PART Ⅰ：OVERVIEW OF SUPPLY CHAIN MANAGEMENT 3
1 Evolution of Supply Chains 3
Learning Outcomes 3
What Is a Supply Chain？ 3
Importance of SCM 5
Evolution of Supply Chains 6
Early Supply Chains 6
Local Supply Chains 7
Global Supply Chains 8
Changing Government Orientation 11
State-Controlled Governments 11
Market-Driven Governments 11
Current Trends That Link Supply Chain Participants More Closely 12
Relationship Building 12
Customer Relationship Management 12
Supplier Relationship Management 13
Product Lifecycle Management 14
Electronic Business 14
Developing Economies 15
Outsourcing 16
Need for Quality Improvement 16
Changing Customer Demands 17
Decreasing Response Time 17
Lean Supply Chains to Reduce Waste 18
Current Developments in SCM 18
Power Has Shifted from Manufacturers to Retailers 18
Consolidation of Small，Local，or Regional Retailers into National Chains 19
Emergence of “Killer Category” Retailers 20
From a Make-and-Sell Mentality to a Sense-and-Respond Orientation 20
Obstacles to Supply Chain Integration 21
Need for Globalization 22
Complexity of Arranging Entities with Common Interests 22
Lack of Effective Interorganizational Systems 23
Need for Multiple Supply Chains within Companies 23
Lack of Trust between Participants 24
Examples of Companies with Successful Supply Chains 25
Focus on Strong Brands 27
Pay Attention to Balance 27
Use Downstream Data and Direct Store Delivery 28
Focus on Building Effective Network Relationships 28
Progress toward an Integrated Supply Chain 28
Supply Chain Models 28
Summary 31
Discussion Questions 32
References 33
2 Supply Chains as a System 37
Learning Outcomes 37
Introduction 37
Supply Chain Systems 39
Inputs 40
Transformation 40
Outputs 41
Manufacturing vs.Services 42
Types of Supply Chains 42
Physical Flow 44
Information Flow 45
Funds Flow 46
Relational Flow 47
Examples of Supply Chains in Different Industries 48
Internal and External Customers 49
Open Systems vs.Closed Systems 51
Effect of External Influences on Supply Chains 52
Obstacles and Enablers of Supply Chain Integration 53
Obstacles 54
Enablers 55
Performance Measurement 56
Allocation of Costs，Resources，and Benefits along the Supply Chain 59
Value Creation as the Ultimate Objective 60
Summary 63
Discussion Questions 64
References 64
PART Ⅱ：THE CUSTOMER PERSPECTIVE 69
3 Determining Customer Needs 69
Learning Outcomes 69
Introduction 69
Group Customers into Homogeneous Segments 71
Determine the Needs of the Ultimate Consumer 72
Product Needs 72
Service Needs 73
Marketing Mix 73
Manufacturing and Service Supply Chains 74
How Do You Accurately Determine Needs？ 74
Past History 75
Market Research 76
Open System Scanning 77
Competition 77
Technology 78
Economy 79
Government 80
Social Trends 81
Business Environment 81
How Do You Forecast Demand？ 83
Quantitative Forecasting Methods 83
Time-Series Methods 84
Causal Method 87
Qualitative Forecasting Methods 89
Survey Method 89
Delphi Method 89
Attributes of a Well-Designed Product 90
Functionality（Product Works to Satisfy Customers’ Needs） 90
Validity（Product Has Value and Functions at a Reasonable Cost） 91
Manufacturability（Product Can Be Efficiently Produced） 91
Quality（Product Has a Variety of Quality Attributes） 91
Serviceability（Product Can Be Serviced during Its Effective Life） 92
Recyclability（Product Can Be Recycled along the Reverse Logistics Supply Chain） 92
Product Design Approaches 93
Quality Function Deployment 93
Concurrent Engineering 94
Design for Manufacturability 95
Design for Sustainability 95
Determine the Number of Supply Chains Needed within a Company 96
Align with Customer Segment 97
Align with Product/Service Bundle 98
Align with Supplier Category 98
Performance Measurement 99
Determine the Needs of Internal Customers 99
Conclusion 100
Discussion Questions 101
References 101
4 A System to Meet Customer Needs 105
Learning Outcomes 105
What Is Customer Relationship Management？ 106
Global Supply Chain Forum Model 107
How CRM Can Be Used to Design a Supply Chain？ 108
Origins of CRM 108
What Can CRM Do？ 110
Benefits 110
