Understanding and Managing the Services Supply Chain

Abstract

SUMMARY: Services have become increasingly important as the driving force in the U.S. economy. However, there has been little research to date on services supply chains. It is believed that service businesses can benefit by applying some best practices from manufacturing to their processes. However, the inherent differences in services create a need for supply chain management tools specific to the services sector. This article documents the growing importance of the services sector and of services purchasing. Next, it develops a supply chain framework appropriate for a services supply chain by comparing and contrasting the applicability of three product‐based manufacturing models: Global Supply Chain Forum Framework, SCOR and Hewlett‐Packard's Supply Chain Management Model. Finally, this research describes the challenges for procurement professionals managing purchases for a services supply chain and provides suggestions for use of supply chain management theory, and practices for improvement.