Principles of Supply Chain Management

The second edition of this popular textbook presents a balanced overview of the principles of supply chain management. Going beyond the usual supply chain text, Principles of Supply Chain Management not only details the individual components of the supply chain, but also illustrates how the pieces must come together. To show the logic behind why supply chain management is essential, the text examines how supply chains are evolving, looks ahead to new developments, and provides a balanced look at supply chains with a focus on both the customer side and the supplier side of supply chains. See What’s New in the Second Edition: Expanded coverage of current topics such as e-commerce, risk management, outsourcing and reshoring, sustainability, project management, and data analytics Increased emphasis on how customers are becoming more influential in steering product design Additional coverage of the use of data analytics to evaluate customer preferences and buying patterns A new chapter devoted to logistics and its increasing importance in supply chains Company profiles of organizations with effective supply chains that illustrate the main theme of each chapter A "Hot Topic" for each chapter, providing a description of a critical management issue to stimulate class discussion A complete set of instructor materials for each chapter, including presentation slides, test banks, class exercises, discussion questions, and more From the point of distribution to the final customer, all the way back to the point of origin at the mine or farm, the text provides examples and case histories that illustrate a proven approach for achieving effective supply chain integration. This self-contained resource provides readers with a realistic appraisal of the state of the art in supply chain management and the understanding needed to build and manage effective supply chains in a wide range of industries. Most importantly, it emphasizes the need for building and maintaining collaboration among all members of the supply chain.

Preface to the Second EditionPreface to the First EditionAcknowledgmentsIntroductionAuthorsChapter OutlineOVERVIEW OF SUPPLY CHAIN MANAGEMENTEvolution of Supply ChainsLearning OutcomesCompany Profile: Procter & Gamble (P&G)What Is a Supply Chain?Importance of SCMEvolution of Supply ChainsEarly Supply ChainsLocal Supply ChainsGlobal Supply ChainsChanging Government OrientationState-Controlled GovernmentsMarket-Driven GovernmentsCurrent Trends that Link Supply Chain Participants More CloselyRelationship BuildingElectronic BusinessDeveloping EconomiesOutsourcingNeed for Quality ImprovementChanging Customer DemandsCurrent Developments in SCMPower Has Shifted from Manufacturers to RetailersConsolidation of Small, Local, or Regional Retailers into National ChainsEmergence of "Killer Category" RetailersFrom a Make-and-Sell Mentality to a Sense-and-Respond OrientationObstacles to Supply Chain IntegrationNeed for GlobalizationComplexity of Arranging Entities with Common InterestsLack of Effective Interorganizational SystemsNeed for Multiple Supply Chains within CompaniesLack of Trust between ParticipantsExamples of Companies with Successful Supply ChainsSummaryHot Topic: Outsourcing to Low Wage CountriesDiscussion QuestionsReferencesSupply Chains as a SystemLearning OutcomesCompany Profile: Zara’sIntroductionSupply Chain SystemsInputsTransformationOutputsManufacturing versus ServicesCharacteristics of Supply ChainsPhysical FlowInformation FlowFunds FlowRelational FlowExamples of Supply Chains in Different IndustriesInternal and External CustomersOpen Systems versus Closed SystemsEffect of External Influences on Supply ChainsObstacles and Enablers of Supply Chain IntegrationObstaclesEnablersPerformance MeasurementAllocation of Costs, Resources, and Benefits along the Supply ChainValue Creation as the Ultimate ObjectiveSummaryHot Topic: How a Natural Disaster Can Cripple a Supply ChainDiscussion QuestionsReferencesDEMAND PERSPECTIVEDetermining Customer NeedsLearning OutcomesCompany Profile: McDonald’sIntroductionGroup Customers into Homogeneous SegmentsDetermine Needs of the Ultimate ConsumerProduct NeedsService NeedsMarketing