Supply Chain Management For Dummies
Published on 9. February 2018
Book
Paperback/Softback
360 pages
978-1-119-41019-5 (ISBN)
Description
Everyone can impact the supply chain
Supply Chain Management For Dummies helps you connect the dots between things like purchasing, logistics, and operations to see how the big picture is affected by seemingly isolated inefficiencies. Your business is a system, made of many moving parts that must synchronize to most efficiently meet the needs of your customers--and your shareholders. Interruptions in one area ripple throughout the entire operation, disrupting the careful coordination that makes businesses successful; that's where supply chain management (SCM) comes in. SCM means different things to different people, and many different models exist to meet the needs of different industries. This book focuses on the broadly-applicable Supply Chain Operations Reference (SCOR) Model: Plan, Source, Make, Deliver, Return, and Enable, to describe the basic techniques and key concepts that keep businesses running smoothly.
Whether you're in sales, HR, or product development, the decisions you make every day can impact the supply chain. This book shows you how to factor broader impact into your decision making process based on your place in the system.
* Improve processes by determining your metrics
* Choose the right software and implement appropriate automation
* Evaluate and mitigate risks at all steps in the supply chain
* Help your business function as a system to more effectively meet customer needs
We tend to think of the supply chain as suppliers, logistics, and warehousing--but it's so much more than that. Every single person in your organization, from the mailroom to the C-suite, can work to enhance or hinder the flow. Supply Chain Management For Dummies shows you what you need to know to make sure your impact leads to positive outcomes.
Supply Chain Management For Dummies helps you connect the dots between things like purchasing, logistics, and operations to see how the big picture is affected by seemingly isolated inefficiencies. Your business is a system, made of many moving parts that must synchronize to most efficiently meet the needs of your customers--and your shareholders. Interruptions in one area ripple throughout the entire operation, disrupting the careful coordination that makes businesses successful; that's where supply chain management (SCM) comes in. SCM means different things to different people, and many different models exist to meet the needs of different industries. This book focuses on the broadly-applicable Supply Chain Operations Reference (SCOR) Model: Plan, Source, Make, Deliver, Return, and Enable, to describe the basic techniques and key concepts that keep businesses running smoothly.
Whether you're in sales, HR, or product development, the decisions you make every day can impact the supply chain. This book shows you how to factor broader impact into your decision making process based on your place in the system.
* Improve processes by determining your metrics
* Choose the right software and implement appropriate automation
* Evaluate and mitigate risks at all steps in the supply chain
* Help your business function as a system to more effectively meet customer needs
We tend to think of the supply chain as suppliers, logistics, and warehousing--but it's so much more than that. Every single person in your organization, from the mailroom to the C-suite, can work to enhance or hinder the flow. Supply Chain Management For Dummies shows you what you need to know to make sure your impact leads to positive outcomes.
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D Stanton
Supply Chain Management For Dummies
Book
02/2023
3rd Edition
Wiley
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Daniel Stanton
Supply Chain Management For Dummies
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12/2020
Wiley
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Person
Daniel Stanton is an Assistant Professor of Operations Management at the Jack Welch Management Institute. He is an internationally recognized public speaker and the author of two project management courses for LinkedIn Learning. He holds several industry certifications, including Six Sigma Black Belt, PMP, CSCP, and SCPro.
