Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
A New Reference Model for
Core Supply Chain Processes
Rodrigo Cambiaghi Azevedo*
Université Laval, Quebec City, Canada
Sophie D’Amours
Université Laval, Quebec City, Canada
Mikael Rönnqvist
Université Laval, Quebec City, Canada
Supply chain processes-oriented frameworks are of great importance for academics and
practitioners since they play a central role in responding to the challenge of helping different
elements of a supply chain become more integrated toward common objectives. In this context,
the objective of this article is twofold: first we contribute to the discussion on objectives,
development approaches, and applications of process-oriented supply chain models. Second, we
propose an alternative reference model based on a rigorous conception phase. Through this
approach, knowledge concerning different taxonomies for supply chain processes has been
analysed, the existing models have then been evaluated in the light of these definitions, and
finally, the model has been developed based on a content analysis of 184 articles. Proposing this
new model aims to define a central element of an overarching SCM perspective which combines
business processes and management competencies.
* Corresponding Author. E-mail address: rodrigo.cambiaghi@ey.com
I.
This fact along with the increasing
importance of the SCM body of knowledge
explains why the most suitable collection of
processes when implementing an SCM
philosophy is often the subject of intensive
debate among academia and practitioners. In
spite of several attempts that exist in the
literature (e.g. Hewitt, 1994; Srivastava et al.,
1999), two reference models are currently
recognised most when defining supply chain
processes: SCOR (Supply Chain Operations
Reference-model) developed by the APICS-
INTRODUCTION
A common belief in academia and in
practice is related to the fact that business
process and supply chain management are
considered to be tightly interrelated concepts.
In an almost cliché fashion, authors constantly
affirm that the former is a core element when
managing supply chains (Katunzi, 2011;
Lambert et al., 2005; Mentzer et al., 2001;
Trkman et al., 2007) and that the structuring
and optimisation of those processes overshoot
individualized silos results.
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
Supply Chain Council (2012) and GSCF
(Global Supply Chain Forum).
In spite of the proposition and
dissemination of the SCOR and GSCF models,
three main facts have been observed and they
sustain the debate in this article. First, both
models diverge according to certain
fundamental characteristics (Lambert et al.,
2005). While the SCOR model is primarily
focussed on defining the core activities of an
organisation as a set of interrelated entities, the
primary focus of the GSCF model is on the
management aspects of these activities
towards higher organisational performance.
Second, along with their divergence in terms
of focus, these models have not yet been
compared
through
a
complementary
perspective. When presenting the GSCF
model, Lambert et al. (2005) compare it to the
SCOR model according to four main
dimensions:
scope,
intra-company
connectedness, inter-company connectedness,
and drivers of value generation. The authors
conclude that when implementing supply
chain processes, managers will have to decide
which framework best meets the needs of their
firm’s supply chain. However, for the progress
of this essential knowledge domain, further
analyses of both models (independently or
comparatively) as well as new models
propositions will certainly be required.
A third fact, which in a certain way is
an outcome of the first ones, is that the SCM
literature still does not present any sign of
convergence regarding supply chain processes
nomenclatures and scopes. Consulting
publications in five major international SCM
journals between 1996 and 2007, we identified
142 different processes nomenclatures. Within
this sample, different process scopes were
frequently found for the same nomenclature at
the same time that a variety of names was
usually correlated to a unique process. The
same divergent profile is still found when
more recent publications are analysed. In fact,
this unrestricted proliferation of processes
definitions created hurdles to the continuous
evolution of certain processes domains in the
SCM literature. A sound reference model
should assist in improving this situation.
Therefore, this article aims to highlight
the importance of having an overarching
understanding of different kinds of supply
chain processes as well as more scientific
foundations when developing and debating
reference models. To do so, a summary of the
state of the art on different business processes
classifications is presented, allowing us to
compare the SCOR and GSCF models within
this context. Based on this comparison, the
authors have identified the conditions for
proposing an alternative reference model for
core supply chain processes. The model
proposed was developed from the content
analysis of 184 articles available in the
literature. Structured around seven core
processes, the model contributes to further
advances in the practical and academic fields.
It does so essentially by restructuring core
activities and decisions which need to be
carried out to successfully operate a supply
chain as well as by making it possible to link
core processes with competence theory
elements such as organisational and individual
capabilities, skills and knowledge as well as
with contingent elements of a firm such as its
market condition and pursued strategies as
well as organisational culture and leadership
profiles.
In the following section, we summarise
the literature concerning business processes
classifications and we debate the SCOR and
GSCF models in the light of these
classifications. Next, the proposed reference
model for supply chain core processes is
presented together with a description of the
methodology applied and a debate regarding
the implications and contributions of the
model. Finally, the article concludes by
outlining its main findings as well as calling
for further research on this essential business
subject.
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
II.
Xerox, and British Telecom. This discussion
might be regarded as the first endeavour to
classify business processes according to
different levels of importance and role.
Following Davenport’s proposal, most
academics and practitioners have, in their
works on business processes, maintained that
they are operational or managerial, without
questioning their definitions. Consequently,
there is little progress to be found in terms of
processes classification. An interesting
research stream was followed by Markus et al.
(2002).
