Chapter 14
Supply Chain Management
Supply Chain Management
Supply Chain
A management system that
coordinates and integrates all
of the activities performed by
supply chain members into a
seamless process, from the
source to the point of
consumption, resulting in
enhanced customer and
economic value.
Supply Chain Integration
Relationship
Integration
The ability of two or more
companies to develop social
connections that serve to guide
their interactions when working
together.
Role
Specificity
When each firm in a supply chain
has clarity in terms of knowing
which firm is the leader, which
firms are the followers, and which
responsibilities are assigned to
each firm.
Measurement Integration
Measurement
Integration
The performance assessment of the
supply chain as a whole that also
holds each individual firm or
business unit accountable for
meeting its own goals
ActivityBased
costing (ABC)
An accounting method used in
measurement integration to assess
the costs associated with each
supply chain activity
Technology and Planning Integration
Technology
and planning
integration
The creation and maintenance of
information technology systems
that connect managers across and
through the firms in the supply
chain
Material and Service Supplier
Integration
 Firms should link
seamlessly to those
outsiders that provide
goods and services to
them.
Internal Operations Integration
Internal
Operations
Integration
Links internally performed work
into a seamless process that
stretches across departmental
and/or functional boundaries, with
the goal of satisfying customer
requirements
Customer Integration
Customer
Integration
ABC
Segmentation
A competency that enables firms to
offer long-lasting, distinctive, valueadded offerings to those customers
who represent the greatest value to
the firm or
supply chain
The supply-chain process whereby
customers are placed into groups A,
B, and C according to their overall
long-term value to the firm and to
the extent to which the firm can
serve their desires
Customer Relationship Management
Customer
Relationship
Management
Process
The prioritization of a firm’s
marketing focus on different
customer groups according to
each group’s long-term value to
the company or supply chain;
designed to identify and build
relationships with good
customers.
Customer Service Management
Customer
Service
Management
Process
A multi-company, unified
response system to the
customer whenever
complaints, concerns,
questions, or comments are
voiced; designed to ensure
that customer relationships
remain strong.
Demand Management
Demand
Management
Process
The alignment of supply and
demand throughout the supply
chain to anticipate customer
requirements at each level and
create demand-related plans of
action prior to actual customer
purchasing behavior.
Order Fulfillment
Order Fulfillment
Process
A supply chain management
process that involves
generating, filling, delivering,
and providing on-the-spot
service for customer orders.
Manufacturing Flow Management
Manufacturing
Flow
Management
Process
A process that ensures that
firms in the supply chain have
the resources they need
Supplier Relationship Management
Supplier
Relationship
Management
Process
A supply chain management
process that supports
manufacturing flow by
identifying and maintaining
relationships with highly valued
suppliers
Product Development and
Commercialization
Product
Development and
Commercialization
Process
The group of activities that
facilitates the joint
development and marketing of
new offerings among a group of
supply chain partner firms.
Returns Management
Returns
Management
Process
A process that enables firms to
manage volumes of returned
product efficiently, while
minimizing costs and
maximizing the value of the
returned assets to the firms in
the supply chain.
Supply Chain Strategies
Lean Supply
Chain
Management
Agile Supply
Chain Management
The strategy that focuses primarily
on the removal of waste from the
supply chain to achieve the lowest
total cost to the members of the
supply chain system
The supply chain strategy
that focuses primarily on
the ability of the firm to fulfill
customer demand, even if this
means somewhat higher costs
Lean versus Agile Supply Chain
Management
Mapping The Supply Chain
Logistical Components of the Supply Chain
Supply
Chain
Team
Logistics Information System
Sourcing & Procurement
Order Processing
Inventory Control
Warehouse & Materials Handling
Transportation
Trends in Supply Chain
Management
Globalization of supply chain management
Advanced computer technology
Outsourcing of logistics functions
Electronic distribution
Outsourcing of logistics functions