Logistics and Supply Chain Management, 6th Edition

Seven major business transformations

1 From supplier-centric to customer-centric

Traditionally, supply chains have been designed from the ‘factory outwards’ rather than from the ‘customer backwards’. The emphasis in the past was on how to ensure that a batch-oriented production process could most efficiently distribute its output. Thus the goal in supply chain design was often cost minimisation. In today’s highly competitive marketplace, the goal must change to the attainment of higher levels of customer responsiveness. Thus agility rather than cost becomes the key driver.

2 From push to pull

Closely linked to the first transformation is the idea of moving from a ‘production push’ mentality, which seeks to optimise operations through level scheduling ...