Essentials of Supply Chain Management, 5th Edition

CHAPTER 7Supply Chain Innovation for the Real-Time Economy

After reading this chapter you will be able to:

• Understand the need for sharing timely and accurate data among all parties in a supply chain to improve supply chain performance and profitability;
• Appreciate the forces that make coordination and collaboration key requirements for success in 21st-century supply chains;
• Discuss the use of simulations to explore different ideas and promote effective collaboration; and
• See the potential for combining existing technology and software applications to create online collaboration platforms that can enable daily collaboration among thousands of companies and millions of people every day.

Supply Chain Performance Depends on Timely Data

As discussed in the Chapter 1, there are five supply chain drivers that determine the performance of any supply chain: production, inventory, location, transportation, and information. And the goal of most supply chains is to manage them so as to “increase throughput while simultaneously reducing inventory and operating expense” as Eliyahu Goldratt so clearly and simply stated in his book, The Goal (2014, 30th Anniversary Edition, Great Barrington, MA: North River Press).

Accomplishing this goal requires constant adjusting of the first four drivers to get the right balance of efficiency and responsiveness as the world changes. And the key ...