Content
Introduction 1
About This Book 1
Foolish Assumptions 1
Icons Used in This Book 2
Where to Go from Here 2
Part 1: Getting Started with Supply Chain Management 5
Chapter 1: The Growing Demand for Supply Chain Management 7
Defining Supply Chain Management 7
Exploring Complex Business Challenges 9
Operating Under Supply Chain Management Principles 11
Customer focus 12
Systems thinking 12
Bimodal innovation 12
Collaboration 13
Flexibility 13
Technology 14
Global perspective 14
Risk management 14
Visibility 15
Value creation 15
Introducing Five Supply Chain Tasks 15
Implementing the New Supply Chain Agenda 16
Placing the right people in the right jobs 17
Putting the right technology in place 17
Focusing on internal collaboration 17
Directing external collaboration 18
Applying project management 18
Chapter 2: Understanding Supply Chains from Different Perspectives 19
Managing Supply Chain Flows 19
Synchronizing Supply Chain Functions 20
Purchasing 21
Logistics 22
Operations 23
Connecting Supply Chain Communities 24
Designing Supply Chain Systems 27
Measuring Supply Chain Processes 29
Chapter 3: Digging into Your Supply Chain 31
Prioritizing Supply Chain Goals 31
Step 1: Understand what customers value 32
Step 2: Recognize your competitors 33
Step 3: Understand your products or services 33
Looking at Cost Drivers 35
Procurement costs 35
Transportation costs 36
Inventory costs 36
Quality costs 36
Dealing with Trade-Offs 37
Sales versus operations 38
Customer versus supplier 40
Engineering versus procurement 40
Inventory versus customer service 41
Inventory versus downtime 43
Procurement versus logistics 44
Chapter 4: Optimizing Your Supply Chain 47
Designing Your Network 47
Improving and Innovating Processes 49
Lean 49
Six Sigma 51
Theory of Constraints 53
Structuring Supply Chain Projects 55
Managing Cross-Functional Project Teams 56
Creating Cross-Functional Project Plans 57
Creating a RACI Matrix 59
Designing Project Scorecards 61
Using the DIRECT Model 62
Part 2: Managing Supply Chain Processes 65
Chapter 5: Connecting Supply Chain Processes 67
Understanding Supply Chain Processes 67
Introducing the SCOR Model 68
Establishing Process Metrics 72
Building the Right Supply Chain 73
Chapter 6: Planning the Supply Chain 77
Balancing Supply and Demand 78
Aligning Resources with Requirements 79
Analyzing Your Customers 81
Planning Your Products 82
Planning Your Production Systems 83
Planning Your Delivery Systems 84
Planning for Returns 85
Chapter 7: Sourcing, Purchasing, and Procurement 87
Understanding Strategic Sourcing 88
Segmenting Your Supply Chain 88
Managing Life Cycle Costs 90
Minimizing input costs 91
Sourcing your inputs 92
Forecasting your demand 94
Insourcing, outsourcing, and offshoring 94
Managing Supplier Relationships 95
Establishing Supply Contracts 97
Selecting contract terms 97
Selecting payment terms 98
Mitigating Supplier Risks 100
Establishing Purchasing Ethics 104
Chapter 8: Making Your Products or Services 107
Planning and Scheduling Production 108
Planning production 108
Considering capacity 112
Identifying Manufacturing Process Types 115
Operating a discrete manufacturing process 115
Operating a continuous manufacturing process 117
Choosing Your Production Environment 118
Make-to-stock 119
Make-to-order 119
Engineer-to-order 120
Implementing Quality Control and Quality Assurance 121
Considering the risks of poor quality 122
Controlling quality and variability 122
Reducing Manufacturing Waste 124
Chapter 9: Delivering Your Products or Services 127
Understanding Modes of Transportation 128
Pipeline 129
Ocean 129
Rail 129
Truck 131
Parcel 132
Air 133
Selecting Modes of Transportation 134
Managing Warehousing and Inventory 135
Receiving 137
Put-away 137
Inventory counts 138
Picking 138
Packing 139
Shipping 139
Yard management 140
Over, short, and damaged 141
Establishing Inventory Ordering Policies 141
Selecting Material Handling Equipment 143
Managing and Filling Orders 145
Leveraging Third-Party Logistics 147
Chapter 10: Managing Product Returns and Reverse Supply Chains 149
Growing Revenues with Easy Returns 150
Processing Returns of New or Excess Products 151
Minor wear and tear 151
Damage or tampering 152
Substitution 152
Processing Returns of Used or Defective Products 152
Managing Closed-Loop Supply Chains 153
Handling Unauthorized Returns and Fraudulent Products 154
Managing Trade-Ins 155
Chapter 11: Enabling Your Supply Chain 157
Managing Your Business Rules 157
Managing Supply Chain Performance 158
Setting performance goals 159
Align your metrics with your customers 159
Share Your Metrics with Your Suppliers 160
Managing Your Assets 160
Labeling Your Products 161
Addressing Supply Chain Security Issues 163
Ensuring physical security 163
Dealing with counterfeiting 163
Tackling regulatory compliance 164
Addressing unique product requirements 165
Protecting supply chain information 165
Leveraging Information Technology 166
Leveraging Human Resources 167
Mastering Project Management 169
Part 3: Using Technology to Manage Supply Chains 173
Chapter 12: Managing Supply Chain Software 175
Understanding How Processes Evolve 176
Using Transportation Management Systems 178
Using Warehouse Management and Execution Systems 180
Using Demand Planning Systems 182
Using Material Requirements Planning Systems 183
Using Distribution Requirements Planning Systems 185
Using Labor Management Systems 186
Using Customer Relationship Management Systems 187
Using Supplier Relationship Management Systems 188
Using Enterprise Resources Planning Systems 189
Using Supply Chain Modeling Software 190
Using Business Intelligence Software 192
Leveraging Software Analysts 194
Anticipating the Future of Supply Chain Software 195
Chapter 13: Integrating Advanced Manufacturing into Your Supply Chain 197
Avoiding Obsolescence 198
Capitalizing on Advanced Manufacturing 199
Automated manufacturing 199
Computer-aided design 200
3D printing 200
Automated Mobile Robots 203
Unmanned and Autonomous Vehicles 204
Chapter 14: Managing Digital Supply Chains 207
Digitalizing Products and Services 208
Integrating Planning, Execution, and Visibility 209
Creating Customer Centricity 210
Sharing with Blockchains 211
Harnessing the Internet of Things, Big Data, and the Cloud 212
Employing Artificial Intelligence 214
Retooling for Omnichannel 214
Part 4: Driving Value with Supply Chain Management 217
Chapter 15: Transforming Your Supply Chain 219
Improve Transparency and Visibility 219
Deploying Demand Shaping 220
Performing Postponement 221
Renewing Regional Sourcing 222
Reducing Stock-Keeping Units 223
Optimizing Inventory 224
Incorporating Vendor-Managed Inventory 226
Adjusting Payment Terms 227
Using Supply Chain Finance 228
Control the Bullwhip Effect 229
Share information with your partners 229
Reduce and align lot sizes 230
Manage promotions 230
Starting with Small Improvements 231
Creating Sandboxes 231
Chapter 16: Adopting Supply Chain Metrics 233
Understanding Metrics 233
Identifying Performance Attributes 235
Understanding SCOR Metrics 236
Reliability 236
Responsiveness 237
Agility 237
Cost 238
Asset management efficiency 238
Optimizing Operational Metrics 238
Supplier metrics 239
Procure to pay metrics 239
Customer service metrics 239
Capacity, throughput, and yield metrics 240
Formalizing Financial Metrics 241
Accounts payable metrics 241
Total spend metrics 241
Savings metrics 242
Perfecting People Metrics 242
Engagement metrics 242
Productivity and efficiency metrics 243
Turnover metrics 243
Safety metrics 244
Solidifying Sustainability Metrics 245
Consumption metrics 245
Waste metrics 246
Chapter 17: Managing Supply Chain Risks 247
Challenging Assumptions About the Future 247
Building Supply Chain Resilience 249
Identifying Risks 250
Classifying Risks 252
Scoring Risks 253
Managing Risks 255
Accept the risk 255
Transfer the risk 256
Avoid the risk 256
Mitigate the risk 256
Chapter 18: Building Supply Chain Analytics 259
