Excellence in Supply Chain Management

137 Pages·2020·1.758 MB·English

by  Balram Avittathur, Debabrata Ghosh

Excellence in Supply Chain
Management
Recent decades have witnessed an explosion in supply chain complexity.
Very few firms have succeeded in building excellent supply chains and
employing supply chain management (SCM) as a competitive advantage.
For the ones which have developed enhanced supply chain design and
process capabilities, their performance has far exceeded their competitors’.
While for the vast majority of firms, SCM still remains a means of reducing
costs and improving efficiency, for the excellent ones, SCM has turned into
a source for value creation. What factors drive firms towards supply chain
excellence? How can real differentiation be created through supply chains?
Excellence in Supply Chain Management examines the characteristics and
features of firms that excel in SCM.
Balram Avittathur has been Professor of Operations Management at the
prestigious Indian Institute of Management Calcutta (IIM Calcutta) at
Kolkata, India, since 1999. He holds a Fellow of Management (PhD) from
the Indian Institute of Management Bangalore (1999). He specializes in the
broad area of supply chain management. His research interests also include
applications of game theory in operations management and operations
management for environmental sustainability.
Debabrata Ghosh is Associate Professor at the Malaysia Institute for
Supply Chain Innovation (MISI). Prior to this, he was a faculty member
at the Indian Institute of Management Calcutta, India. He holds a Fellow
Programme in Management (PhD) from the Indian Institute of Management
Bangalore. His research interests lie in the areas of supply chain issues in
emerging economies, sustainable operations, and supply chain coordination.
Routledge Focus on Management and Society
Series Editor: Anindya Sen
Professor of Economics, Indian Institute of Management Calcutta, Kolkata,
West Bengal, India
The invisible hand of market has today been replaced by the visible hand of
managerial capitalism. As the power and role of the managers have expanded,
the world also has become more dynamic and volatile. To run their organisations
more efficiently, the managers need to be aware of new developments taking
place all around them. The Focus series addresses this need by presenting a
number of short volumes that deal with important managerial issues in the
Indian context. Volumes in the series will cover topics not only of perennial
interest to managers but also emerging areas of interest like neuro marketing.
Some of the well-established areas of research like bottom-of-the-pyramid
marketing will be dealt with specifically in the Indian context, as well as
critical developments in other fields, like Auction Theory.
The series is designed to introduce management theorists and researchers
(as well as the lay public) to a diverse set of topics relevant directly or
peripherally to management in a concise format, without sacrificing basic
rigour.
Neuromarketing in India
Understanding the Indian Consumer
Tanusree Dutta and Manas Kumar Mandal
Poor Marketing
Insights from Marketing to the Poor
Ramendra Singh
Strategic Change and Transformation
Managing Renewal in Organisations
Swarup K Dutta
Excellence in Supply Chain Management
Balram Avittathur and Debabrata Ghosh
For a full list of titles in this series, please visit: www.routledge.com/
Routledge-Focus-on-Management-and-Society/book-series/RFMS
Excellence in Supply
Chain Management
Balram Avittathur and
Debabrata Ghosh
First published 2020
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
52 Vanderbilt Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group,
an informa business
© 2020 Balram Avittathur and Debabrata Ghosh
The right of Balram Avittathur and Debabrata Ghosh to be
identified as authors of this work has been asserted by them in
accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted
or reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the
publishers.
Trademark notice: Product or corporate names may be trademarks
or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book has been requested
ISBN: 978-0-367-08589-6 (hbk)
ISBN: 978-0-429-02687-4 (ebk)
Typeset in Times New Roman
by Apex CoVantage, LLC
To
Prof. Janat Shah, Director – Indian Institute of Management Udaipur
Our doctoral advisor at IIM Bangalore
Sita, Arjun, my parents and teachers – BA
Floya, Arya, my parents and teachers – DG

Contents
List of abbreviations x
Preface xi
Acknowledgements xiii
1 Operations and supply chain management:
the initial journey 1
Operations management defined 1
The twin pillars of operations management 2
Operations strategy: competing on operations 4
Supply chain management (SCM) 6
Strategic insights 8
2 Inventory management 9
Role of inventory 9
Inventory measurement 10
Economies in ordering 12
Service level and fill rate 13
Basic inventory policies 16
The single period inventory model 17
Strategic insights 18
3 Forecasting and demand planning 19
Types of production systems 19
Types of forecasting 21
Causal forecasting 22
Time series forecasting 23
Measuring forecast accuracy 29
viii Contents
Importance of short lead times 30
Product variety and forecast accuracy 31
Reducing reliance on technique-based forecasting 32
Strategic insights 33
4 Supply chain management as a competitive advantage 35
Efficient supply chains 35
The changing supply chain landscape 36
Drawbacks of an “efficiency only” supply chain 38
Intangible losses and SCM as a competitive advantage 39
Responsive supply chains 42
Agile supply chains 42
Strategic insights 43
5 Supply chain coordination, contracts, and integration 45
The bullwhip effect and supply chain coordination 45
Drivers of the bullwhip effect 46
Centralized versus decentralized supply chains 47
Coordination through supply chain contracts 48
Supply chain integration 55
Strategic insights 58
6 Procurement and vendor management 59
Make or buy? 59
ABC analysis 61
Supply risk 62
Procurement strategies 65
Supplier development 66
Strategic supplier partnerships 67
Strategic insights 68
7 Supply chain risk management 70
Economic cost of disruptions 70
Supply chain disruptions and risk 71
Measuring supply chain risk 72
Supply chain risk management approaches 73
Building supply chain resilience 77
Strategic insights 78
Contents ix
8 Managing design for supply chain management 80
Design for short product life cycles 80
Design for transportation, warehousing, and retailing 81
Facilities, logistics, and network design for fast supply chains 82
Design for reverse logistics and sustainability 86
Distribution channels in the Internet era 87
Strategic insights 88
9 Green and sustainable supply chains 90
Factors that drive sustainability (environmental) initiatives
in organizations 92
The role of regulations 94
Green supply chain management 96
The social aspect of sustainability 96
Strategic insights 97
10 Popular supply chain analytics 100
Basic statistics 100
Predicting scenarios 101
Demand analytics and the hockey stick effect 101
Inventory and lost sales analytics 102
Lead-time analytics 103
Supply chain cost-benefit analytics 105
Strategic insights 105
11 Operations and supply chain management
in the digital era 107
CONTRIBUTED BY PRASAD RAMAKRISHNAN AND AXEL ZEIJEN
Unconventional solutions for unprecedented challenges 107
Digital disruption in a VUCA world 108
Cognitive technologies and artificial intelligence 110
Additive manufacturing 112
Leadership amidst disruptive change 115
Brands, organizations, people, and places 119
Index 120