Operations Management for MBAs, 5th Edition

CHAPTER 7

Supply Chain Management

CHAPTER IN PERSPECTIVE

When the organization designs its processes (Chapter 2) to achieve its competitive strategy, this will include the supply chain for its products and/or services. We now consider the execution, or management, of these processes. In this chapter we address issues related to supply chain management, often involving relationships with organizations outside the firm, and in the following chapter we focus on other important competitive aspects such as capacity and scheduling.

Supply chain management fundamentally involves matching supply with demand and as such is strongly related to a firm's competitiveness. Important supply chain management topics include designing and restructuring the value chain, outsourcing, and e-commerce. Furthermore, competent management of the supply chain has major impacts on all the strategic sand cone factors described in Chapter 1: quality, dependability, speed, and cost.

We first define the concept of supply chains and discuss their strategic importance. We then describe the many elements involved in their design, such as logistics, global sourcing, and supplier management. From this we move to the role of information technology and provide guidelines for successful supply chain management. We conclude ...