Supply chain effectiveness: strategy and integration

Supply chain effectiveness has never been more important to commercial success. Yet, the overall experience to date has been disappointing for too many companies. This article sets out to explain why, arguing that technology alone is not the answer and that strategy and management considerations are also crucial.

The article seeks to achieve its aims by drawing on the most relevant ideas from the thought‐leadership literature, along with striking illustrations from the general business press. The author draws on his own years of experience teaching, researching and writing on supply chain strategy to distill a number of insights and implications of particular value to business strategists.

The main insight offered is that effective supply chain management requires the ability to meet two main challenges, a strategic challenge and an integration challenge. The strategic challenge centers around two key questions, what to outsource and when to partner. The integration challenge emerges from current trends toward more complex and web‐like supply chains, where effective supply chain integration is increasingly becoming a strategic capability and potential source of sustainable competitive advantage in its own right.

The article contributes both perspective and prescription. It offers perspective on the two major challenges identified, strategy and integration. It also offers more specific guidance on how to go about deciding what to outsource and when to partner, identifying and assessing the most significant opportunities and risks. It further offers guidance on what to prioritize when setting out to meet the supply chain integration challenge.