The Rise of Big Data, Sensors, and the Internet of Things 260
Outline of an Analytics Plan 261
Define your theory about the problem or opportunity 262
Acquire the data 263
Clean, structure, and filter the data 263
Query the data and test your theory 264
Look for correlations and patterns 264
Correlation, Causation, and Interpolation 265
Modeling, Simulation, and Optimization 268
Simulation 269
Optimization 269
Scenario Planning 270
Dashboards and Control Towers 272
Part 5: Building Your Supply Chain Management Career 275
Chapter 19: Selecting a Supply Chain Career 277
Doing Your Homework 277
Examining Supply Chain Career Categories 278
Associates 281
Technicians 283
Planners and Analysts 284
Engineers 286
Supervisors 287
Managers 288
Sales Representatives 290
Information Technology Managers 290
Project Managers 292
Journalists 292
Executives 292
Educators 293
Humanitarian Supply Chain Professionals 294
Chapter 20: Pursuing Supply Chain Education 295
Earning Certificates and Certifications 295
APICS 296
Project Management Institute 299
Council of Supply Chain Management Professsionals 300
Institute for Supply Management 301
International certifications 302
Earning Degrees and Diplomas 303
Undergraduate degrees 304
Graduate degrees 304
Exploring Online Education Options 304
Traditional online programs 305
MITx MicroMasters in Supply Chain Management 305
Coursera 305
LinkedIn Learning 306
YouTube 306
Playing Supply Chain Games 306
The Beer Game 307
The Fresh Connection 307
Part 6: The Part of Tens 309
Chapter 21: Ten Questions to Ask About Your Supply Chain 311
Who Are Your Key Customers? 311
What Do Your Key Customers Value? 312
How Could Your Supply Chain Create More Value? 312
How Do You Define Supply Chain Management? 313
What Information Do You Share with Suppliers? 313
How Do You Compare with Competitors? 314
What Changes Could Increase Revenue? 315
What Changes Could Lower Costs? 315
What Affects Your Supply Chain Now? 316
What Will Affect Your Supply Chain in the Future? 317
Index 319
About This Book 1
Foolish Assumptions 1
Icons Used in This Book 2
Where to Go from Here 2
Part 1: Getting Started with Supply Chain Management 5
Chapter 1: The Growing Demand for Supply Chain Management 7
Defining Supply Chain Management 7
Exploring Complex Business Challenges 9
Operating Under Supply Chain Management Principles 11
Customer focus 12
Systems thinking 12
Bimodal innovation 12
Collaboration 13
Flexibility 13
Technology 14
Global perspective 14
Risk management 14
Visibility 15
Value creation 15
Introducing Five Supply Chain Tasks 15
Implementing the New Supply Chain Agenda 16
Placing the right people in the right jobs 17
Putting the right technology in place 17
Focusing on internal collaboration 17
Directing external collaboration 18
Applying project management 18
Chapter 2: Understanding Supply Chains from Different Perspectives 19
Managing Supply Chain Flows 19
Synchronizing Supply Chain Functions 20
Purchasing 21
Logistics 22
Operations 23
Connecting Supply Chain Communities 24
Designing Supply Chain Systems 27
Measuring Supply Chain Processes 29
Chapter 3: Digging into Your Supply Chain 31
Prioritizing Supply Chain Goals 31
Step 1: Understand what customers value 32
Step 2: Recognize your competitors 33
Step 3: Understand your products or services 33
Looking at Cost Drivers 35
Procurement costs 35
Transportation costs 36
Inventory costs 36
Quality costs 36
Dealing with Trade-Offs 37
Sales versus operations 38
Customer versus supplier 40
Engineering versus procurement 40
Inventory versus customer service 41
Inventory versus downtime 43
Procurement versus logistics 44
Chapter 4: Optimizing Your Supply Chain 47
Designing Your Network 47
Improving and Innovating Processes 49
Lean 49
Six Sigma 51
Theory of Constraints 53
Structuring Supply Chain Projects 55
Managing Cross-Functional Project Teams 56
Creating Cross-Functional Project Plans 57
Creating a RACI Matrix 59
Designing Project Scorecards 61
Using the DIRECT Model 62
