a firm whose business boundaries include one-time suppliers and/or customers
collaborative approach to making and distributing products and services to customers
generic supply chain flow
1. firms extracting raw materials from the ground (iron ore, wood, oil)
2. selling these to suppliers (lumber companies, raw food distributors)
3. turn raw materials into materials useable by manufacturers (sheet steel, aluminum, lumber)
4. component manufacturers make and sell intermediate components (electrical wire, fabrics)
5. final-products manufacturers (coca-cola, boeing) assemble finished goods and sell to wholesalers
reverse logistics activites
returned product, warranty repairs, recycled product.
end-product manufacturer (boeing, general motors, coca-cola)
key to developing effective supply chain management
keeping the customer in mind
supply chain management
idea of coordinating or integrating a number of product-related activities among supply chain participants to improve operating efficiencies, quality, and customer service in order to gain a sustainable competitive advantage for all of the collaborating organizations.
who has the most to gain from supply chains?
firms with large system inventories, many suppliers, complex product assemblies, and large purchasing budgets.
supply chain safety stock, forecasting, and production problems. Caused by forecasts not being met.
business process reengineering (BPR)
radical rethinking and redesigning of business processes to reduce waste and increase performance.
third-party logistics providers (3PLs)
used to ensure a continuous, uninterrupted supply of goods.
supply chain management in wholesaling and retailing industries is referred to as:
quick response (QR) service response logistics, or integrated logistics
encouraging or helping the firm's suppliers to perform.
determining the current capabilities of suppliers.
effective supplier management allows:
firms to selectively screen out poor-performing suppliers and build successful, trusting relationships with the remaining top-performing suppliers.
advantages of operating on a global scale
larger market for products, lower labor costs
risks of operating on a global scale
fluctuating exchange rates, tariffs, taxes
How can firms avoid problems with global operation
use a number of suppliers, manufacturing, and storage facilities in various foreign locations
successful supply chain integration occurs when:
participants realize that supply chain management must become part of the firms' strategic planning processes, where objectives are based on the end-customers' needs.
supply chain expansion is occurring on two fronts:
increasing the breadth of the supply chain to include foreign manufacturing, and increasing the depth of the supply chain to include second- and third-tier suppliers and customers.
second-tier suppliers and customers are:
suppliers' suppliers and the customers' customers
three corporate goals are:
value, productivity, growth
process of obtaining services, supplies, and equipment in conformance with corporate regulations
design, operation, and improvement of production systems that efficiently transform inputs into finished good and services, while maximizing productivity.
coordinated planning and execution of product distribution, transport, warehousing