Supply Chain Research Labs: Brain Trust

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Relevant, rigorous, and wide-ranging, university studies of supply chain issues focus on real-world challenges.

In the three decades since he first began conducting logistics research, John T. "Tom" Mentzer, one of the nation's leading marketing and logistics strategy experts, has seen academic inquiry take on a new shape and personality.

"When I started, logistics research was operations focused," Mentzer says. "That element is still there, but universities are increasingly exploring the role logistics plays in the larger arena."

Today, cutting-edge logistics researchers are asking questions that might have seemed outsized—perhaps even esoteric—to their counterparts from earlier eras. Where researchers once tackled basic challenges—how do you move products from Point A to Point B cost effectively?—today's scholars are taking on grander queries: What happens in logistics that delights the customer? What effect does knowledge management have on the supply chain? What happens if one firm knows more than its competition? What role do leadership and "transformational followership" play in the supply chain? What makes retailers stay loyal to manufacturers?

"Today's researchers are still operational, but we are more strategic," Mentzer says.

And, he adds, more relevant. Even in these pragmatic times, professors still debate the age-old question: Should logistics research be rigorous or relevant? Mentzer answers the question succinctly: "Why choose?"

Relevance is defined differently by various scholars. As you'll see in the following examples, at some institutions, the link between industry's immediate needs and the research interests of the faculty remains tenuous. At others, it drives the agenda.

In a Logistics State of Mind

Texas A&M University

In the Lone Star state, the Supply Chain Systems Laboratory (SCSL), part of the industrial distribution program at Texas A&M University, aims to generate information that can serve industry, the economy, and students and faculty eager to put textbook, classroom, and laboratory knowledge to work.

The lab got its start in response to market developments affecting distributors. "In 1999, we built a consortium of firms and associations to study the dot-com issue, and we quickly found that the dot-coms would fail," says Laboratory Director Barry Lawrence, noting that distributors found themselves increasingly responsible for managing information, functions that the dot-coms were, theoretically, working to enhance.

The lab was created, in part, to conduct the research that distributors would need to make a smooth, productive transition into the digital world and to measure their supply chain performance. Under Lawrence's guidance, the lab brought together businesses and associations to present researchers with a mix of questions, some particular to a specific firm, others germane to the industry as a whole. Under this model, businesses would fund the research and supply the data. The Texas A&M researchers, meanwhile, would analyze the information and present it for industry's benefit, all the while adding to the knowledge base and developing a considerable pool of information for future projects.

Just as important, the information would help educate tomorrow's business and academic leaders, many of whom work side-by-side with faculty to crunch the numbers and interpret the data.

The initial research consortium consisted of 10 private and nonprofit organizations, including the National Electronic Distributors Association. The first topic they took on involved just-in-time inventory strategy.

"The early just-in-time (JIT) movement in the United States was handled sloppily," Lawrence recalls. As retailers sought to cut inventory and manufacturers sought to move goods, "the distributors got buried in inventory," he says.

"The trouble was, distributors hadn't been confronted with being inventory specialists. With JIT, they had to learn to get inventory under control," Lawrence adds.

This dilemma spawned as many as 100 research projects on inventory stratification—projects that resulted in the development of tools distributors could deploy for immediate benefit. The initial projects, in turn, led to intensive research into network optimization and best-practice methodologies.

A Proactive Approach

After several years of conducting studies based on industry challenges, Lawrence and his team decided they wanted to shift focus, continuing their work on current issues but addressing those peeking over the horizon as well.

"We wanted to change the dialogue a bit," Lawrence explains. Rather than having the distribution sector present his team with questions, he wanted to approach them and propose work that would help them anticipate issues. The big challenge, he knew, would be securing funding for work with long-term, rather than immediate, applications. What one entity could, or would, underwrite work of this scope?

With that in mind, Texas A&M researchers identified several topics—including optimizing sales and marketing, and enhancing distributor profitability—likely to affect distributors in the near future, then created a series of research consortiums. These consortiums consist of two or more companies, trade associations, universities, or government agencies willing to collaborate and pool resources to develop knowledge and tools that numerous entities can use.

Looking ahead, Lawrence explains, "We knew there would be research solutions, but that they would be hard to achieve." The goal of the research was to present consortium members with a best-practices approach that they could implement ahead of challenges, rather than in reaction to them.

For 2009, SCSL researchers are examining issues associated with the Mexico-Texas trade corridor. The project brings together manufacturers, distributors, logistics providers, and government offices to develop solutions for global supply chain throughput. "That's one consortium without an end," Lawrence says, adding that political and economic events will continually transform the playing field.

To conduct its many projects, the Supply Chain Systems Laboratory employs 10 full-time researchers and draws on the work of 10 full-time industrial distribution faculty and their graduate students. "Beyond that, we have alliances with other departments that grow the footprint to 100 faculty members," Lawrence says.

The lab is aided by a board of industry advisers, comprised of 19 CEOs. "Those companies provide constant feedback," he says, noting that they insist on rigor and relevance.