Perceiving
higher
knowledge
dynamism for some processes and the
consequent complexity in structuring them
with modelling approaches in use at that time,
the authors proposed the concept of “Emergent
Knowledge
Processes”
(EKPs)
and
investigated a new theory for information
systems (IS) to support them. EKPs are
defined as organisational activity patterns that
exhibit three characteristics in combination
(Markus et al., 2002):
BUSINESS PROCESSES
CLASSIFICATION
Business process (BP) is defined as a
group of logically related tasks that draws on
multiple functional skills and organisational
resources and that focusses on delivering value
to its stakeholders (Adesola and Baines, 2005;
Aguilar-Savén,
2004;
Burgess,
1998;
Davenport, 1993; Hammer, 1990; Skrinjar and
Trkman, 2013; Tinnila, 1995). Its body of
knowledge is composed of a vast literature on
topics
such
as
Business
Process
Reengineering,
Business
Process
Design/Redesign,
Business
Process
Management and Business Process Modelling,
just to mention a few.
In spite of the innumerable theoretical
and practical developments already published
in a variety of periodicals since the 1980’s, it
has been observed that debates around
classification for different types of business
process have rarely been explored. This topic
was initially discussed in the pioneer work of
Davenport in 1993. In his work, the author
categorised business processes as operational
or managerial; however, a clear definition and
debate for each category is lacking.
Nevertheless, Davenport exemplified business
processes such as “Product Development”,
“Customer
Acquisition”,
“Customer
Requirements
Identification”,
“Manufacturing”, “Integrated Logistics”,
“Order Management” and “Post-sale Service”
as being typical operational processes in
manufacturing firms, while “Performance
Monitoring”, “Information Management”,
“Asset Management”, “Human Resource
Management”, and “Planning and Resource
Allocation” are viewed as typical management
processes. In addition, when discussing the
ideal extension for a business process (the
trade-off between “integration benefits versus
management complexity”), the author
described examples of processes considered
core by large corporations such as IBM,
(1) An emergent process of “deliberations”
with no best structure or sequence;
(2) Highly unpredictable potential users
and work context; and
(3) Information requirements that include
general, specific and tacit knowledge
distributed across experts and nonexperts.
In spite of its important contribution,
the concept of EKPs has not fulfilled its
potential due to its primary focus on
supporting information systems. In addition,
placing IS as their research focal point has also
prevented the authors from exploring new
frontiers of business processes classification
where emergent, as well as structured and
predictable activity patterns are applied
together when pursuing value creation for
firms’ shareholders. Certainly, considering
processes such as “strategic business
planning” and “new product development” as
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
purely emergent, as argued by Markus et al.
(2002), disregards all prior knowledge about
existing logics for these processes.
Mentzer et al. (2007) have revamped
the discussion on business processes
classification. In a more comprehensive and
emphatic approach, the authors propose three
main process categories: (i) core processes
that are needed to attain business goals by
enabling goods and services to reach an
external customer; (ii) support processes that
are needed to make the core processes work as
well as possible, but which are not critical to
the success of the company; (iii) management
processes which are broader knowledge
domains used to control and coordinate the
core and support processes.
In following the presented line of
evolution for business processes classification,
it becomes commonly understood that while
core processes demonstrate structured and
predictable
patterns
of
performance,
management processes are considered broad
knowledge domains with activities that are not
always executed in definite order. Besides its
activities-performance
pattern,
when
meticulously analysed, the definition of
management process presented by Mentzer et
al. (2007) and also the explanation of EKPs
defended by Markus et al. (2002), approximate
the concept of managing firms’ competences.
The term ‘competence’ is defined as the ability
to sustain the coordinated deployment of assets
in ways that help a firm achieve its goals
(Sanchez, 2004). According to Harmsen and
Jensen (2004) its study relies on the
investigation of the association between a
company’s internal characteristics (e.g.
activities, assets, capabilities, skills as well as
organisational and individual knowledge) and
market value creation. From this perspective,
even though an exhaustive debate about
terminologies is beyond the scope of this
article, it is more appropriate to use the term
“management competence” instead of
“management process”. Davenport (1993)
corroborates this perspective when affirming
that the term “management process” is, in a
certain way, an oxymoron.
As a result, management competences
act through core processes activities and
assume two important responsibilities: first, to
assure the deployment of competence elements
among the different core processes acting as
coordination and control mechanisms with
each other; second, by explicitly addressing
issues such as organisational and individual
knowledge, to facilitate learning and
continuous improvement for core and support
processes. This combination of core processes
and management competences is supported by
the coordination theory proposed by Malone
and Crowston (1994). According to the
authors, this theory attempts to address the
growing interest in questions about how the
activities of complex systems can be
coordinated. The theory is founded on the idea
of conceptual separation of two types of
activity that are present within any process:
activity that directly contributes to the output
of the process (business goals) and additional
activities called coordination mechanisms,
which must be carried out in order to manage
various interdependencies among activities
and resources.
As an interdisciplinary area, the study
of coordination draws on a variety of
disciplines including computer science,
organisation theory, management science,
economics, linguistics, and psychology
(Malone and Crowston, 1994). Consequently,
it underpins the proposal that management
competences are less adequate when
developing reference models since their
existence in firms relies on several different
business aspects including company culture,
organisational structures, leadership profiles,
personnel performance evaluation and reward
systems among others (Worley and Lawler,
2006; Gattorna, 2006).
