Supply Chain Management: Strategy, Planning, and Operation

Cover......Page 1
Title Page......Page 2
Copyright Page......Page 3
About the Authors......Page 4
Contents......Page 5
Preface......Page 11
Acknowledgments......Page 13
  1.1 What Is a Supply Chain?......Page 14
  1.2 The Objective of a Supply Chain......Page 16
  1.3 The Importance of Supply Chain Decisions......Page 18
  1.4 Decision Phases in a Supply Chain......Page 19
  1.5 Process Views of a Supply Chain......Page 21
  1.6 Examples of Supply Chains......Page 26
  Discussion Questions......Page 30
  Bibliography......Page 31
  2.1 Competitive and Supply Chain Strategies......Page 32
  2.2 Achieving Strategic Fit......Page 34
  2.3 Expanding Strategic Scope......Page 44
  2.4 Challenges to Achieving and Maintaining Strategic Fit......Page 47
  2.5 Summary of Learning Objectives......Page 48
  Bibliography......Page 49
  CASE STUDY: The Demise of Blockbuster......Page 50
  3.1 Financial Measures of Performance......Page 53
  3.2 Drivers of Supply Chain Performance......Page 57
  3.3 Framework for Structuring Drivers......Page 59
  3.4 Facilities......Page 60
  3.5 Inventory......Page 62
  3.6 Transportation......Page 65
  3.7 Information......Page 66
  3.8 Sourcing......Page 69
  3.9 Pricing......Page 70
  3.10 Summary of Learning Objectives......Page 72
  Discussion Questions......Page 73
  CASE STUDY: Seven-Eleven Japan Co.......Page 74
  CASE STUDY: Financial Statements for Walmart Stores Inc. and Macy’s Inc.......Page 80
  4.1 The Role of Distribution in the Supply Chain......Page 82
  4.2 Factors Influencing Distribution Network Design......Page 84
  4.3 Design Options for a Distribution Network......Page 87
  4.4 Online Sales and the Distribution Network......Page 100
  4.5 Distribution Networks in Practice......Page 113
  4.6 Summary of Learning Objectives......Page 114
  Bibliography......Page 115
  CASE STUDY: Blue Nile and Diamond Retailing......Page 116
  5.1 The Role of Network Design in the Supply Chain......Page 121
  5.2 Factors Influencing Network Design Decisions......Page 122
  5.3 Framework for Network Design Decisions......Page 127
  5.4 Models for Facility Location and Capacity Allocation......Page 129
  5.5 Making Network Design Decisions in Practice......Page 145
  Discussion Questions......Page 146
  Exercises......Page 147
  Bibliography......Page 151
  CASE STUDY: Managing Growth at SportStuff.com......Page 152
  CASE STUDY: Designing the Production Network at CoolWipes......Page 153
  6.1 The Impact of Globalization on Supply Chain Networks......Page 155
  6.2 The Offshoring Decision: Total Cost......Page 157
  6.3 Risk Management in Global Supply Chains......Page 160
  6.4 Discounted Cash Flows......Page 164
  6.5 Evaluating Network Design Decisions Using Decision Trees......Page 166
  6.6 To Onshore or Offshore: Evaluation of Global Supply Chain Design Decisions Under Uncertainty......Page 173
  6.7 Making Global Supply Chain Design Decisions Under Uncertainty in Practice......Page 181
  Discussion Questions......Page 182
  Exercises......Page 183
  Bibliography......Page 184
  CASE STUDY: BioPharma, Inc.......Page 185
  CASE STUDY: The Sourcing Decision at Forever Young......Page 188
  7.1 The Role of Forecasting in a Supply Chain......Page 190
  7.2 Characteristics of Forecasts......Page 191
  7.3 Components of a Forecast and Forecasting Methods......Page 192
  7.4 Basic Approach to Demand Forecasting......Page 193
  7.5 Time-Series Forecasting Methods......Page 195
  7.6 Measures of Forecast Error......Page 205
  7.7 Selecting the Best Smoothing Constant......Page 208
  7.8 Forecasting Demand at Tahoe Salt......Page 210
