Profile: Studying uncertainty in supply chains

Since he began exploring supply chain management three decades ago, Professor Scott Webster has taken a broad view of the field. He has studied areas as diverse as the pricing of fashion products, flexible workday policies, winemaking, cruise line revenues, machine tool making and laws that require electronics manufacturers to reuse discarded products. "I consider a supply chain to be two or more parties linked by a flow of resources," said Webster. "It often takes place in a manufacturing setting, but it also can involve the pure movement of goods, such as operations like UPS, and even flows of money and information as in the financial sector." Webster holds the prestigious Bob Herberger Arizona Heritage Chair in Supply Chain Management. For the 16 years prior to the appointment, he was on the faculty of Syracuse University, where he earned a reputation as one of the nation's leading researchers in the modeling of supply chains. Earlier, he spent seven years on the faculty of the University of Wisconsin-Madison and also held two semester-long posts as a visiting professor at Queen's University in Ontario, Canada and the Zaragoza Logistics Center in Spain. Webster's academic interests have long spanned a wide area. As a doctoral student at Indiana University in the late 1980s, he studied both the design of distribution networks and the organization of flexible manufacturing systems. In 1990, he received a double major Ph.D. in Operations Management and Decision Sciences. Making business less risky Webster has become widely known for his explorations of uncertainty in supply chains. He has written dozens of scholarly articles, as well two books, including a textbook entitled Principles of Supply Chain Management. "Much of my work involves looking at how to manage risk in supply chains, which is another way of saying how you deal with supply chains in which uncertainty is a significant factor," Webster said. "The uncertainty can relate to demand or it can relate to supply or to both." Syracuse University is located in New York State's Finger Lakes region, one of the leading wine producing areas of the United States and home to more than a hundred vineyards. As part of his research, Webster and his colleagues worked with local wineries crafting strategies to cope with the uncertainty inherent in agricultural production. "We got to know people at some of the wineries in the area and became familiar with some of the challenges that they faced," Webster said. "We had a number of research projects come out of that." In a 2011 journal article , Webster and a colleague at Syracuse's Whitman School of Management suggested establishment of a "fruit futures market," similar to commodities futures markets, as a way for risk averse firms in the industry to manage uncertainty. Production of grapes and other fruit can vary widely from year to year depending on weather, disease and other factors beyond the control of producers. Finding value in supply chains As an undergraduate, Webster majored in mathematics and statistics. After graduation, Whirlpool Corp. hired him as an operations research analyst in an internal consulting group at the home appliance maker's Benton Harbor, Michigan, headquarters. After three years in that job, he shifted to a position in Whirlpool's finance department, where he worked for another three years. He was involved in projects related to supply chain management or logistics throughout his work at Whirlpool, and it was his experience at the company that sparked his interest in the field. "During that time, what I found was that logistics was where the money was for the company," he said. "A lot of the projects had to do with logistics. In the finance department, we had to look at questions like how much inventory we should build up and how we should change distribution networks." Benton Harbor is located in the southwest corner of Michigan, near the Indiana border, so while working at Whirlpool, Webster started taking night courses in logistics at Indiana University's South Bend campus and the University of Chicago. He received a master's degree in August of 1985, and one year later, left Whirlpool to pursue his doctorate at Indiana's business school in Bloomington. His dissertation topic was the scheduling problems of flexible machine systems, and in his thesis, he developed a theory to help producers manage those problems. He continued his focus on scheduling in his research during his years on the Wisconsin School of Business faculty. New emphasis for an ancient field It was at Syracuse that he launched his stream of research into uncertainty and risk in supply chains. He explored the topic in a number of different settings, including, services, retailing and distribution, as well as winemaking. One of his research projects was a collaboration with Peter Bernegger of Eastman Kodak, who was working to implement a production control system at the time. They worked on the development of an analytical model of inventory and production control that brought greater stability to the company's production schedules and improved product availability, while lower operating costs. Their paper describing the Kodak’s system was published in August in the journal Interfaces. Another study that Webster conducted with researchers at Iowa State University and Singapore Management University explored the efficiency of "bucket brigade" order retrieval systems, in which workers pick products off of racks and hand them to other workers. Webster and his colleagues identified how this simple approach to distribution could be improved in some instances by shifting the location of where products are stored on the rack. Webster sees supply chain management as an exciting field. Although the term was coined in 1982, the study of logistics, from which supply chain management evolved, is as old as the Great Pyramids, he noted. "What changed is the recognition that logistics must be viewed from a strategic perspective that is of concern to companies at the CEO level," he said. "Secondly, in the global environment, supply chain management requires looking beyond the firm. You have to also consider the firm that supplies your firm, as well as the other firm's suppliers." While companies are increasingly recognizing the importance of supply chain management, so too are business schools, according to Webster. "In the academic area, there certainly are a lot more programs. It is an interesting field to be in today."