Few words have entered everyday speech as quickly as “supply chain.” It seems that everyone now knows what a supply chain is and has been affected by product shortages, delays, or other disruptions to the supply chain. Even supply chain terminology, such as the bullwhip effect, JIT, and inventory management, have found their way into consumers’ minds. But what has not been discussed as much is the people who keep these supply chains running. While Insights has focused on women in supply chain before, what remains underexamined is how women operate in the supply chain profession and the unique skills and advantages they bring to the supply chain profession.
In “Women are an Advantage in Supply Chain Collaboration and Efficiency,” Siqi Ma, Li Hao, and John A. Aloysius address this gap in the research by discussing the benefits of women’s inclusion in the supply chain team dynamic. Awareness of gender roles in the workplace has increased greatly in the last forty years. And most managers have more than a passing interest in team dynamics and getting the most from team members. Ma, Hao, and Aloysius find that certain attributes women bring advance supply chain collaboration. In particular, their research focuses on the higher levels of “intuition, flexibility, empathy, leadership, and multi-tasking abilities” found among women and how these collaboration-influencing behaviors drive certain supply chain outcomes. Cooperation with counterparts in rival firms – despite short-term incentives to seek your own firm’s advantage – create a more efficient supply chain that benefits everyone. And this seeking the benefit of everyone is not just the right thing to do, it is also the smart thing to do.
Women as Collaborators in the Supply Chain
More women are entering the supply chain profession thanks to initiatives from the Retail Industry Leader’s Association, the Council for Supply Chain Management Professionals, and the Association for Supply Chain Managers. As a result, they are bringing with them a refined set of social skills and a more collaborative outlook to complement their industry and technical knowledge. Ma, Hao, and Aloysius identified three key aspects where this collaborative outlook benefits overall supply chain efficiency. Their research focuses particularly on one of the key relationships in the supply chain, that of the buying agent and the supply agent. Additionally, their research model accounts for asymmetries in both information and risk sharing – two factors that, along with misaligned incentives, can stymie collaboration. The three key aspects are:
- Women supply chain professionals are more collaborative, regardless of whether they are a buying agent or a supply agent. This higher level of collaboration can be seen in lower amounts of forecast inflation and production adjustments. Trust is thus demonstrated because (a) retailers do not overstate consumer demand levels - which hurts suppliers who bear the cost of overproduction, and (b) suppliers do not have to anticipate a certain level of inflation and thus can base their quantity on what the buyer forecasts.
- Just knowing that one’s counterpart is a woman affects behaviors and outcomes, as both males and females "are more collaborative when they are paired with a woman than with a man.” Even if this higher level of collaboration stems from the “expectation of a higher level of cooperation from their female partners,” the fact remains that the presence of a female supply chain partner reduces inequality between supply chain partners. For example, "a retailer who expects less production adjustment from female suppliers would inflate their forecast less when working with a female supplier, than when working with a male supplier."
- Female supply chain pairs outperform all other pairings in their model, meaning that these behavioral differences are more than simple niceties; they’re driving “productivity differences, as all-women supply chains have the highest efficiency, significantly outperforming any other gender composition.”
While any of these findings would be compelling alone, taken together they create a compelling case for recruiting women for and retaining women in key supply chain roles. Female retailers paired with a female supplier have a 4.2% higher level of efficiency as compared to male-male pairs. Furthermore, this higher efficiency level “narrows the profit gap between suppliers and retailers … [which thus] may also reduce inequality between supply chain partners.” The authors indicate that future research should be conducted on three- or four-person teams as well as on how hierarchical relationships influence gender pairings. Future research on this topic will nonetheless go a long way to studying how the gender of decision makers can improve a firm’s competitive advantage and perhaps the overall efficiency of certain supply chains.
Implications for Managers
Social scientists have long recognized that our expectations about human behavior are heavily gendered. The authors use game theory to model these expectations and illuminate the effects of different pairings on supply chain efficiency. In their judgment, their work further supports efforts to ensure the inclusion of women in the workforce. Though commonly (and justly) regarded as a moral necessity, it is also, they believe, an economic imperative.
Business suffers when it is exclusionary, and the authors argue that this study gives managers reason "beyond diversity initiatives to assign more women to work with their supplier/retailer partners ..." Perhaps, in addition to bullwhip effect, JIT, etc., businesspeople can think of collaboration as a key term and driver of efficiency in supply chain relationships and take positive steps to facilitate it.
As John Aloysius states in a prior article, it’s not just the right thing to do – it's the smart thing to do.