Part 2: Managing Supply Chain Processes 65
Chapter 5: Connecting Supply Chain Processes 67
Understanding Supply Chain Processes 67
Introducing the SCOR Model 68
Establishing Process Metrics 72
Building the Right Supply Chain 73
Chapter 6: Planning the Supply Chain 77
Balancing Supply and Demand 78
Aligning Resources with Requirements 79
Analyzing Your Customers 81
Planning Your Products 82
Planning Your Production Systems 83
Planning Your Delivery Systems 84
Planning for Returns 85
Chapter 7: Sourcing, Purchasing, and Procurement 87
Understanding Strategic Sourcing 88
Segmenting Your Supply Chain 88
Managing Life Cycle Costs 90
Minimizing input costs 91
Sourcing your inputs 92
Forecasting your demand 94
Insourcing, outsourcing, and offshoring 94
Managing Supplier Relationships 95
Establishing Supply Contracts 97
Selecting contract terms 97
Selecting payment terms 98
Mitigating Supplier Risks 100
Establishing Purchasing Ethics 104
Chapter 8: Making Your Products or Services 107
Planning and Scheduling Production 108
Planning production 108
Considering capacity 112
Identifying Manufacturing Process Types 115
Operating a discrete manufacturing process 115
Operating a continuous manufacturing process 117
Choosing Your Production Environment 118
Make-to-stock 119
Make-to-order 119
Engineer-to-order 120
Implementing Quality Control and Quality Assurance 121
Considering the risks of poor quality 122
Controlling quality and variability 122
Reducing Manufacturing Waste 124
Chapter 9: Delivering Your Products or Services 127
Understanding Modes of Transportation 128
Pipeline 129
Ocean 129
Rail 129
Truck 131
Parcel 132
Air 133
Selecting Modes of Transportation 134
Managing Warehousing and Inventory 135
Receiving 137
Put-away 137
Inventory counts 138
Picking 138
Packing 139
Shipping 139
Yard management 140
Over, short, and damaged 141
Establishing Inventory Ordering Policies 141
Selecting Material Handling Equipment 143
Managing and Filling Orders 145
Leveraging Third-Party Logistics 147
Chapter 10: Managing Product Returns and Reverse Supply Chains 149
Growing Revenues with Easy Returns 150
Processing Returns of New or Excess Products 151
Minor wear and tear 151
Damage or tampering 152
Substitution 152
Processing Returns of Used or Defective Products 152
Managing Closed-Loop Supply Chains 153
Handling Unauthorized Returns and Fraudulent Products 154
Managing Trade-Ins 155
Chapter 11: Enabling Your Supply Chain 157
Managing Your Business Rules 157
Managing Supply Chain Performance 158
Setting performance goals 159
Align your metrics with your customers 159
Share Your Metrics with Your Suppliers 160
Managing Your Assets 160
Labeling Your Products 161
Addressing Supply Chain Security Issues 163
Ensuring physical security 163
Dealing with counterfeiting 163
Tackling regulatory compliance 164
Addressing unique product requirements 165
Protecting supply chain information 165
Leveraging Information Technology 166
Leveraging Human Resources 167
Mastering Project Management 169
Part 3: Using Technology to Manage Supply Chains 173
Chapter 12: Managing Supply Chain Software 175
Understanding How Processes Evolve 176
Using Transportation Management Systems 178
Using Warehouse Management and Execution Systems 180
Using Demand Planning Systems 182
Using Material Requirements Planning Systems 183
Using Distribution Requirements Planning Systems 185
Using Labor Management Systems 186
Using Customer Relationship Management Systems 187
Using Supplier Relationship Management Systems 188
Using Enterprise Resources Planning Systems 189
Using Supply Chain Modeling Software 190
Using Business Intelligence Software 192
Leveraging Software Analysts 194
Anticipating the Future of Supply Chain Software 195
Chapter 13: Integrating Advanced Manufacturing into Your Supply Chain 197
Avoiding Obsolescence 198
Capitalizing on Advanced Manufacturing 199
Automated manufacturing 199
Computer-aided design 200
3D printing 200
Automated Mobile Robots 203
Unmanned and Autonomous Vehicles 204
