Supply Chain Engineering

Having established that this book is about design, let us be clear about another important issue, specifically that design always involves tradeoffs. 

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Jarke, M., Miatidis, M., Schluter, M., Brandt, S. Media-Assisted Product and Process Tiaceability in Supply Chain Engineering. In Proceedings of the 37 Hawaii International Conference on System Sciences (HICSS), Big Island, Hawaii, USA, IEEE Computer Society Press, Los Alamitos (2004)... 

Before we formally define supply chain engineering, we begin with the defini-hon of what a supply chain is. 

Supply chain engineering encompasses the following key activities for the effective management of a supply chain ... 

An important distinction, however, between Supply Chain Engineering (SCE) and Supply Chain Management (SCM) is the emphasis in SCE on the design of the supply chain network and the use of mathematical models and methods to determine the optimal strategies for managing the supply chain. 

The various decisions in supply chain engineering can be broadly grouped into three types—strategic, tactical, and operational. 

Facilities (plants and distribution centers) play a key role in supply chain engineering. They are generally considered as strategic decisions and directly affect the performance of the supply chain. The key decision variables under facilities are the following ... 

Raw material cost accoimts for 40%-60% of the production cost in most manufacturing industries. In fact, for the automotive industry, the cost of components and parts from outside suppliers may exceed 50% of sales (Wadhwa and Ravindran, 2007). For technology firms, component cost as a fraction of sales could be as high as 80%. Hence, the selection of suppliers for raw materials and intermediate components is considered a critical area of strategic decision making in supply chain engineering. Chapter 6 discusses supplier selection models under multiple conflicting criteria. 

In this chapter, we have defined the term "supply chain engineering" and discussed the types of decisions that are made in managing supply chains. We also demonstrated the close relationship between certain supply chain performance metrics and a company s financial performance. Finally, the importance of supply chain management was illustrated in our discussion of the Supply Chain Top 25 (Hofman et al., 2011) and their essential characteristics. An overview of the topics covered in Chapters 2 through 8 was also presented. 

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