Operations Management Research

, Volume 5, Issue 1–2, pp 57–68 | Cite as

Using the social system of a supply chain to improve a focal organization’s operating performance

  • Kevin Burgess
  • Prakash J. SinghEmail author


In this paper, we explore how a large organization, operating in a mature, asset-intensive industry, used the social system of a key supply chain to generate significant improvement in operating performance (e.g., inventory turnover ratio improved from 0.8 to 3.2 in 5 years). A case study approach was used to study a steel rail supply chain involving an Australian railway company as the focal company. This supply chain consisted of two other companies: a steel manufacturer and a bulk transporter. Multiple forms of data were collected and analyzed, including models and process maps of the supply chain, published and internal documents, Enterprise Resource Planning system reports, and in-depth interviews of 31 key personnel involved in the supply chain. We found that the organizations had invested heavily in formal systems, such as governance processes and information technology systems. However, it was the informal mechanisms across and within the social system which made the greatest contribution to the resulting improvements. This suggests that organizations may be able to achieve significant operating performance outcomes at far lower cost and in shorter time frames by working through the existing social systems instead of focusing excessively on formal governance and IT systems.


Supply chain management Social factors Informal factors Operating performance 


  1. Agarwal A, Shankar R (2002) Analyzing alternatives for improvement in supply chain performance. Work Stud 51(1):32–37CrossRefGoogle Scholar
  2. Brandenburger A, Nalebuff B (1996) Co-opetition: a revolution mindset that combines competition and cooperation. Doubleday, New YorkGoogle Scholar
  3. Burgess K, Singh PJ, Koroglu R (2006) Supply chain management: a structured literature review and implications for future research. Int J Oper Prod Manag 26(5):703–729CrossRefGoogle Scholar
  4. Burt RS (1992) Structural holes: the social structure of competition. Harvard University Press, CambridgeGoogle Scholar
  5. Cachon G, Fisher M (2000) Supply chain inventory management and the value of shared information. Manag Sci 46(8):1032–1048CrossRefGoogle Scholar
  6. Chen F (1999) Decentralized supply chains subject to information delays. Manag Sci 45:1076–1090CrossRefGoogle Scholar
  7. Chen IJ, Paulraj A (2004a) Towards a theory of supply chain management: the constructs and measurements. J Oper Manag 22(2):119–150CrossRefGoogle Scholar
  8. Chen IJ, Paulraj A (2004b) Understanding supply chain management: critical research and a theoretical framework. Int J Prod Res 43(1):131–163CrossRefGoogle Scholar
  9. Coleman J (1988) Social capital in the creation of human capital. Am J Sociol 94:S95–S120CrossRefGoogle Scholar
  10. Cousins PD, Handfield RB, Lawson B, Petersen KJ (2006) Creating supply chain relational capital: the impact of formal and informal socialization processes. J Oper Manag 24(6):851–863CrossRefGoogle Scholar
  11. Cousins PD, Menguc B (2006) The implications of socialization and integration in supply chain management. J Oper Manag 24(5):604–620CrossRefGoogle Scholar
  12. De Búrca S, Fybes B, Marshall D (2005) Strategic technology adoption: extending ERP across the supply chain. J Enterp Inf Manag 18(4):427–440Google Scholar
  13. Defee CC, Stank TP (2005) Applying the strategy-structure-performance paradigm to the supply chain environment. Int J Logist Manag 16(1):28–50CrossRefGoogle Scholar
  14. Ellram LR (1996) The use of case study methodology in logistics research. J Bus Logist 17(2):93–138Google Scholar