Figure 1 illustrates the overarching
SCM framework where the supply chain
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
processes classification proposed by Mentzer
et al. (2007) is complemented with the
competence theory knowledge previously
exposed. In it, management competences are
depicted as sets of elements, such as the ones
described by Sanchez (2004), which are
applied throughout core processes.
From this perspective, it can be seen
that both the SCOR and GSCF models, are not
to be considered self-excluding models but
complementary to some extent. They simply
approach the supply chain processes field from
two distinct viewpoints. While the focus of the
SCOR model is essentially on the
identification of core processes, the purpose of
the GSCF model is basically to expose the
most important management competences
required to succeed in terms of coordination of
any supply chain.
However, as previously mentioned,
management competences seem to be more
contingent
on
important
business
characteristics such as company culture,
organisational structures and leadership
profiles and therefore less suitable for the
development of reference models. For
instance, when analysing the reference model
for the demand management process proposed
by the GSCF model, it can be observed that
while the description of the process
encompasses a series of discussions related to
different forums (strategic, tactical and
operational) within organisations, the level of
detail presented for the activities is not enough
insightful since it misses important elements
such as individual and corporative knowledge
around customer behaviours and forecasting
approaches or the reward system for forecast
accuracy as well as the organisational culture
underpinning this system. The feasibility of
constructing reference models for supply chain
management competencies will be posted later
in the text as a main research area for further
improvements of this business discipline.
FIGURE 1. SUPPLY CHAIN PROCESSES CLASSIFICATION FRAMEWORK.
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
In addition, in spite of the fact of being
complementary, the addition of the SCOR and
GSCF models presents a certain level of
overlap. For instance, activities related to
customer order entry (e.g. filling orders and
checking product availability) are seen within
the deliver process of the SCOR model as well
as within the order fulfilment process of the
GSCF. This phenomenon might be related to
the fact that both models were developed
based on consensus analysis of SCM
professionals without a prior debate on
different types of business processes. Thus,
this article presents a first attempt in the
literature to apply an innovative scientific
approach to elaborate a reference model for
supply chain processes. The model, described
in the sequence, sets its focus exclusively on
the identification of supply chain core
processes which will hopefully engender
additional debate in terms of supply chain
process-oriented models as well as enable
further research on supply chain management
competences.
III.
literature is related to the mature stage of the
SCM body of knowledge which allows
delineating sustainable propositions. With the
introduction of the concept in the early 1980s
(Oliver and Webber, 1992), SCM literature has
rapidly increased in size during the 1990s
(Carter and Ellram, 2003) and during the first
decade of the 2000s (Burgess et al., 2006).
Next the methodology applied to
construct the model is detailed, followed by
the introduction of the model itself and finally,
an evaluation of the resulting model is
provided.
3.1. Methodology
In order to build up a reference model
essentially from the literature review, a content
analysis method was centrally applied. Content
analysis is defined as a technique for making
reliable inferences by systematically and
objectively identifying special characteristics
of messages such as texts, audios, etc. (Berg,
1998). It is considered an appropriate method
for
comprehensive
literature
reviews
(Cullinane and Toy, 2000), and thus
considered appropriate to investigate implicit
core process characteristics alongside explicit
process descriptions in articles.
It is important to emphasise that, when
defining a process-oriented framework, one
important issue is related to the company’s
locus along the value chain. As for SCOR and
GSCF, we focus our model on the
manufacturing industry, especially for
companies which add value to incoming raw
materials and commercialise finished products
on a business-to-business model. Later in this
text, we discuss the opportunity to apply the
proposed framework as a meta-model in the
development of industry-specific reference
models (i.e. aerospace, automotive, brewing or
chemical). Due to its focus, the proposed
model might not be completely applicable for
retailers, wholesalers and purely extractive or
general service businesses. This limitation will
New Supply Chain Core Processes
Framework
This section proposes an alternative
reference model for core supply chain
processes. The conception of the model was
first elaborated on explicit knowledge
available in the literature and then validated
through
tacit
knowledge
of
SCM
professionals. The justification for this
approach is twofold: first of all, as previously
mentioned, the SCOR and GSCF models were
developed based strictly on consensus analysis
of SCM professionals (tacit knowledge) and
there is still no evidence of consensus in the
literature on the adoption of their processes
nomenclatures and scopes. Therefore, we aim
to contribute to minimising this gap by
fundamentally raising a literature-based supply
chain core processes model. A second central
motivation to search for core processes in the
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
be further addressed in the concluding remarks
of the paper where recommendations for
additional research are proposed.
Therefore, the construction of the
model involved four main phases: first, two
activities were performed in parallel. While
one searched for processes nomenclatures used
most in the literature, the other investigated the
central characteristics of supply chain core
processes. Next, articles containing the
nomenclatures identified were selected and
analysed, allowing finally the construction of a
new reference model.
These phases are
presented in more detail as follows.

Management (IJLM), Journal of
Business Logistics (JBL), and Supply
Chain Management Review (SCMR).
We used these periodicals to search for
different
supply
chain
process
nomenclatures.
The
searching
mechanism looked at each of the
selected journals for articles containing
the exact terms “process” and “supply
chain management” appearing in any
part of their text. By guaranteeing the
presence of these two terms
simultaneously, we expected to find
articles
discussing
SCM-related
subjects at the same time that any type
of business process nomenclature (e.g.
