Operations Management: An Integrated Approach, 5th Edition

IMPLEMENTING SUPPLY CHAIN MANAGEMENT

Implementing a strategic, integrated supply chain requires considerable effort on the part of the initiating company. This change often is a result of external pressures faced by the company, such as increased global competitors, an industry consolidation reducing the number of surviving companies in the industry, a switch to e-commerce including e-purchasing and e-sourcing), or major technological changes within the industry.

Typically, a company begins by analyzing its current supply chain. A small cross functional team leads the effort, examining all facets of the system to determine where improvements are possible and necessary. Most companies begin by looking at the parts of the supply chain, the internal dimension, in which they have the most control: manufacturing or service processes, distribution processes, and/or retail capacity and the time and costs of sourcing, producing, and distributing products or services. Improving performance in these areas has been the priority of many supply chain management initiatives. For a typical manufacturer, this means investing in automation and sales and operations planning technologies. For distributors and retailers, the priority has focused on supplier relationships, warehouse management, and transportation management solutions.

Some companies also include product design and supply chain design in the internal dimension. Supply chain design includes determining the best locations for manufacturing ...