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A Practical Introduction to Supply Chain

Book Description

In many businesses, supply chain people are trapped in reactive roles where they source, contract, purchase, receive, warehouse, and ship as a service. However, in some businesses suppliers contribute to improvement programs, technology, funding, marketing, logistics, and engineering expertise. Breaking into a proactive supply chain role takes broad thinking, a talent for persuasion, and the courage to go after it. This book supplies proven methods to help you do so.

A Practical Introduction to Supply Chain describes how to run an efficient supply chain that exceeds expectations in terms of cost, quality, and supplier delivery. It explains the need to integrate systems, the flow of information, and the way in which people work together between commercial purchasing, materials management, and distribution parts of the supply chain.

Sharing powerful insights from the perspective of a supply chain manager, the book details practical techniques drawn from the author’s decades of experience. It presents methods that apply directly to supply chains involving a physical product, manufactured internally or outsourced, as well as physical operations such as oilfield services.

This book demonstrates how to make a supply chain organization work in practice—contributing more to business success than traditional purchasing and logistics organizations can. In addition to writing about practical supply chain issues and approaches, the author also describes proven methods he used while working with client teams on assignments. He also details some of the ways his teams used to manage the people part of the change.

Table of Contents

  1. Cover
  2. Half Title
  3. Title Page
  4. Copyright Page
  5. Table of Contents
  6. AUTHOR
  7. LIST OF ACRONYMS
  8. INTRODUCTION
  9. CHAPTER 1 SUPPLY CHAIN IN A STRATEGIC CONTEXT
    1. 1.1 Importance of Supply Chain Performance to the Business
      1. 1.1.1 Prices and Cost
      2. 1.1.2 Lead Time and Responsiveness
      3. 1.1.3 Quality and Innovation
    2. 1.2 Scope of the Supply Chain
    3. 1.3 Supply Chain Organizations and Relationships with Other Functions
    4. 1.4 Supply Chain Metrics
  10. CHAPTER 2 SEVEN ELEMENTS OF SUPPLY CHAIN EXCELLENCE
    1. 2.1 Understanding Customers and Demand
    2. 2.2 The Capability of Your Supply Base to Meet Your Requirements
    3. 2.3 Relationships
    4. 2.4 Supply Chain Business Processes
    5. 2.5 Information Technology
    6. 2.6 Supply Chain People
    7. 2.7 Lean Practice in the Supply Chain
  11. CHAPTER 3 UNDERSTANDING CUSTOMERS AND DEMAND
    1. 3.1 Forecasting Demand
    2. 3.2 Sales and Operations Planning (S&OP)
      1. 3.2.1 Master Production Scheduling Process
      2. 3.2.2 Available to Promise Calculations
      3. 3.2.3 S&OP for Products with Optional Product Features
    3. 3.3 Dependent and Independent (Spares/Maintenance) Demand
    4. 3.4 Regularity of Demand
    5. 3.5 Standardization
    6. 3.6 Critical Parts
    7. 3.7 Forecasting and Planning for Different Types of Demand
  12. CHAPTER 4 SUPPLY MANAGEMENT
    1. 4.1 Supply Base Alignment
    2. 4.2 Managing Low-Value Items and Services
      1. 4.2.1 One-Stop Shop
      2. 4.2.2 P-Cards
      3. 4.2.3 Buy Houses
      4. 4.2.4 VMI
      5. 4.2.5 Vending Machines
      6. 4.2.6 Risks to Critical Supplies and Suppliers
    3. 4.3 Categorizing Spend and Starting Work on Your Supply Base
    4. 4.4 Commodity Management
    5. 4.5 Sourcing and Supplier Selection
    6. 4.6 Pricing
      1. 4.6.1 Estimating the Right Price for Costing Purposes
    7. 4.7 Total Cost
    8. 4.8 Risk Assessment and Mitigation
    9. 4.9 Relationships