“production process” or “order
management process”) would be found
in the texts. It is important to
emphasise that on this occasion, the
research was still not looking for
process descriptions (e.g. scope,
activities, involved players, etc.). This
activity would be addressed in a further
step of the research (Supply Chain
Processes Literature Search and
Literature Content Analysis). At this
point in time, the research was
restricted to the identification of
different process nomenclatures mostly
used in the literature. For the proposed
search, the ABI/Inform Global
Proquest academic database was used
and the time period considered was
between January 1, 1996 and
December 31, 2007. The starting
search period was chosen as it was
associated with the year of launching
of the SCOR and GSCF models since
after this event the supply chain
process nomenclatures in the literature
should be in some way influenced by
the nomenclatures adopted by both
reference
models.
The
search
procedure came up with a total of 182
articles. After eliminating articles in
Supply
Chain
Processes
Nomenclatures Identification – this
initial phase was dedicated to
identifying the supply chain process
nomenclatures most used in the
literature. Firstly identifying supply
chain process nomenclatures would
later allow us to search for literature
references which could be analysed in
the
light
of
core
processes
characteristics. The execution of this
step was founded on the work
developed by Menachof et al. (2009).
Through a large survey with
experienced academic professionals,
the authors analysed 82 periodicals in
the SCM arena (including traditional
peer-reviewed journals, practitionerfocussed publications, editor-reviewed
journals
and
cross-disciplinary
periodicals) and ranked them according
to a composite rating of periodical
usefulness in terms of teaching,
outreach and research. According to
their research, the five top classified
periodicals were (in alphabetical
order): Harvard Business Review
(HBR), International Journal of
Physical Distribution and Logistics
Management
(IJPD&LM),
International Journal of Logistics
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes

interview format and book reviews,
162 articles were kept for the
nomenclatures search analysis. By
analysing all 162 articles, 142 different
business process nomenclatures were
found. Out of 142 nomenclatures, 102
appeared in a single article. As
previously mentioned, similar profile is
found today with more recent
publications.
Specification of supply chain core
processes characteristics – a phase
concurrent with the identification of
business
process
nomenclatures
specified supply chain core process
characteristics
that
should
be
considered in the literature content
analysis. In an analogous effort,
Srivastava et al. (1999) used four
criteria selecting core business
processes
using
a
marketing
perspective: (i) a core process should
address fundamental but common
business tasks that are critical to the
achievement of the organisation’s goal;
(ii) each core process should manifest a
prima facie case that contributes to
customer value creation; (iii) each
process should be more macro than
micro-level; (iv) the core processes
should manifest clear (macro and
micro)
interactions
and
interrelationships. Based on the work
of Srivastava et al. (1999) and the
general SCM and business process
literatures (previously debated), we
identified three main characteristics for
a supply chain core process. First, a
core process, from a macroperspective, must be represented as a
set of structured and continuous interrelated activities, events, and resources.
By searching for structured and
continuous process characteristics, we
intend to differentiate core processes
from management competences since

our objective relies upon the former.
Second, the description of the analysed
process should present enough
evidence that the process is executed
based on complementary expertise
from different parts of a supply chain.
Third, core processes must be focussed
on external customers by dealing with
their information or transactions. This
characteristic is aligned with the prima
facie case mentioned by Srivastava et
al. (1999).
Supply Chain Processes Literature
Search and Literature Analysis – the
previous steps supplied initial evidence
on how to search for core processes in
the literature and, from this stage on,
the research applied an iterativeexploratory approach. First of all, for
each of the 142 process nomenclatures
previously found, a subsequent
literature search was performed. This
activity aimed to find articles
containing process descriptions which
could be analysed in the light of the
supply
chain
core
processes
characteristics. At this stage, all
academic and non-academic peerreviewed English language periodicals
were considered for analysis. This
periodical sampling was chosen due to
the fact that allowing the search on
other periodicals outside the SCM
domain would potentially bring in
different perceptions of processes and
processes inter-relationships from
different
business
domains;
contributing in this way to the multidisciplinary approach contemplated by
the SCM concept. In addition, keeping
a broader approach for possible
periodicals would make it possible for
us to include important literatures
dedicated to certain domains such as
general business administration as well
as business process management
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
(BPM). Making use again of the
ABI/Inform Global Proquest academic
database and considering the same time
boundaries previously adopted, the
search looked for the exact process
nomenclature in the document title
combined with the search for the exact
term “business process” in the
document text. The main reason for
combining these two parameters in the
searching
mechanism
was
the
expectation of a higher probability of
selecting articles focussed on the
description
of
core
process
characteristics. This initial procedure
resulted in 51 articles, which were then
analysed. For each of these initial
articles, a meticulous content analysis
was performed to identify evidence for
each of the three characteristics of a
core supply chain process previously
described. In addition, the analysis of
these initial articles led to a second
round of literature search, where some
new process nomenclatures retrieved
from the initial 51 articles were added
to the initial list of nomenclatures, as
well as additional publications for
certain specific nomenclatures being
required in order to collect further
evidence about process characteristics.
While
for
the
additional
nomenclatures, the literature searching
mechanism was applied with the same
degree of rigour as previously, for the
existing
nomenclatures,
different
searching mechanisms were tested (i.e.
it was allowed to search process
nomenclature throughout the document
text, instead of only in its title). Finally,
a total of 184 articles were identified
and analysed. Table 1 illustrates the
five journals with the highest presence
of articles analysed. A list of the
articles included can be obtained from
the authors upon a written request.