Chapter 14: Managing Digital Supply Chains 207
Digitalizing Products and Services 208
Integrating Planning, Execution, and Visibility 209
Creating Customer Centricity 210
Sharing with Blockchains 211
Harnessing the Internet of Things, Big Data, and the Cloud 212
Employing Artificial Intelligence 214
Retooling for Omnichannel 214
Part 4: Driving Value with Supply Chain Management 217
Chapter 15: Transforming Your Supply Chain 219
Improve Transparency and Visibility 219
Deploying Demand Shaping 220
Performing Postponement 221
Renewing Regional Sourcing 222
Reducing Stock-Keeping Units 223
Optimizing Inventory 224
Incorporating Vendor-Managed Inventory 226
Adjusting Payment Terms 227
Using Supply Chain Finance 228
Control the Bullwhip Effect 229
Share information with your partners 229
Reduce and align lot sizes 230
Manage promotions 230
Starting with Small Improvements 231
Creating Sandboxes 231
Chapter 16: Adopting Supply Chain Metrics 233
Understanding Metrics 233
Identifying Performance Attributes 235
Understanding SCOR Metrics 236
Reliability 236
Responsiveness 237
Agility 237
Cost 238
Asset management efficiency 238
Optimizing Operational Metrics 238
Supplier metrics 239
Procure to pay metrics 239
Customer service metrics 239
Capacity, throughput, and yield metrics 240
Formalizing Financial Metrics 241
Accounts payable metrics 241
Total spend metrics 241
Savings metrics 242
Perfecting People Metrics 242
Engagement metrics 242
Productivity and efficiency metrics 243
Turnover metrics 243
Safety metrics 244
Solidifying Sustainability Metrics 245
Consumption metrics 245
Waste metrics 246
Chapter 17: Managing Supply Chain Risks 247
Challenging Assumptions About the Future 247
Building Supply Chain Resilience 249
Identifying Risks 250
Classifying Risks 252
Scoring Risks 253
Managing Risks 255
Accept the risk 255
Transfer the risk 256
Avoid the risk 256
Mitigate the risk 256
Chapter 18: Building Supply Chain Analytics 259
The Rise of Big Data, Sensors, and the Internet of Things 260
Outline of an Analytics Plan 261
Define your theory about the problem or opportunity 262
Acquire the data 263
Clean, structure, and filter the data 263
Query the data and test your theory 264
Look for correlations and patterns 264
Correlation, Causation, and Interpolation 265
Modeling, Simulation, and Optimization 268
Simulation 269
Optimization 269
Scenario Planning 270
Dashboards and Control Towers 272
Part 5: Building Your Supply Chain Management Career 275
Chapter 19: Selecting a Supply Chain Career 277
Doing Your Homework 277
Examining Supply Chain Career Categories 278
Associates 281
Technicians 283
Planners and Analysts 284
Engineers 286
Supervisors 287
Managers 288
Sales Representatives 290
Information Technology Managers 290
Project Managers 292
Journalists 292
Executives 292
Educators 293
Humanitarian Supply Chain Professionals 294
Chapter 20: Pursuing Supply Chain Education 295
Earning Certificates and Certifications 295
APICS 296
Project Management Institute 299
Council of Supply Chain Management Professsionals 300
Institute for Supply Management 301
International certifications 302
Earning Degrees and Diplomas 303
Undergraduate degrees 304
Graduate degrees 304
Exploring Online Education Options 304
Traditional online programs 305
MITx MicroMasters in Supply Chain Management 305
Coursera 305
LinkedIn Learning 306
YouTube 306
Playing Supply Chain Games 306
The Beer Game 307
The Fresh Connection 307
Part 6: The Part of Tens 309
Chapter 21: Ten Questions to Ask About Your Supply Chain 311
Who Are Your Key Customers? 311
What Do Your Key Customers Value? 312
How Could Your Supply Chain Create More Value? 312
How Do You Define Supply Chain Management? 313
What Information Do You Share with Suppliers? 313
How Do You Compare with Competitors? 314
What Changes Could Increase Revenue? 315
What Changes Could Lower Costs? 315
What Affects Your Supply Chain Now? 316
What Will Affect Your Supply Chain in the Future? 317
Index 319