  7.9 The Role of IT in Forecasting......Page 215
  7.10 Forecasting in Practice......Page 216
  Discussion Questions......Page 217
  Exercises......Page 218
  Bibliography......Page 219
  CASE STUDY: Specialty Packaging Corporation......Page 220
  8.1 The Role of Aggregate Planning in a Supply Chain......Page 222
  8.2 The Aggregate Planning Problem......Page 224
  8.3 Aggregate Planning Strategies......Page 226
  8.4 Aggregate Planning at Red Tomato Tools......Page 227
  8.5 Aggregate Planning Using Linear Programming......Page 228
  8.6 Aggregate Planning in Excel......Page 233
  8.7 Building a Rough Master Production Schedule......Page 237
  8.9 Implementing Aggregate Planning in Practice......Page 238
  8.10 Summary of Learning Objectives......Page 239
  Exercises......Page 240
  CASE STUDY: Kloss Planters and Harvesters......Page 242
  9.1 Responding to Predictable Variability in the Supply Chain......Page 244
  9.2 Managing Supply......Page 245
  9.3 Managing Demand......Page 247
  9.4 Sales and Operations Planning at Red Tomato......Page 248
  9.5 Implementing Sales and Operations Planning in Practice......Page 254
  Exercises......Page 255
  Bibliography......Page 257
  CASE STUDY: Mintendo Game Girl......Page 258
  CASE STUDY: Promotion Challenges at Gulmarg Skis......Page 259
  10.1 Lack of Supply Chain Coordination and the Bullwhip Effect......Page 261
  10.2 The Effect on Performance of Lack of Coordination......Page 263
  10.3 Obstacles to Coordination in a Supply Chain......Page 265
  10.4 Managerial Levers to Achieve Coordination......Page 269
  10.6 Collaborative Planning, Forecasting, and Replenishment......Page 274
  10.7 Achieving Coordination in Practice......Page 278
  10.8 Summary of Learning Objectives......Page 279
  Bibliography......Page 280
  11.1 The Role of Cycle Inventory in a Supply Chain......Page 281
  11.2 Estimating Cycle Inventory-Related Costs in Practice......Page 284
  11.3 Economies of Scale to Exploit Fixed Costs......Page 286
  11.4 Aggregating Multiple Products in a Single Order......Page 291
  11.5 Economies of Scale to Exploit Quantity Discounts......Page 299
  11.6 Short-Term Discounting: Trade Promotions......Page 310
  11.7 Managing Multiechelon Cycle Inventory......Page 315
  11.8 Summary of Learning Objectives......Page 318
  Exercises......Page 319
  Bibliography......Page 322
  CASE STUDY: Delivery Strategy at MoonChem......Page 323
  CASE STUDY: Pricing and Delivery at KAR Foods......Page 325
  Appendix 11A: Economic Order Quantity......Page 326
  12.1 The Role of Safety Inventory in a Supply Chain......Page 327
  12.2 Factors Affecting the Level of Safety Inventory......Page 329
  12.3 Determining the Appropriate Level of Safety Inventory......Page 331
  12.4 Impact of Supply Uncertainty on Safety Inventory......Page 340
  12.5 Impact of Aggregation on Safety Inventory......Page 343
  12.6 Impact of Replenishment Policies on Safety Inventory......Page 355
  12.8 The Role of IT in Inventory Management......Page 359
  12.9 Estimating and Managing Safety Inventory in Practice......Page 360
  12.10 Summary of Learning Objectives......Page 361
  Exercises......Page 362
  CASE STUDY: Managing Inventories at ALKO Inc.......Page 366
  CASE STUDY: Should Packing Be Postponed to the DC?......Page 369
  Appendix 12A: The Normal Distribution......Page 370
  Appendix 12C: Expected Shortage per Replenishment Cycle......Page 371
  Appendix 12D: Evaluating Safety Inventory for Slow-Moving Items......Page 372
  13.1 The Importance of the Level of Product Availability......Page 374
  13.2 Factors Affecting Optimal Level of Product Availability......Page 375