CRM Processes 111
Problems 112
CRM’s Future 115
Product Lifecycle Management 115
What Is PLM？ 116
How Did PLM Evolve？ 116
What Does PLM Include？ 116
What Does PLM Not Include？ 117
What Are the Benefits of PLM？ 118
What Is the Present Status of PLM？ 119
What Are the Obstacles？ 119
What Does the Future Hold？ 120
Supply Chain Mapping 121
The Basic（Generic） Supply Chain 121
Variations for Different Industries 122
Supply Chain Mapping 123
Determining Resource Requirements 123
Facilities 125
Equipment 125
Employees 127
Inventory 127
Information Systems 128
Designing Processes to Match with Products 128
Make-to-Stock 128
Assemble-to-Order 129
Make-to-Order 129
Engineer-to-Order 130
Determining the Mix of “Make” and “Buy” 130
Core Competency Concept 130
Total Cost of Ownership 131
Cost Reduction vs.Revenue Increase Considerations 132
Effect of Outsourcing Movement 133
Aligning Entities along the Supply Chain 133
Entities to Be Involved 134
Allocation of Authority and Responsibility among Entities 134
Collaboration Process 135
Implementation Plan 136
Evaluating the System Design 136
Will It Accomplish Its Objectives？ 136
Is It Sustainable？ 137
Is It Flexible？ 138
Summary 139
Discussion Questions 139
References 140
5 Demand Management 145
Learning Outcomes 145
Introduction 145
Definition of Demand Management 147
Importance of Demand Management 149
Managing Demand 150
Accept All Demand 150
Select the Types of Demand to Accept 150
Solicit External Input in Forming Demand Patterns 150
Design the Form in Which Demand Will Be Accepted 151
Impose Constraints on Demand Submission 151
Managing Supply 151
Select a Demand Management Strategy 151
Develop a Demand Forecasting System 152
Determine the Resource Requirements to Meet the Demand 152
Merging Supply and Demand into a Demand Management Process 153
Develop Sales and Operations Planning to Match Short-Term Supply and Demand 153
Collaboration among Supply Chain Participants 153
Demand Management in Manufacturing 154
Demand Management in Services 156
Proposed Demand Management Strategies 158
Factors That Affect the Selection of a Demand Management Strategy 160
Resources’ Value 160
Type of Demand 162
Top Management Strategies 162
Relationship between Factors and Strategies 163
Model for Integrating Demand and Supply Management 165
Programs Used to Implement Demand Management Strategies 171
Provide Strategy Programs 173
Match Strategy Programs 173
Influence Strategy Programs 176
Control Strategy Programs 176
Demand Management along the Supply Chain 177
Retail 177
Wholesale 178
Manufacturer 178
Mining and Agriculture 178
Summary 178
Discussion Questions 179
References 180
PART Ⅲ：THE SUPPLY PERSPECTIVE——DISTRIBUTION，PRODUCTION，AND PROCUREMENT 185
6 Distribution and Retailing 185
Learning Outcomes 185
Introduction 185
Retail Function 186
History of Retailing 186
Retail Services 191
Characteristics of the Industry 191
Customers and Markets 193
Outputs 193
Inputs 194
Transformation Process 194
Impact on Operations Management 196
Designing the Retail Process 196
Strategic Orientation 197
Critical Design Points——Keys to Success 198
Additional Factors to Consider in Retail Store Design 202
A Multidiscipline Project 202
Continuing Need to Readjust or Redesign 202
E-Commerce Considerations（Direct vs.Indirect Selling） 203
Strategic or Long-Term Considerations 203
Managing a Retail Business 203
Determine the Expected Demand 203
Plan Capacity to Meet Demand 204
Implement the Operating Plan 205
Measure Performance 205
Replan for the Next Period 206
Retail and Inventory Management 206
Value 206
Availability 206
Variety 206
Presentation 206
Service 207
Response Time 207
Present Situation in Retailing 207
Future in Retailing 209
Role of Wholesalers and DCs 209
Ordering 210
Receiving 210
Stocking 210
Picking 211
Loading the Trucks 211
Transport to Stores 211
Unloading and Display at Stores 211
Critical Success Factors for Distribution 212
Inventory within Distribution Functions 212
Inventory Management between Retailer and Distributor 213
Technology in Distribution Functions 213
