Published by Pearson FT Press (April 6, 2015) © 2015
Paul MyersonTHE PRACTICAL, EASY INTRODUCTION TO MODERN SUPPLY CHAIN/LOGISTICS MANAGEMENT FOR EVERY PROFESSIONAL AND STUDENT!
- COVERS CORE CONCEPTS, PLANNING, OPERATIONS, INTEGRATION, COLLABORATION, NETWORK DESIGN, AND MORE
- SHOWS HOW TO MEASURE, CONTROL, AND IMPROVE ANY SUPPLY CHAIN
- INCLUDES PRACTICAL ADVICE FOR JUMPSTARTING YOUR OWN SUPPLY CHAIN CAREER
This easy guide introduces the modern field of supply chain and logistics management, explains why it is central to business success, shows how its pieces fit together, and presents best practices you can use wherever you work.
Myerson explains key concepts, tools, and applications in clear, simple language, with intuitive examples that make sense to any student or professional. He covers the entire field: from planning through operations, integration and collaboration through measurement, control, and improvement.
You’ll find practical insights on hot-button issues ranging from sustainability to the lean-agile supply chain. Myerson concludes by helping you anticipate key emerging trends—so you can advance more quickly in your own career.
Trillions of dollars are spent every year on supply chains and logistics. Supply chain management is one of the fastest growing areas of business, and salaries are rising alongside demand. Now, there’s an easy, practical introduction to the entire field: a source of reliable knowledge and best practices for students and professionals alike.
Paul A. Myerson teaches you all you’ll need to start or move forward in your own supply chain career. Writing in plain English, he covers all the planning and management tasks needed to transform resources into finished products and services, and deliver them efficiently to customers.
Using practical examples, Myerson reviews the integration, collaboration, and technology issues that are essential to success in today’s complex supply chains. You’ll learn how to measure your supply chain’s performance, make it more agile and sustainable, and focus it on what matters most: adding customer value.
- MASTER NUTS-AND-BOLTS OPERATIONAL BEST PRACTICES
Improve procurement, transportation, warehousing, ordering, reverse logistics, and more - BUILD A BETTER GLOBAL SUPPLY CHAIN
Manage new risks as you improve sustainability - STRENGTHEN KEY LINKAGES WITH YOUR PARTNERS AND CUSTOMERS
Get supply chains right by getting collaboration right - PREVIEW THE FUTURE OF SUPPLY CHAINS—AND YOUR SUPPLY CHAIN CAREER
Discover “where the puck is headed”—so you can get there first
Part I: Supply Chain and Logistics Management: Overview 1
Chapter 1: Introduction 3
Supply Chain Defined 4
SCOR Model 5
An Integrated, Value-Added Supply Chain 7
The Value Chain 7
Leveraging the Supply Chain 8
Supply Chain Strategy for a Competitive Advantage 9
Segmenting the Supply Chain 10
The Global Supply Chain and Technology 11
Chapter 2: Understanding the Supply Chain 13
Historical Perspective 13
Value as a Utility 14
Organizational and Supply Chain Strategy 15
Mission Statement 15
SWOT Analysis 16
Strategic Choices 17
Supply Chain Strategy Elements and Drivers 17
Supply Chain Strategy Methodology 19
Supply Chain Opportunities and Challenges 23
Supply Chain Talent Pipeline 26
Career Opportunities in Supply Chain and Logistics Management 27
Growing Demand 27
Part II: Planning for the Supply Chain 31
Chapter 3: Demand Planning 33
Forecasting Used to Be Strictly Like “Driving Ahead,
Looking in the Rearview Mirror” 34
Forecasting Realities 35
Types of Forecasts 36
Demand Drivers 36
Forecasting Process Steps 37
Quantitative Versus Qualitative Models 38
Qualitative Models 38
Quantitative Models 39
Product Lifecycles and Forecasting 40
Introduction 41
Growth 41
Maturity 41
Decline 41
Time Series Components 42
Time Series Models 43
Associative Models 44
Correlation 45
Seasonality 45
Multiple Regression 46
Forecasting Metrics 46
Forecast Error Measurement 47
Demand Forecasting Technology and Best Practices 48
Chapter 4: Inventory Planning and Control 51
Independent Versus Dependent Demand Inventory 51
Types of Inventory 53
Costs of Inventory 53
Carrying or Holding Costs 54
Ordering Costs 54
Setup Costs 54
Total Cost Minimized 55
Economic Order Quantity Model 56