TABLE 1. LIST OF JOURNALS WITH HIGHEST PRESENCE OF
ARTICLES ANALYSED.
Journal
# of Articles
The Journal of Business Forecasting
12
Business Process Management Journal
11
International Journal of Operations & Production Management
9
Production Planning & Control
7
International Journal of Production Economics
7
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
FIGURE 2. SUPPLY CHAIN CORE PROCESSES MODEL.

among those three core process
characteristics were also found in
articles related to nomenclatures such
as “S&OP process”, “order fulfilment
process”, “inventory replenishment
process”,
“quotation
process”,
“delivery process”, and “ordering
process”. In hand with the results of the
content analysis, we started an
intensive investigation in terms of the
processes scopes proposed by high
adherent core process nomenclatures.
This task allowed us to define logically
the boundaries of a set of core
processes identified in the articles as
well as their inter-relationships. Its
development was performed through
iterative ad-hoc validations with 12
members of our research teams.
Model Construction: the analyses of
the 184 selected articles came up with
the percentages that each core process
characteristic was found evident for
articles analysed under a certain
process nomenclature. For instance, out
of the 32 articles analysed under the
nomenclature “Strategic Planning
Process”, 25 (78%) presented clear
evidence of a structured and
continuous
set
of
inter-related
activities, resources and events. 23
articles (72%) presented apparent proof
for
multi-disciplinary
knowledge
required for the process performance
and 15 (47%) clearly transmitted the
importance and the structure to deal
with customer information and
transactions. Higher levels of evidence
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
Additionally, through our experience in
management
consulting,
the
application of this model has been
discussed
with
several
global
companies in different industries that
are undergoing substantial supply chain
transformation initiatives.
Finally, along with clear
processes boundaries, nomenclatures
for each process were determined
based on two straightforward criteria:
applying the same taxonomy in case of
high
level
of
nomenclature
standardisation in the literature (i.e.
strategic planning, S&OP, order
fulfilment, inventory replenishment
and product return); or defining a new
taxonomy in case of the existence of
recent and considerable trends on the
process emphasis or due to the lack of
consensus in the literature. The
previously
mentioned
ad-hoc
validations with SCM professionals
also supported the definition of the
final nomenclatures applied in the
proposed model.
parts of the model. It is important to state that
the descriptions presented below do not intend
to demonstrate all possible activities existing
in each core process. Some main activities are
highlighted along the text with the aim of
supporting the definition of the process scope.
The recommendations for further research will
raise the need for more detailed analyses in
terms of possible sub-processes and activities
within each process domain.
3.2.1. Strategic Planning Process (SPP)
Johnson and Scholes (1997) define
strategic planning as the direction and scope of
an organisation over the long term which
achieves advantages for the organisation
through its configuration of resources within a
changing environment to meet the needs of
markets and fulfil stakeholder expectations.
Consequently, the strategic planning process
relates to the mechanisms for the development
of the strategic plan and its subsequent
deployment (e.g., O’Regan and Ghobadian,
2002, Dibrell et al., 2014).
According to Larsen et al. (2000),
strategic planning is a cyclical process which
normally takes place once a year with
revisions during the year. The planning
horizon spans from twelve months to ten years
depending on conditions such as market
complexity (Jennings and Disney, 2006;
Larsen et al., 2000) and company growth rate
(Larsen et al., 2000).
Jennings and Disney (2006) affirm that
there appears to be general agreement among
strategic planning researchers that the strategic
planning process consists of three major
components: (i) formulation (including setting
objectives and assessing the external and
internal
environments,
evaluating
and
selecting
strategic
alternatives);
(ii)
implementation; and (iii) control.
3.2. Core Supply Chain Processes
Framework
This section presents the reference
model developed. Its construction resulted in a
proposition of seven inter-related core supply
chain processes. They are: strategic planning
process, sales and operations planning process,
value commitment process, order fulfilment
process, inventory replenishment process,
product return process, and value development
process. Figure 2 illustrates the proposed
model and the following subsections present
each process. Instead of presenting the entire
theoretical discussion found in the literature of
each process, we focus on presenting the
process definitions, objectives and main
activities found in the literature analysed as
well as their connections with the remaining
3.2.2. Sales & Operations Planning Process
(S&OP)
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A New Reference Model for Core Supply Chain Processes
Olhager et al. (2001) define the sales
and operations planning process as the forum
where different functional strategies meet to
establish an operations plan that economically
serves the needs of the market, while
supporting both the strategic and financial
plans of the firm. In other words, the goal of
the sales and operations planning process is to
continuously balance demand, supply,
distribution, and financial plans to achieve
corporate objectives (Whisenant, 2006). With
the planning horizon varying from three
months to over three years (Grimson and Pike,
2007), the S&OP process usually takes place
in monthly cycles with a rigid process agenda.
Sub-processes involved in the S&OP
process usually include: demand plan
generation; generation of an operations plan
reflecting the foreseen demand as well as its
financial consequences; S&OP meetings for
plans alignment and validation; and, finally,
communication of the decisions taken and
generation of plans’ accountability (Bower,
2006; Wallace, 2006; Grimson and Pyke,
2007, Tuomikangas and Kaipia, 2014).
exact value expected by individual customers
(Gattorna, 2006). On the other hand, concepts
such as revenue management have been
presented as the counterpart knowledge
required for protecting value for selling
organisations (Talluri and Van Ryzin, 2005).
