Strategic Supply Chain Management- TOC
By Purchasing Staff -- Purchasing, 1/7/2009 12:06:00 PM
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Strategic Supply Chain Management Introduction SOME GENERAL POINTS OF REFERENCE
The purpose of this book is to present a non-technical guide to integrated supply chain management, why it's important, how it's being implemented, and how companies can use it in developing their own overall supply strategies. Most importantly, we want to cut across the many partisan interpretations of supply chain management and arrive at a universal view of the concept. First, a few ground rules on terminology:
Among the most important problems with supply chain management is it's a complex concept - so complex that many of its advocates aren't even convinced that it will work. Parts of the concept seem to make absolute good sense for many companies. On the other hand, some aspects make good sense for only a relatively small portion of the business world. Often the theory seems to run counter to the facts of application practicability. The purpose of this book is to examine supply chain management from a very practical standpoint - neither cheerleading nor debunking. We look at the promise as well as the pitfalls. Where there have been failures we try to look at how they could have been avoided. We also try to seek out the lessons that can be learned from the failure. Where there have been successes we want to examine the underlying truths that can be applied more broadly. In any case, we want to look at the full significance of integrated supply chain management, why it is regarded by many as the most important business concept in several decades, and what those in all phases of business management need to know about it. Essentially, supply chain management is a recognition of the direct link between planning and control of the supply (value adding) process and corporate competitiveness. It is seen by a growing number of business managers as the least explored and most promising avenue to competitive advantage available to companies in today's business climate. It starts from the premise that such traditional areas for developing competitive strategies as marketing, finance, production, and design are yielding progressively declining results in terms of winning competitive advantage. In the other direction it holds that supply has been relatively unexploited as a competitive resource. Supply chain management is an effort to win economic advantage by expert deployment of supply chain resources. In simplest terms, an integrated supply chain is a connected series of organizations, resources and activities involved in the creation and delivery of value in the form of finished products and services to end customers. Management of a supply chain involves the integration of all decisions that affect the design and flow of purchased items/materials/services into and through a corporate entity to finished products. In the application of supply chain management, internal and external materials decisions become part of a focused sourcing strategy aimed at winning customers and increasing competitiveness. Supply chain management deals with the integration of the processes required to deliver value to the external customer. Integration of processes involves linking the many steps along the way from determination of the customer wants and needs to the creation of a new product or service to meet that demand. In its most complex applications, supply chain management achieves integration through the use of a new product development process, one that is linked to an order fulfillment processes that assures delivery of a product or service anywhere in the world and frequently to after-sale customer service processes. Jim Morgan Editorial Director, Emeritus PURCHASING Magazine Strategic Supply Chain Management  WHAT'S IN THE BOOK In many ways the objective of this book is to probe and answer many of the questions floating around the subject of supply chain management. The outline of how we will attempt to deal with these questions are summarized in the following paragraphs: Sourcing. How important a part does sourcing play in the development of successful supply chain management strategies? How does the selection of suppliers determine how other parts of the supply chain actually work? We look at why a growing number of top corporate executives is placing greater emphasis on the supply part of supply chain issues. We also examine the relationship of the buying/sourcing function to the overall competitiveness of a 21st century organization. And we scrutinize how some companies already are building competitive strategies predicated on better use of their sourcing operations. Strategic sourcing. The supply chain. What is the supply chain and how does the way it is managed affect corporate well being? What are some of the typical processes that comprise the supply chain and how to they interact? How do companies determine where their redundancies and inefficiencies are in relation to their competition? And how to they determine and overcome internal political hurdles in making decisions about what to keep and what to outsource? We explore what's involved in changing/keeping suppliers, in reducing the supply base, in making make/buy decisions, and in sharing corporate information with outside suppliers. Further, we describe a few of the more typical supply chains. Organization. What are some of the changes needed in organizational thinking to make supply chain management work? What should a corporate strategic planning organization look like? What sort of changes are needed in the way a company sets its goals? The following chapters