Chapter 18
Supply Chain Management
Chapter Overview
Chapter 18 is devoted to supply chain management, an integrative management framework that takes a broader view at value adding processes than the view restricted to one business. Value is added by a variety of manufacturers and services. In many situations, value can be enhanced if the customers and suppliers within a supply chain communicate more and share information with each other. This level of communication and a broad perspective on problem solving forms the basis for supply change management.
|
Chapter Resources |
|
Esources |
|
| Esource 18.1 | Ashley Ward Manufacturing stresses its abilities to not only manufacture precisely what the customer wants, but build a relationship that is described as a partnership, not just a buyer and a supplier. A glance at what Ashley Ward's broad customer base says about their service provides evidence that Ashley Ward sells a capability to do whatever the customer wants, and does not define its capability in specific product terms. With customers that range from a producer of musical instruments to plumbing fixtures, flexibility is important. |
| Esource 18.2 | Few businesses depend on suppliers as much as retail giant Wal-Mart. Supplier actions and behaviors can reflect on public perception of the customer. As a result, Wal-Mart has developed sophisticated guidelines that dictate supplier behavior. These guidelines are available for view at Wal-Mart's Supplier Standards. |
| Esource 18.3 | iTenders.com auctions a variety of services to business customers. FreeMarkets.com offers software, as well as buying and supplying services to hundreds of companies in wide spectrum of industries. |
|
Supplementary Readings |
|
| Supplementary Reading 18.1 | L.L.Bean Delivers the Goods (FastCompany, Issue 10) provides a description of how L.L. Bean continues to provide a model of retail delivery quality. |
| Supplementary Reading 18.2 |
Why Detroit Is Going to Pieces (Business Week, September 3, 2001) describes how U.S. auto manufacturers are transitioning from outsourcing components from suppliers to outsourcing entire product modules. |
| Supplementary Reading 18.3 |
What's with all the Warehouses? (Business Week, November 1, 1999) examines what happens to warehousing as Ecomerce grows. |
| Supplementary Reading 18.4 |
Collaboration and cooperation are critical components of SCM. Global Enabled Supply Chain Series: Logistics (Murphree, J., iSource (http:www.isource.com) January, 2002 article provides examples of how collaborative business partners in transportation and logistics drastically reduce costs. |
|
Interactive Models |
|
| Interactive Model 18.1 |
The
Risk Pooling Interactive Model |
|
Links to Operations On Site Companies |
|
| Operations On Site 18.1 | Chematch provides B2B services in the chemical industry. |
|
OM Exploration |
|
Check it out: Internet Reference Sites for Chapter |
|
| B2B Today.com | Supply Chain Council |
| Logistics World | |
| Institute for Supply Management | |
|
OM in Action |
|
| OM in Action 18.1 | The increased emphasis on supply chain management has been
met with a wide array of support services supplying expertise and
software. Demand Solutions is one such firm. Examine the Demand
Solutions website. a. What aspects of the Demand Solution software are specifically designed for enhancing supply chain effectiveness? How will that enhancement happen? b. Find the website of another supply chain management solution provider. How does its offerings compare to Demand Solutions? |
|
Online Business Tours |
|
| Online Business Tour 18.1 |
For many industries, raw material inputs consist of commodity products. This is
particularly true for food producers. Take the short Royal
Cake Company tour. Identify the raw materials required for the oatmeal
cookie and creme filling.
a. Identify an online bulk source for each of these raw
materials. |
|
A Letter from the Top |
|
| Letter from the Top 18.1 | Read Nike's 2001 Letter to shareholders, available in the
2001 annual
report. Chairman and CEO Philip Knight mentions a massive
three-year overhaul of the Nike supply chain. a. How could supply chain problems contribute to the lack of
performance Knight describes in his letter? What might improve as the
supply chain management is improved. b. In his letter, Knight mentions that Nike did "not match orders and production well." What does he mean by this statement? What implications might the supply chain overhaul have for matching "orders and production?" |
|
Putting It All Together: A Virtual Case Study |
|
| Putting It all Together 18.1: |
Used equipment is becoming much more popular as an alternative for
businesses that need to expand or upgrade. In "Cisco's
Worst Nightmare (and Sun's and IBM's and Nortel's and ...), Fortune,
February 4, 2002 some of the pros and cons are discussed.
Clearly there is and advantage to the used equipment seller and, if things
go well, to the buyer. The producer of new products, however, must
adjust. Check out Gray
Market Booms for IT, Telecommunications Gear, Purchasing Magazine,
April 18, 2002 for cautions directed at purchasing managers.
"Victims" of gray market competition have created an anti-gray
market alliance. Explore their website. Visit the Asset
Recovery Center and one of its competitors, such as Network Hardware Resale
or Dovebid a. What are the dangers of buying used equipment? What precautions should be taken? b. From an ecological or "green" perspective, why is a used market for equipment beneficial? Is a market for used equipment really a "gray" market? How does the sale of used computer equipment differ from the sale of used cars or other industrial equipment? c. How should manufacturers of new equipment deal with the influx of competition from used equipment sales? Does it make sense for them to deny service on that equipment? |
|
Additional Reading |
|
|
Additional Reading 18.1 |
A Supply Chain Wiz Comes Back Wiser, Business Week, June 3, 2002 |