Based on the literature (Bramham et
al., 2005; Daniel et al., 2003; Hvam et al.,
2006), we present four sub-processes
commonly present in the value commitment
process literature:


3.2.3. Value Commitment Process (VCP)

The value commitment process is in
charge of conducting the mutual discussion
and arrangement of terms of a sales order. To
accomplish this, it spans from the initial
dialogue between the company and the
customer when dealing with a requirement, up
to the moment when the customer inquiry is
converted into an order for the vendor. We
named the process “value commitment” as it is
during this set of activities that values are
agreed upon between both parties in a
negotiation, the customer and the selling
company. In this context, value can be
understood to be a combination of product
characteristics, price and customer services. In
the last years literature has intensively
addressed reasons and methods as to how to
identify, promise, and consequently deliver the
Initiate dialogue – the dialogue with an
individual customer might begin with
either party (Daniel et al., 2003). It
may be conducted through any of the
selling channels a company has
available (e.g., Internet, direct sales,
telesales, etc.);
Develop quotation – this stage involves
steps such as assessing the feasibility
of product construction according to
the customer’s required configuration,
analysing standard options and
required modifications (Bramham et
al., 2005), determining material lists
and estimating product prices (Hvam et
al., 2006);
Negotiate / Tailor – this sub-process
starts by presenting the initial quotation
to the customer followed by an
iterative process, which may involve
the seller modifying its offer in order to
meet the customer’s needs better
(Daniel et al., 2003). In this stage,
aspects such as product characteristics,
price and payment conditions as well
as operational (e.g. delivery lead-time
and order flexibility) and product
related services (e.g. warranty and
return policies) are discussed. The
negotiation of operational services is
usually supported by concepts such as
available-to-promise
(ATP)
and
capable-to-promise (CTP) which aim
to provide realistic information when
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes

promising delivery lead-time to
customers;
Commit – finally, at this stage both
parties have to commit to the
transaction (Daniel et al., 2003). The
customer quote document is thus
converted into a customer order when
an agreement on all negotiated aspects
is achieved. The conversion of the
customer quote into customer order
triggers the order fulfilment process.
This event is symbolised in our
framework by the linking-element C.P.
– commitment point.
fulfilment process encompasses the order-todelivery and order-to-cash cycles.
However, like the value commitment
process, the order fulfilment process also
presents different configurations depending on
the operations environment applied to the
order (Pil and Holweg, 2004; Dominguez and
Framinan, 2013). In other words, the location
of the order decoupling point (DP) sets the
scope of the order fulfilment process as well as
its complementary inventory replenishment
process. The literature defines order fulfilment
as a process driven by final customer orders,
while the inventory replenishment process is
driven by forecast or inventory replenishment
orders. For instance, if an order is fulfilled
according to make-to-stock strategy, the shortterm planning and execution of activities
related to sourcing and manufacturing are not
performed under the order fulfilment process
scope since the order is delivered directly from
inventory. In this case, those activities are
performed under the inventory replenishment
process. However, as the strategy moves
towards higher levels of product customisation
(e.g. assemble-to-order and make-to-order),
more such activities are incorporated into the
order fulfilment process up to the level that, in
engineer-to-order environments where not
even raw materials are kept in stock, the order
fulfilment process takes responsibility for all
short-term planning and execution for sourcing
and manufacturing activities. In theory, this
eliminates the need for the inventory
replenishment process. Figure 3 illustrates the
complementary responsibilities of the order
fulfilment and inventory replenishment
processes
in
different
operations
environments.
Therefore, based on the literature
analysed, we found four major sub-processes
related to OFP:
Notably, the value commitment
process presents a different configuration and
levels of importance when analysing
contrasting
strategies
and
operations
environments. For example, in make-to-stock
environments the process may eliminate
quotation related activities and also simplify
negotiation-related activities to product
availability check and payment conditions
selection.
However,
in
“to-order”
environments the process is more complex and
extremely important to firm performance and
consequently for the entire supply chain.
Additional aspects such as supplier-customer
involvement experience or simply the sales
channel used for the transaction might require
different activities when negotiating an
agreement. The development of situationalbased models is recommended as further
research of this work.
3.2.4. Order Fulfilment Process (OFP)
As previously mentioned, the order
fulfilment process is triggered when a
customer quote (inquiry) is converted into a
customer order. Subsequently, it covers all
related activities from the moment the order is
received to the instant the customer obtains the
product and the seller collects the agreed
compensation. In other words, the order

Generate
activities
checking
Order – encompasses
such as order editing,
customer
credit,
and
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A New Reference Model for Core Supply Chain Processes



transmitting order from point of sales
to upstream member (Croxton, 2003).
Short-term Plan and Execute Sourcing
and Manufacturing – comprises
activities such as Master Production
Scheduling (MPS), Rough Cut
Capacity Planning (RCCP), Materials
Requirement
Planning
(MRP),
Capacity Requirement Planning (CRP),
purchasing and manufacturing orders
release as well as its consequent
execution and control (Amaro et al.,
1999; Kritchanchai and MacCarthy,
1999; Stevenson et al., 2005; Wikner
and Rudberg, 2005). As previously
mentioned, this set of activities is
elective depending on the location of
the order decoupling point.