MixManufacturing and Service Supply ChainsAccurately Determine Customer NeedsApproachesMarket ResearchOpen System ScanningDevelop Reliable Demand ForecastsQuantitative Forecasting MethodsQualitative Forecasting MethodsCollaborative ForecastingDetermine the Attributes of a Well-Designed ProductFunctionality (Product Works to Satisfy Customers’ Needs)Validity (Product Has Value and Functions at a Reasonable Cost)Manufacturability (Product Can Be Efficiently Produced)Reliability (Product Has a Variety of Quality Attributes)Serviceability (Product Can Be Serviced during Its Effective Life)Recyclability (Product Can Be Recycled along the Reverse Logistics Supply Chain)Consider Alternative Product Design ApproachesQuality Function DeploymentConcurrent EngineeringDesign for ManufacturabilityDesign for SustainabilityDetermine the Number of Supply Chains Needed by a CompanyAlign with Customer SegmentAlign with Product/Service BundleAlign with Supplier CategoryAlign with Common IncentivesRespond to Needs of Internal CustomersConclusionHot Topic: Human TraffickingDiscussion QuestionsReferencesA System to Meet Customer NeedsLearning OutcomesCompany Profile: GE AviationSupply Chain ModelsGlobal Supply Chain Forum ModelCustomer Relationship ManagementOrigins of CRMWhat Can CRM Do?BenefitsCRM ProcessesProblemsCRM’s FutureProduct Life Cycle ManagementWhat Is PLM?How Did PLM Evolve?What Does PLM Include?What Does PLM Not Include?What Are the Benefits of PLM?What Are the Obstacles?What Is the Present Status of PLM?What Does the Future Hold?Supply Chain ConfigurationBasic (Generic) Supply ChainVariations for Different IndustriesSupply Chain MappingDetermining Resource RequirementsFacilitiesEquipmentEmployeesInventoryInformation SystemsDesigning Processes to Match with ProductsMake to StockAssemble to OrderMake to OrderEngineer to OrderDetermining the Mix of Make and BuyCore Competency ConceptTotal Cost of OwnershipCost Reduction versus Revenue Increase ConsiderationsEffect of Outsourcing MovementAligning Entities along the Supply ChainEntities to Be InvolvedAllocation of Authority and Responsibility among EntitiesCollaboration ProcessImplementation PlanEvaluating the System DesignWill It Accomplish Its Objectives?Is It Sustainable?Is It Flexible?SummaryHot Topic: SweatshopsDiscussion QuestionsReferencesDemand ManagementLearning OutcomesCompany Profile: NextEraIntroductionDefinition of Demand ManagementImportance of Demand ManagementManaging DemandAccept All DemandSelect the Types of Demand to AcceptSolicit External Input in Forming Demand PatternsDesign the Form in Which Demand Will Be AcceptedImpose Constraints on Demand SubmissionManaging SupplySelect a Demand Management StrategyDevelop a Demand-Forecasting SystemDetermine the Resource Requirements to Meet the DemandMerging Supply and Demand into a Demand Management ProcessSales and Operations Planning to Match Short-Term Supply and DemandCollaboration among Supply Chain ParticipantsDemand Management in ManufacturingDemand Management in ServicesProposed Demand Management StrategiesFactors That Affect Selection of a Demand Management StrategyResources’ ValueType of DemandTop Management StrategiesRelationship between Factors and StrategiesModel for Integrating Demand and Supply ManagementPrograms Used to Implement Demand Management StrategiesProvide Strategy ProgramsMatch Strategy ProgramsInfluence Strategy ProgramsControl Strategy ProgramsDemand Management along the Supply ChainRetailWholesaleManufacturerMining and AgricultureSummaryHot Topic: The Problem of CheapDiscussion QuestionsReferencesSUPPLY PERSPECTIVE—DISTRIBUTION, PRODUCTION, PROCUREMENT, AND LOGISTICSDistribution and RetailingLearning OutcomesCompany Profile: Lowe’sIntroductionRetail FunctionHistory of RetailingCharacteristics of the IndustryCustomers and MarketsOutputsInputsTransformation ProcessImpact on Operations ManagementDesigning the Retail ProcessStrategic OrientationCritical Design Points: Keys to SuccessAdditional Factors to Consider in Retail Store DesignManaging a Retail BusinessDetermine the Expected DemandPlan Capacity to Meet DemandImplement the Operating PlanMeasure PerformanceReplan for the Next PeriodRetail and Inventory