Basic EOQ Calculation 57
Reorder Point (ROP) Models 57
Fixed-Quantity Model 57
Fixed-Period Model 60
Single-Period Model 61
ABC Method of Inventory Planning and Control 61
Realities of ABC Classification 62
Other Uses for ABC Classification 63
Inventory Control and Accuracy 63
Cycle Counting 63
Key Metrics 64
Inventory Planning and Control Technology 65
Software 65
Hardware 67
Careers 67
Chapter 5: Aggregate Planning and Scheduling 69
The Process Decision 70
Goods and Service Processes 70
Planning and Scheduling Process Overview 72
Aggregate Planning 74
S&OP Process 74
Demand and Supply Options 76
Aggregate Planning Strategies 78
Master Production Schedule 78
Production Strategies 79
System Nervousness 80
Material Requirements Planning 80
Bill of Materials 80
MRP Mechanics 81
Short-Term Scheduling 83
Types of Scheduling 84
Sequencing 84
Finite Capacity Scheduling 85
Service Scheduling 85
Technology 86
Part III: Supply Chain Operations 87
Chapter 6: Procurement in the Supply Chain 89
Make or Buy 90
Outsourcing 90
Other Supply Chain Strategies 91
The Procurement Process 93
Identify and Review Requirements 93
Establish Specifications 94
Identify and Select Suppliers 95
Determine the Right Price 97
Issue Purchase Orders 98
Follow Up to Ensure Correct Delivery 99
Receive and Accept Goods 100
Approve Invoice for Payment 100
Key Metrics 100
Technology 101
Chapter 7: Transportation Systems 103
Brief History of Transportation Systems in America 103
Transportation Cost Structure and Modes 105
Transportation Costs 105
Modes 105
Legal Types of Carriage 110
For Hire 110
Private 110
Transportation Economics 111
Transportation Cost Factors and Elements 111
Rates Charged 114
Effects of Deregulation on Pricing 115
Pricing Specifics 115
Documents 116
Domestic Transportation Documents 116
International Transportation Documents 119
Key Metrics 122
Technology 122
Chapter 8: Warehouse Management and Operations 125
Brief History of Warehousing in America 126
Economic Needs for Warehousing 126
Types of Warehouses 127
Warehouses by Customer Classification 127
Warehouses by Role in the Supply Chain 128
Warehouses by Ownership Type 129
Warehouse Economic Benefits 131
Consolidation 132
Accumulation, Mixing, and Sorting 133
Postponement 134
Allocation 134
Market Presence 135
Warehouse Design and Layout 135
Size of Facility 135
Facility Layout 137
Warehouse Operations 140
Packaging 141
Key Metrics 142
Customer-Facing Metrics 142
Technology 143
Warehouse Management Systems 143
Yard Management Systems 145
Chapter 9: Order Management and Customer Relationship Management. .147
Order Management 148
Order Placement 148
Order Processing 148
Order Preparation and Loading 149
Order Delivery 150
Customer Relationship Management 150
Customer Service 150
Customer Relationship Management 154
Technology 155
Chapter 10: Reverse Logistics and Sustainability 157
Reverse Logistics Activities 157
Repairs and Refurbishing 158
Refilling 159
Recall 159
Remanufacturing 159
Recycling and Waste Disposal 160
Returns Vary by Industry 160
Publishing Industry 160
Computer Industry 160
Automotive Industry 160
Retail Industry 161
Reverse Logistic Costs 161
Reverse Logistics Process 161
Receive 161
Sort and Stage 161
Process 162
Analyze 162
Support 162
Reverse Logistics as a Strategy 162
Using Reverse Logistics to Positively Impact Revenue 162
Other Strategic Uses of Reverse Logistics 163
Reverse Logistics System Design 164
Product Location 164
Product Collection System 164
Recycling or Disposal Centers 165
Documentation System 165
Reverse Logistics Challenges 165
Retailer-Manufacturer Conflict 165
Problem Returns and Their Symptoms 166
Cause and Effect 166
Reactive Response 166
Managing Reverse Logistics 166
Gatekeeping 167
Compacting the Distribution Cycle Time 168
Reverse Logistics Information Technology Systems 168
Centralized Return Centers 168
Zero Returns 169
Remanufacture and Refurbishment 169
Asset Recovery 170
Negotiation 170
Financial Management 170
Outsourcing 170
Reverse Logistics and the Environment 170
Supply Chain Sustainability 171
Green Logistics 171
Chapter 11: Global Supply Chain Operations and Risk Management 173
Growth of Globalization 173
Factors Influencing Globalization 174
Reasons for a Company to Globalize 174
Global Supply Chain Strategy Development 175