Deliver – involves tasks such as
delivery
scheduling,
vehicle
preparation (e.g. loading), outbound
transportation and when necessary,
tasks related to product installation and
set-up (Kritchanchai and MacCarthy,
1999).
Billing and Collect – while billing
involves tasks related to sending the
order invoice to the customer (Croxton,
2003), cash collect tasks are related to
invoice payment by the customer
(Kallio et al., 2000).
the inventory level, examples of key
performance indicators to measure its
efficiency might be inventory turnover and
number of stock-out per period of time
(Jammernegg and Reiner, 2007).
Therefore, we list three major subprocesses found in the literature about the
process:


3.2.5. Inventory Replenishment Process
(IRP)
Figure 3 presents the inventory
replenishment process as the counterpart of the
order fulfilment process. Its responsibilities
span from the update of the forecast as well as
inventory consumption along the value chain
network up to the moment when the material is
replaced in its exact inventory position. Since
the focus of the process is the replenishment of

Update Forecasting / Inventory
Consumption – involves activities such
as the deployment of the sales plan
coming from the S&OP process to the
stock-keeping units (SKUs) level, the
update of forecast data based on recent
demand behaviours as well as the
update of sales quotas for example per
region, customer type, or customer.
The
concept
of
Distribution
Requirements Planning (DRP) might
be applied to translate forecast data
into inventory requirements for a
certain
location.
In
pull-based
environments, the consumption of the
inventory by the customer is
transmitted, normally automated, to
sellers, starting up the inventory
replenishment process;
Short-term Plan and Execute Sourcing
and Manufacturing – this activity was
debated previously within the scope of
the order fulfilment process. Its
execution under the order fulfilment or
inventory
replenishment
process
depends on location of the order
decoupling point (Figure 3);
Distribute Inventory – involves all the
steps required after manufacturing (e.g.
transportation
preparation,
orders
consolidation, transport load and
execution) up to the moment the
product is placed in its final inventory
location;
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A New Reference Model for Core Supply Chain Processes
FIGURE 3. COMPLEMENTARY RESPONSIBILITIES OF OFP AND IRP IN
DIFFERENT OPERATIONS ENVIRONMENTS (adapted from Poulin et al., 2006).
3.2.6. Product Return Process (PRP)
3.2.7. Value Development Process (VDP)
The sixth supply chain core process is
the product return process. The process begins
when a customer decides to return one or more
products to the seller (Amini et al., 2005). It
ends with the disposal of the product by the
seller and the provision of a solution for the
customer.
Some descriptions found in the
literature reflect characteristics related to the
retail sector (Autry et al., 2007; Bernon et al.,
2013). However, in terms of the manufacturing
industry, Guide Jr. and Wassenhove (2006)
affirm that there are three primary groups of
elements in every return case: (i) the product
return execution (receive, sort, analyse the
quality of the returned product, disposal,
respond to the customer, etc.), (ii)
remanufacturing operational strategies, (3)
remanufactured products market development.
The two latter groups give evidence of the
interactions existing between the product
return process and other core processes such as
the S&OP, value commitment, order
fulfilment and inventory replenishment.
Activities related to the value
development process were found in the
literature under a series of nomenclatures (e.g.
product development process, product design
process, product introduction process, etc.). By
performing content analysis, we identified that
these processes descriptions available in the
literature present a high level of evidence of
analysed core supply chain process
characteristics. We denominated the process
“value development” due to contributions in
the literature that emphasise the dynamic
environment companies are currently facing,
driven by competition for value generation in
terms of products and associated services for
customers (Hughes and Chafin, 1996; Hart et
al., 1999; Gattorna, 2006).
Thus, the value development process
involves the whole series of steps from the
generation of an idea or an opportunity,
through the project proposal, prototyping and
testing to the launching and post-launch
review of a product/service (or a combination
of both) that adds value to end users, the
company and the value chain (Hughes and
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
Chafin, 1996; Sroufe et al., 2000). In addition,
the process is the only core process to present
a structured and continuous behaviour where
activities are deployed from a strategic
perspective to an operational level inside a
single process (Holmes and Campbell Jr.,
2004; Dooley and Johnson, 2001).
require a greater level of dependence on
aspects such as organisational culture and
desired strategic positioning.
Another implication brought up by this
paper is related to the method applied for the
investigation of the set of core processes most
commonly
required
in
manufacturing
environments. The method was designed to
simultaneously explore scientific and applied
as well as tacit and implicit knowledge
available in the SCM arena. Traditional
frameworks have basically relied on tacit
knowledge of SCM professionals without
comprehensively exploring the knowledge
available in the vast SCM literature. By
employing this method, this article supports
the argument that more scientifically relevant
methods are required when developing robust
processes-oriented supply chain models.
Nevertheless, the main limitations of the
method here applied rely first on the lack of
statistical inferences when sampling the
articles for the content analysis. Second,
different methods of defining processes
nomenclatures and searching mechanisms
could be also applied and statistically tested. In
addition, the ad-hoc validations with SCM
professionals used during the framework
development should next evolve to surveybased methods in order to increase the
exposure of the model to different professional
profiles. Finally, the use of research methods
such as case studies, where the proposed
model could be investigated in depth in
specific settings, is also considered a
subsequent step of this research.