  15. Fabbe-Costes N, Jahre M (2008) Supply chain integration and performance: a review of the evidence. Int J Logist Manag 19(2):130–154CrossRefGoogle Scholar
  16. Fine CH (1998) Clockspeed. Perseus Books, ReadingGoogle Scholar
  17. Ford D, Hakansson H (2006) IMP - some things achieved: much more to do. Eur J Mark 40(3/4):248–258CrossRefGoogle Scholar
  18. Forrester JW (1961) Industrial dynamics. MIT Press, CambridgeGoogle Scholar
  19. Fransoo JC, Wouters MJF (2000) Measuring the bullwhip effect in the supply chain. Supply Chain Manag Int J 5(2):78–89CrossRefGoogle Scholar
  20. Gardner JT, Cooper MC (2003) Strategic supply chain mapping approaches. J Bus Logist 24(2):37–65CrossRefGoogle Scholar
  21. Geertz C (1973) Thick Description: Toward an interpretation theory of culture. In: Geertz C (ed) The interpretation of cultures. Basic Press, New York, pp 79–118Google Scholar
  22. Gittell JH (2000) Organizing work to support relational co-ordination. Int J Hum Resour Manag 11(3):517–539CrossRefGoogle Scholar
  23. Granovetter MM (1985) Economic action and social structure: the problem of embeddedness. Am J Sociol 91(1):481–510CrossRefGoogle Scholar
  24. Halldorsson A, Skjøtt-Larsen T (2006) Dynamics of relationship governance in TPL arrangements - a dyadic perspective. Int J Phys Distrib Logist Manag 36(7):490–506CrossRefGoogle Scholar
  25. Hervani AA, Helms MM, Sarkis J (2005) Performance measurement for green supply chain management. Benchmark Int J 12(4):330–350CrossRefGoogle Scholar
  26. Holmstrom J (1998) Implementing vendor-managed inventory the efficient way: a case study of partnership in the supply chain. Prod Inventory Manag J 39(3):1–5Google Scholar
  27. Houghton L, Kerr D (2006) A study into the creation of feral information systems as a response to an enterprise resource planning systems implementation within the supply chain of a large government-owned corporation. Int J Internet Enterprise Manag 4(2):135–147Google Scholar
  28. Itami H, Roehl TW (1991) Mobilizing invisible assets. Harvard University Press, CambridgeGoogle Scholar
  29. Jick TD (1990) Customer-supplier partnerships: human resources as bridge builders. Hum Resour Manag 29:435–454CrossRefGoogle Scholar
  30. Kang S-C, Morris SS, Snell SA (2007) Relational archetypes, organizational learning, and value creation: extending the human resource architecture. Acad Manag Rev 32(1):236–256CrossRefGoogle Scholar
  31. Klein B (1980) Transaction cost determinants of “unfair” contractual arrangements. Am Econ Rev 70(2):356–362Google Scholar
  32. Knowledge Based Systems Inc. (2009) IDEF integrated definition methods. Accessed December 2009
  33. Koulikoff-Souviron M, Harrison A (2007) The pervasive human resource picture in interdependent supply relationships. Int J Oper Prod Manag 27(1):8–27CrossRefGoogle Scholar
  34. Krause DR, Handfield RB, Tyler BB (2007) The relationships between supplier development, commitment, social capital accumulation and performance improvement. J Oper Manag 25(2):528–545CrossRefGoogle Scholar
  35. Lau HCW, Lee WB (2000) On a responsive supply chain information system. Int J Phys Distrib Logist Manag 30(7/8):598–610CrossRefGoogle Scholar
  36. Lee HL, Padmanabhan V, Whang S (1997) The Bullwhip effect in supply chains. Sloan Manage Rev 38(3):93–102Google Scholar
  37. Lewis MW (1998) Iterative triangulation: a theory development process using existing case studies. J Oper Manag 16:455–469CrossRefGoogle Scholar
  38. McCarter MW, Northcraft GB (2007) Happy together?: insights and implications of viewing managed supply chains as a social dilemma. J Oper Manag 25(2):498–511CrossRefGoogle Scholar
