Supply chain management: strategy, planning, and operation

✍ Scribed by Chopra, Sunil; Meindl, Peter; Vir Kalra, Dharam

• Publisher: Pearson
• Year: 2017
• Tongue: English
• Leaves: 590
• Edition: Sixth edition
• Category: Library

✦ Table of Contents

Cover......Page 1
Dedication......Page 6
About the Authors......Page 8
Contents......Page 10
Preface......Page 18
1.1 What is a Supply Chain?......Page 22
1.2 Historical Perspective......Page 24
Materials Management......Page 25
1.3 The Objective of a Supply Chain......Page 26
1.4 The Importance of Supply Chain Decisions......Page 28
1.5 Decision Phases in a Supply Chain......Page 30
Cycle View of Supply Chain Processes......Page 32
Push/Pull View of Supply Chain Processes......Page 34
Supply Chain Macro Processes in a Firm......Page 36
Gateway and Apple: Two Different Journeys into Retailing......Page 37
Zara: Apparel Manufacturing and Retail......Page 38
Toyota: A Global Auto Manufacturer......Page 39
Amazon: Online Sales......Page 40
Gopaljee—Transforming Traditional Supply Chains......Page 41
Jaipur Rugs Company: A Socioeconomic Network......Page 42
Discussion Questions......Page 43
India’s Generic Drugs and Supplier’s Surplus......Page 44
2.1 Competitive and Supply Chain Strategies......Page 46
2.2 Achieving Strategic Fit......Page 48
Tailoring the Supply Chain for Strategic Fit......Page 57
2.3 Expanding Strategic Scope......Page 58
Interfunctional Scope: Maximizing Company Profit......Page 59
Agile Intercompany Scope......Page 60
Fragmentation of Supply Chain Ownership......Page 61
2.5 Achieving and Maintaining Strategic Fit in Emerging Retail Markets: The Indian Scenario......Page 62
2.7 Adaptation......Page 64
2.8 Summary of Learning Objectives......Page 65
Bibliography......Page 66
Netflix......Page 67
Redbox......Page 68
A Classic Case of Lack of Strategic Fit......Page 69
The Empowered Customer......Page 70
Globalization......Page 71
3.2 Financial Measures of Performance......Page 72
3.3 Drivers of Supply Chain Performance......Page 76
3.4 Framework for Structuring Drivers......Page 78
Role in the Supply Chain......Page 79
Components of Facilities Decisions......Page 80
Role in the Supply Chain......Page 81
Components of Inventory Decisions......Page 82
Components of Transportation Decisions......Page 84
Role in the Supply Chain......Page 85
Components of Information Decisions......Page 86
Components of Sourcing Decisions......Page 88
Role in the Supply Chain......Page 89
Components of Pricing Decisions......Page 90
3.11 Infrastructure......Page 91
Components of Infrastructure Decisions......Page 92
3.12 International Logistics......Page 93
3.13 Summary of Learning Objectives......Page 94
Bibliography......Page 95
The Convenience Store Industry and Seven-Eleven in Japan......Page 96
The Seven-Eleven Japan Franchise System......Page 97
Store Information and Contents......Page 98
Seven-Eleven Japan’s Integrated Store Information System......Page 99
Seven-Eleven’s Distribution System......Page 100
7-Eleven in the United States......Page 101
Case Study: Financial Statements for Walmart Stores Inc. and Macy’s Inc.......Page 102
4.1 The Role of Distribution in the Supply Chain......Page 104
4.2 Factors Influencing Distribution Network Design......Page 106
Manufacturer Storage with Direct Shipping......Page 109
Manufacturer Storage with Direct Shipping and In-Transit Merge......Page 111
Distributor Storage with Carrier Delivery......Page 113
Distributor Storage with Last-Mile Delivery......Page 115
Manufacturer or Distributor Storage with Customer Pickup......Page 117
Retail Storage with Customer Pickup......Page 120
Selecting a Distribution Network Design......Page 121
Impact of Online Sales on Customer Service......Page 122
Impact of Online Sales on Cost......Page 124
Using Online Sales to Sell Computer Hardware: Dell......Page 125
Using Online Sales to Sell Books: Amazon......Page 128
Using the Internet to Sell Groceries: Peapod......Page 130
Using the Internet to Rent Movies: Netflix......Page 133
4.5 Indian Agricultural Produce Distribution Channels: Ripe for Major Transformation......Page 135
4.6 Indian Fmcg Sector-distribution Channels......Page 139
4.8 Distribution Networks in Practice......Page 140
4.9 Summary of Learning Objectives......Page 141
Discussion Questions......Page 142
The Diamond Retailing Industry......Page 143
Blue Nile......Page 144
Zales......Page 145
Tiffany......Page 146
Study Questions......Page 147
