Processes, supply chain

In this chapter, it will be briefly reviewed the supply chain processes based on the work developed by Lambert (2008), then it will be presented the three Demand Driven Supply Chain components proposed by the author, followed by a literature review for each one of the compraients. The reason to choose Lambert s processes review was due to its broad coverage of supply chain processes, including customers and suppliers. 

Lambert (2008) states that empirical research has led to the conclusion that the structure of activities within and between companies is a critical cornerstone of creating unique and superior supply chain performance, and therefore, corporate success requires a change from managing individual functions to integrating activities into supply chain management processes. 

He also emphasizes the importance of having standard business processes across the members of the supply chain, in order to have a common language that allows integrating processes from different companies. 

Lambert (2008) describes that the Global Supply Chain Forum proposes the framework presented in the Fig. 4.1 to integrate and manage business processes across the supply chain. 

This framework presents eight key processes that are common to all companies in a supply chain, as summarized below  

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Person R C, McKenna D R, Ellebracht J W, Griffin D B, McKeith F K, Scanga J A, Beltk K E, Smith G C and Saveli J W (2005), Benchmarking value in pork supply chain processing and consumer characteristics of hams manufactured from different quality of raw materials , Meat Sci, 70, 91-97. 

Reiner G (2005) Customer-oriented improvement and evaluation of supply chain processes supported by simulation. International Journal of Production Economics 96 (3) 381-395... 

SC Planners 1 stage Supply chain Process Sensors... 

Bowersox DJ, Gloss DJ. Logistical Management the Integrated Supply Chain Process. McGraw-Hill Series in Marketing. 1996. 

Successful supply chain management requires a change from managing individual functions to integrating activities into key supply chain processes. Traditionally, both upstream and downstream portions of the supply chain have interacted as disconnected entitles receiving sporadic flows of information over time. 

In many major corporations, such as 3M, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process approach to the business. The key supply chain processes are ... 

The increasing use of outsourcing has accelerated the need to coordinate supply chain processes because the organization becomes more dependent on outside contractors suppliers. Consequently, coordination mechanisms must be in place within the organization. Where to place these coordination mechanisms and which team and functions are responsible become critical decisions. 

This book is designed to share the principles of supply chain management. It is written based on the practical experiences of the author, relating them to industry principles that are discussed in the various chapters. This book can be used as a textbook for business education or as a reference book for businesses that recognize the need to change the way that their supply chain processes are managed. 

The RSPO multi-stakeholder process has gained recognition as a valid mechanism to develop and implement social and environmentally responsible management practices towards sustainable development and could eventually serve as a blueprint for multi-stakeholder production and supply-chain processes for other critical regionally or globally traded commodities. ... 

During the sustainment phase, the individual agencies want to operate efficiently but may still require assistance such as security info, weather information, sharing of resources, help with breaking up cartels, assistance with persistent problems involving interpretation of laws, and coordination with military. Since many parallel efforts may be in operation, with each agency having its own supply chain processes, it may be appropriate to coordinate by consensus. 

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. 

In today s world, clicks are sexier than bricks. There is a fascination with online presence. Social and e-commerce news grabs headlines while the traditional manufacturing processes are largely taken for granted. Delivery through the supply chain is assumed. Supply chain processes are not sexy. The pioneers did not earn the seven-digit salaries of the Wall Street financial executives. However, the supply chain was and still is the silent enabler behind great companies, world economies, and successful communities. It created viable brands and defined world economies. 

The bricks pave the evolution of supply chain processes. In the 30-year evolution, as shown in Figure 1.2, three types of bricks mattered the right use of assets or buildings expansion into Brazil, Russia, India, and China (BRIG countries) and the knowledge to build supply chain... 

To effectively use assets, supply chain leaders have found that they cannot be insular. They have found that they must tear down the bricks between the silos of their own internal organizations to stretch across networks to build lasting supply chain processes. The walls of these functional silos are difficult to break down, but they must be dislodged to build the end-to-end supply chain. For, it is now not just a company s bricks, but the responsibility for all the assets of the extended network that is paramount. 

Brick 3 Knowledge Building Effective Supply Chain Processes. Putting Value in value Networks... 

Figure 1.3 The Evolution of Supply Chain Process Excellence...

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. 

In reality, less than 2 percent of the trading exchanges provided value to the extended supply chain over the course of the next decade. They were not a major factor in the evolution of supply chain processes. 

As a result, the focus of supply chain processes is shifting from inside-out to outside-in. To connect a network of smaller networks of suppliers, logistics providers, and third-party manufacturers, there is a shift from a vertical focus or building functional excellence in operations to the building of horizontal processes to connect value networks. In this transition, compaiues learn that they must break... 

Underneath the evolntion of process and technology are the stories of people. It is abont individuals who never dreamed that they would spend their careers in snpply chain management. For these pioneers there were no yellow brick roads, or clear paths. Instead, they stumbled forward. These pioneers learned lessons through doing. Slowly, the processes evolved. And as they evolved, the pioneers transformed supply chain processes brick by brick. 

Supply Chain Process Failures Leading to Financial Balance Sheet Disclosure (Material Events)... 

Supply chain failures affect each company differently. Rarely does a company tie balance sheet write-offs explicitly to supply chain failures, but recent annual reports provide a multitude of examples of where supply chain process mistakes were material events on corporate balance sheets. 

First Shift in the Supply Chain Process The Efficient Supply Chain... 

In the beginning, supply chain excellence was defined as the lowest manufactured cost. The belief was that supply chain excellence could be achieved by sweating the assets. This set of beliefs formed the foundation for the efficient supply chain. Through the evolution of supply chain processes, costs were reduced, inventory levels lowered, and waste eliminated however, each company reached a point where they could no longer just cut costs without trading off service to customers. They had reached their effective frontier. 

Between 2000 and 2010, there were many market shifts, and companies found that without the ability to sense and adapt to market conditions, the reliable supply chain was not sufficient. In 2000, Cisco Systems was caught in the downturn of the e-commerce bubble. As a result of not sensing demand changes, the company was forced to write off 2.25 billion in inventory in 2001. This loss taught the company an important lesson. The redefinition of supply chain processes to be more resilient enabled the company to sense and withstand the downturn of the Great Recession of 2008. 

To unleash the growth potential, supply chain processes needed reinvention. During this time, companies defined their global strategies and corporate processes. In this era, companies built teams and trained supply chain professionals. 

To be effective at market sensing, companies have to build strong horizontal processes to connect downstream and upstream data. Traditionally, supply chain processes have evolved from vertical processes. These functional silos—source, make, and deliver—gave birth to supply chain management. However, this silo approach, and a focus on vertical excellence, is both a barrier and an enabler to maximize value and build strong networks. It is a conundrum. Companies need to build strong vertical silos to deliver operational excellence but at some point in their maturity, they must "break the glass" and shift their focus to build horizontal excellence. 

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