  39. McCormack K, Ladeira MB, de Loiver MPV (2008) The supply chain performance and maturity in Brazil. Supply Chain Manag Int J 13(4):272–282CrossRefGoogle Scholar
  40. Miles MB, Huberman AM (1994) Qualitative data analysis: an expanded sourcebook. SAGE Publications, Thousand Oaks, CAGoogle Scholar
  41. Milhaupt CJ (1996) A relational theory of Japanese corporate governance: contract, culture, and the rule of law. Harv Int Law J 37(1):3Google Scholar
  42. Naslund D (2002) Logistics needs qualitative research - especially action research. Int J Phys Distrib Logist Manag 32(5):321–338CrossRefGoogle Scholar
  43. Porterfield TE, Bailey JP, Evers PT (2010) B2B eCommerce: an empirical investigation of information exchange and firm performance. Int J Phys Distrib Logist Manag 40(6):435–455CrossRefGoogle Scholar
  44. Power D (2005) Supply chain management integration and implementation: a literature review. Supply Chain Manag Int J 10(4):252–263CrossRefGoogle Scholar
  45. Putnam R (2000) The collapse and revival of the American community. Simon and Schuster, New YorkGoogle Scholar
  46. QSR International (2004) NU*DIST V4 Qualitative analysis software package, 4th edn. QSR International, MelbourneGoogle Scholar
  47. Russell DM, Hoag AM (2004) People and information technology in supply chains: social and organizational influences on adoption. Int J Phys Distrib Logist Manag 34(2):102–122CrossRefGoogle Scholar
  48. Sari K (2008) Inventory inaccuracy and performance of collaborative supply chain practices. Ind Manag Data Syst 108(4):405–509CrossRefGoogle Scholar
  49. Scarbrough H (2000) The HR implications of supply chain relationships. Hum Resour Manag J 10:5–17CrossRefGoogle Scholar
  50. Serva MA, Fuller MA, Mayer RC (2005) The reciprocal nature of trust: a longitudinal study of interacting teams. J Organ Behav Manag 26(6):625–648CrossRefGoogle Scholar
  51. Snub AN, Stonebraker PW (2009) The human impact on supply chains: evaluating the importance of “soft” areas on investigation and performance. Supply Chain Manag Int J 14(1):31–40CrossRefGoogle Scholar
  52. Stewart G (1997) Supply-chain operations reference model (SCOR): the first cross-industry framework for integrated supply-chain management. Logist Inf Manag 10(2):62–67CrossRefGoogle Scholar
  53. Supply Chain Council (2002) Supply chain operations reference (SCOR) model, 2002. Accessed November, 2002
  54. Tan KC, Kannan VR, Handfield RB, Ghosh S (1999) Supply chain management: an empirical study of its impact on performance. Int J Oper Prod Manag 19(10):1034–1052CrossRefGoogle Scholar
  55. Villena VH, Revilla E, Choi TY (2011) The dark side of buyer-supplier relationships: a social capital perspective. J Oper Manag 29(6):561–576CrossRefGoogle Scholar
  56. Voss C, Tsikriktsis N, Frohlich M (2002) Case research in operations management. Int J Oper Prod Manag 22(2):195–291CrossRefGoogle Scholar
  57. Wallenburg CM, Raue JS (2011) Conflict and its governance in horizontal cooperations of logistics service providers. Int J Phys Distrib Logist Manag 41(4):385–400CrossRefGoogle Scholar
  58. Wasserman S, Faust K (1994) Social network analysis: methods and analysis. Cambridge University Press, CambridgeGoogle Scholar
  59. Williamson OE (1979) Assessing vertical market restrictions: antitrust ramifications of the transaction-cost approach. Univ Penn Law Rev 127:953–993CrossRefGoogle Scholar
  60. Yin R (2003) Case study research: design and method, 3rd edn. Sage, Thousand OaksGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Centre for Defence Acquisition, Defence Academy of the United KingdomCranfield UniversityShrivenhamUK
  2. 2.Department of Management & MarketingThe University of MelbourneMelbourneAustralia

Personalised recommendations