Chapter 12: Designing efeetiie supply ehains
Supply chain = the interrelated series of processes within a frr and across diferent frrs
that produces a service or product to the satsfacton of custorersr .t is a network of
service, raterial, ronetary, and inforraton fows that link a frrms custorer relatonship,
order fulflrent, and supplier relatonship processes to those of its suppliers and custorersr
Creating an Efeetiie upply Chain
Creatng an efectve supply chain involves the recogniton of eeternal corpettve pressures
as well as internal organizatonal pressures fror groups such as sales, rarketng, and
product developrentr
These pressures are:
1r Dynaric sales volures
One of the rost costly operatng aspects of supply chains is trying to reet the needs
of volatle sales voluresr Oten this involves eecessive inventories, underutlized
personnel, or rore eepensive delivery optons to reet custorer derands on trer
2r Custorer service and quality eepectatons
Organizatonal pressures eranatng fror the sales and rarketng groups for
superior service levels for the organizatonms custorersr
3r Service/product proliferaton
A thoughtul balance needs to be struck between the cost of operatng the supply
chain and the need to rarket new services and productsr
4r Ererging rarkets
The increasing irportance of ererging rarkets and the roles they play in the global
rarket erphasizes the pressure on critcal resources such as iron ore, agricultural
corrodites, and laborr
Three rajor areas of focus in creatng an efectve supply chain:
Supply chain ranagerent = the synchronizaton of a frrms processes with those of its
suppliers and custorers to ratch the fow of raterials, services, and inforraton with
derandr
Supply chain design = Designing a frrms supply chain to reet the corpettve priorites of
the frrms operatons strategyr
, See eeplanaton page 506r
Supply chain design optons can be placed into four categories:
- Strategic optons, which include linking supply chain designs to corpettve
priorites, rass custorizaton, and outsourcing decisionsr
- Logistcal network optons, which include facility locatons and inventory placerent
in the network of raterial fowsr
- .ntegraton optons, which include designs to ritgate supply chain dynarics and
risk, supply chain collaboraton to link rajor processes, and supplier selectonr
- Sustainability optons, which include designs for environrental concerns and
disaster reliefr
upply Chains for eriiees and Manufaeturing
eriiees
Supply chain design for a service provider is driven by the need to provide support for the
essental elerents of the various services it deliversr
Supply Chain for a Florist:
Manufaeturing
A fundarental purpose of supply chain design for ranufacturers is to control inventory by
ranaging the fow of raterialsr
Supply Chain for a Manufacturing Firr:
Supply chain = the interrelated series of processes within a frr and across diferent frrs
that produces a service or product to the satsfacton of custorersr .t is a network of
service, raterial, ronetary, and inforraton fows that link a frrms custorer relatonship,
order fulflrent, and supplier relatonship processes to those of its suppliers and custorersr
Creating an Efeetiie upply Chain
Creatng an efectve supply chain involves the recogniton of eeternal corpettve pressures
as well as internal organizatonal pressures fror groups such as sales, rarketng, and
product developrentr
These pressures are:
1r Dynaric sales volures
One of the rost costly operatng aspects of supply chains is trying to reet the needs
of volatle sales voluresr Oten this involves eecessive inventories, underutlized
personnel, or rore eepensive delivery optons to reet custorer derands on trer
2r Custorer service and quality eepectatons
Organizatonal pressures eranatng fror the sales and rarketng groups for
superior service levels for the organizatonms custorersr
3r Service/product proliferaton
A thoughtul balance needs to be struck between the cost of operatng the supply
chain and the need to rarket new services and productsr
4r Ererging rarkets
The increasing irportance of ererging rarkets and the roles they play in the global
rarket erphasizes the pressure on critcal resources such as iron ore, agricultural
corrodites, and laborr
Three rajor areas of focus in creatng an efectve supply chain:
Supply chain ranagerent = the synchronizaton of a frrms processes with those of its
suppliers and custorers to ratch the fow of raterials, services, and inforraton with
derandr
Supply chain design = Designing a frrms supply chain to reet the corpettve priorites of
the frrms operatons strategyr
, See eeplanaton page 506r
Supply chain design optons can be placed into four categories:
- Strategic optons, which include linking supply chain designs to corpettve
priorites, rass custorizaton, and outsourcing decisionsr
- Logistcal network optons, which include facility locatons and inventory placerent
in the network of raterial fowsr
- .ntegraton optons, which include designs to ritgate supply chain dynarics and
risk, supply chain collaboraton to link rajor processes, and supplier selectonr
- Sustainability optons, which include designs for environrental concerns and
disaster reliefr
upply Chains for eriiees and Manufaeturing
eriiees
Supply chain design for a service provider is driven by the need to provide support for the
essental elerents of the various services it deliversr
Supply Chain for a Florist:
Manufaeturing
A fundarental purpose of supply chain design for ranufacturers is to control inventory by
ranaging the fow of raterialsr
Supply Chain for a Manufacturing Firr:
