Increasingly, businesses around the world are viewing supply chain issues as part of an organizational mission and quest to offer better and cheaper products, establish lean and reliable systems, achieve customer satisfaction, and stay competitive. Business executives are recognizing that supply chain management (SCM) is a key determinant of the ultimate success of any organization in the global environment. The emphasis of any enterprise is thus no longer on an organization's competence, but on a supply chain's competence. In the age of the supply chain, the fates of networked businesses are joined. Channel partners thus need to find better and more effective ways to position themselves in this new economy. Purchasing, operations, logistics, and transportation managers also need to understand how their domain areas interact and affect the entire supply chain.
The aim of Wisner et al.'s book, Principles of Supply Chain Management – A Balanced Approach, is to examine the strategic value and the new challenges of SCM.
The focus of the book is on the fundamentals and the advanced issues needed in building supply chain competence. The authors offer a management and a systemic view of SCM that could help business leaders and practicing managers to obtain needed information for practical engagement and continuous learning. A number of case stories are also available in the text to provide insights on the strategic and tactical roles of SCM.
The book shows there is a need for supply chain members to work together to respond quickly, correctly, robustly, and profitably to market demands and signals. To achieve such a goal, goods and information must be flowing smoothly and swiftly along the supply chain. Specifically, according to the authors, it involves four critical elements: purchasing, operations, distribution, and integration.
The purchasing element involves the acquisition of raw materials and components needed to make products. Three building blocks are introduced in the text: purchasing management, supplier management, and strategic sourcing. Readers will come to understand, for example, through the examples on performance metrics (p. 66) and the supplier corrective action request (pp. 75‐76), the impact that supplier management has on a supply chain's ability to achieve its strategic goals. It is apparent that quality and reliability management plays a central role in developing the best supply base capabilities.
The operations system involves the activities needed to process the items such as materials and other purchased components into finished products or ready‐to‐assembly modules. The text looks into the following five critical areas: demand management and collaborative planning, forecasting, and replenishment (CPFR), aggregate planning and material requirements planning (MRP), enterprise resource planning (ERP) systems, just‐in‐time (JIT) practices, and total quality management (TQM). Deming's 14 points for management, Crosby's four absolutes of quality, Juran's quality trilogy, and the Malcolm Baldrige National Quality Award, for example, are discussed in detail. Supply chain quality management is instrumental in developing supply chain collective competence. This book is probably the first text publication in SCM that has a special focus on quality and quality management.
The distribution process involves the activities required to deliver goods and services to meet market demands. Throughout the text, transportation management, customer relationship management (CRM), network design, and service response logistics are viewed as the foundations of SCM. Risk pooling, JIT warehousing, and e‐commerce, for example, are discussed in this section to help practitioners to understand issues associated with transportation management and how that can impact supply chain competence. It is also more prudent for both business executives and practicing managers in the digital age to have the knowledge of customer relationships and the tools available to aid in CRM. This important topic is treated fairly in the text. Further, service location, layout strategies, and waiting line models are viewed as service response logistics. Examination of these areas could help to identify the right service capacity and to deliver the services in the right place at the right time and in an effective manner.
The importance of integration is also noted in the text. Three areas are suggested as a process of further coordinating the basic SCM practices such as purchasing, operations, and distribution. They are coordination/integration activities, global integration problems, and performance measurement. The aim of this final step is to improve supply chain system reliability and competence. The balanced scorecard approach is adopted to measure the supply chain collective success. This framework consists of four performance dimensions: customer satisfaction, financial status, internal business processes, and learning and growth. These challenges imply that a new view and system of SCM must be established. The new supply chain system thus needs to go beyond the traditional calls and to enrich supply chain confidence.
If business executives and practitioners can follow through the issues laid out in the text, they have a roadmap and a skill set for building a better and more trustworthy supply chain.
