AJIBM  Vol.4 No.3 , March 2014
Strategic Fast Supply Demand-Chains in a Network Context: Opportunistic Practices That Can Destroy Supply Chain Systems
Abstract: This paper has a conceptual character and explores an approach between transaction cost analysis theory and network theory when applied to supply chains in a broader context: industrial management research. This approach raises the assumptions that fast supply chains, i.e., supply chains made of short time relationships and multiple partners can contribute to destroying trust and collaboration between companies, ending up by stressing actual systems’ arrangements in somehow stable supply chains/network chains. As a consequence, transforming them in distrust arrangements and thus giving birth to new (old) approaches based only on transaction cost analysis theory: opportunism and limited rationality as the continuum for relationships between companies in a globalized world with numerous potential agents/companies that can play several roles. Too high levels of entropy can show this reality: the number of potential players (suppliers, customers or complementors) with theoretically equal probability of establishing partnerships with one focal company in a supply chain or network arrangement is excessive in relation to the number of current suppliers, customers and complementors, and for that reason, the focal company is somehow dissipating energy in identifying several potential players and in a state of giving one way or another equal importance to them all, situation that can affect stable relations with current partners. Theoretically, this will create what looks like strategic fast supply—demand chains or network chains: fast because they are rapidly settle down and fast as they are also rapidly dismantled. Those arrangements are the ones responsible for several possible and fast relations (internalizing resources from the environment and/or externalizing resources to the environment) but, anyway, contributing to loose trust, credibility and running against profitable games with partners already involved with focal companies in stable supply chains.
Cite this paper: Carvalho, J. , Martins, A. , Ramos, T. and Dias, E. (2014) Strategic Fast Supply Demand-Chains in a Network Context: Opportunistic Practices That Can Destroy Supply Chain Systems. American Journal of Industrial and Business Management, 4, 123-133. doi: 10.4236/ajibm.2014.43019.

[1]   Forrester, J.W. (1959) Advertising: A Problem in Industrial Dynamics. Harvard Business Review, 36, 100-110.

[2]   Forrester, J.W. (1958) Industrial Dynamics: A Major Breakthrough for Decision Makers. Harvard Business Review, 36, 37-66.

[3]   Lee, H.L., Padmanabhan, V. and Whang, S. (1997) The Bullwhip Effect in Supply Chains. Sloan Management Review, 1997, 93-102.

[4]   Shahabuddin, S. (2012) The Bullwhip Effect: Is There a Solution? The Business Review, Cambridge, 20, 30-36.

[5]   Simchi-Levi, D., Kaminsky, P. and Simchi-Levi, E. (2000) Designing and Managing the Supply Chain-Concepts, Strategies, and Case Studies. McGraw-Hill, Irwin, Boston.

[6]   Sterman, J.D. (2000) Business Dynamics: Systems Thinking and Modeling for a Complex World. McGraw-Hill, Irwin, Boston.

[7]   Gadde, L.-E., Håkansson, H. and Persson, G. (2010) Supply Network Strategies. 2nd Edition, John Wiley & Sons, Hoboken.

[8]   Brandenburger, A.M. and Nalebuff, B.J. (1997) Co-Opetition. Currency Doubleday.

[9]   Yami, S., Castaldo, S., Dagnino, G.B. and Le Roy, F. (2010) Coopetition: Winning Strategies for the 21st Century. Edward Elgar Publishers.

[10]   Doz, Y. and Hamel, G. (1998) Alliance Advantage: The Art of Creating Value through Partnering. Harvard Business School Press, Boston.

[11]   Gadde, L.-E. and Håkansson, H. (2001) Supply Network Strategies. John Wiley & Sons, Hoboken.

[12]   Industrial Marketing and Purchasing Group (2014).

[13]   Singh, R.K. and Sharma, M.K. (2014) Prioritising the Alternatives for Flexibility in Supply Chains. Production Planning & Control, 25, 176.

[14]   Bertalanffy, L. (1968) General Systems Theory. Penguin Books, London.

[15]   Kast, F.E. and Rosenzweig, J.E. (1972) General Systems Theory: Applications for Organization and Management. Academy of Management Journal, 1972, 447-466.

[16]   Le Moigne, J.L. (1977) La Théorie du Système Général: Théorie de la modélisation. Presses Universitaires de France, Paris.

[17]   Luhmann, N. and Gilgen, P. (2012) Introduction to Systems Theory. Polity.

[18]   Richardson, G.P. (1999) Feedback Thought in Social Science and Systems Theory. Pegasus Communications, Waltham, Mass.

[19]   Forrester, J.W. (1971) Counterintuitive Behavior of Social Systems. Technology Review, 73, 52-68.

[20]   Paik, S.-K. and Bagchi, P.K. (2007) Understanding the Causes of the Bullwhip Effect in a Supply Chain. International Journal of Retail and Distribution Management, 35, 308-324.

[21]   Checkland, P. and Scholes, J. (1999) Soft Systems Methodology in Action. John Wiley & Sons, Hoboken.

[22]   Gharajedaghi, J. (1999) Systems Thinking—Managing Chaos and Complexity. Butterworth Heinmann.

[23]   Lindskog, M. (2012) Systems Theory: Myth or Mainstream. Logistics Research, 4, 63-81.

[24]   Sterman, J.D. (1991) A Skeptic’s Guide to Computer Models. In: Barney, G.O., Ed., Managing a Nation: The Microcomputer Software Catalog, Westview Press, Boulder, 209-229.

[25]   Forrester, J.W. (1961) Industrial Dynamics. MIT Press, Cambridge, Mass.

[26]   Simon, H.A. (1981) The Sciences of the Artificial. 2nd Edition, The MIT Press, Cambridge, Mass.

