Abstract: Supply Chain Management has been traditionally understood as the
management and optimisation of logistic processes regarding the
management of flows of goods. Business research recognises the Supply
Chain as mainly a support service for its key activities, and which is generally
examined in regard to the technical and engineering aspects with the sole
objective of finding the minimum cost solution. This research argues instead
that, in the fashion industry at least, Supply Chain Management becomes a
key activity in Value Chain management and therefore in the business model.
As a consequence, this study is not a Supply Chain Management Study in the
traditional sense but rather examines the disruptive fashion business model
focusing on innovation, starting with the restructuring of the Supply Chain,
based on information technology revolutionising the retail business and,
particularly, the fashion industry. Information technology has generated a
completely new Supply Chain Management model, leading to disruptive
competitive advantage.
This research focuses on the exploration of the Supply Chain at the level of
the theory of the firm and the concept of the business model, rather than at a
technical or operational level. The theoretical lens is at firm level examining
the concept of the business model. The empirical part of this study applies
qualitative and quantitative methods, as indicated. The main quantitative
method is financial analysis, which enables the examination of fifteen industry-leading
companies within the fashion industry. Additionally, descriptive and
bivariate statistical analysis are applied to examine the statistical strength and
significance of relationships between Supply Chain and business performance
variables. The second part of the empirical research uses expert interviews
with industry professionals to verify or falsify the findings of the statistical
analysis, and to develop the findings further.
The classical Supply Chain research approach is also questionable and should
be revisited; typical Supply Chain research variables include efficiency,
effectiveness, cycle time, postponement, whereas the main objective of Supply Chain research is the optimum configuration and design of a Supply Chain.
This research study makes a unique contribution to knowledge situating the
supply chain within the context of the theory of the firm and provides evidence
that the Supply Chain is more than a support function, it represents a key
business activity to increase competitiveness providing the infrastructure for
disruptive business model innovations. The overall result of the industry case
study and the expert interviews is that digitalisation changes the possibilities
in the Supply Chain configuration considerably. New Supply Chain
configurations enabled by digitalisation have led to disruptive business model
innovations, so that Supply Chain Management has become a key business
activity because it is the basis of the reorganising of the relationship between
the firm’s purchase markets, product development, manufacturing, distribution
channels, and the consumer market. This development represents a restricted
change at a lower level of business operations but a major one at the strategic
level, with implications for the theory of the firm and the theory of a firm’s
growth.
In this regard, the main issues of future Supply Chain research may therefore
be the challenges of delivering the right goods at the right time to the right
location and how to deliver the right data regarding commodity flows to the
right decision maker, within the right time. The Supply Chain department may
gradually become a Value Chain Management department, the business
model development department, at least in the industrial firm. However, the
term management may be somewhat misleading in this context because
management means controlling, implementing and supervising network-centric
operations in which defined production processes, reporting,
distribution processes and decisions almost always initiated by real-time POS
data leading to a highly responsive value chain.