ManagementValueAvailabilityVarietyPresentationServiceResponse TimePresent Situation in RetailingFuture in RetailingRole of Wholesalers and Distribution CentersOrderingReceivingStockingPickingLoading the TrucksTransporting to StoresUnloading and Display at StoresCritical Success Factors for DistributionInventory within Distribution FunctionsInventory Management between Retailer and DistributorTechnology in Distribution FunctionsAt the Retail StoreMovement of GoodsAt the Distribution CenterDistribution Center DesignPositioning Services within the Distribution FunctionsPresale ServicesPostsale ServicesRole of Third-Party Service ProvidersDistribution Performance MeasurementFinancial Performance MeasuresOperating Performance MeasuresCollaboration Performance MeasuresRetailer–Distributor RelationshipSummaryHot Topic: Contaminated MilkDiscussion QuestionsReferencesProduction and Service ProcessesLearning OutcomesCompany Profile: CaterpillarIntroductionEvolution of the Production FunctionFrom Craft to Mass ProductionFrom Mass Production to Mass CustomizationCritical Success Factors for ManufacturersCost and EfficiencyQualityResponsiveness: Timing of DeliveryResponsiveness: Product/Service MixFlexibilityAgilityInformation TechnologyManufacturing StrategiesMake to StockLocate to OrderAssemble to OrderMake to OrderEngineer to OrderBatch to Lean OperationsPresent Batch FlowProposed Lean Production FlowCustomer Lead TimeExtra Available SpaceFaster Detection of Quality ProblemsEase of Transferring OperatorsReduced Scheduling RequirementsSmaller Lot SizesNo Buildup of WIP InventoryEmpowered EmployeesReduced Equipm

Richard E. "Dick" Crandall is a professor in the College of Business at Appalachian State University (ASU), Boone, North Carolina. He is certified in production and inventory management (CFPIM) and as a supply chain professional (CSCP) by APICS-The Association for Operations Management. He earned his PhD in production/operations management from the University of South Carolina, Columbia, and is a registered professional engineer and a certified public accountant. Prior to joining ASU, Dick worked as an industrial engineer and in management positions for manufacturing and service companies. He was a consultant with a major consulting firm, installing systems for both operations and financial applications. With Rick Crandall, he coauthored the book Vanishing Boundaries, How Integrating Manufacturing and Services Creates Customer Value, by CRC Press, Taylor & Francis Group. William "Rick" Crandall currently serves as a professor of management in the School of Business at the University of North Carolina at Pembroke. He received his PhD in business administration with a focus on organizational behavior and human resource management from the University of Memphis, Tennessee. His primary research interest is in the area of crisis management, helping organizations cope with catastrophic events. He is the author of the book, Crisis Management in the New Strategy Landscape (coauthored with John Parnell and John Spillan, also of the University of North Carolina at Pembroke), released by Sage Publications. He is also active in researching issues related to supply chain management. Prior to entering higher education, Dr. Crandall worked in management for ARA Services (now ARAMARK), a service management firm based in Philadelphia. Dr. Charlie C. Chen was educated at Claremont Graduate University, California, and earned his PhD in management information systems. He is a professor in the Department of Computer Information Systems at Appalachian State University, Boone, North Carolina. His research interests include project management and supply chain management. He is a member of the Association for Information Systems and Decision Sciences Institute and is certified by the Project Management Institute as a project management professional (PMP). Dr. Chen has published in journals such as Communications of Association for Information Systems, Behaviour and Information Technology, Journal of Knowledge Management Research & Practice, and the Journal of Information Systems Education. Dr. Chen is a dedicated transnational scholar and a trip leader for study-abroad programs in Asia (Japan and Taiwan).