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Learning Objectives -
After reading this chapter, you should be able to do the following: Understand the development of supply chain management in leading corporations. Appreciate the importance and role of supply chain management among private and public organizations. Understand the contributions of a supply chain approach to organizational efficiency and effectiveness.
Chapter 1 Management of Business Logistics, 7th Ed. 2
Learning Objectives
Analyze the benefits that can accrue from implementing effective supply chain practices. Understand the major challenges and issues facing organizations developing and implementing supply chain strategies. Discuss the major change drivers in our economy and in the global marketplace.
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Logistics Profile:
SAB Distribution
SAB, a central Pennsylvania food wholesaling company, had grown to $180 million over the years. Current management were dealing with flat sales and profit profiles and had cut costs to the point where further cuts were counterproductive. The market had changed and SAB was unable to respondmanagement had questions but no answers. What happened? Where does SAB fit in the supply chain? What should SAB do?
Chapter 1 Management of Business Logistics, 7th Ed. 4
Introduction
Supply chain management now part of the business vocabulary. Impact of global marketplace drastically changed the landscape of business. Change was rapid and continuous in the 1990s. Doing business in the comfort zone was no longer synonymous with success.
Chapter 1 Management of Business Logistics, 7th Ed. 5
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On the Line:
Extreme Enterprise
Integrating new enterprise and supply chain management solutions allowed Columbia Sportswear to keep up with sales that increased from $3 million in 1984 to $470 million in 1999. With one store and a handful of outlets, distribution to its customers is where the rubber meets the road. Columbias president was determined not to let distribution restrain growth, and backed it with money. A 1 million square foot distribution center receives more than 2 million units/month and set a record by shipping 172,000 items in one day, and more than 2 million items in a month.
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Figure 1-1
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Figure 1-3
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Figure 1-6: Total Supply Chain Management Cost --- All Sectors
14 12
Revenue %
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Figure 1-7:
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Figure 1-8:
Running Lean
50 45 40 35 30 25 20 15 10 5 0 1996 Qtr 4
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Number of times Dell and Compaq turn inventory over in each quarter, calculated at an annual rate.
Compaq Dell
1997 Qtr 1
1997 Qtr 2
1997 Qtr 3
1997 Qtr 4
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