At the Retail Store 213
Movement of Goods 214
At the Distribution Center 214
Positioning Services within the Distribution Functions 215
Pre-Sale Services 215
Post-Sale Services 215
Role of Third-Party Service Providers 216
Predominant Delivery Methods 216
Truck——Privately Owned or Third-Party Carriers 216
Rail——For Selected Goods 218
Waterways 218
Air 218
Pipeline 219
Parcel 219
Transmission Lines 219
Fiber-Optic Cable Networks 219
Third-Party Service Providers 220
Importance of RDCs 220
Trend toward Outsourcing the Distribution Function 221
Major Companies——UPS，FedEx，Ryder 222
Distribution Performance Measurement 222
Financial Performance Measures 222
Operating Performance Measures 222
Collaboration Performance Measures 222
Retailer-Distributor Relationship 223
Summary 223
Discussion Questions 224
References 224
7 Production and Service Processes 227
Learning Outcomes 227
Introduction 227
Evolution of the Production Function 229
From Craft to Mass Production 230
From Mass Production to Mass Customization 231
Critical Success Factors for Manufacturers 231
Cost and Efficiency 232
Quality 232
Responsiveness——Timing of Delivery 232
Responsiveness——Product/Service Mix 232
Flexibility 232
Agility 233
Information Technology 233
Manufacturing Strategies 233
Make-to-Stock 234
Locate-to-Order 234
Assemble-to-Order 235
Make-to-Order 235
Engineer-to-Order 235
Batch to Lean Operations 236
Present Batch Flow 236
Machine Breakdowns 237
Supplier Failures 237
Worker Flexibility 238
Customer Lead Times 238
Customer Order Size 238
Proposed Lean Production Flow 238
Customer Lead Time 239
Extra Available Space 239
Faster Detection of Quality Problems 239
Ease of Transferring Operators 240
Reduced Scheduling Requirements 240
Smaller Lot Sizes 240
No Buildup of WIP Inventory 240
Empowered Employees 240
Reduced Equipment Breakdowns 241
Reduced Late Material Deliveries 241
Reduced Write-Off of Inventory 241
Make or Buy Strategies 241
Vertical Integration 241
Outsourcing 242
Capacity Planning 245
How Much Capacity？When？What Kind？ 245
Location and Ownership 245
Service Production Strategies 246
Relationships with Downstream Customers 248
From Transactions to Processes 248
Transactions vs.Processes 249
Basic Processes of a Business 250
Benefits of a Process Orientation 250
Effect of Process Orientation 251
Organizational Structure 251
Strategies 252
Knowledge Management 253
Change Management 253
Trends in Production 253
From Manual to Automated 254
From Domestic to Global 254
From Standard Products to Customized 254
Postponement 254
Sales and Operations Planning 255
Performance Measurement 255
As Measured by Accounting 255
As Measured by Production 256
Measures along the Supply Chain 256
Summary 256
Discussion Questions 257
References 258
8 Procurement/Purchasing 261
Learning Outcomes 261
Introduction 261
Role of Procurement in the Supply Chain 262
Traditional Purchasing 263
Contemporary Purchasing 264
Critical Success Factors for Procurement 265
Functionality 265
Availability 265
Cost 266
Quality 266
Match Inflow with Outflow 266
Reduce Variances in Delivery 267
Increase Supplier Dependability 267
Reduce the Bullwhip Effect 267
Become an Intercompany Facilitator 268
Find Sustainable Suppliers 268
Changing Role of Purchasing 268
Purchasing Functions 271
Product Design 271
Product Specifications 271
New Product Introduction 272
Target Costing 274
Supplier Selection 275
Supplier Location 275
Inventory Management 276
Purchasing Process 277
Supplier Evaluation 278
Supplier Relationship Management 278
Supply Chain Coordination/Collaboration 278
Purchasing at Different Stages of the Supply Chain 279
Consumer 279
Retail 279
Wholesale 280
Manufacturer 280
Mining and Agriculture 281
Services 281
Dealing with Offshore Outsourcing 282
As a Strategic Concept 282
TCO Considerations 284
As a Project，with Project Management Needs 284
Other Considerations——Intangible Costs and Public Acceptance 285
Supplier Location as a Strategy for Entering an Offshore Market 285
Performance Measurement 286
Traditional——Positive Purchase Price Variance 286