define how an organization can tackle such issues as well as define some of the major considerations involved in selecting which core competencies to keep and which to downplay and/or outsource. We also explore the politics of decision making and some of the trade-offs and risks involved in shifting parts of the normal operation to suppliers. Internal integration. What are some of the needed changes in the procurement operation? How about changes in the way procurement interfaces with other functions in the company? In Chapter 4 we look at changes in the way the various functions work together to make the supply chain perform optimally. Is it realistic to expect internal functions to work together? How important is cross-functional teaming to the success of supply chain management? What functions need to be part of the process? How involved should functions be in the process? Suppliers. What is the place of outside suppliers in the development of a supply chain strategy? What is their importance and how does it vary with what has traditionally been thought of as the supplier's place in corporate competitiveness? How do companies make policies about what product, production, engineering, marketing information is shared with suppliers and potential suppliers? Chapters 6-8 explore what's involved in making policies about how confidential supplier information is handled, decisions about which suppliers to form partnerships with, and decisions about how much business should be placed with specific suppliers. Outsourcing. Where do outsourcing, strategic partnerships, strategic alliances with suppliers fit into sourcing strategies? What are some of the advantages and disadvantages inherent in these new relationships with suppliers? We look at some of the problems and successes that companies have in explaining to supplier marketers how the corporate game plan works for them; as well as some of the problems companies have in making themselves attractive to world class suppliers. Supplier integration. What degree of supplier integration is needed in the management of the supply chain? How can internal processes be further integrated so that the subject company has a clearer picture of how each function and process relates to each other. How should integration of internal and external processes be handled? We define some of the problems that need to be overcome in integrating suppliers into the supply chain. Cycles. These chapters attempt to deal with how supply chain management meshes into various supply chain cycles and the requirements of a supply chain strategy as a product moves from one process in the chain to another. Optimization. What are the key processes and what needs to be put into place to optimize the supply chain? In detail, how do such processes as new product deve Product development. What is the relationship of integrated supply chain management to new pro Measurement. Traditional measures of performance are not sufficient for the measurement of the relative performance of supply chain management strategies. In Chapter 14 we define some of the measures that are needed to facilitate interdepartmental integration. Benchmarking. How do companies approach the problems of integrated supply chain management and how does their handling of supply chain management compare with the best in the field? How is benchmarking approached in a field where there is still little visible success being recorded. We explore in Chapter 12 what needs to change in benchmarking when a firm moves to a supply chain management mode and what measurements need to be changed. We also look briefly at the importance of ISO-9000. Quality. Chapter 15 details the problems that are created in monitoring and improving quality when outsourcing is increased as part of the supply chain strategy. We attempt to answer the question whether it is possible to initiate cost reduction and also improve product/service quality. Key elements of success. What needs to go into models of the chain in terms of analysis of key costs, quality, time, and technology parameters? What are some of the systems needed to identify We give the short answer to what strategic supply chain management is all about. In the course of the book we will also explore these questions: What is meant by strategic sourcing and how does it affect the way an enterprise organizes? What does strategic sourcing mean in terms of management priorities and initiatives? How does a sourcing strategy affect corporate strategy and how is all this different from traditional approaches to the sourcing function?lopment, order-fulfillment, customer service, product manufacturing, supply planning, logistics planning work under supply chain management? We explore the parameters for how the overall supply chain needs to work and how do the various processes affected by it need to interact.duct development? What is the required depth of involvement of suppliers in new product development. Chapters 8 and 9 look at the role of purchasing in setting up ground rules for new product development and what's involved in setting up supplier relationships that go further than partnerships - relationships that are best described as alliances where the supplier ties its future to the customer company.technology and design alternatives in the design process? How do cross-functional and cross-locational teams throughout the supply chain develop and use team-oriented measurements? Chapter 17 explores how the supply chain management team can provide for results-oriented measurements, benchmarking, and goal setting that are monitored by executive management with methods of accountability.
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