5.1 The Role of Network Design in the Supply Chain......Page 151
5.2 Factors Influencing Network Design Decisions......Page 152
Macroeconomic Factors......Page 153
Competitive Factors......Page 155
Customer Response Time and Local Presence......Page 156
Phase I: Define a Supply Chain Strategy/Design......Page 157
Phase II: Define the Regional Facility Configuration......Page 158
Governmental Incentives and Choice of Locations......Page 159
Phase II: Network Optimization Models......Page 160
Phase III: Gravity Location Models......Page 164
Phase IV: Network Optimization Models......Page 167
Accounting for Taxes, Tariffs, and Customer Requirements......Page 174
Sourcing and Production......Page 175
Distribution......Page 176
Scope of Central Support System......Page 177
Branches......Page 178
Company Culture......Page 179
5.6 Making Network Design Decisions in Practice......Page 180
Distribution Network Design in Uncertain Environment......Page 181
Reliance Fuel Retailing......Page 182
Discussion Questions......Page 183
Exercises......Page 184
Bibliography......Page 188
The Network Options......Page 189
New Network Options......Page 191
Study Questions......Page 192
6.1 The Impact of Globalization on Supply Chain Networks......Page 193
6.2 The Offshoring Decision: Total Cost......Page 195
6.3 Risk Management in Global Supply Chains......Page 198
Flexibility, Chaining, and Containment......Page 200
6.4 Discounted Cash Flows......Page 202
The Basics of Decision Tree Analysis......Page 204
Evaluating Flexibility at Trips Logistics......Page 205
Evaluating the Spot Market Option......Page 206
Evaluating the Fixed Lease Option......Page 208
Evaluating the Flexible Lease Option......Page 210
6.6 To Onshore or Offshore: Evaluation of Global Supply Chain Design Decisions Under Uncertainty......Page 211
Evaluating the Options Using Expected Demandand Exchange Rate......Page 212
Evaluating the Onshore Option......Page 213
Evaluating the Offshore Option......Page 216
6.7 Making Global Supply Chain Design Decisions Under Uncertainty in Practice......Page 219
6.8 Summary of Learning Objectives......Page 220
Exercises......Page 221
Bibliography......Page 222
Background......Page 223
Current Plant Costs at BioPharma......Page 224
Study Questions......Page 225
Study Questions......Page 226
7.1 The Role of Forecasting in a Supply Chain......Page 227
7.2 Characteristics of Forecasts......Page 228
7.3 Components of a Forecast and Forecasting Methods......Page 229
7.4 Basic Approach to Demand Forecasting......Page 230
Identify Major Factors That Influence the Demand Forecast......Page 231
Static Methods......Page 232
Adaptive Forecasting......Page 237
7.6 Measures of Forecast Error......Page 242
7.7 Selecting the Best Smoothing Constant......Page 245
7.8 Forecasting Demand at Tahoe Salt......Page 247
Trend-Corrected Exponential Smoothing (Holt’s Model)......Page 248
Trend- and Seasonality-Corrected Exponential Smoothing (Winter’s Model)......Page 251
7.9 The Role of IT in Forecasting......Page 252
7.10 Forecasting in Practice......Page 253
Discussion Questions......Page 254
Exercises......Page 255
Bibliography......Page 256
Forecasting......Page 257
8.1 The Role of Aggregat e Planning in a Supply Chain......Page 259
8.2 The Aggregate Planning Problem......Page 261
Identifying Aggregate Units of Production......Page 262
8.3 Aggregate Planning Strategies......Page 263
Red Tomato Tools......Page 264
8.5 Aggregate Planning Using Linear Programming......Page 265
Objective Function......Page 266
Constraints......Page 267
Building a Basic Aggregate Planning Spreadsheet......Page 270
Building an Aggregate Planning Spreadsheet Using Solver......Page 271
Forecast Error in Aggregate Plans......Page 273
8.7 Building a Rough Master Production Schedule......Page 274
8.9 Inventory Planning and Economic Theory Aberrations......Page 275
8.10 Implementing Aggregate Planning in Practice......Page 277
8.11 Summary of Learning Objectives......Page 278
Exercises......Page 279
KPH Production Planning......Page 281
Options for New Plants......Page 282
9.1 Responding to Predictable Variability in the Supply Chain......Page 283
9.2 Managing Supply......Page 284
Managing Capacity......Page 285
9.3 Managing Demand......Page 286
9.4 Sales and Operations Planning at Red Tomato......Page 287
The Base Case......Page 288
When to Promote: Peak or Off-Peak?......Page 289
When to Offer a Promotion If Discount Leads to a Large Increase in Consumption......Page 290