International Transportation Methods 177
Ocean 177
Air 177
Motor 178
Rail 178
Global Intermediaries 178
Global Supply Chain Risks and Challenges 178
Questions to Consider When Going Global 179
Key Global Supply Chain Challenges 180
Risk Management 181
Potential Risk Identification and Impact 181
Sources of Risk 182
Supply Chain Disruptions 183
Risk Mitigation 184
Part IV: Supply Chain Integration and Collaboration 187
Chapter 12: Supply Chain Partners 189
Outsourcing 189
Reasons to Outsource 190
Steps in the Outsourcing Process 191
Supply Chain and Logistics Outsourcing Partners 192
Traditional Service Providers 192
Third-Party Logistics Providers 193
Fourth-Party Logistics Service Providers 196
Chapter 13: Supply Chain Integration Through Collaborative Systems 199
Internal and External Integration 200
Internal Integration 200
External Integration 201
Supply Chain Collaboration Methods: A Closer Look 206
Quick Response 206
Efficient Consumer Response 207
Collaborative Planning, Forecasting, and Replenishment 208
Chapter 14: Supply Chain Technology 211
Supply Chain Information 211
Supply Chain Information Needs 213
Supply Chain Software Market 214
Supply Chain Planning 215
Supply Chain Execution 215
Other Supply Chain Technologies 216
SCM System Costs and Options 217
Best-in-Class Versus Single Integrated Solution 217
Consultants 218
Current and Future Trends in Supply Chain Software 218
Short-Term Supply Chain Technology Trends 218
Emerging Supply Chain Technology Trends 219
Part V: Supply Chain and Logistics Network Design 223
Chapter 15: Facility Location Decision 225
The Importance of Facility Location When Designing a Supply Chain 225
Supply Chain Network Design Influencers 226
Types of Distribution Networks 228
Manufacturer Storage with Direct Shipping 228
Manufacturer Storage with Direct Shipping and In-Transit Merge 229
Distributor Storage with Carrier Delivery 230
Distributor Storage with Last-Mile Delivery 232
Manufacturer or Distributor Storage with Customer Pickup 233
Retailer Storage with Customer Pickup 234
Impact of E-Business on the Distribution Network 235
Location Decisions 237
Strategic Considerations 237
Location Decision Hierarchy 238
Dominant Factors in Manufacturing 240
Dominant Factors in Services 240
Location Techniques 240
Location Cost-Volume Analysis 240
Weighted Factor Rating Method 242
Center of Gravity Method 243
The Transportation Problem Model 245
Technology 246
Careers 246
Chapter 16: Facility Layout Decision 249
Types of Layouts 249
Product Layouts 250
Process Layouts 250
Hybrid Layouts 253
Cellular (or Work Cell) Layouts 253
Fixed-Position Layout 255
Facility Design in Service Organizations 255
Designing and Improving Product Layouts 256
Assembly Line Design and Balancing 256
Work Cell Staffing and Balancing 258
Warehouse Design and Layout Principles 260
Design and Layout Process 260
Technology 261
Careers 262
Part VI: Supply Chain and Logistics Measurement, Control, and Improvement 263
Chapter 17: Metrics and Measures 265
Measurement and Control Methods 265
The Evolution of Metrics 266
Data Analytics 266
Measurement Methods 267
Measurement Categories 267
Balanced Scorecard Approach 268
Customer Service Metrics 269
Operational Metrics 269
Financial Metrics 270
SCOR Model 270
Supply Chain Dashboard and KPIs 273
Indicators 274
Benchmarking 274
Chapter 18: Lean and Agile Supply Chain and Logistics 277
Lean and Waste 277
History of Lean 278
Value-Added Versus Non-Value-Added Activities 279
Waste 280
Lean Culture and Teamwork 281
Lean Teams 282
Kaizen and Teams 283
Team and Kaizen Objectives 283
Value Stream Mapping 283
VSM Benefits 286
Lean Tools 286
Standardized Work 288
5S-Workplace Organization System 288
Visual Controls 289
Facility Layout 289
Batch Size Reduction and Quick Changeover 289
Quality at the Source 290
Point-of-Use Storage 291
Total Productive Maintenance 291
Pull/Kanban and Work Cells 291
Lean and Six Sigma 292
Chapter 19: Outlook for Supply Chain and Logistics Management 293
Supply Chain and Logistics Career Outlook 293
Trends in Supply Chain and Logistics Management 294
Supply Chain Trends 294
Logistics Trends 295
Supply Chain Leadership Trends 296
Supply Chain Technology Trends 297
Conclusion 299
References 301
Index 305