Innovative Research Examines the Green Supply Chain

While living and working in New Zealand, Diane Mollenkopf, associate professor of logistics at the University of Tennessee at Knoxville, got a sneak preview of how environmental consciousness can shape the supply chain and the marketplace.

"New Zealand has a reputation for being clean and green," she says, noting that green business practices and supply chains have been at the top of the nation's agenda for years. That's driven, in part, by necessity.

"The country has to import consumer products," Mollenkopf adds, which makes many goods expensive. As a result, "People make do, reuse, keep their cars for 20 years.

"When I returned to the United States, nobody here was talking about green issues," she recalls. In fact, in the logistics field, environmental topics were regarded as a niche interest, something of scant importance in the land of plenty.

People are talking about green issues now, of course, and Mollenkopf is leading some of the discussion. In fact, she's conducting—or, as director of the institution's logistics PhD program, encouraging and supporting—some of the green research that may well help industries prepare for climate change, diminishing resources, and new government regulations.

One topic that particularly interests her is returns management. So much of logistics focuses on getting the product to the consumer. But marketing, Mollenkopf explains, concentrates on convincing consumers that their purchases are risk-free, that if any given item doesn't meet their needs, it can always be returned.

What happens when that product comes back? Can it be recycled? Stripped of its metals and toxic materials before being discarded? How can a company efficiently manage its reverse flow? Can it convert a returned product into an asset?

"In terms of legislation, Europe is well ahead of America," she says, pointing to laws that task producers with responsibility for the disposal of their products. Europe is also leading the way in legislating the reduction of hazardous substances in products.

"Moving to green manufacturing and distribution is catching on now in the United States, particularly with global firms," she says.

Still another research project—a partnership with some university colleagues—kicks off this summer. The project team aims to investigate the relationship among three key supply chain issues facing industry: globalization, lean processes, and the green movement.

"How do firms balance these three complementary and sometimes contradictory strategies?" Mollenkopf asks. "There are no easy answers."

Perhaps not, but the project team expects to uncover some useful practices. They'll begin by conducting focus groups with representatives from different companies. After analyzing the data they collect, researchers will embark on phase two of their project. "From there, we want to move into an in-depth study of some firms that seem to be leading edge," she says.

That will involve talking with representatives from these firms, as well as with their suppliers and customers.

"Where it will lead, we're not sure," Mollenkopf says. She does expect to identify several practices that companies can adopt to create synergies across the three issue areas.

Work like this may well help companies rethink their business models in changing times. Mollenkopf expects to see the most resourceful develop environmental strategies that ensure their sustainability. Some may discard planned obsolescence in favor of service and product upgrades that continue their relationship with the customer. Still others will re-examine their distribution networks and warehouse management systems. Whatever they pursue, she says, "there is a lot of opportunity to raise environmental consciousness."Innovative Research Examines the Green Supply Chain

While living and working in New Zealand, Diane Mollenkopf, associate professor of logistics at the University of Tennessee at Knoxville, got a sneak preview of how environmental consciousness can shape the supply chain and the marketplace.

"New Zealand has a reputation for being clean and green," she says, noting that green business practices and supply chains have been at the top of the nation's agenda for years. That's driven, in part, by necessity.

"The country has to import consumer products," Mollenkopf adds, which makes many goods expensive. As a result, "People make do, reuse, keep their cars for 20 years.

"When I returned to the United States, nobody here was talking about green issues," she recalls. In fact, in the logistics field, environmental topics were regarded as a niche interest, something of scant importance in the land of plenty.

People are talking about green issues now, of course, and Mollenkopf is leading some of the discussion. In fact, she's conducting—or, as director of the institution's logistics PhD program, encouraging and supporting—some of the green research that may well help industries prepare for climate change, diminishing resources, and new government regulations.

One topic that particularly interests her is returns management. So much of logistics focuses on getting the product to the consumer. But marketing, Mollenkopf explains, concentrates on convincing consumers that their purchases are risk-free, that if any given item doesn't meet their needs, it can always be returned.

What happens when that product comes back? Can it be recycled? Stripped of its metals and toxic materials before being discarded? How can a company efficiently manage its reverse flow? Can it convert a returned product into an asset?

"In terms of legislation, Europe is well ahead of America," she says, pointing to laws that task producers with responsibility for the disposal of their products. Europe is also leading the way in legislating the reduction of hazardous substances in products.

"Moving to green manufacturing and distribution is catching on now in the United States, particularly with global firms," she says.

Still another research project—a partnership with some university colleagues—kicks off this summer. The project team aims to investigate the relationship among three key supply chain issues facing industry: globalization, lean processes, and the green movement.

"How do firms balance these three complementary and sometimes contradictory strategies?" Mollenkopf asks. "There are no easy answers."

Perhaps not, but the project team expects to uncover some useful practices. They'll begin by conducting focus groups with representatives from different companies. After analyzing the data they collect, researchers will embark on phase two of their project. "From there, we want to move into an in-depth study of some firms that seem to be leading edge," she says.

That will involve talking with representatives from these firms, as well as with their suppliers and customers.

