Table Of Content

Business Management / Supply Chain Management W R Series on Resource Management . . The second edition of this popular textbook presents a balanced overview of the principles of C C C supply chain management. Going beyond the usual supply chain text, Principles of Supply he ra ra n Chain Management not only details the individual components of the supply chain, but also n n d Principles of d illustrates how the pieces must come together. To show the logic behind why supply chain a a l management is essential, the text examines how supply chains are evolving, looks ahead to ll l 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. S Supply Chain Management u See What’s New in the Second Edition: p • Expanded coverage of current topics such as e-commerce, risk management, out- p sourcing and reshoring, sustainability, project management, and data analytics l • Increased emphasis on how customers are becoming more influential in steering y SECOND EDITION product design CP • Additional coverage of the use of data analytics to evaluate customer preferences hr and buying patterns i an • A new chapter devoted to logistics and its increasing importance in supply chains ic n • Company profiles of organizations with effective supply chains that illustrate the i p main theme of each chapter Ml • A “Hot Topic” for each chapter, providing a description of a critical management e issue to stimulate class discussion as • A complete set of instructor materials for each chapter, including presentation slides, n o test banks, class exercises, discussion questions, and more a f g From the point of distribution to the final customer, all the way back to the point of origin e at the mine or farm, the text provides examples and case histories that illustrate a proven m 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 e the understanding needed to build and manage effective supply chains in a wide range of in- n dustries. Most importantly, it emphasizes the need for building and maintaining collaboration t among all members of the supply chain. E S D E I C T O Richard E. Crandall I K21704 O N 6000 Broken Sound Parkway, NW N D Suite 300, Boca Raton, FL 33487 ISBN: 978-1-4822-1202-0 William R. Crandall 711 Third Avenue 90000 New York, NY 10017 an informa business 2 Park Square, Milton Park www.crcpress.com Abingdon, Oxon OX14 4RN, UK 9 781482 212020 Charlie C. Chen w w w. c r c p r e s s . c o m K21704 cvr mech.indd 1 11/3/14 9:54 AM Principles of Supply Chain Management SECOND EDITION Series on Resource Management RECENT TITLES Principles of Supply Chain Management, Second Edition by Richard E. Crandall, William R. Crandall, and Charlie C. Chen ISBN: 978-1-4822-1202-0 Supply Chain Risk Management: An Emerging Discipline by Gregory L. Schlegel and Robert J. Trent ISBN: 978-1-4822-0597-8 Supply Chain Optimization through Segmentation and Analytics by Gerhard J. Plenert ISBN: 978-1-4665-8476-1 Vanishing Boundaries: How Integrating Manufacturing and Services Creates Customer Value, Second Edition by Richard E. Crandall and William R. Crandall ISBN: 978-1-4665-0590-2 Food Safety Regulatory Compliance: Catalyst for a Lean and Sustainable Food Supply Chain by Preston W. Blevins ISBN: 978-1-4398-4956-9 Driving Strategy to Execution Using Lean Six Sigma: A Framework for Creating High Performance Organizations by Gerhard Plenert and Tom Cluley ISBN: 978-1-4398-6713-6 Building Network Capabilities in Turbulent Competitive Environments: Practices of Global Firms from Korea and Japan by Young Won Park and Paul Hong ISBN: 978-1-4398-5068-8 Integral Logistics Management: Operations and Supply Chain Management Within and Across Companies, Fourth Edition by Paul Schönsleben ISBN: 978-1-4398-7823-1 Lean Management Principles for Information Technology by Gerhard J. Plenert ISBN: 978-1-4200-7860-2 Supply Chain Project Management: A Structured Collaborative and Measurable Approach, Second Edition by James B. Ayers ISBN: 978-1-4200-8392-7 Modeling and Benchmarking Supply Chain Leadership: Setting the Conditions for Excellence by Joseph L. Walden ISBN: 978-1-4200-8397-2 Principles of Supply Chain Management SECOND EDITION Richard E. Crandall William R. Crandall Charlie C. Chen CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2015 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Version Date: 20140721 International Standard Book Number-13: 978-1-4822-1205-1 (eBook - PDF) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www.copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identifica- tion and explanation without intent to infringe. Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com To Jean—yesterday, today, and tomorrow To Sue, my wife and friend forever To Fu-Mei, my mother and mentor forever Contents Preface to the Second Edition ..................................................................................................xxix Preface to the First Edition .......................................................................................................xxxi Acknowledgments ..................................................................................................................xxxiii Authors ....................................................................................................................................xxxvii Introduction .............................................................................................................................xxxix Section I Overview of Supply Chain Management 1. Evolution of Supply Chains .................................................................................................3 Learning Outcomes .................................................................................................................3 What Is a Supply Chain? .........................................................................................................6 Importance of SCM ..................................................................................................................7 Evolution of Supply Chains ....................................................................................................9 Early Supply Chains ...........................................................................................................9 Local Supply Chains ...........................................................................................................9 Global Supply Chains .......................................................................................................10 Changing Government Orientation ....................................................................................13 State-Controlled Governments .......................................................................................13 Market-Driven Governments ..........................................................................................13 Current Trends That Link Supply Chain Participants More Closely .............................14 Relationship Building .......................................................................................................14 Customer Relationship Management ........................................................................14 Supplier Relationship Management ..........................................................................15 Product Life Cycle Management ................................................................................15 