9.5 Implementing Sales and Operations Planning in Practice......Page 293
Simbhaoli Sugars Limited–—Spreading Sweetness......Page 294
Exercises......Page 296
Bibliography......Page 298
Questions......Page 299
Case Study: Promotion Challenges at Gulmarg Skis......Page 300
10.1 Lack of Supply Chain Coordination and the Bullwhip Effect......Page 302
Transportation Cost......Page 304
Relationships Across the Supply Chain......Page 305
Information-Processing Obstacles......Page 306
Operational Obstacles......Page 307
Behavioral Obstacles......Page 309
Aligning Goals and Incentives......Page 310
Improving Information Visibility and Accuracy......Page 311
Improving Operational Performance......Page 312
Building Strategic Partnerships and Trust......Page 314
10.6 Collaborative Planning, Forecasting, and Replenishment......Page 315
Collaborative Assortment Planning......Page 317
Risks and Hurdles for a CPFR Implementation......Page 318
10.7 Collaborative Planning, Forecasting, and Replenishment—Indian Experiences......Page 319
10.8 Achieving Coordination in Practice......Page 320
10.9 Summary of Learning Objectives......Page 321
Bibliography......Page 322
11.1 The Role of Cycle Inventory in a Supply Chain......Page 323
Inventory Holding Cost......Page 326
Ordering Cost......Page 327
Lot Sizing for a Single Product (Economic Order Quantity)......Page 328
Lot Sizing with Capacity Constraint......Page 332
11.4 Aggregating Multiple Products in a Single Order......Page 333
Lot Sizing with Multiple Products or Customers......Page 334
All Unit Quantity Discounts......Page 341
Marginal Unit Quantity Discounts......Page 343
Why Do Suppliers Offer Quantity Discounts?......Page 346
11.6 Short-Term Discounting: Trade Promotions......Page 352
11.7 Managing Multiechelon Cycle Inventory......Page 357
11.8 Cycle Inventory Optimisation in Indian Distribution Channels......Page 360
Multiechelon Inventory Optimization—Major Challenges......Page 361
Discussion Questions......Page 362
Exercises......Page 363
Bibliography......Page 366
Questions......Page 367
Questions......Page 369
Analysis:......Page 370
12.1 The Role of Safety Inventory in a Supply Chain......Page 371
Measuring Demand Uncertainty......Page 373
Measuring Product Availability......Page 374
12.3 Determining the Appropriate Level of Safety Inventory......Page 375
Linking Safety Inventory and Cycle Service Level......Page 376
Evaluating Safety Inventory Given Desired Cycle Service Level......Page 378
linking Safety Inventory and Fill Rate......Page 379
Impact of Desired Product Availability and Uncertaintyon Safety Inventory......Page 382
12.4 Impact of Supply Uncertainty on Safety Inventory......Page 384
12.5 Impact of Aggregation on Safety Inventory......Page 387
Specialization......Page 391
Product Substitution......Page 394
Component Commonality......Page 396
Postponement......Page 397
12.6 Managing Uncertainty in Supply Chain Through Postponement—Indian Paint Industry......Page 399
Continuous Review Policies......Page 400
Periodic Review Policies......Page 401
12.8 Managing Safety Inventory in a Multiechelon Supply Chain......Page 403
12.9 The Role of IT in Inventory Management......Page 404
12.10 Estimating and Managing Safety Inventory in Practice......Page 405
12.11 Summary of Learning Objectives......Page 406
Exercises......Page 407
Current Distribution System......Page 411
Case Study: Should Packing Be Postponed to the DC?......Page 413
Questions......Page 414
Appendix 12A: The Normal Distribution......Page 415
Analysis......Page 416
Analysis:......Page 417
13.1 The Importance of the Level of Product Availability......Page 419
13.2 Factors Affecting Optimal Level of Product Availability......Page 420
Optimal Cycle Service Level for Seasonal Items with a Single Order in a Season......Page 423
One-Time Orders in the Presence of Quantity Discounts......Page 426
Desired Cycle Service Level for Continuously Stocked Items......Page 428
13.3 Managerial Levers to Improve Supply Chain Profitability......Page 430
Improving Forecasts: Impact on Profits and Inventories......Page 432
Quick Response: Impact on Profits and Inventories......Page 433
Postponement: Impact on Profits and Inventories......Page 438
Tailored Postponement: Impact on Profits and Inventories......Page 442
Tailored Sourcing: Impact on Profits and Inventories......Page 443
13.4 Setting Product Availability for Multiple Products Under Capacity Constraints......Page 444
