MT - Business case - Principle of Supply Chain Management

Series on Resource Management Principles of Supply Chain Management SECOND EDITION Richard E. Crandall William R. Crandall Charlie C. Chen Principles of Supply Chain Management SECOND EDITION Series on Resource Management RECENT TITLES Principles of Supply Chain Management, Second Edition by Richard E. Crandall, William R. Crandall, and Charlie C. Chen ISBN: 978-1-4822-1202-0 Supply Chain Risk Management: An Emerging Discipline by Gregory L. Schlegel and Robert J. Trent ISBN: 978-1-4822-0597-8 Supply Chain Optimization through Segmentation and Analytics by Gerhard J. Plenert ISBN: 978-1-4665-8476-1 Vanishing Boundaries: How Integrating Manufacturing and Services Creates Customer Value, Second Edition by Richard E. Crandall and William R. Crandall ISBN: 978-1-4665-0590-2 Food Safety Regulatory Compliance: Catalyst for a Lean and Sustainable Food Supply Chain by Preston W. Blevins ISBN: 978-1-4398-4956-9 Driving Strategy to Execution Using Lean Six Sigma: A Framework for Creating High Performance Organizations by Gerhard Plenert and Tom Cluley ISBN: 978-1-4398-6713-6 Building Network Capabilities in Turbulent Competitive Environments: Practices of Global Firms from Korea and Japan by Young Won Park and Paul Hong ISBN: 978-1-4398-5068-8 Integral Logistics Management: Operations and Supply Chain Management Within and Across Companies, Fourth Edition by Paul Schönsleben ISBN: 978-1-4398-7823-1 Lean Management Principles for Information Technology by Gerhard J. Plenert ISBN: 978-1-4200-7860-2 Supply Chain Project Management: A Structured Collaborative and Measurable Approach, Second Edition by James B. Ayers ISBN: 978-1-4200-8392-7 Modeling and Benchmarking Supply Chain Leadership: Setting the Conditions for Excellence by Joseph L. Walden ISBN: 978-1-4200-8397-2 Principles of Supply Chain Management SECOND EDITION Richard E. Crandall William R. Crandall Charlie C. Chen CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2015 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Version Date: 20140721 International Standard Book Number-13: 978-1-4822-1205-1 (eBook - PDF) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com To Jean—yesterday, today, and tomorrow To Sue, my wife and friend forever To Fu-Mei, my mother and mentor forever Contents Preface to the Second Edition. ................................................................................................. xxix Preface to the First Edition. ...................................................................................................... xxxi Acknowledgments...................................................................................................................xxxiii Authors.....................................................................................................................................xxxvii Introduction.............................................................................................................................. xxxix Section I Overview of Supply Chain Management 1. Evolution of Supply Chains.................................................................................................. 3 Learning Outcomes..................................................................................................................3 What Is a Supply Chain?. ........................................................................................................6 Importance of SCM. ................................................................................................................. 7 Evolution of Supply Chains. ...................................................................................................9 Early Supply Chains............................................................................................................ 9 Local Supply Chains. .......................................................................................................... 9 Global Supply Chains. ...................................................................................................... 10 Changing Government Orientation. ................................................................................... 13 State-Controlled Governments........................................................................................ 13 Market-Driven Governments........................................................................................... 13 Current Trends That Link Supply Chain Participants More Closely. ............................ 14 Relationship Building. ...................................................................................................... 14 Customer Relationship Management. ....................................................................... 14 Supplier Relationship Management........................................................................... 15 Product Life Cycle Management. ............................................................................... 15 Electronic Business............................................................................................................ 15 Developing Economies. .................................................................................................... 16 Outsourcing........................................................................................................................ 16 Need for Quality Improvement....................................................................................... 17 Changing Customer Demands........................................................................................ 18 Decreasing Response Time. ........................................................................................ 18 Lean Supply Chains to Reduce Waste. ...................................................................... 18 Current Developments in SCM. ........................................................................................... 19 Power Has Shifted from Manufacturers to Retailers................................................... 19 Consolidation of Small, Local, or Regional Retailers into National Chains............. 20 Emergence of “Killer Category” Retailers. .................................................................... 20 From a Make-and-Sell Mentality to a Sense-and-Respond Orientation. .................. 20 Obstacles to Supply Chain Integration................................................................................ 21 Need for Globalization. ....................................................................................................22 Complexity of Arranging Entities with Common Interests........................................22 Lack of Effective Interorganizational Systems.............................................................. 23 vii viii Contents Need for Multiple Supply Chains within Companies. ................................................ 23 Lack of Trust between Participants................................................................................. 23 Examples of Companies with Successful Supply Chains................................................. 25 Summary. ................................................................................................................................ 25 Discussion Questions............................................................................................................. 28 References................................................................................................................................ 28 2. Supply Chains as a System. ................................................................................................ 31 Learning Outcomes................................................................................................................ 31 Company Profile: Zara’s. ....................................................................................................... 31 Introduction. ........................................................................................................................... 35 Supply Chain Systems. .......................................................................................................... 37 Inputs................................................................................................................................... 37 Transformation................................................................................................................... 38 Outputs. .............................................................................................................................. 38 Manufacturing versus Services....................................................................................... 39 Characteristics of Supply Chains......................................................................................... 39 Physical Flow...................................................................................................................... 40 Information Flow............................................................................................................... 41 Funds Flow. ........................................................................................................................42 Relational Flow. .................................................................................................................42 Examples of Supply Chains in Different Industries..........................................................43 Internal and External Customers......................................................................................... 45 Open Systems versus Closed Systems. ............................................................................... 46 Effect of External Influences on Supply Chains. ............................................................... 48 Obstacles and Enablers of Supply Chain Integration. ...................................................... 48 Obstacles. ..........................................................................................................