Functional/dysfunctional supply chain exchanges

Abstract

Purpose

The purpose of this paper is to propose a means‐end value chain framework to understand two supply chain party's values by presenting a value‐matching framework.

Design/methodology/approach

Using means end theory, qualitative data from third party logistics (3PL) providers and manufacturers were used to construct means end value hierarchies to demonstrate how values between buyers and sellers can be mismatched.

Findings

In comparing the responses from the 3PLs and manufacturers, examples were found of exchange‐specific value matches and exchange‐specific value mismatches. The analysis showed that the 3PL managers interviewed were seeking to provide the value of being “market‐driven” (refers to a reactive business logic, which favors incremental adjustments to changes in the business environment), while the manufacturers desired their 3PLs to be “market‐driving” (refers to innovative business logic by providing break‐through ideas, practices and processes).

Research limitations/implications

This research focuses more attention on an important objective of the marketing concept often overlooked in the business‐to‐business relationship literature: fulfilling the local firm's needs. This paper extends the use of the MEVHM and expands its applicability beyond understanding the focal firm's values to all exchange parties, including suppliers, third parties and cooperative alignments with competitors. Additionally, this paper contributes to the literature by suggesting that exchange values are a type of value important in achieving functional exchanges, and the concept of “value matching”.

Practical implications

Applying the MEVHM to both the focal firm and their supply chain exchange party provides a decision analysis tool for the management of exchanges. Additionally, this paper's model can be a guiding mechanism for managers to assist in the exchange party search and selection process.

Originality/value

The literature and the qualitative study suggest that the MEVHM could be a useful tool in understanding supply chain partners. However, this should be performed while fulfilling the firm's need (e.g. at a profit). In order for a focal firm to fulfill these needs from a particular exchange, it must understand the value it desires from that exchange. Not only is the MEVHM applicable to gain understanding of the exchange party's values of a particular exchange, but it is also an appropriate tool to gain understanding of the focal firm's exchange values.

Citation

Davis‐Sramek, B., Fugate, B.S. and Omar, A. (2007), "Functional/dysfunctional supply chain exchanges", International Journal of Physical Distribution & Logistics Management, Vol. 37 No. 1, pp. 43-63. https://doi.org/10.1108/09600030710723318