13.5 Optimising Availability of Maintenance, Repair, and Operations Inventories......Page 446
13.7 Summary of Learning Objectives......Page 449
Exercises......Page 450
Bibliography......Page 452
Proposal from Responsive Supplier......Page 453
Analysis:......Page 454
Analysis......Page 455
Analysis:......Page 456
Appendix 13F: Simulation Using Spreadsheets......Page 457
Setting Up a Simulation Model......Page 458
Using Data Tables to Create Many Instances......Page 459
14.1 The Role of Transportation in a Supply Chain......Page 460
14.2 Modes of Transportation and Their Performance Characteristics......Page 462
Package Carriers......Page 463
Rail......Page 464
Intermodal......Page 465
14.3 Transportation Infrastructure and Policies......Page 466
Direct Shipment Network to Single Destination......Page 469
Direct Shipping with Milk Runs......Page 470
All Shipments via Intermediate Transit Point with Cross-Docking......Page 471
Shipping via DC Using Milk Runs......Page 472
Tailored Network......Page 473
14.5 Mumbai Dabbawalas: A Highly Responsive Distribution Network......Page 475
Transportation and Inventory Cost Trade-Off......Page 476
Trade-Off Between Transportation Cost and Customer Responsiveness......Page 483
Tailored Transportation by Customer Density and Distance......Page 485
Tailored Transportation by Product Demand and Value......Page 486
Indian Automotive Industry: Problems of Finished Vehicle Logistics......Page 487
14.9 Making Transportation Decisions in Practice......Page 488
Discussion Questions......Page 489
Distribution Alternatives for Illinois......Page 490
Case Study: The Future of Same-Day Delivery: Same as the Past?......Page 491
Transportation Options from China......Page 492
Production Centers......Page 493
Matching Manufacturer Expectations and LSP Capabilities to ensure a proper Fit......Page 494
Challenges for the FVL Service Providers......Page 495
IT Solutions......Page 496
The Soft: Fleet Management......Page 497
Case: Versatile Transportation System. . . A Multitasking Vehicle Concept......Page 498
The Loading capacity of different models are given below......Page 499
Appendix 14B: Gopaljee: Milk Run for Milk......Page 500
Supply Chain......Page 502
15.1 The Role of Sourcing in a Supply Chain......Page 504
How Do Third Parties Increase the Supply Chain Surplus?......Page 506
Factors Influencing Growth of Surplus by a Third Party......Page 509
Risks of Using a Third Party......Page 510
15.3 Examples of Successful Third-Party Suppliers......Page 512
15.4 Total Cost of Ownership......Page 514
Auctions in the Supply Chain......Page 517
Basic Principles of Negotiation......Page 518
Sharing Risk to Grow Supply Chain Profits......Page 519
Sharing Rewards to Improve Performance......Page 529
15.7 The Impact of Incentives when Outsourcing......Page 530
15.8 Designing a Sourcing Port folio: Tailored Sourcing......Page 531
15.9 Making Sourcing Decisions in Practice......Page 534
15.10 Summary of Learning Objectives......Page 535
Exercises......Page 536
Bibliography......Page 537
16.1 The Role of Pricing and Revenue Management in a Supply Chain......Page 539
16.2 Pricing and Revenue Management for Multiple Customer Segments......Page 541
Pricing to Multiple Segments......Page 543
Allocating Capacity to a Segment Under Uncertainty......Page 546
Dynamic Pricing......Page 548
Overbooking......Page 552
16.5 Pricing and Revenue Management for Bulk and Spot Contracts......Page 555
16.6 Using Pricing and Revenue Management in Practice......Page 557
16.8 Summary of Learning Objectives......Page 558
Exercises......Page 559
Bibliography......Page 560
Groupon and the Daily Deal......Page 561
Study Questions......Page 562
17.1 The Role of Sustainability in a Supply Chain......Page 563
17.2 The Tragedy of the Commons......Page 565
What are Some Solutions to This “Tragedy”?......Page 566
17.3 Key Pillars of Sustainability......Page 568
Social Pillar......Page 569
Environmental Pillar......Page 570
17.4 Sustainability and Supply Chain Drivers......Page 571
Inventory......Page 572
Sourcing......Page 573
Pricing......Page 574
17.5 Closed-Loop Supply Chains......Page 575
17.6 The Pricing of Sustainability......Page 576
Pricing of Emissions......Page 577
17.7 Summary of Learning Objectives......Page 578
Bibliography......Page 579
Case Study: HUL—A Sustainable Supply Chain......Page 580
Fuelling the T&L Sector......Page 581
Supply Chains Achieve Greater Efficiency......Page 582
Prospects......Page 583
Index......Page 584