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Supply Chain Management for Dummies
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Table of Contents

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 the Author

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.

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