In addition, three main implications
can be found with the introduction of the new
framework: first, when compared to the
equivalent SCOR model, the proposed model
presents improved propositions in terms of
supply chain comprehensiveness as well as a
more evident business process perspective. By
denominating the processes around functional
responsibilities (e.g. source, make and
delivery), the SCOR model still lacks
IV. IMPLICATIONS AND
LIMITATIONS OF THE PROPOSED
MODEL
This section analyses the main
implications of the proposed model for
practical and scientific contexts and identifies
its limitations which should drive future
advances in this important knowledge domain.
First of all, the discussion regarding
different classifications of supply chain
processes presented prior to the development
of the core processes model improves the
theoretical ground for processes-oriented
supply chain models. The advocated
classification, which combines core and
support
processes
with
management
competences, provides a framework to support
a clear definition of focus and expected
contributions for reference models. Following
this perspective, core processes propositions
should focus on defining a logically-related set
of activities that draws on multiple
departmental skills which enable goods and
services to reach their marketplace. In
complement, the study of management
processes should investigate competencebased elements to be embedded in the firm’s
coordination and control mechanisms in order
to attain its strategic positioning.
Through the understanding of supply
chain processes classification, we found
opportunities for improvement of the current
state of the art for core processes reference
models. However, a further advance of this
research should investigate the feasibility of
proposing reference models for supply chain
management competences since they seem to
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A New Reference Model for Core Supply Chain Processes
structuring organisations around flows of
customer-driven activities. For instance, the
Source process in the SCOR model presents
five macro activities: 1. Schedule Product
Deliveries; 2. Receive Products; 3. Verify
Product; 4. Transfer Product and; 5. Authorise
Supplier Payment. The responsibilities and
knowledge involved in all activities are usually
found completely within the procurement
department of manufacturing firms, therefore
missing the multiple functional skills claimed
by the business process definition. Similar
examples can be found for instance within
different configurations proposed by the Make
process. In terms of supply chain
comprehensiveness, core activities related to
customer value development and commitment
were later addressed by the Supply Chain
Council through the CCOR (Customer-Chain
Operations Reference-model) and the DCOR
(Design-Chain Operations Reference-model)
models with the aim of filling the existing gap
in the SCOR model. However, a potential
meta-model involving the association of the
three reference models developed (DCOR /
SCOR / CCOR) is still scarcely explored in the
literature.
Second, in spite of their vast literature
and applications in the SCM arena, processes
such as strategic planning and sales and
operations planning are not explicitly
considered in existing SCM processes
frameworks.
After
interviewing
120
companies, Poirier & Quinn (2006) found that
S&OP process ranks second in terms of the
most important SCM initiatives, thus
demonstrating its core importance for
companies today. The SCOR model still
presents S&OP as a best practice for the subprocess P1 – Plan Supply Chain, but it fails to
structure a planning hierarchy where processes
deploy supply chain decisions (e.g. assets
requirement/utilisation, demand visibility,
supply chain investments, etc.) through
different planning horizons and information
aggregation levels.
Finally, the proposed model explicitly
debates the organisation of two key moments
of truth within any manufacturing business:
the commitment point (C.P.) and the
decoupling point (D.P.). C.P. can be
summarised as the instant when market
positioning strategies pursued by a firm are
translated into commitments to customers
through parameters such as price and
discounts, order flexibility, delivery lead-time
and reliability. In complement, D.P.
determines how operational activities and
decisions should be organised to fulfil those
commitments. Thus, by making these
moments explicit, the model copes with the
challenge of streamlining supply chain
processes to handle multiple operational
strategies. The SCOR model, addresses the
D.P. decision by separately describing the
processes Source, Make and Deliver according
to MTS, MTO and ETO strategies. By offering
this simple structure, the model falls short in
aligning these activities with front-end
activities and decisions in the supply chain as
well as it dismantles a logical and continuous
flow of activities and decisions through the
traditional
silos
perspective
within
organisations.
V. CONCLUDING REMARKS
This paper has sought to revitalise the
debate concerning process-oriented supply
chain reference models. After reviewing the
fundamentals of this important management
discipline, the paper assesses the currently
most recognized reference models and
proposes a new reference model for core
supply chain processes. A central piece in this
proposition, the use of coordination theory, has
supported the comprehension that activities
performed to plan and move products and
services to customers should be analysed in
complement to elements of firms that are
continuously deployed to successfully achieve
their strategic positioning in the marketplace.
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Rodrigo Cambiaghi Azevedo, Sophie D’ Amours, Mikael Rönnqvist
A New Reference Model for Core Supply Chain Processes
The article also calls for a higher level
of systematic investigation in this field. In
addition to the new model here presented, the
SCOR and the GSCF frameworks, other
propositions such as the Process Classification
Framework (PCF) developed by the American
Productivity and Quality Center (APQC) and
the Supply Chain Relationships in Aerospace
(SCRIA) model widely used by the UK
aerospace industry, should gain more exposure
in different contexts where scientific
inferences could be applied to investigate their
benefits and disadvantages for academics and
practitioners. By pursuing more systematic
investigations, we hope new propositions can
be continuously generated to support the
evolving knowledge around supply chains and
its application in practical fields.
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