Electronic Business ...........................................................................................................15 Developing Economies .....................................................................................................16 Outsourcing .......................................................................................................................16 Need for Quality Improvement ......................................................................................17 Changing Customer Demands .......................................................................................18 Decreasing Response Time .........................................................................................18 Lean Supply Chains to Reduce Waste .......................................................................18 Current Developments in SCM ............................................................................................19 Power Has Shifted from Manufacturers to Retailers ..................................................19 Consolidation of Small, Local, or Regional Retailers into National Chains ............20 Emergence of “Killer Category” Retailers .....................................................................20 From a Make-and-Sell Mentality to a Sense-and-Respond Orientation ...................20 Obstacles to Supply Chain Integration ...............................................................................21 Need for Globalization .....................................................................................................22 Complexity of Arranging Entities with Common Interests .......................................22 Lack of Effective Interorganizational Systems .............................................................23 vii viii Contents Need for Multiple Supply Chains within Companies .................................................23 Lack of Trust between Participants ................................................................................23 Examples of Companies with Successful Supply Chains ................................................25 Summary .................................................................................................................................25 Discussion Questions ............................................................................................................28 References ...............................................................................................................................28 2. Supply Chains as a System .................................................................................................31 Learning Outcomes ...............................................................................................................31 Company Profile: Zara’s ........................................................................................................31 Introduction ............................................................................................................................35 Supply Chain Systems ...........................................................................................................37 Inputs ..................................................................................................................................37 Transformation ..................................................................................................................38 Outputs ...............................................................................................................................38 Manufacturing versus Services ......................................................................................39 Characteristics of Supply Chains ........................................................................................39 Physical Flow .....................................................................................................................40 Information Flow ..............................................................................................................41 Funds Flow .........................................................................................................................42 Relational Flow ..................................................................................................................42 Examples of Supply Chains in Different Industries .........................................................43 Internal and External Customers ........................................................................................45 Open Systems versus Closed Systems ................................................................................46 Effect of External Influences on Supply Chains ................................................................48 Obstacles and Enablers of Supply Chain Integration .......................................................48 Obstacles .............................................................................................................................49 Enablers ..............................................................................................................................50 Performance Measurement ..................................................................................................50 Allocation of Costs, Resources, and Benefits along the Supply Chain ..........................53 Value Creation as the Ultimate Objective...........................................................................54 Summary .................................................................................................................................56 Hot Topic .................................................................................................................................56 Discussion Questions ............................................................................................................59 References ...............................................................................................................................59 Section II Demand Perspective 3. Determining Customer Needs ...........................................................................................63 Learning Outcomes ...............................................................................................................63 Company Profile: McDonald’s .............................................................................................63 Introduction ............................................................................................................................67 Group Customers into Homogeneous Segments ..............................................................68 Determine Needs of the Ultimate Consumer ....................................................................69 Product Needs ...................................................................................................................70 Service Needs ....................................................................................................................70 Marketing Mix ...................................................................................................................70 Manufacturing and Service Supply Chains ..................................................................71