Supply Chain Practicalities

In addition to the basic negotiation of costs and quantities of pipe to be supplied, the relationship between pipe maker and pipe user may involve other market related factors. Technical support may be required in terms of material selection, application of technical standards and provision of quality control test services. Transport to the site of use may involve restrictions in terms of vehicle size or times of delivery. This is particularly so when pipes are being laid below busy city streets or in remote rural locations. Pipe storage areas near the site may be limited and this then implies smaller, more frequent deliveries. Such practical considerations may have a significant bearing on the delivery price of pipe. 

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Just-in-Time (JIT) Delivery Refers to a supply chain practice whereby manufacturers receive components on or just before the time that they are needed on the assembly line, rather than bearing the cost of maintaining several days or weeks supply in a warehouse. This adds greatly to the cost-effectiveness of a manufacturing plant and puts the burden of warehousing and timely delivery on the supplier of the components. 

Today s supply chain practices evolved by many years of experience from industrial revolution, that is the world is not characterized by scarcity but challenged with a variety of customer needs [2]. In other words, a customer s passive acceptance of a product shifted to active encounter in the design and delivery of a... 

The term supply chain is not new. ft is fundamental to military strategy. ft was the difference between winning and losing in the Napoleonic wars and the Battle of the Bulge in World War ff. The application of supply chain practices as a fundamental business process is newer. First coined in 1982 to be used as an overarching business concept, it is now 30 years old. Over the last three decades, it has morphed in definition. ... 

Implications matter. The business impact of the evolution of supply chain practices is far-reaching. To snpport the evolution, an entire ecosystem of software, consulting, and hardware companies dedicated to improving supply chain processes evolved. 

No two supply chains are alike. They come in many forms and definitions. While companies may argue on the definition of a supply chain, no one in manufacturing and distribution organizations will disagree that it matters. Over the last 30 years, it has become clear that supply chain practices both build and destroy brands. While failure can have a quick and deleterious impact, success can be seen only over many, many years. Although the stories of the losers fill headlines, the untold story is the one of quiet leaders using supply chain processes over the course of many years to improve corporate viability. 

When the pioneers recount their stories, they all agree that in the beginning, the emphasis was on manufacturing efficiency. The most efficient supply chain was believed to be the most effective supply chain. Supply chain practices evolved primarily to make manufacturing even more efficient. 

The second generation of supply chain professionals acted as the boots on the ground for the expansion of supply chain practices into BRIG (the emerging economies of Brazil, Russia, India, and China) countries. They were the implementers of global processes and systems to penetrate new markets. They were the builders of supply chain organizations in new countries. 

Companies that committed to global growth early in the period from 2000 to 2005 accelerated corporate growth faster than their peer groups through the adoption of supply chain practices. 

Commodity markets are in turmoil. Material prices have increased sharply since 2000, erasing the prior declines of the twentieth century. In 2011, 58 percent of the Fortune 100 listed the increase in cost of commodities as a risk to earnings in their annual reports. The cost of materials and the associated uncertainty is higher than at any time in the evolution of supply chain practices. 

For many, the situation is dire. Supply chain practices were defined in the early 199 Os when crude oil was 10 per barrel. They have changed... 

Quadrant n. In this scenario, volume is high and demand error is low. This is the easiest manufacturing process within the supply chain to manage through traditional supply chain practices. It is the perfect scenario to apply Lean process thinking. 

The inertia to continue historic supply chain practices is high. During the first 30 years of supply chain management, pioneers built strong, functional silos. They focused on projects and aligned metrics... 

We now have the teams in place to work on process iimovation. We need to give them the financial resources to make a difference. Five years ago, fewer than 15 percent of companies had a dedicated team to work on global supply chain practices in a center of excellence (COE). The functions of the team are shown in Fignre 6.6 while the performance gaps are shown in Figure 6.7. 

