Professional Documents
Culture Documents
1 1
2 2
n n
Consumers/End-users
1
1
1
2
Initial Suppliers
n 2
1
3 1
2 3
n
3 n
1
n n
2
1 Focal Company
n
n
Members of the Focal Company’s Supply Chain
Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics
Management, Vol. 9, No. 2 (1998), p. 3.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 5.
What is Supply Chain Management?
There is a lot of confusion over what supply chain
management is.
Some consider it “logistics outside the firm” but the
CLM definition of logistics includes “point of origin to
point of consumption” so that can’t be right.
We will define supply chain management as “the
integration of key business processes from end user
through original suppliers that provides products,
services, and information that add value for
customers and other stakeholders.”
From this definition, the GSCF framework has been
developed which includes eight key business
processes.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance.
Supply Chain Management Processes
Information Flow
Manufacturer
Tier 2 Tier 1 Consumer/
Supplier Supplier Logistics Customer End user
Purchasing Marketing
PRODUCT FLOW
Production Finance
R&D
Supply Chain Management Processes
DEMAND MANAGEMENT
ORDER FULFILLMENT
RETURNS MANAGEMENT
Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics
Management, Vol. 9, No. 2 (1998), p. 2.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 3.
The Processes… Briefly
Customer Relationship Management - provides
the structure for how relationships with customers
are developed & maintained, including the PSAs
between the firm & its customers.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance.
Examples of Functional Involvement
Business
Functions
Business
Processes Research &
Marketing Sales Development Logistics Production Purchasing Finance
Customer Relationship Marketing Plan Account Technological Logistics Manufacturing Sourcing Customer
Management & Resources Management Capabilities Capabilities Capabilities Capabilities Profitability
Knowledge of Alignment of
Customer Service Prioritization of Technical Coordinated Priority
Customer Logistics Cost to Serve
Management Customers Service Execution Assessment
Operations Activities
Competing
Demand Competitors’ Process Manufacturing Sourcing Tradeoff
CUSTOMERS
Programs in Forecasting
SUPPLIERS
Knowledge Reverse
Customer Product Remanufac- Material Revenue &
Returns Management of Marketing Information Logistics
Architecture, Data Base Strategy, Information Specification
Visibility
Knowledge Design turing Costs
Programs Capabilities
Source: Adapted from Douglas M. Lambert, Larry C. Guinipero and Gary J. Ridenhower, “Supply Chain Management: A Key to Achieving Business
Excellence in the 21st Century,” unpublished manuscript.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 23.
The Elements of the Supply Chain
Management Framework
2) What processes should be
linked with each of these key
supply chain members?
Supply Chain
Business
Processes
3) What level of integration and 1) Who are the key supply chain
management should be applied members with whom to link
for each process link? processes?
Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics
Management, Vol. 9, No. 2 (1998), p. 4.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 9.
Network Structure: the Supply Chain Looks
Different Depending on Where You Are in It
For a Shrimper For a Retailer
Tier 3 to
Tier 3 to Initial Tier 2 Tier 1 Consumers/
Tier 1 Tier 2 Consumers/ suppliers Suppliers Suppliers End-users
Customers Customers End-users
1
1
2
2
n
n 1
Consumers/End-users
1 1
Initial Suppliers
2 n 2
3 1 2 3
n 3
n
n n
1
2 1
n n
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 10.
Therefore…
Some companies might not need all eight
processes linked-up with the supply chain
members.
Example: The Limited might not implement the
Customer Relationship Management process, at
least not as it is prescribed in this framework.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance.
Types of Inter-Company Business Process Links
Tier 3 to Tier 3 to
Initial Tier 2 Tier 1 Tier 1 Tier 2 Consumers/
suppliers Suppliers Suppliers Customers Customers End-users
1 1
2 2
n n
Consumers/End-users
1
1
1
2
Initial Suppliers
n 2
1
3 1
2 3
1 n
3 n
n 1
n n
2
1 1
n
n
n
Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics
Management, Vol. 9, No. 2 (1998), p. 7.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 16.
Types of Inter-Company Business
Process Links
Managed links: links that the focal company finds
important to integrate and manage.
Monitored links: links that are not as critical to the
focal company, but they should be integrated and
managed between the other members of the supply
chain.
Not managed links: links that the focal company is not
actively involved in managing, nor are they critical
enough to use resources for monitoring.
Non-member links: links that are not part of the focal
company’s supply chain structure, but they can and
often will affect the performance of the focal company
and its supply chain.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance.
Why Are Standardized Business
Processes Important?
It is important that everyone is talking the same language and
has the same expectations – otherwise there’s a mismatch.
Tier 2 Tier 1 Manufacturer
Consumer/
Supplier Supplier Logistics Customer End-user
Purchasing Marketing
PRODUCT FLOW
Production Finance
R&D
DEMAND MANAGEMENT
ORDER FULFILLMENT
RETURNS MANAGEMENT
Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics
Management, Vol. 9, No. 2 (1998), p. 10.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 18.
Management Components
The level of integration and management of a business process link is a function of the
number and level of components added to the link. Adding more management components
or increasing the level of each component can increase the level of integration of the
business process link.
Planning and
Control Methods Management
Methods
Work Flow/
Activity Structure Power and
Leadership Structure
Organization
Structure Risk and
Reward Structure
Product Flow
Culture and
Structure
Attitude
Information Flow
Structure
Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics
Management, Vol. 9, No. 2 (1998), p. 12.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance, p. 21.
Physical and Technical Management
Components
Planning and control of operations are keys to moving an organization
or supply chain in a desired direction. The extent of joint planning is
expected to bear heavily on the success of the supply chain. The
control aspects can be operationalized as the best performance
metrics for measuring supply chain success.
The work structure indicates how the firm performs its tasks and
activities. The level of integration of processes across the supply chain
is a measure of organizational structure.
Organizational structure can refer to the individual firm and the supply
chain; the use of cross-functional teams would suggest more of a
process approach.
Product flow structure refers to the network structure for sourcing,
manufacturing, and distribution across the supply chain. Since
inventory is necessary in the system, some supply chain members
may keep a disproportionate amount of inventory.
The kind of information passed among channel members and the
frequency of information updating has a strong influence on the
efficiency of the supply chain.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance.
Managerial & Behavioral
Management Components
Management methods include the corporate philosophy and
management techniques. It is very difficult to integrate a top-down
organization structure with a bottom-up structure. The level of
management involvement in day-to-day operations can differ across
supply chain members.
The power and leadership structure across the supply chain will affect
its form. One strong leader will drive the direction of the chain. The
exercise of power, or lack of, can affect the level of commitment of
other members. Forced participation will encourage exit behavior,
given the opportunity.
© Supply Chain Management Institute. Source: Supply Chain Management: Processes, Partnerships, Performance.