Supply chain management requires horizontal management approach

Supply chain management can lead to better, faster and cheaper products and services. It also is crucial to innovation and sustainability. Despite the many benefits on paper, the concepts of supply chain management are only limited applied in practice. Jack van der Veen, Professor of Supply Chain Management at Nyenrode Business University, analyzed the gap between theory and practice in recent years.

“Supply chain management has not yet found its way into the daily practice of organizations to the extent that you would expect based on the theory. The objective of the research was to get a better understanding of the limitations of cooperation in the supply chain and to support organizations with practical tools,” Van der Veen explains.  

Horizontal versus vertical management

Van der Veen’s research shows that supply chain management requires a completely different management approach than organizations are used to. “Those differences can be summarized in horizontal (process-based) management instead of vertical (hierarchical) management. The reason why a process often does not produce the desired results, is because there is usually little coordination between the various activities that make up the process. By managing horizontally, the focus is on all activities of the process and all parties involved”, according to Van der Veen.

In order to help organizations and their supply chains to transform into supply chain management, a ‘Triple A Approach’ was applied during the research: attention (what does supply chain management entail), acceptance (why is supply chain management necessary) and action (the development of practical tools to make the transformation happen). Van der Veen: “You will see that making the transition is difficult, because organizations have to develop on different levels from strategy, infrastructure and mindset & behavior.”

Orchestrate the chain

Professionals are positive about the supply chain management perspectives and are motivated to implement the changes. They find it hard though, to integrate the concepts with their daily practice in a pragmatic way. “We noticed that professionals in many industries run into the same problems. To remain focused, we used three key environments: logistics, construction and healthcare chains. Organizations that collaborate constructively internally and within the chain can jointly add more value, meet sustainability objectives better, deliver more quality, innovate faster and are more agile,” explains Van der Veen. The research findings were published in the book 'Regisseer de keten' (Orchestrate the chain), which Van der Veen wrote together with Michel van Buren in 2021.

Better understanding

During recent years, supply chain management has received a lot of attention and the principle is now more embraced than at the beginning of the research back in 2015. Van der Veen: “Our research enabled us to reach a wide audience of interested professionals. This has made organizations understand why supply chain management is needed and that a horizontal management approach is more beneficial than a vertical approach. Many organizations have jump-started their transformation and we hope that this research motivates other organizations to follow their lead”.