12237 WordsNov 11, 201549 Pages
smi8239X_ch01_001-026.qxd 2/27/07 11:22 PM Page 1 CHAPTER 1 Introduction to Supply Chain Management 1.1 WHAT IS SUPPLY CHAIN MANAGEMENT? Fierce competition in today’s global markets, the introduction of products with shorter life cycles, and the heightened expectations of customers have forced business enterprises to invest in, and focus attention on, their supply chains. This, together with continuing advances in communications and transportation technologies (e.g., mobile communication, Internet, and overnight delivery), has motivated the continuous evolution of the supply chain and of the techniques to manage it effectively. In a typical supply chain, raw materials are procured and items are produced at one…show more content…
Although many of these concepts are useful and insightful, for the purposes of this text, we will use supply chain management as the generic name for the set of concepts, approaches, strategies, and ideas that we are discussing. What makes supply chain management difficult? Although we will discuss a variety of reasons throughout this text, they can all be related to some or all of the following observations: 1. Supply chain strategies cannot be determined in isolation. They are directly affected by another chain that most organizations have, the development chain that includes the set of activities associated with new product introduction. At the same time, supply chain strategies also should be aligned with the specific goals of the organization, such as maximizing market share or increasing profit. 2. It is challenging to design and operate a supply chain so that total systemwide costs are minimized, and systemwide service levels are maintained. Indeed, it is frequently difficult to operate a single facility so that costs are minimized and service level is maintained. The difficulty increases exponentially when an entire smi8239X_ch01_001-026.qxd 2/27/07 11:22 PM Page 3 CHAPTER 1: INTRODUCTION TO SUPPLY CHAIN MANAGEMENT system is being considered. The process of finding the best systemwide strategy is known as global
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