    10. 4.10 Negotiation
      1. 4.10.1 A Negotiation with a Change of Scope
      2. 4.10.2 A Negotiation Where Price Is the Dominant Issue
      3. 4.10.3 A Negotiation with a Surprise Result
    11. 4.11 Supplier Development
    12. 4.12 Supplier Life Cycle Management
      1. 4.12.1 Supplier Agendas
    13. 4.13 Cost Reduction
    14. 4.14 Lead-Time Reduction
    15. 4.15 Contracts and Agreements
    16. 4.16 Key Contract Clauses and Issues
    17. 4.17 Trade Regulations and Compliance
    18. 4.18 Bribery and Corruption
    19. 4.19 Corporate Responsibility
    20. 4.20 Regulations Regarding Electronics and Substances
    21. 4.21 Auditing Requirements and Sarbanes–Oxley
  13. CHAPTER 5 LOGISTICS
    1. 5.1 S&OP
    2. 5.2 Rough-Cut and Finite Capacity Planning/Scheduling
    3. 5.3 MRP
      1. 5.3.1 Planning, Scheduling, and Pulling
        1. 5.3.1.1 MRP Results
      2. 5.3.2 Forester Effect
      3. 5.3.3 Instability in MRP
      4. 5.3.4 Spares or Other Nonplanned Demand
      5. 5.3.5 Optional Features
        1. 5.3.5.1 Phantoms, Purchase Flags, and Shop Stock Flags
    4. 5.4 Making Logistics Easier
      1. 5.4.1 ABC Parts Management
      2. 5.4.2 Kits
      3. 5.4.3 Pull Systems
      4. 5.4.4 Bin Stock Replenishment
      5. 5.4.5 Vending Machines
      6. 5.4.6 VMI
    5. 5.5 Inventory Management
      1. 5.5.1 Inventory Reduction and Optimization
      2. 5.5.2 Warehouse Layout
      3. 5.5.3 Inventory Accuracy
    6. 5.6 Distribution
  14. CHAPTER 6 SUPPLY CHAIN BUSINESS PROCESSES
    1. 6.1 End-to-End Processes
    2. 6.2 Supply Chain Information Technology
      1. 6.2.1 Other Packages
        1. 6.2.1.1 Forecasting
        2. 6.2.1.2 Warehouse Management Systems (WMSs)
        3. 6.2.1.3 Distribution Network Planning Systems
        4. 6.2.1.4 Customer Relationship Management (CRM)
        5. 6.2.1.5 Supplier Relationship Management
        6. 6.2.1.6 Computer-Aided Engineering (CAE)
        7. 6.2.1.7 Project Management Packages
    3. 6.3 IT to Support Competition-Beating Processes
      1. 6.3.1 Other Examples of Good Uses of IT
        1. 6.3.1.1 Vendor Managed Inventory (VMI)
        2. 6.3.1.2 Industry 4.0
        3. 6.3.1.3 Point-of-Sales Data
  15. CHAPTER 7 SUPPLY CHAIN PEOPLE AND ORGANIZATIONS
    1. 7.1 Communication Skills and Quality
      1. 7.1.1 Vice President, Supply Chain
    2. 7.2 Organization Structures, Teams, and People
    3. 7.3 Commodity Groups and the Organization
    4. 7.4 Linking the Planning and Purchasing Functions
    5. 7.5 Managing Up, Managing Down, and Managing along the Supply Chain
  16. CHAPTER 8 LEAN SUPPLY CHAIN PRACTICE
    1. 8.1 Applicability of Lean Tools in the Supply Chain
    2. 8.2 Waste Removal
    3. 8.3 Process Mapping
    4. 8.4 Continuous Improvement Cycles: PDCA and DMAIC
      1. 8.4.1 Basic Steps
      2. 8.4.2 Example
    5. 8.5 Example of Lean Improvements in the Supply Chain
    6. 8.6 KPIs
  17. CHAPTER 9 MAKING CHANGE HAPPEN
    1. 9.1 Dealing with Unpleasant News
    2. 9.2 Step Change and Incremental Change
    3. 9.3 Taking Advantage of IT as a Driver of Change
    4. 9.4 Speak with Data
      1. 9.4.1 Pareto Analysis
      2. 9.4.2 Twin-Axes Graphs
      3. 9.4.3 Paired Comparisons
    5. 9.5 Change Cycle
    6. 9.6 Willingness and Ability
    7. 9.7 Presenting and Selling Your Case for Change
      1. 9.7.1 What Is the Problem: Why Should They Do This?
      2. 9.7.2 What Is the Proposal: How Might It Impact Them?
      3. 9.7.3 What Is the Plan: How Will We Do It?
  18. CHAPTER 10 PRODUCT DESIGN AND DEVELOPMENT AND THE SUPPLY CHAIN
    1. 10.1 Supplier Involvement in Product Design Teams
  19. APPENDIX: EXAMPLE SUPPLY CHAIN ROLE PROFILES
  20. SUGGESTED FURTHER READING
  21. INDEX