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• Module overview
• 1. Introduction to supply chain management
  • Introduction
  • 1.1 What is supply chain management?
    • 1.1.1 Supply chain management: The concept
    • 1.1.2 Supply chain management: Evolution
    • 1.1.3 Supply chain management: The search for a definition
    • 1.1.4 Supply chain management: The drivers:
  • 1.2 Technology and supply chain management
  • 1.3 Supply chain management: New business models and challenges
    • 1.3.1 New supply chain business models
    • 1.3.2 Challenges
  • 1.4 Key issues in supply chain management

• 2. Supply chain management and information systems

  • 2.1 Introduction
  • 2.2 Goals of supply chain IT systems
  • 2.3 Supply chain IT goals: Challenges and means
    • 2.3.1 Standardisation
    • 2.3.2 Infrastructure
    • 2.3.3 Electronic commerce
    • 2.3.4 Supply chain management issues and IT
  • 2.4 Integrating the supply chain information systems
  • 2.5 Decision support systems
    • 2.5.1 The characteristics of decision support systems
    • 2.5.2 DSS components
    • 2.5.3 DSS in supply chain management
  • 2.6 Summary

• 3. Logistic network configuration

  • 3.1 Introduction
  • 3.2 The supply chain network
    • 3.2.1 Network design decisions
    • 3.2.2 Design consideration
  • 3.3 Logistics and facility costs in logistics network configuration
  • 3.4 Logistics network design and decision support systems
    • 3.4.1 The supply chain model
    • 3.4.2 Data and a network model
    • 3.4.3 Model and data validation
    • 3.4.4 Solution techniques
  • 3.5 Key features of a network configuration DSS

• 4. Inventory management and risk pooling

  • 4.1 Introduction
  • 4.2 Inventory: Basic concepts
    • 4.2.1 Why hold inventory: Inventory functionality
    • 4.2.2 Inventory related definitions
    • 4.2.3 Inventory related issues
  • 4.3 The inventory policy
    • 4.3.1 Basic inventory decisions and EOQ
    • 4.3.2 Inventory policy under conditions of uncertainty
  • 4.4 Risk pooling
    • 4.4.1 The Square Root Law of Inventory
    • 4.4.2 Centralised versus the decentralised system
    • 4.4.3 Supply chain inventory
    • 4.4.4 Inventory management: Practical issues
  • 4.5 Summary

• 5. Supply chain integration: The value of information

  • 5.1 Introduction
  • 5.2 Information and supply chain integration
    • 5.2.1 The bullwhip effect
    • 5.2.2 The reasons for bullwhip effect
    • 5.2.3 Quantifying the bullwhip effect
    • 5.2.4 Measuring bullwhip effect: The practical issues
    • 5.2.5 Bullwhip effect: Managerial insight
    • 5.2.6 Reducing bullwhip effects
  • 5.3 Effective forecasts and supply chain integration
  • 5.4 Collaborative supply chains and information integration
  • 5.5 Supply chain systems and information integration
  • 5.6 Information and the synchronised supply chain
  • 5.7 Summary

• 6. Supply chain integration: Distribution strategies

  • 6.1 Introduction
  • 6.2 Transportation and distribution
    • 6.2.1 Transport modes
    • 6.2.2 Inbound transportation
    • 6.2.3 Distribution
  • 6.3 Centralised versus decentralised control
  • 6.4 Distribution strategies
    • 6.4.1 Direct shipment
    • 6.4.2 Cross docking
    • 6.4.3 Warehousing and distribution strategies
    • 6.4.4 Transhipment
  • 6.5 Central versus local facilities
  • 6.6 Push versus pull systems
    • 6.6.1 Push systems
    • 6.6.2 Pull systems
  • 6.7 Summary

• 7. Supply chain simulation games:

  • 7.1 Introduction
  • 7.2 The Beer Game
    • 7.2.1 The purpose
    • 7.2.2 The Beer Game scenario
    • 7.2.3 Features and options
  • 7.3 Playing the Beer Game
    • 7.3.1 Beer Game projects
    • 7.3.2 The Beer Game: The learning tool
  • 7.4 The Risk Pooling Game
    • 7.4.1 Playing the Risk Pooling Game
    • 7.4.2 Risk pooling project
  • 7.5 Summary

• 8. Supply chain integration: Strategic partnering

  • 8.1 Introduction
  • 8.2 Strategic partnering
    • 8.2.1 Strategic partnering: A framework
  • 8.3 Supply chain partnership models
    • 8.3.1 Manufacturer and supplier partnership
    • 8.3.2 Strategic partnering with logistics service providers
    • 8.3.3 RSP or retailer supplier partnership
    • 4.3.4 Distributor integration
  • 8.4 Summary

