Supply chain extended view

Traditional view of supply chain excellence. For demand-driven initiatives to be successful, they must extend from the customers customer to the supplier s supplier. The concepts of demand latency, demand sensing, demand shaping, demand translation, and demand orchestration are not widely understood. As a result, they require education and a business champion. Organizations not familiar with the concepts will not understand why the demand management processes need to change. 

Logistics is NOT supply chain management. Like every functional area within SCM, logistics sees itself as the focal point, viewing other players as extending out from itself. But this geo-centric view will only lead to trouble. 

Some view supply chain design as integral to their strategies for competing. For them, competing successfully centers not only on products, but also on the operations that make up the extended product as described in Chapter 1. These operations deliver the physical and extended products to customers hands. With this viewpoint, supplier relations, logistics, and information systems support customer satisfaction and fall within the definition of SCM. This, in turn, leads to increased market share and profit. Costs, while important, are secondary with this viewpoint. Efforts to reduce cost must also support strategy. 

ABC s emphasis on cross-frmctional processes is the reason for its growing importance in single-company application. Its potential rises when we talk about supply chains. In the supply chain world, any one company s operations are part of a flow from incoming, or upstream, partners to outgoing, or downstream, partners. Activities in a company and the way we accormt for them should no longer be viewed as stand-alone and isolated but as part of the chain that extends beyond the company. ABC is a way to reinforce this view. 

Together the partners view the model as an extended logistics value network and optimized conditions are the objective as each player sets aside the need for control and uses the most effective system from beginning to end of the supply chain, even when it means one player incurs an extra cost in the process. Balanced scorecards become the means of analysis and assignment and the technique for allocating costs across the extended enterprise. 

This chapter probes the hnancial implications of different logistics strategies. While it may be clear that cost must form a central plank of supply chain strategy for classic shirts, that is not to say that the product team for fashion blouses can ignore the cost implications of their actions (see Table 1.1). The common theme is the concept of value, and the extent to which both management teams are creating value for the end-customer. Here, we advance the concept of value beyond the mainly end-customer view that we took in Chapter 2, and extend it to other stakeholders in the supply chain. 

The theoretical literature on supply chain collaboration is diversified representing multiple perspectives. The diverse literature reflects the versatile nature of supply chain collaboration involving a variety of motives and objectives (Barringer and Harrison 2000 Hitt 2011 Verdecho et al. 2012 Fawcett et al. 2012). This study examines supply chain collaboration from multiple perspectives (1) technical-economic perspective, e.g. uncertainty reduction, transaction cost economics, resource based view, relational view, and extended resource based view (2) sociopolitical perspective, e.g. resource dependence theory, social exchange theory, and social dilemma theory (3) trust based rationalism and (4) learning and knowledge perspective. These multiple perspectives provide us with insights into the nature, forms, contents, and forces of supply chain collaboration. 

Resource based view, relational view, extended resource based view, and social dilemma theories perceive collaborative advantage (i.e., joint competitive advantage) as the consequence of supply chain collaboration. 

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