Contemporary——Enhanced Value from the Supply Chain for the Consumer 286
Future of Purchasing 287
Summary 288
Discussion Questions 289
References 290
9 Reverse Supply Chains 293
Learning Outcomes 293
Introduction 293
Description of Reverse Supply Chain Networks 293
Benefits of Reverse Logistics 295
Barriers to Reverse Logistics 295
Continuation of Forward Supply Chains 296
History of Reverse Logistics 298
Principal Drivers of the Movement 299
Individual Consumers 299
Individual Businesses 300
Society——The Community 300
Society as a Group 300
Environmental Concerns 301
Resource Scarcity Concerns 301
Business Sector 302
Economic Benefits Possible 302
New Businesses，Even New Industries，Possible 302
Government——At All Levels 303
Activities in Reverse Logistics 303
Service——Assist Customer to Assure Proper Use of Product 303
Returns——Product Is Intact and Needs Repackaging or Relocation 303
Restoration——Product Needs Minor Modification or Repair 304
Remanufacturing——Product Needs Overhaul and Major Rebuilding 304
Recycling——Product Components Needs Reconstitution as Part of Another Product 305
Disposal——Product Remains Need to Return to Natural State 305
Hazardous Waste Disposal 305
Role of Private Industry 306
New Paradigms in Product Design（Design for Sustainability） 306
Design and Operate Green Supply Chains 307
Develop Systems to Manage Reverse Logistics 307
Participate in Joint Ventures to Seek Social Objectives 307
Role of Government 308
Research——To Identify Threats and Opportunities 308
Legislation——To Standardize Business Requirements 310
Regulation——To Monitor Performance 311
Participation——To Encourage and Support Ongoing Programs 312
Role of Consumer 312
Participant in RSC Programs 312
Educated Consumer 312
Supporter of Green Supply Chain Efforts 313
Reverse Logistics Network 313
Continuation of the Forward Supply Chain 313
Operate in an Open System Environment 314
Heavily Outsourced by Major Businesses 315
Support and Service 315
Returns 315
Repairs 315
Remanufacture 316
Rework 316
Recycle 316
Need for a Lifecycle System Approach 316
Need for IT 319
Other Considerations in Designing Reverse Supply Chains 319
Future 320
Growth in Amount of Materials Recycled 320
Increase in Number of Companies Performing Reverse Logistics Activities 320
Joint Ventures between Private Business and Government 321
Increased Emphasis on Prevention，Not Just Reusing 321
More Companies Will Design Integrated Reverse Logistics Systems 321
Summary 321
Discussion Questions 322
References 322
PART Ⅳ：INTEGRATED SUPPLY CHAINS 327
10 The Need to Integrate 327
Expected Outcomes 327
Introduction 327
Setting the Stage 329
Obstacles to Integration 330
Status of Integration Efforts 331
From Mass Production to Mass Customization 333
From Craft to Mass Production 334
Prelude to Mass Customization 335
From Vertical Integration to Virtual Integration 337
From Homogeneous Cultures to Diverse Cultures 339
Drivers of Change 340
Global Competition 340
Global Markets 341
Economic Advantage 341
Lower Costs 341
Higher Revenues 342
Relationships and Trust among Supply Chain Participants 342
Trust between Individuals 342
Formal Contracts or Agreements 342
Common Interests or Projects（Enforced Trust） 343
Involves Change Management 343
Change Is Difficult within a Company 343
Embedded Culture 343
Policies and Procedures 344
Organization Structure 344
Customer Relationships 345
Supplier Relationships 345
Union Relationships 345
Change Is More Difficult for a Community 346
Company-Community Relationship 346
Difficulty in Changing Laws and Regulations 346
Difficulty in Changing Infrastructure 347
Change Is Most Difficult for an Entire Country 347
Political Implications 347
Regional Differences 347
Steps in the Integration Process 347
Build Interfaces with Customers and Suppliers 348
Change Interfaces to Interlaces to Make the Relationships Closer 348
Change Interlaces to Integrated Relationships 348
Need for Strategic Planning 348
Categories of Operations 349
Normal Operations 350
Improvement Programs 350
Problem-Solving Programs 350