• 9. International issues in supply chain management

  • 9.1 Introduction
  • 9.2 Globalisation and SCM issues
    • 9.2.1 Global business forces
  • 9.3 International supp ly chain - risks and advantages
    • 9.3.1 Risks in international supply chain
    • 9.3.2 Risk management strategies
    • 9.3.3 Risk management framework
  • 9.4 Issues in intern ational supply chain management
  • 9.5 Logistics infrastructure: Regional issues
  • 9.6 Summary

• 10. Product design and supply chains

  • 10.1 Introduction
    • 10.1.1 Matching the supply chain to the product
  • 10.2 Design for logistics
    • 10.2.1 Packaging
    • 10.2.2 Manufacturing: Concurrent and parallel processing
    • 10.2.3 Postponement or delayed differentiation
  • 10.3 Mass customisation and supply chains
  • 10.4 Supply chain is sues and the push-pull boundary
  • 10.5 Summary

• 11. Supply chain management and customer value

  • 11.1 Introduction
    • 11.1.1 The concept of value
    • 11.1.2 Customer service and value
  • 11.2 Supply chain management and customer value
    • 11.2.1 Tailored logistics
    • 11.2.2 Customer value dimensions
  • 11.3 Customer value measures
    • 11.3.1 Customer based measures
    • 11.3.2 Supply chain performance measures
  • 11.4 Information technology and customer value
  • 11.5 Summary

1.1.2 Supply chain management: Evolution

Academic and industry practitioners are struggling to come up with an universally accepted definition of SCM. The reasons for this difficulty can best be viewed by looking at the historical development of supply chain management. Stadtler (2000) mentions that the term SCM was created by two consultants in 1982. However, the move towards supply chain management followed a definitive industry trend. We will now look at this development.

The evolution and development of supply chain management have been studied quite extensively. All commentators have generally agreed or acknowledged that this discipline has evolved as a separate and distinct subject during the last 50 years as a result of a definitive business culture. focussed on customer orientation and cost minimisation. We will follow the footsteps of Metz (1998) to look at the genesis and evolution of SCM. It will be apparent that supply chain management is based on a systems approach. It is about optimisation of the system and the main enablers of this new science are advanced computer and information technology.

Physical distribution management. In 1963 the National Council and Physical Distribution Management was set up in the USA . At that time most companies appreciated the necessity of separating the distribution and transportation functions from the sales and marketing functions of the company. Practitioners soon discovered the inter-relationships between the warehousing and transportation functions. Physical distribution management integrated these two functions and this resulted in reduced inventory and a more reliable and efficient transportation. These concepts are later covered in the course. At this stage we can only say that by separating these functions from the marketing and sales functions, managers could look at these as distinct functions with specific cost characteristics. This in turn enabled the managers to take effective and integrated decisions to reduce cost and improve service level.

This in turn enabled the company to meet demand with a faster response time allowing shortening of order cycle and improvement of business forecasts. Moreover, the integrated view of warehousing and transportation enabled cost optimisation by aiding decision making regarding the location of warehouses. According to Metz (1998) physical distribution management was enabled by two things: improved data communication between different levels of warehousing and advanced analytical capability.

Figure 1.5: The physical distribution management stage. (adapted from: Meitz, 2001)

Logistics management. The next phase in the development of SCM was the logistics phase where we saw the emergence of the term 'logistics management'. Within the scope of this new concept, the manufacturing, procurement and order management functions were integrated with physical distribution management. This integration was made possible by electronic data interchange, advancement in worldwide communications and the availability of computers for management and analysis of business data.

Figure 1.6 The logistics stage (adapted from Meitz 2001)

Supply chain management. The next stage was the 'supply chain' stage or, as Metz likes to call it, the ' integrated supply chain' stage. At this stage the logistics functions has been extended to add suppliers at one end and customers at the other end. This is what we call a supply chain in simple terms and is vastly more complex than the simple two stage model of the physical distribution chain. The continuing advancements in electronic communication, information technology, e-business and computerised decision support systems have aided in the management of the complexities associated with a 'supply chain'. Metz 's view of a 'super supply chain management' is just an extension of this concept and is in fact the state of supply chain management currently. This view integrates the supply chain functions with product development, marketing and customer service. The enablers in this case are more advanced communication technology, computerised decision support systems and a highly trained human resource.

Figure 1.7 The supply chain concept (adapted from Meitz 2001)

Figure 1.8 The 'super' supply chain concept. (adapted from Meitz 2001)

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