"Where it will lead, we're not sure," Mollenkopf says. She does expect to identify several practices that companies can adopt to create synergies across the three issue areas.

Work like this may well help companies rethink their business models in changing times. Mollenkopf expects to see the most resourceful develop environmental strategies that ensure their sustainability. Some may discard planned obsolescence in favor of service and product upgrades that continue their relationship with the customer. Still others will re-examine their distribution networks and warehouse management systems. Whatever they pursue, she says, "there is a lot of opportunity to raise environmental consciousness."

Discovering Solutions

University of Nebraska—Lincoln

Erick Jones, director of the RFID and Supply Chain Logistics Lab at the University of Nebraska-Lincoln (UNL), believes supply chain research should either offer solutions, or the fodder for solutions, to industry challenges.

Before pursuing his doctorate, Jones worked in industry for 14 years, including a stint with Arthur Andersen. When that firm's fate was sealed by the 2001 Enron financial scandal, the out-of-work Jones decided to complete his engineering studies. That led to a faculty appointment in UNL's College of Engineering.

Jones' RFID and Supply Chain Logistics Lab partners with a host of corporations and government agencies—from UPS to NASA—to facilitate the use of RFID in diverse operations. One project, for example, looks at embedding RFID tags into the license plates of commercial vehicles. Another project featured a collaboration with the Mechanical Contractors Education Research Fund and the Waldinger Corporation, one of the nation's largest mechanical, electrical, and sheet metal contractors. Waldinger supported the project by giving the research team access to its managers and job sites.

The objective of the research was to prove the usability and flexibility of RFID technology in the mechanical construction industry. The findings have ramifications for both the construction industry and the development of RFID.

Some of Jones' work has direct applications not just for industries, but for geographic regions. For example, his research on network models is aimed at helping U.S.-friendly international companies make intelligent decisions about establishing a Midwestern distribution base.

It may not show such firms precisely where to build a warehouse, but it will provide information about which transportation networks interface, what costs are associated with various transportation options, and which offer best access to markets. "If we want to import jobs," Jones says, "work like this is crucial."

So crucial that he strives to ensure that his projects filter down to industry within an accelerated time frame. Traditional science and engineering research often takes 10 years to reach the development stage. "My research goals are to be usable with industry within three to five years," he says.

Give and Take

University of Tennessee, Knoxville

Although controversial in some purist circles (many critics see little difference between industry-academia collaborations and consulting), the give and take between researcher and industry is increasingly common and increasingly crucial to businesses. From Tom Mentzer's vantage point at the University of Tennessee at Knoxville, relevant research needs to draw on the business world for its data. In exchange, it provides the business community with information that enhances the development of best practices.

"Companies are my laboratory," he explains. His research does not provide information that is specific to any one firm—a roadmap, say, for Company X to address its problems. Rather, it provides "generalizable" information applicable to a vast number of settings.

For example, an examination of the risk factors associated with relocating operations to Asia might look at everything from port capacity to the incidence of container loss at sea. What it won't do is zero in on the company-specific supply chain questions that a firm might need to ask before embarking on an overseas venture.

Open Communication

In the course of conducting this research, Mentzer and his colleagues often develop tools that businesses can use to assess and improve their operations. For example, the logistics team at the school developed a cutting-edge tutorial that provides a means for evaluating the capabilities of forecasting software. Rather than treat this as a proprietary product, Mentzer saw a chance to share useful information with the business community. He opted to offer unfettered access to the tutorial.

To ensure that industry leaders can tap into the new ideas percolating at UT Knoxville, the logistics and supply chain faculty introduced a series of forums that showcase the latest research. The supply chain forums were designed "as a vehicle where students, faculty, and business leaders can get together to talk about issues," says Mentzer.

As many as 70 companies take advantage of the opportunity. At some point during the forum, Mentzer asks company participants to name the pressing issues that face them. "One year later," he says, "that information is the subject of conversation at a forum."

Companies pay to participate in the forums—in fact, they fund some of the research. That occasionally creates a misunderstanding about the purpose of the work, Mentzer explains, noting that executives have been known to press for research covering a challenge particular to their operations. When that happens, other members of the forum are quick to police the self-absorbed, reminding them that "we're here to talk about bigger issues," Mentzer says.

Student Background

At UT Knoxville, the emphasis on big issues and their relevance to business is reinforced by the PhD program's recruiting policies. Diane Mollenkopf, associate professor of logistics and director of the logistics doctoral program, prefers PhD candidates well-versed in the ups and downs of business life and the culture of academe.

"One of our prerequisites is that the PhD students we bring in come from industry," she says. The ideal student has a foot in both worlds—committed to contributing to the discipline but also eager to generate knowledge that can be put to use.

This approach results in work that offers far different information from a report generated by a consultant or troubleshooter analyzing a single company's operations. "We ask more 'why' questions," Mollenkopf says. "Why is this happening in the business world?"

Jones agrees, noting that university research provides the business community with unbiased information from a reputable and independent source—information that isn't tailored to please or shaped to complement the views of a client. "When we're doing research," he says, "the answer is the answer."

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