Supply Ecosystems: The Next Big Thing?

Thanks to the rise of purchase-to-pay (P2P) software, we hear quite often about “supplier networks” and “business networks” as the next big thing that will link buyers with vendors. But what about the concept of a “supply ecosystem” that goes further? This is the premise in a forthcoming Journal of Business Logistics article authored by Penn State’s Christopher Craighead, Auburn University’s David Ketchum and the University of Tennessee’s Russell Crook. Based on the author’s definition, these new supply ecosystems appear to more closely resemble giant industrial conglomerates or trading firms, but without necessarily having corporate parent/child ties between members (think Toyota, Mitsubishi, Samsung and to a lesser degree Siemens and GE).

Curiously, the comparison is even more appropriate with Asian trading companies given that future supply chains of these organizations will be more regionalized as companies “scale back on global sourcing.” Under this scenario, the authors suggest, “Many of the complex global supply chain networks that currently exist are likely to be replaced by regionally based ecosystems whose members work closely together.”

The authors take an approach that appears to resemble some of the arguments that Michael Rothschild put forth in his book Bionomics, which essentially argued that economies and trade be studied like biological ecosystems. Specifically in this case, the authors suggest that, “Interactions and interdependencies within supply chains parallel biological ecosystems where organisms, such as plants, compete for scarce resources, such as water.” Keeping this in mind, “Current supply chain thought generally emphasizes the collaborative relationships among supply chain members but underemphasizes the level of competition for scarce resources and profits that takes place within those relationships.”

Until we can get our hands on the full article, we’ll share some of the snippets about the elements that are likely to mark and lead to “supply ecosystems” or current sourcing and supply chain models. Stay tuned!

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