Supply Chain Management For Dummies

Chapter 3

Digging into Your Supply Chain

IN THIS CHAPTER

Establishing your supply chain priorities

Balancing cost and value

Compromising to improve results

Before you can manage something, you have to understand how it works and what you want it to do. A supply chain is no exception. Many kinds of supply chains exist, and each of them needs to deliver a different kind of product or service to meet customers’ needs. This chapter covers the factors that define how a supply chain needs to perform and how each factor affects costs. Then the chapter discusses trade-offs are being managed in every supply chain.

Prioritizing Supply Chain Goals

A friend of mine has a sign on her desk that reads “Good, Fast, Cheap … Pick Any Two.” The message is relevant for supply chain management because you often have to figure out what’s most important to you and be willing to compromise on the rest.

Step 1: Understand what customers value

To make good decisions about what to prioritize in a supply chain, start with your customers. Because the purpose of a supply chain is to deliver value to a customer, the first step in engineering and managing a supply chain is understanding exactly what your customers ...