  13.3 Managerial Levers to Improve Supply Chain Profitability......Page 385
  13.4 Setting Product Availability for Multiple Products Under Capacity Constraints......Page 399
  13.6 Summary of Learning Objectives......Page 402
  Exercises......Page 403
  Bibliography......Page 405
  CASE STUDY: The Need for Speed at Winner Apparel......Page 406
  Appendix 13A: Optimal Level of Product Availability......Page 407
  Appendix 13B: An Intermediate Evaluation......Page 408
  Appendix 13D: Expected Overstock from an Order......Page 409
  Appendix 13F: Simulation Using Spreadsheets......Page 410
  14.1 The Role of Transportation in a Supply Chain......Page 413
  14.2 Modes of Transportation and Their Performance Characteristics......Page 415
  14.3 Transportation Infrastructure and Policies......Page 419
  14.4 Design Options for a Transportation Network......Page 422
  14.5 Mumbai Dabbawalas: A Highly Responsive Distribution Network......Page 428
  14.6 Trade-Offs in Transportation Design......Page 429
  14.7 Tailored Transportation......Page 438
  14.9 Making Transportation Decisions in Practice......Page 440
  14.10 Summary of Learning Objectives......Page 441
  Bibliography......Page 442
  CASE STUDY: Designing the Distribution Network for Michael’s Hardware......Page 443
  CASE STUDY: The Future of Same-Day Delivery: Same as the Past?......Page 444
  CASE STUDY: Selecting Transportation Modes for China Imports......Page 445
  15.1 The Role of Sourcing in a Supply Chain......Page 446
  15.2 In-House or Outsource?......Page 448
  15.3 Examples of Successful Third-Party Suppliers......Page 454
  15.4 Total Cost of Ownership......Page 456
  15.5 Supplier Selection—Auctions and Negotiations......Page 459
  15.6 Sharing Risk and Reward in the Supply Chain......Page 461
  15.7 The Impact of Incentives When Outsourcing......Page 472
  15.8 Designing a Sourcing Portfolio: Tailored Sourcing......Page 474
  15.9 Making Sourcing Decisions in Practice......Page 476
  15.10 Summary of Learning Objectives......Page 477
  Exercises......Page 478
  Bibliography......Page 479
  16.1 The Role of Pricing and Revenue Management in a Supply Chain......Page 481
  16.2 Pricing and Revenue Management for Multiple Customer Segments......Page 483
  16.3 Pricing and Revenue Management for Perishable Assets......Page 490
  16.5 Pricing and Revenue Management for Bulk and Spot Contracts......Page 497
  16.6 Using Pricing and Revenue Management in Practice......Page 499
  16.7 Summary of Learning Objectives......Page 500
  Exercises......Page 501
  Bibliography......Page 502
  CASE STUDY: To Savor or to Groupon?......Page 503
  17.1 The Role of Sustainability in a Supply Chain......Page 505
  17.2 The Tragedy of the Commons......Page 507
  17.3 Key Pillars of Sustainability......Page 510
  17.4 Sustainability and Supply Chain Drivers......Page 513
  17.5 Closed-Loop Supply Chains......Page 517
  17.6 The Pricing of Sustainability......Page 518
  17.7 Summary of Learning Objectives......Page 520
  Bibliography......Page 521
Part VII Online Chapter......Page 10
 The Role of IT in a Supply Chain......Page 530
 The Supply Chain IT Framework......Page 532
 Customer Relationship Management......Page 533
 Internal Supply Chain Management......Page 534
 Supplier Relationship Management......Page 535
 The Transaction Management Foundation......Page 536
 The Future of IT in the Supply Chain......Page 537
 Risk Management in IT......Page 538
 Supply Chain IT in Practice......Page 539
 Summary of Learning Objectives......Page 540
 Bibliography......Page 541
 C......Page 522
 E......Page 523
 I......Page 524
 M......Page 525
 P......Page 526
 S......Page 527
 T......Page 528
 Z......Page 529