Sequences of improvement in supply networks: case studies from the pharmaceutical industry

Purpose – The aim of the current study is to develop an understanding of the decisional process that leads a company, at a given point in time, to choose the subsequent supply chain management (SCM) initiative to be implemented. Design/methodology/approach – This research adopts the descriptive case study research design, as defined by Yin and McCutcheon and Meredith. Four supply networks, whose central firms are leading pharmaceutical companies, have been investigated. Findings – At a given time when deciding the SCM initiative(s) to be implemented, external fit and the state of supply network configuration and integration are both important, but for different reasons. In particular, lack of external fit triggers the implementation of SCM initiatives. Sequences of SCM initiatives are the result of a series of successive decisional situations, where the external fit and state of supply network configuration and integration vary each time a new SCM initiative is implemented. Research limitations/implications – The research is descriptive. Further research is required to develop a theory on the sequences of SCM improvement initiatives. Practical implications – Managers contemplating the implementation of SCM interventions should consider the current performance conditions for competitiveness and compare them with the measured supply network performances, decide what SCM initiatives should be implemented after considering the current state of the supply network configuration and integration and performance dimensions to be improved, and measure the impact (positive and negative) of the implemented initiatives on supply network performance to evaluate whether or not to implement further initiatives. Moreover, if managers are able to forecast the potential performance trade-off associated with the implementation of the selected SCM interventions, long-term improvement programmes encompassing further SCM initiatives over time can be planned to counteract the trade-off penalty. Originality/value – This study refines current literature on the sequences of improvement in supply networks, by demonstrating that the state of supply network configuration and integration is not enough to explain the decisional process that leads a company to follow a well-defined sequence. The paper also explores how the external fit affects the adoption of the following SCM initiatives, thus proving that SCM sequences cannot be considered context-free.