Trent Tucker

In the often cited "Aligning supply chain strategies with product uncertainties" 2002 paper in the California Management Review, Professor Hau L. Lee elegantly illustrated how understanding supply and demand uncertainties can lead to the adoption of a supply chain strategy best suited to a particular business environment. Lee's theoretical model was operationalized for the first time in late 2008 as part of PhD dissertation research into "supply chain orientation."
The purpose of this session is two-fold: to discuss how the Lee model was operationalized and share some new insights gleaned from survey data.

The Lee model was recast from its theoretical roots into a workable survey instrument with 20 questions — 10 each for supply and demand uncertainty and included as part of a larger survey. The analysis of the results helps determine which of four generic supply chain strategies (efficient, responsive, risk-hedging, or agile) align best with a business' domain. This survey instrument provides a tool to businesses to perform their own analysis on their supply processes and suite of products.

The second part of the session will discuss the analysis of the responses to the survey questions. Initial analysis showed that the survey respondents represented all four SCM strategies and anecdotal evidence of company activities corroborates Lee's model. Further analysis dug deeper into the data to reveal underlying factors in both the supply and demand uncertainties. Supply uncertainties fell into Inputs, Set-up, and Production categories, while a Sales variable, a COGS variable, Product Management and Product Lifecyle were found to be underlying factors on the Demand Uncertainty side. The new factors uncovered were tested for and found to be reliable. The constructs were also shown to have convergent and discriminant validity.

The session will conclude with discussion of goodness of fit and ways in which the Lee model and the survey instrument can be further refined to obtain usable information for companies looking to develop or enhance their SCM strategies.