Managing supply chains and networks as a new challenge for logistics manager education

Defining further directions for improving the education system in the field of logistics process and supply chain management is not possible without a deep understanding of the trends and the essence of the changes taking place before our eyes today. Intensive qualitative changes in the current economic reality are characterized by a large scale, including phenomena such as: transformations of political systems, the emergence of virtual transnational networks of influence, increasing market competitiveness –

leading to a wave of major company mergers, qualitatively new consumer expectations, a faster process of product development and obsolescence, the turbulent development of the service sector, etc.

All these processes give rise to far-reaching consequences in the entire socio-

economic reality. In these conditions, logistics and supply chain management is a very dynamic sphere, constantly subject to change due to its service role towards most sectors of the economy.

A fundamental feature of the changes appearing in today’s economic reality is the accumulation of difficulties in the field of management due to the synergistic effect of the combined impact of increased complexity and growing volatility. This leads to recurring discontinuity of development processes, although the specifics of the new socio-

economic order are not yet entirely clear. It is known, however, that the future will belong to new “lean” organizations, based on teamwork, closely linked with customers and suppliers, with a flat structure, flexible, quality-oriented, and conducting global operations. In general, the current market success of companies is largely dependent on improving their functioning in flexible, easily adaptable supply chains and networks and on the proper use of their resources to achieve this goal. This requires achieving excellence in the execution of individual companies’ tasks, and in particular: expanding the scope and intensity of cooperation, optimizing operations and resource utilization, ongoing multilateral communication, constant improvement of logistics process execution and measuring their effectiveness and efficiency, increasing the speed of reaction to changes, increasing information transparency, and immediately and effectively resolving emerging difficulties and problems.

Traditional logistics, focusing its attention on issues of trade-offs between individual groups of basic logistics costs, such as transport, storage, packaging costs, etc., is increasingly the subject of education at the professional level, taking on the characteristics of operational knowledge. The need for strategic management of product flow processes in classically considered logistics channels has made decision-makers aware of the necessity to change the perspective on logistics processes, aiming for a more comprehensive approach to the issues of the “journey” of products through successive phases of economic processes. It can probably be said that it was on the basis of logistics that the concept of the “extended enterprise” was born, being an example of a super-organization functioning in the form of supply chains, and in today’s era of rapid IT sector development – also in the form of supply networks.

There are a number of groups of views related to the supply chain concept. Some argue that the supply chain is an internal creation within logistics. Other views indicate that logistics process management and supply chain management are identical. Further views proclaim the existence of a certain common decision-making part of logistics and supply chain management, which brings this concept closer to the already classic marketing-logistics management. However, the view that supply chain management

is a process much broader and more complex than classic logistics management is probably closest to reality. Such a view expresses the traditional stratification between the “core” and the “protective belt” within each discipline or field of knowledge. The core of logistics as a field of knowledge consists of problems of material, information, and service flows along vertical value chains (or supply chains), which aim to coordinate these flows and are based on systems thinking (a holistic view), where the unit analyzed is essentially the flow itself. In other words – the core indicates what the entirety of logistics knowledge concerns.

The central element of the core in this case is “thinking in terms of flows,” where the substance of these flows is raw materials, work-in-progress, finished goods, high/low-value products, and flows of information and services.

It is much more difficult to describe the “protective belt” of logistics. For example, when we consider the human factor, we practically include motivation problems, or –

when considering the organizational structures of companies most favorable for logistics –

we deviate directly from the analysis of product flows. Such an interdisciplinary approach creates difficulties in determining how “tight” or “loose” this protective belt of logistics should be. Hence, doubts arise as to the actual differences between logistics and the supply chain. At present, the protective belt of logistics seems to be very wide, which has found its direct expression in the creation of the supply chain concept, covering, in addition to logistics aspects, also marketing, organizational, or financial issues. Supplementing

this concept with information and spatial elements gave it a network character.

Regardless of the school of thought adopted, from the perspective of the supply chain, more or less closely linked companies belonging to the logistics channel closely coordinate their efforts aimed at improving efficiency and increasing the competitiveness of the product to which the given logistics channel relates. In the supply chain, the philosophy of close integration with suppliers and customers dominates in order to achieve additional market successes and benefits. Basically, the entire orientation of supply chain functioning shifts from inventory management problems in individual companies to optimal strategic inventory placement from the point of view of the entire supply chain. This is a very difficult task, requiring not only ordinary knowledge of logistics processes in a given company or group of companies, but also –

making decisions that affect the interests of various functional groups of the involved enterprises.

The article comes from the magazine “Logistyka” 4/2006.