[27]   Jackson, M.C. (1999) Towards Coherent Pluralism in Management Science. Journal of the Operational Research Society, 50, 12-22.

[28]   Stacey, R.D. (1995) The Science of Complexity: An Alternative Perspective for Strategic Change Processes. Strategic Management Journal, 16, 477-495.

[29]   Beinhocker, E.D. (1997) Strategy at the Edge of Chaos. The McKinsey Quarterly, 1, 24-39.

[30]   Brown, S.L. and Einsenhardt, K.M. (1998) Competing on the Edge. Harvard Business School Press, Cambridge, Mass.

[31]   Khun, L. (2009) Adventures in Complexity: For Organizations near the Edge of Chaos. Triarchy Press Ltd.

[32]   Senge, P.M. (1990) The Fifth Discipline: The Art and Practice of the Learning Organization. DoubleDay Currency, New York.

[33]   Kline, P. and Sunders, B. (2010) Ten Steps to a Learning Organization. Great River Books. 2nd Edition.

[34]   The Economist (2002) Incredible Shrinking Plants.

[35]   Lynn, B.C. (2006) End of the Line: The Rise and Coming Fall of the Global Corporation. Crown Business.

[36]   Crespo de Carvalho, J. (2001) E-Business & E-Commerce-On & Offline. Edições Sílabo, Lisbon.

[37]   Gattorna, J.L. and Walters, D.W. (1996) Managing the Supply Chain: A Strategic Perspective. MacMillan, London.

[38]   Sehgal, V. (2011) Supply Chain as Strategic Asset: The Key to Reaching Business Goals. Wiley, Hoboken.

[39]   Oliveira, F. and Gimeno, A. (2014) Supply Chain Management Strategy: Using SCM to Create Greater Corporate Efficiency and Profits. IBM Press, Indianapolis.

[40]   Hines, P. (1993) Integrated Materials Management: The Value Chain Redefined. The International Journal of Logistics Management, 4, 13-22.

[41]   Fine, C.H. (2000) Clockspeed-Based Strategies for Supply Chain Design. Production and Operations Management, 9, 213-221.

[42]   Gattorna, J.L. (2010) Dynamic Supply Chains: Delivering Value through People. Financial Times Press, Upper Saddle River.

[43]   Christopher, M. (1992) Logistics and Supply Chain Management. Pitman Publishing, London.

[44]   Christopher, M. (2011) Logistics and Supply Chain Management. Financial Times Series, 4th Edition, Financial Times Press, Upper Saddle River.

[45]   Mena, C., Humphries, A. and Choi, T. (2013) Toward a Theory of Multi-Tier Supply Chain Management. Journal of Supply Chain Management, 49, 58-77.

[46]   Swaminathan, J., Smith, S.F. and Sadeh, N.M. (1998) Modeling Supply Chain Dynamics: A Multiagent Approach. Decision Sciences, 29, 607-632.

[47]   Fukunaga, Y., Takahashi, Y., Tanaka, N., Kojima, T. and Morita, M. (2000) System Dynamics Analysis of Stability during Non-Equilibrium Stage in Physical Distribution. Proceedings of the 18th International Conference of the System Dynamics Society, Bergen, 6-10 August.

[48]   Groothedde, B. (2000) Dynamics in Spatial Logistic Chains. Proceedings of the 18th International Conference of the System Dynamics Society, Bergen, 6-10 August.

[49]   Anderson Jr., E.G., Fine, C.H. and Parker, G.G. (2000) Upstream Volatility in the Supply Chain: The Machine Tool Industry as a Case Study. Production and Operations Management, 9, 239-251.

[50]   Sobrero, M. and Roberts, E.B. (2002) Strategic Management of Supplier-Manufacturer Relations in New Product Development. Research Policy, 31, 159-182.

[51]   Cakravastia, A. and Diawati, L. (1999) Development of a System Dynamic Model to Diagnose the Logistic Chain Performance of Shipbuilding Industry in Indonesia. Proceedings of the 17th International Conference of the System Dynamics Society, Wellington, 20-23 July.

[52]   Strohhecker, J. (2000) Supply Chain Management: Software Solutions, versus Policy Design. Proceedings of the 18th International Conference of the System Dynamics Society, Bergen, 6-10 August.

[53]   Barlas, Y. and Aksogan, A. (1996) Product Diversification and Quick Response Order Strategies in Supply Chain Management. Proceedings of the 14th Conference of the International System Dynamics Society, Cambridge, 22-25 July, pp. 47-50.

[54]   Vargo, S.L. and Lusch, R.F. (2004) Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68, 1-17.

[55]   Vargo, S.L. and Lusch, R.F. (2006) Service-Dominant Logic: What It Is, What It Is Not, What It Might Be. In: Lush, R.F. and Vargo, S.L., Ed., The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions, M. E. Shape, New York, pp. 43-56.

[56]   Vargo, S.L. and Lusch, R.F. (2008) From Goods to Service(s): Divergences and Convergences of Logics. Industrial Marketing Management, 37, 254-259.

[57]   Vargo, S.L. and Lusch, R.F. (2008) Why “Service”? Journal of the Academy of Marketing Science, 36, 25-38.

[58]   Vargo, S.L. and Lusch, R.F. (2008) Service-Dominant Logic: Continuing the Evolution. Journal of the Academy of Marketing Science, 36, 1-10.

[59]   Vargo, S.L. and Lusch, R.F. (2011) It’s All B2B…and Beyond: Toward a Systems Perspective of the Market. Industrial Marketing Management, 40, 181-187.

[60]   Shannon, C.E. and Weaver, W. (1949) The Mathematical Theory of Communication. University of Illinois Press, Urbana.

[61]   Forrester, J.W. (1989) The Beginning of System Dynamics. MIT System Dynamics Group Memo D