Can supply chain managers embrace an entrepreneurial mindset?

Editor’s note: The following article is a joint project of professors in the University of Tennessee Knoxville’s Global Supply Chain Institute. For more on the Institute, click here.

How can managers integrate entrepreneurship into supply chain management? Entrepreneurs use resources and innovation to exploit opportunities, which can help businesses thrive in today’s volatile, uncertain, complex, and ambiguous (VUCA) environment. Thomas Goldsby, Donald Kuratko and Michael Goldsby recently promoted the use of the Corporate Entrepreneurship Assessment Instrument (CEAI) to assess a firm’s entrepreneurship level and encourage entrepreneurship in supply chain management.

The reason for this is that supply chain professionals have historically been risk-averse, focusing on efficiency, risk mitigation, and resilience, especially as they are driven by metrics such as cost reduction and efficiency. By contrast, entrepreneurs tend to be more risk-tolerant and innovative, focused on potential top-line revenue growth. Incorporating some aspects of entrepreneurship into SCM can bring new growth opportunities. One case in point: businesses that embraced agility during the COVID-19 pandemic were able to pivot more quickly and take advantage of market shifts.

To encourage a greater entrepreneurial mindset in supply chain professionals, the Corporate Entrepreneurship Assessment Instrument (CEAI) has been adapted to measure the readiness of supply chain managers to embrace entrepreneurial activities. This tool measures intrapreneurship, the practice of fostering entrepreneurial activities within an organization among supply chain professionals. The instrument looks at management support of entrepreneurship, employee work discretion, time availability for problem-solving, rewards and reinforcement, and organizational boundaries. Understanding the organization’s current level of intrapreneurship can help organizations increase innovation where they are lacking.

How can supply chain managers shift their mindset? There are several ways to go about this. First, managers can foster a culture of entrepreneurship within SCM to encourage leaders to explore new opportunities, innovate processes, and think more dynamically about partnerships, logistics, and risk mitigation.

Second, managers can balance risk management with entrepreneurial opportunities. As the global supply chain disruptions during the pandemic illustrated, agility—the ability to rapidly adapt to changing conditions—was essential. To take advantage of emerging opportunities, such as new supply sources or product lines arising from disruptions, managers should incorporate entrepreneurial agility into supply chain processes.

Third, since entrepreneurs are often seen as innovators who combine existing resources in new ways to seize opportunities, SC managers can adopt this approach by encouraging their teams to innovate in supply chain design. This could involve exploring new technologies, revising supplier relationships, rethinking logistics strategies, or even engaging in cross-firm collaborations to bring about more efficient, sustainable, or flexible supply chains.

Fourth, supply chain managers should rethink their supplier and partner relationships, viewing them not just as transactional but as potential sources of innovation and growth. For example, Apple and Corning employed an entrepreneurial mindset to create a new product- a scratch-resistant glass screen- for the iPhone despite Corning’s significant production capacity constraints. This type of entrepreneurial approach emphasizes building flexible, strategic alliances or partnerships that yield sustainable competitive advantages. This could involve forming closer partnerships with suppliers to co-create value or identifying alternative suppliers to mitigate risks.

Finally, attitude is everything. Managers need to view supply chain innovation as a key driver of growth, rather than just a function of cost-cutting and efficiency. By encouraging entrepreneurial approaches to SCM, firms can create new growth opportunities, such as innovative logistics solutions, customized supply chains for different markets, or sustainable sourcing practices that appeal to environmentally conscious consumers.

Supply chain managers have the formidable task of creating value in a constantly changing environment. Employing an entrepreneurial mindset can help turn challenges into opportunities. Using tools like the Corporate Entrepreneurship Assessment Instrument (CEAI) can help organizations evaluate their readiness for such a shift and encourage intrapreneurial activities among supply chain professionals. In this way, supply chain innovation can drive growth.

About the Global Supply Chain Institute

The University of Tennessee's Global Supply Chain Institute (GSCI) is the preeminent hub for supply chain thought leadership and talent development. The pinnacle of GSCI’s efforts is UT’s Supply Chain Forum, which brings together more than 80 of the world’s most innovative and impactful companies twice a year to learn, network, and recruit the country’s top supply chain talent. 

SC
MR