Strategic Supply Chain Management

Task A: Journal Assignment

Paper title: Managing supply chain uncertainty with emerging ethical issues
Author: Elliot Siamangungsong, Linda C. Hendry and Mark Stevenson, The research paper
was published by International Journal of Operations & Production Management, Vol. 36 Issue
10, pp. 1272-1307
Paper received in December 2014 and accepted in March 2016
Objective: The paper empirically investigates effective management strategies for 14 sources
of supply chain uncertainty, with focus on ethical issues. It used manufacturing strategy theory
for theoretical foundation. Multi case study data is collected from 12 food companies of
Indonesia, an emerging economy.
Conceptual model of supply chain uncertainty published in 2012 (Simangunsong et al) says the
sources of uncertainty are either: internal to the firm, internal to the supply chain or external
sources of uncertainty, giving a total of 14. Similarly, management strategy is divided into two:
strategies to reduce uncertainty at source and to cope with uncertainties. This model is used in
the research.
Issues: The three ethical issues mentioned in the paper are: first, collusion among suppliers to
ration supplies and increase prices; second, unethical influences on government policies; and
third abuse of power by large retailers. These issues either affect the level of uncertainty or are
linked to strategies for managing uncertainties. Unethical business practices may increase profit
in short duration but in longer run, these practices can result dissatisfaction among customers
and if the supplier recognizes that the behavior of buyer/client is unethical the supplier
performance may get adversely affected.
The concept of sustainability in supply chain assures that social, environmental and economic
concerns are well addressed concurrently, which has increased the challenges and made the
job of a supply chain manager more difficult:
The findings of the research highlight empirical evidence which says suppliers conspire
by forming a group and control the supply of material, thereby fabricating a scarcity in
order to increase the price. If the demand of a particular product produced by a company
increase in the market, then the manufacturer may enter into panic buying mode and
forced to pay more for same quantity.
External source of uncertainty includes changes in government regulations, if a food
manufacturer is using a product as a raw input to the manufacturing process but due to
government regulation the person is forced to change the manufacturing process & bear
the cost of inventory also.
Large supermarket chains can easily introduce a dedicated distribution network & cross
docking system reducing the price for the end consumer and eliminating local retailers. It
can be raised as an ethical issue, as it promotes anti-competition and try to remove
smaller retailers whose economic & social sustainability lie on this business
Rational: Emerging economies are not adequately represented in research into supply chain
uncertainties. As a manger, I will be working in an emerging market where the uncertainties/risk
will be dissimilar. The difference in government regulation, culture and other reasons made me
chose a research article written in the context of emerging economy. In the paper Indonesian
scenario is analyzed.
The issue of ethics in business is not taken seriously, smaller member of a large complex
supply chain is of the notion that ethical responsibility lie with only large players. A normal issue
in supply chain can be managed easily but when it comes to doing/discharging duties ethically
some managers may be hesitant because of monetary reasons. Today, customers are aware
and they observe activities happening not only in a particular business unit but also at the
overall organization level. And loosing customer base could be the penalty for any wrong action.
The current research article meets both the criteria and therefore I selected it.

Sunil Kumar
2016PGP115