The paper seeks to understand and analyse how integration changes in one supply chain are influenced by the overlap between chains

Design/methodology/approach

The paper discusses the concepts of supply chain, firm network, overlap and integration. It takes a dynamic perspective focusing on continuing processes of change in the degree of integration within and between networks. The three examples are based on more than 70 interviews over a long period of time of firms involved in the transportation, automotive and construction industries.

Findings

The paper finds that the overlap between supply chains in terms of actors, resources and activities could seriously delay, hinder and increase costs to the process when changing the degree of integration in one chain. Therefore, supply chain myopia might lead to an increase in the total costs of a firm. Further, there is a trade‐off between the costs of integration in the focal chain and increasing costs arising from decreased integration in overlapping supply chains. Failure to consider the negative effects and the resistance caused by delays and dissolving relationships within overlapping supply chains can be detrimental. The overlap between chains can be both positive and negative, and can be reversed over time.

Research limitations/implications

The research is limited to three examples and the interaction between two supply chains in each case. Since interdependencies might exist between several supply chains, the effects of change could have implications for more than one other supply chain.

Practical implications

When changing existing or developing supply chains for new businesses, firms need to take into consideration the effects and reactions of other chains. Integration between two chains might facilitate the development of business but may also actually hinder its future development.

Originality/value

The interdependencies between supply chains imply that strong pressure towards supply chain integration focusing on one chain, in literature and practice, has to be questioned for the single firm. Another specific value is the importance of existing chains for the development of new businesses.

Citation

Hertz, S. (2006), "Supply chain myopia and overlapping supply chains", Journal of Business & Industrial Marketing, Vol. 21 No. 4, pp. 208-217. https://doi.org/10.1108/08858620610672579