Crisis Management 350
Need for a Multi-Year Project Plan 350
Supply Chain Integration Is a Long-Term Program 351
Requires a Coordinated Multi-Team，Multi-Entity Effort 351
Performance Measurement across the Supply Chain 351
Integration Requires Sharing 351
Responsibilities 351
Resources 352
Sharing Requires Measurement 352
Summary 352
Discussion Questions 352
References 353
11 Why Integration Is Difficult 357
Learning Outcomes 357
Introduction 357
Determining Strategic Objectives 358
Evaluating the Potential Return on Investment 358
Uncertainty of Benefits 359
Tangible，or Direct 359
Intangible，or Indirect 359
Uncertainty of Costs 360
Product Costs 360
Support（Overhead） Costs 360
Uncertainty of Assets Employed 360
Designing for Participant Differences 361
Participants Are Not Equal 361
Commitment 361
Contribution 362
Different Roles——Drivers and Followers 362
Technical Differences 362
Size 362
Proximity 362
Type of Operation 363
Attitudinal Differences 363
Culture 363
Mission and Strategy 363
Need for Multiple Supply Chains 364
Different Customer Segments 364
Different Supplier Segments 365
Separating Interwoven Networks 366
Selecting and Implementing Technology 366
Product and Service Processes 367
Remove Barriers 367
Eliminate Redundancy 367
Develop Compatible Processes 368
Strive for Effectiveness and Effciency 368
Interorganizational Systems 368
Lack of Systems Compatibility 368
Lack of Information 368
Lack of a System 369
Financial Funds Flow 369
Realigning Infrastructure 370
Internal Organization 370
Effect of Outsourcing Movement 371
External Organization 371
Policies and Procedures 372
Physical Infrastructure 372
Transforming Company Cultures 372
Internal 372
External 373
Building Relationships 373
Communicate 373
Coordinate 373
Cooperate 373
Collaborate 374
Why Do Companies Not Collaborate？ 375
Lack of Trust 375
Measuring Performance 378
Maintaining the System 379
During the Implementation Process 379
During the Operation of the Supply Chain 379
Extension into Reverse Logistics 380
Obstacles to International SCM 380
Summary 381
Discussion Questions 381
References 382
12 How to Build an Integrated Supply Chain 385
Learning Outcomes 385
Introduction 385
Who Manages the Supply Chain？ 386
Past and Future of Supply Chain Management 386
Present Supply Chains 388
The World of Lean Production 389
Product 390
Purchasing Process 390
Production Process 390
Delivery Process 391
Demand Variation 391
Stages in Moving from Functional-Focus to Cross-Enterprise Collaboration 391
A Comprehensive Supply Chain Model 393
Decisions Needed to Achieve a Lean and Agile Supply Chain 395
Commitment 395
Concept 396
Configuration 397
Top Management 397
Marketing 398
Purchasing 398
Manufacturing 399
Distribution 400
Finance and Accounting 400
Communication 401
Culture 402
Customization 403
Integrated Supply Chain 403
Coordination 404
Cooperation 404
Collaboration 410
Steps in the Change Process 411
Investigate 412
Involve 412
Include 412
Initiate 412
Invigorate 412
Implement 413
Integrate 413
Institutionalize 413
Innovate 413
A Look Ahead 413
Complexity 414
Clairvoyance 415
Summary 417
Discussion Questions 417
References 417
PART Ⅴ：THE FINANCIAL AND INFORMATION TECHNOLOGY PERSPECTIVES 423
13 Information Flow along the Supply Chain 423
Learning Outcomes 423
Introduction 423
Need for Information Flow 424
Types of Information Transmitted 426
Upstream Suppliers 426
Midstream Supply Chains 426
Downstream Customers 427
Reverse Supply Chain 427
Supply Chain Connectivity 427
Intracompany Technologies Used 429
Data Capture 430
Computer-Aided Design 430
Point-of-Sale Terminals 430
Automatic Identification Systems 431
Groupware 432
Data Storage and Retrieval 433
Data Manipulation and Reporting——ERP Systems 433
Supply Chain Direct Links 435
Customer Relationship Management 435
Supplier Relationship Management 435
Linking Technologies 436
Interorganizational Systems 436
EDI and Internet EDI 436
Automatic Identification Systems 437
Linking Applications 437
Video Conferencing 437
Sales and Operations Planning 438
Product Lifecycle Management 439