Four different countries were preselected to review the proposed maturity model and answer the assessment to identify current and future states based on demand driven supply chain concepts. In this way, it wiU be possible to validate the proposed maturity model at the same time that companies current and future states are identified. The main criteria to select the countries were their market maturity, interviewees supply chain practical experience, and author s knowledge of their operations. 

SCOR is designed to enable companies to communicate, compare and develop new or improved supply-chain practices from companies both within and outside of their industry segment. Its key components are ... 

The CSCMP standards target users who want to quickly assess their supply chain practices, perhaps as a first cut at identifying needs for improvement. A user of these standards assesses where they stand on a 1 to 5 scale, ranging from Below Minimum to Best Practice. Because the process standards document what are already widely adopted practices, adopting these standards does not ensure improved competitive position. 

Montcrief, Bob and Stonich, Mark, Supply-chain practice maturity model and performance assessment, a presentation by the Performance Management Group (PMG) and PittigUo Rabin Todd and McGrath (PRTM), November... 

One of the major effects of the Internet on supply chain practices is in the area of procurement. Firms now utilize the Internet not only to diversify the supply base and hedge the risk but also to obtain lower costs through auctions. Several new firms such as FreeMarkets have built their business model around business-to-business supply auctions. Several other firms like Ariba and Com-merceOne have added auction capabilities to their product suite. In this section we present several papers that address important issues related to supply chain management... 

Zhou, H. and W. Benton. 2007. Supply chain practice and information sharing. Journal of Operations Management. 25(6) 1348-1365. 

The goal of many companies has been to shorten C2C, but in this paper, the relationship between C2C and financial performances is tested industry by industry (Fawcett et al. 2007). The C2C is a critical performance measure and was also selected as the measure which has the greatest impact on supply chain practice as it showed the direct financial benefits of SCM (Banomyong 2005 Christopher and Gattoma 2005 Farris et al. 2005 Fawcett et al. 2007). 

Shen T (2005) Linking supply chain practices to operational and financial performance. Supply chain 2020 project working paper... 

A survey by Yusuf et al. (2003), which was carried out by questionnaire to 600 manufacturing companies, showed that only a few companies adopted agile supply chain practices, but many companies embraced long-term collaboration with suppliers and customers, which was conceptuahzed as lean supply chain practices. 

When a firm decides it must move into Level 3, termed enhancing partner relationships, the focus moves to such matters as supplier synchronization to make sure planning systems involve the key suppliers mentioned. The idea is to make certain these suppliers are bringing the right materials forward to meet actual production needs. The current use of demonstrated best supply chain practices is considered, regardless of the industry from which these practices derived. Suppliers manage inventories through VMI systems and replenishment is based on information... 

Similar stories point out that significant improvements can be the result of a focused advanced supply chain management effort. According to William Copacino, managing partner of Accenture s Global Supply Chain practice, Companies that have successfully mastered their supply chains have realized documented gains measuring up to 35% in market share (Copacino, 2001, p. 25). 

Lean supply chain practices make-to-order production... 

In Figure 8.2, the question of what is involved in APS is answered. APS becomes the next step in order management and planning and should become a key tool in supporting supply chain management practices. As a firm progresses to advanced levels of supply chain, APS and ERP will converge and support supply chain practices across a business network. 

Zhu, Q. and Geng, Y. 2013. Drivers and barriers of extended supply chain practices for energy saving and emission reduction among Chinese manufacturers. Journal of Cleaner Production, 40, 6-12. 

In the third option, if the new market is overseas, the company would need to decide where to locate component production and assembly. If the supply chain straddles multiple countries, the company would need new expertise in freight forwarding, warehousing, and local supply chain practices. We discuss these further in Chap. 7. 

Extending the balanced scorecard into the context of the supply chain. Brewer and Speh (2000) consider that performance measurement systems must be aligned to supply chain practices ... 

McDonnell, M. (2001). E-collaboration Transforming your supply chain into a dynamic trading community. Supply Chain Practice, 3(2), 80-89. 

Rowbottom, U. (2004) Managing risk in global supply chains . Supply Chain Practice, Vol. 6,No. 2,pp. 16-23. 

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