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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

8.1 Introduction

We have seen that the two key drivers of supply chain management have been competition and technology. This competition is becoming more and more intense as globalisation and free market forces gain ground around world. The concept of 'integrated' supply chain management and its emphasis on collaboration with other supply chain partners raises issues regarding the scope and dimensions of this collaboration in order to achieve the supply chain goal of competitive superiority.

We repeat again that in the sense we are viewing the world, it is the supply chains which compete for the customers' business, not individual firms or the products. Because of this emphasis, it makes sense for firms to look for collaborative frameworks which will 'maximise' the strength of the 'chain' in order to deliver the leanest value to the customer. This necessarily means that firms have to be concerned with their resources, and how they should manage their supply chain related activities, using internal and external resources, in ways that ensure the best outcomes for their products.

The principal concern is the best management, not the ownership of all activities aimed at achieving the goal. Having said that, it must be appreciated that the traditional approach of businesses would be to extend vertically by increasing internal capabilities to the maximum level possible. This approach requires that the firm is large and capable of managing all these diverse and disparate activities in the efficient manner which is a pre-requisite for it to compete. The alternative avenue, when ownership of all activities is thought to be essential, is to acquire firms which have complementary strengths in different area. In both cases the rationale of committing substantial resources for the additional capability in new areas of business have to be justified.

There is no doubt that business security, transparency and integration issues can be much better managed when the ownership is common. This advantage has to be weighed against the cost of resources and the question of the 'core competence' of the firm, however; and the operational and financial effects of getting involved in activities which could be better managed by firms which are specialised and which enjoy greater economies of scale in operations.

The other rational approach would be to purchase products and services from specialised firms through arm's length bargaining. It is probable that these independent firms enjoy great economies of scale and have resources which enable them to offer the product or service at a price which the buying firm could never achieve if producing a product or doing a task in-house. This is a strong reason for a firm to procure a product or service from an independent supplier.

The concern, however, is that arm's length bargaining and short term transactions are accompanied by a sense of insecurity as the supply of a product or service or the price associated with these could be unreliable. This is not a very desirable situation for long term business planning. Moreover, the integrated and collaborative business model which modern supply chain management concepts advocate would not work in such an environment of 'adversarial' transactions. The other and more acceptable way of harnessing the power of all the firms within the supply chain is by making strategic alliances with independent specialised firms which provide input into the firm's supply chain.

These strategic partnerships are aimed at achieving long term supply chain goals and should result in a 'win-win' situation for all partners in the supply chain. This concept is ideal for new business models, but it requires considerable skill to devise an acceptable framework for a strategic alliance based on mutual trust. We will discuss in the following sections some of the issues related with strategic partnering in supply chain management.

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