Third-Party Services 439
Service-Oriented Architecture 439
Software as a Service 440
Cloud Computing 441
Benefits of Information Technologies 442
Tangible Benefits 443
Increase Revenues 443
Reduce Product Costs 443
Reduce Transaction Costs 443
Reduce Product Development Lead Time 443
Reduce Capital Investment Costs 444
Intangible Benefits 444
Improve Customer Relations 444
Improve Decision Making 444
Streamline Administrative Processes 444
Integrate Company Planning and Execution 444
Barriers to IT Adoption 445
Technological Obstacles 445
Standards Interoperability 445
Back-End Interoperability 446
Scope of Applications 446
Security 446
Managerial Obstacles 447
Power Structure 447
Trust 448
Economic Issues 448
Employee Acceptance 448
Societal Obstacles 449
Model of an Integrated Supply Chain Information System 449
Summary 450
Discussion Questions 451
References 451
14 Funds Flow along the Supply Chain 455
Learning Outcomes 455
Overview of the Flow of Funds 455
Need for Electronic Funds Flow 456
Cash Is King 456
Domestic Supply Chains Require EFT 457
International Supply Chains Require EFT 457
Benefits and Obstacles of Funds Flow in Supply Chains 458
Flows in a Supply Chain 458
Benefits of Improved Funds Flow 459
Obstacles 459
Participants Other Than Members of the Supply Chain 460
Banks 461
Value-Added Networks 461
Performance Measurement 461
Financial Accounting Measures——Current Ratio 461
Management Accounting Measures——Days of Receivables，Inventory，Payables 462
Contemporary Measures——Cash-to-Cash Cycle Time 462
Effect of Production Strategies on Funds Flow 464
Effect of Outsourcing on Product Costs and Capital Requirements 465
Compare Companies——Retailers vs.Manufacturers 465
Financial Institutions’ Cash Supply Chain 465
Technologies Used 466
Interorganizational Systems 466
Components of an IOS 466
Benefits 468
Obstacles 468
Evolution 469
Future 470
Electronic Data Interchange 471
Benefits 472
Obstacles 473
Internet EDI 473
Future 473
New Concepts in Funds Flow 474
Funds Flow in the Reverse Supply Chain 475
A Comprehensive Example 475
Components of a Financial Statement 476
Analyzing the Cash Flow Statement 476
Looking at Alternatives 479
Summary 481
Discussion Questions 481
References 482
15 ROI for Supply Chains and Other Issues 485
Learning Outcomes 485
Supply Chain Configurations 486
Programs Requiring Close Supply Chain Relationships 487
Need to Evaluate Supply Chain ROI 488
Tangible Benefits 488
Reduced Inventory 488
Reduced Cycle Times 488
Improved Customer Service 489
Improved Quality 489
Tangible Costs 489
Communications 489
Retraining Internal Employees 489
Restructure Supplier Network 489
Design Customer Network 490
Capital Investment 490
Indirect Costs 490
Meetings Required to Organize Customer and Supplier Relationships 490
Programs to Change Internal Culture 491
Changes in Organization Structure 491
Realignment of Roles of Supply Chain Participants 491
Cash Flow and Time Value of Money Considerations 491
Intangible Benefits 492
Integrated Flow of Goods and Services 492
Faster Resolution of Problems 492
Match Customer Wants with Products Provided 493
Reduced Excess Capacity along the Supply Chain 493
Increased Knowledge 493
Intangible Costs 494
Loss of Confidential Information 494
Increased Awareness of Inequitable Treatment among Participants 494
Discrepancy between Contribution and Payoff among Participants 494
Legal Actions 494
Plan for Equitable Distribution among Members 495
How to Organize？ 495
How to Distribute？ 496
Role of Prime Mover in the Supply Chain 496
Organize 496
Select the Team 497
Monitor Ongoing Operations 498
Evaluate Performance 498
Initiate Change 498
Changes in Supply Chain Composition 499
Dictated by Prime Mover 499
Consensus of the Supply Chain Participants 500
Consultation with an Outside Adviser 500
Mediation by Third Party 500
Legal Action 500
Case Studies 500
Use of Accounting Records 501
RFID Implementation 501
Cost Reductions with Investment Requirements 502
Supply Chain Finance 502
Benefits of Supply Chain Collaboration 503
Summary 503
