Transaction Cost Economics vs. Supply Chain Management

When Oliver E. Williamson published his article Outsourcing: Transaction cost economics and supply chain management (2008), he confronted SCM research with uncomfortable questions. Surprisingly, it took four years until the first SCM researcher, Paul Zipkin, published A Reply to Williamson’s “Outsourcing …” (Production and Operations Management, Vol. 21, No. 3). Some of them may be provoking, but we should not brush aside the questions raised by Williamson. For example, he states that the “unit of analysis for TCE is the transaction” and asks: “The corresponding unit of analysis for SCM is what?” Zipkin rightly states: “We may be eclectic, but no one can accuse us of being parochial”. But this should be no excuse for us to ignore that our unit of analysis is the supply and demand network. Williamson reminds us that SCM research needs its paradigm. We need a consistent theory of the supply chain rather than eclectically adjusting theories that actually describe other units of analysis.