Supply Chain Management
A Guide to Best Practice
Management Briefings Executive Series

By Andrew Cox, et al.
Financial Times / Prentice Hall
November 2003
ISBN: 0-273-66270-8
136 Pages, Illustrated
$257.50 paper original

In the last ten years, a revolution has occurred in the way in which companies manage their business strategy and its operational delivery. Called Supply Chain Management (SCM), it is a strategic business model that has been developed in response to increasing global competitive pressures.

Many companies have already chosen to outsource all "non-essential" activities (transforming them from fixed to variable costs), to re-focus on their core competencies. And while this type of outsourcing plays well with investors in the short-term, the solution that it offers is only a temporary one - unless it is accompanied by a robust SCM strategy.

This is because much of the value offered by companies to their customers is generated externally by the company's suppliers. So, if the company is unable to manage or develop its suppliers or if the suppliers fail to perform, the company's performance is affected too. Evidence suggests that for those firms who are prepared to develop SCM strategies, the payback in terms of competitive advantage and cost reduction can be considerable.

In recent years, companies as diverse as IBM, Wal-Mart, Toyota and Dell have all undergone nothing short of a supply chain revolution and today, all regard supply chain management as an essential part of their overall business strategy. This briefing offers a practical working guide to help you and your organization implement a robust and effective supply chain management approach. Extensive case study material illustrates what should - and should not - be done so that strategic and operational targets can be achieved.

This briefing discusses the six key steps in effective SCM:
Focus on core competencies
Outsource all non-core competencies
Align demand and supply: consolidate all similar activities into category management
Rationalize the supply base and create strategic alliances with key suppliers
Develop long-term supply chain relationships and optimize through e-business technology
Undertake proactive supplier and supply chain development

Contents 1. Supply chain management and 'best practice' sourcing
The four basic sourcing options
Which of the options is 'best practice' for the buyer?
The key enablers of successful SCM implementation

2. Is supply chain management the best strategic sourcing option?
Selecting the right sourcing strategy
Internal investments and the make-buy decision
External investments and the four generic sourcing strategies
Selecting strategic sourcing options

3. Is supply chain management feasible operationally?
Internal success factors
External success factors

4. Implementing supply chain management initiatives
The three competitive market and SCM strategy options
A framework for developing competitive market and SCM strategies
Creating a physically efficient (lean) supply chain
Creating an innovative and market-responsive (agile) supply chain
Market differentiation and cost leadership with an innovative and process efficiency supply chain strategy
Conclusions: the conundrum of knowledge and understanding

5. Software and Internet tools for effective supply chain management
The theoretical benefit of software and Internet tools for SCM initiative
The major e-sourcing software applications
The major Internet sourcing applications
A framework for analyzing the utility of software and Internet-based tools and SCM initiatives

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