Discussion Questions 504
References 504
PART Ⅵ：THE FUTURE 509
16 Trends in Supply Chain Development and Management 509
Learning Outcomes 509
From the Past to the Present 510
From the American Revolution to World War Ⅱ 510
From World War Ⅱ until the Present 511
Evolution of Critical Success Factors in the United States 512
Beginning（from First Settlements through 1800） 514
Industrial Revolution（1840s-1890s） 515
Growth and Recovery（1890s-1930s） 515
Mass Production（1940s-1950s） 515
Arisings（1960s-1970s） 516
Awakening（1980s） 516
Globalization Ⅰ（1990s） 516
Globalization Ⅱ and Mass Customization（2000 and After） 516
Major Drivers of Change in Supply Chains 517
Global Competition 517
Outsourcing 518
Increased Complexity and Risk 518
Changes Needed in the Future 518
Global Business Perspective 519
Balanced Approach to Offshore Outsourcing 520
Total Cost of Ownership 520
Risk Management 521
Other Issues 521
Continuing Changes in Technology 522
Retail Operations 522
Demand Forecasting 522
Transportation and Distribution 523
Information Systems 523
From Special-Purpose to General-Purpose Resources 524
Vanishing Boundaries between Manufacturing and Services 525
Process Evolution from Transactions to Integrated 526
Transactions vs.Processes 526
Benefits of a Process Orientation 527
Infrastructure Refinements 527
From Vertical to Horizontal Organizations 528
From Rigid Rules to Flexible Policies and Procedures 528
From Tacit Knowledge to Implicit Knowledge 529
From Financial Accounting to Management Accounting 529
Culture and Employees 530
From Passive or Obstructing Culture to Engaged and Receptive Culture 530
Employees——From Specialized to Empowered 531
Supply Chain Relationships 532
From Adversarial to Collaborative 532
Trust and Distrust 533
Emergence of Third-Party Supply Chain Coordinators 535
Summary 536
Discussion Questions 537
References 537
17 Preparation for the Future 539
Learning Outcomes 539
Recognize the Need to Adapt to Changing Conditions 540
Open System Environment 540
Globalization 540
Competition 540
Economy 541
Technology 541
Customers 541
Employees 542
New Measure of Success——Sustainability 542
Financial Success 542
Social Responsibility 543
Environment 544
Integrating Financial Results，Society Equity，and Sustainability 544
Identify What Needs to Be Done 544
ISM Study 545
IBM and IW Study 546
APICS E＆R Foundation Inc 548
Summary of Challenges 548
Role of Government 550
Environment 550
Business Ethics 551
Product Safety 551
Social Equity 552
Infrastructure 552
Role of Third Parties 553
Direct Support——Outsourcing 553
Indirect Support——Financing and Insurance 553
Advisory——Consulting and Training 553
Analyst——Measure Performance and Identify Needs 553
Manager——Virtual Holding Company 554
Future Technology——Information Technology Oriented 554
ERP Extension 554
Service-Oriented Architecture 555
Internet Processes 555
Interorganizational Systems 555
Process Technology 556
Non-IT Technology 556
Build Strategic and Operational Plans 557
Continue the Drive for Collaboration 557
Develop Performance Measures for Supply Chain Management 557
Integrate Delivery Effectiveness Measures 558
Integrate Cost and Quality Measures 559
Supplier Profitability 559
Effectiveness of Supply Chain Integration 559
Structure the Organization to Manage Change 560
Purchasing 560
Integrate All Functions 562
Educate the Work Force 562
Marketing 562
Overcome Inertia 563
Modify the Culture to Accept Change 563
Drive for Sustainability 564
Sustainability 564
Triple Bottom Line 564
Beyond the Triple Bottom Line 565
Why Should Business Take the Lead？ 566
Need for Alliances 566
Benefits and Obstacles 567
Sustainability in the Future 567
Wisdom——Education and Training 568
Definitions 568
From Data to Information 569
From Information to Knowledge 570
From Knowledge to Wisdom 570
Some Ways to Learn 571
Obstacles to Knowledge Transfer 572
Will Knowledge Replace “Things”？ 573
Vanishing Boundaries between Manufacturing and Services 574
Application of Chaos Theory to Business 575
Summary 576
Discussion Questions 577
References 577
Index 581