Running head: JOURNAL ARTICLE REVIEW 2 1
Journal Article Review 2
Liberty University
"Supply chain opportunity in an uncertain economic recovery" by Eric G. Olson
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Statement of Author’s Purpose
The single most important issue here is how companies can rebuild a damaged supply
chain during and immediately after unreliable economic conditions. Eric G. Olson explained in
his article “Supply chain opportunity in an uncertain economic recovery” the varying ways and
opportunities that businesses are able to adjust to an unstable economy by changing operations
within the supply chain. He describes these solutions so that companies can attempt to create a
profit margin to help a business recover and rebuild from damaging economic blows. Olson
expresses that businesses cannot simply “wait and see” when it comes to the economy and an
unstable market (Olsen, 2010, pg. 488). He urges managers to take advantage of the situation and
turn it around to help the business rather than panic and let it negatively chip away at a business.
Olsen encourages supply managers to “…work to make their supply chains more flexible and
adaptive to the environment” (2010, pg. 488). This can help managers forecast potential future
issues within the market and how to best approach them from a logical business standpoint.
Olson’s research provides support for a scalable and flexible supply chain and how it can
help eliminate several risks during the recovery period. He offers a four-step guide to help
businesses take advantage of supply chain opportunities in economic downturn. He also provides
evidence to support his idea that a flexible and scalable supply chain are able to be more cost
effective and easier to achieve in unexpected economic situations.
Application and Background of the Issue
One example provided by Olson is the tracking and measuring of inventory during
economic changes. As the market fluctuates, and as customer behaviors evolve, it is imperative
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for managers to closely monitor inventory information (Olson, 2010). Consumer buying patterns
can quickly and easily change. Due to this, businesses benefit from being flexible and open to
changes according to the changes within the market. Olson explained how developing a more
scalable and flexible plan can, “…reduce many of the risks associated with capturing growth
opportunities when even the best planning efforts still do not reflect volatile market dynamics”
(Olson, 2010, pg. 491). This is an example of balancing supply and the demand. An example of
this concept can be seen in products that experience specific seasonal surges. If a products sales
surge during the summertime, but remain the same through the other seasons, then it is the duty
of the business to properly prepare for this surge. Managers should be able to recognize the
demand and prepare for the demand. This proper preparation can help the business become more
profitable than if managers were unprepared. This balance of the supply and of the demand is
important for a business to make a profit. This flexibility of the company and manager is a useful
tactic in company achieving it’s most possible potential.
Managerial Implications
Economic downturns can be an uncertain and damaging time for businesses, but Olson
provides support for the idea that managers actually have the opportunity to help their businesses
survive and even thrive during economic crises. By using the concept of scalability, businesses
can and should scale back in different departments in order to adjust to the economy. This
flexibility of a company is a necessity in order to modify itself to the current economic situation
and survive unexpected economic turns. An example of flexibility can be seen in regards to
temporary staffing. Perhaps it is more beneficial for a business to help manage labor costs by
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deciding on provisional staffing and decide which employees have potential to be hired full-time
after the company recovers from the economic situation (Olson, 2010).
Another example of opportunities that managers have to incorporate a more scalable and
flexible approach is ensuring that the supply chain is consistent and running smoothly. Ensuring
that the supply chain itself is always running efficiently and without issues is a huge step that can
help a manager in a time of economic crisis. When all aspects of the supply chain are already in
good working order, when an economic downturn takes place, the business is already at
somewhat of an advantage. Starting with a strong supply chain helps to give a business the
opportunity to be flexible without creating issues or more problems. These are examples of
strides that managers are able to take in stressful economic periods in order to strengthen the
company and help the business to recover after the downturn. These periods of uncertain
economic recovery can be a trying time for managers, but also a beneficial challenge to help
them develop stronger analyzing skills and experience in discovering solutions under extreme
pressure.
Summary
In conclusion, businesses have several opportunities to become more scalable and
flexible during economic recovery periods. A flexible and more scalable supply chain can
surprisingly be more easily achievable and cost-effective for businesses, more than managers
realize. This can help businesses recover and rebuild from economic downfalls much faster. It
helps companies to be more efficient and resourceful in the restructure. Creating a stronger
supply chain helps a company bounce back and grow more quickly after recessionary periods
(Olson, 2010, pg. 493). Olson supported these ideas with a four-step guide for businesses to
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follow in order to create more flexible and scalable supply chains. He proved that periods of
economic distress can actually be an ideal time for a business to develop stronger supply chains
and create strategies of strong regrowth. Olson outlined a specific approach and model for
managers to use as a guide to creating a stronger, better supply chain during unexpected
economic distress.
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References
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Chae, B. (2009). “Developing key performance indicators for supply chain: an industry
perspective”, Supply Chain Management: An International Journal, Vol. 14 No. 6, pp.
422‐8
Eric G. Olson, (2010) "Supply chain opportunity in an uncertain economic recovery",
Supply Chain Management: An International Journal, Vol. 15 Issue: 6, pp.488-492,
https://doi.org/10.1108/13598541011080464
Kristal, M. M., Huang, X., & Roth, A. V. (2010). The effect of an ambidextrous supply chain
strategy on combinative competitive capabilities and business performance. Journal of
Operations Management, 28(5), 415-429. doi:10.1016/j.jom.2009.12.002
Vakharia, A. J., & Yenipazarli, A. (2009). Managing supply chain disruptions. Boston: Now.
doi:10.1561/0200000012
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