Introduction to Supply Chain Management

Robert B. Handfield and Ernest L. Nichols Jr.

Prentice Hall, 1999

183 pages, $26.67

To order: Call (800) 922-0579

Supply chain management has been a part of the business vernacular for a number of years now. But how many business people really understand the concept? And why it is so important for an organization to manage its supply chain activities comprehensively and aggressively?

The authors do a commendable job of addressing these issues in this just-released book. Though the title carries the word "introduction," the book really is much more than a primer in supply chain management. The discussion on developing and maintaining a supply chain relationship, for example, puts forth a number of principles and proven practices for developing alliances with supply chain partners. There's also a good discussion of how to resolve conflict among the partners.

The discussion of information technology correctly positions IT as a central integrating factor of supply chain management. The explanations of the types of IT capabilities—including some specific software programs—are clear and to the point. Clarity is a hallmark of the chapter on managing the flow of materials across the chain, too.

The five real-world case studies included in the book provide a worthwhile perspective on how companies have successfully addressed their supply chain challenges. These case examples range from Selectron's ability to develop a total supply chain cost model to Daisytek's complete re-engineering of its supply chain network to achieve a lead position as a distributor of computers and peripherals.

For any organization seeking to educate their people on the power and potential of supply chain management, Introduction to Supply Chain Management will be a valuable resource. Managers seeking to clarify the concept in their own minds will find it similarly useful.

The authors come from the academic community. Robert B. Handfield is an associate professor of purchasing at Michigan State University. Ernest L. Nichols Jr. is the director of the FedEx Center for Cycle Time Research at the University of Memphis.

Using Modeling to Solve Warehouse Problems

Maida Napolitano

WERC—Warehousing Education & Research Council, 1998

132 pages, $27 (WERC members), $54 (non-members)

To order: Call WERC at (630) 990-0001

Modeling and warehousing are ideally suited for one another, writes author Maida Napolitano of Gross & Associates, who developed this guide for WERC—the Warehouse Education and Research Council. The booklet provides a clear definition of modeling, describes its benefits, and shows how this technique can be applied in the warehousing environment. Perhaps most importantly for the non-technical reader, the information is presented in terms that the management reader (not the mathematician) can appreciate.

The four core benefits of modeling have been demonstrated in a wide range of processes and activities, Napolitano says. Specifically, modeling can:

• Impose a systematic, logical approach to assessing a given course of action, thereby decreasing the risk level.
• Facilitate a deeper insight and knowledge about the workings of the existing business system.
• Provide an opportunity for experimentation, testing various alternatives without any significant investment.
• Graphically represent a proposed system or solution before it becomes a reality.

But if the benefits are so compelling, why have so many companies failed to adopt modeling techniques? The answer: They often are intimidated by the perception that modeling is an arcane science—the sole province of systems engineers, mathematicians, and other techies. But that's a false perception, the author argues. Modeling, in essence, is simply a process of translating aspects of a real system—any one of the many activities that take place in warehousing, for example—into a numerical, graphic, or logical representation that can be tested and manipulated on paper or on the computer.

The WERC booklet proceeds to tell readers how modeling can be applied to solve specific warehousing problems. In this regard, one of the publication's most valuable aids is a matrix in the introductory chapter that identifies 12 specific warehousing tasks (for example identifying warehousing costs or improving pallet utilization) that can be enhanced by modeling. It then states the main objective of the modeling program that addresses each task, and points the reader to the appropriate section for further discussion.

For each task, the author walks the reader through the steps required to develop a modeling program and outlines the resources required—software, hardware, and people.

This WERC publication effectively demystifies modeling. It's a worthwhile primer on the nature and benefits of modeling, and includes a valuable and comprehensive glossary in the back of the book.

Strategic Supply Chain Alignment: Best Practice in Supply Chain Management

John Gattorna

Gower Publishing Ltd., 1998

671 pages, $120

To order: Call (800) 535-9544

Editor John Gattorna, a Sydney, Australia-based consultant for Andersen Consulting, has assembled an ambitious collection of articles on supply chain strategy and processes. The pieces are written mostly (though not exclusively) by his colleagues at Andersen. The book has a decidedly global perspective, with contributions coming from authors based in Asia, Europe, Australia/New Zealand, and the Americas.

The articles in this big (671-page) book are organized within the framework of a strategic alignment model, developed by the editor. That model positions the key elements necessary for supply chain success—the market, the strategic response to that market, the cultural mindset of the supply chain partners, and the leadership capability. Connecting all of this, says Gattorna, are the information enablers and drivers.

In the markets section of the book, for example, readers will find discussions on such topics as efficient consumer response, demand management, and postponement strategies. The technology section contains a piece on managing technology across the supply chain and a discussion of internet logistics. A special interest section includes articles on specific business sectors—telecommunications, healthcare, automotive—as well as supply chain challenges in individual countries like China and Australia.

It's unlikely that many will read this book cover to cover in one, or even a few, sittings. Instead, they will more likely select a section or article that speaks to a specific supply chain issue they are addressing. It's a good reference book for a corporate library or logistics department. In addition, it will likely find a home in the increasing number of college classrooms where supply chain management is being taught.

Customer-Centered Supply Chain Management: A Link-by-Link Guide

Fred A. Kuglin

AMACOM, 1998

300 pages, $35

To order: Call (800) 262-9699

The premise here is that companies will succeed only if they begin and end their supply chain strategy with the customer foremost in mind. That is, they need to define what the customer needs and the price they are willing to pay—and then determine how to move the goods through the pipeline to that customer as efficiently and cost-effectively as possible. The author, a former Frito-Lay executive and now a consultant with Ernst & Young, describes how to go about those critical activities through what he terms a customer-centered supply chain management process.

That process begins with developing a business strategy, and then proceeds through such activities as designing a supply chain network, developing accurate performance measures, and then renewing the process for continuous improvement. Emphasizing that he's talking about a process, Kuglin throughout the book reinforces the notion that customer-centered supply chain management is not a destination, but rather an ongoing journey.

Each chapter begins by describing the process to be addressed—business strategy, quality commitment, inter-enterprise innovation, performance measures, and so forth. This is followed by a step-by-step methodology for executing the concept. In some cases the detail is sufficient to serve as a practical guide; in others, the discussion is overly general. But in all cases, the author does provide a useful overview and gives good general direction. The book also is replete with anecdotes about people and experiences that reinforce and add personality to the main points.

Customer-Centered Supply Chain Management hammers home a number of themes that supply chain professionals—regardless of their position or years in the profession—need to hear. These include the primacy of the customer as the focal point in the supply chain process; the need to approach supply chain management as an integrated process; and the criticality of extending the chain to embrace both suppliers and customers.

An unfortunate organizational structure, with far too many heads and subheads and a cumbersome numbering scheme, detracts from the book's readability. Despite this, the main messages come through.

The Shape Shifters: Continuous Change for Competitive Advantage

John L. Mariotti

Van Nostrand Rheinhold, 1997

276 pages, $29.95

To order: Call (800) 225-5945 Ext. 2497

The title of John Mariotti's new book will sound familiar to fans of the Star Trek: The Next Generation television series—and intentionally so. Shape shifters on that science fiction series were creatures that could quickly mold themselves into any shape appropriate to the circumstances they faced. For Mariotti, that capability is a suitable metaphor for the way businesses must respond to a changing marketplace.

Mariotti, former president of Huffy Bicycles and Rubbermaid's Office Products Group, contends that successful enterprises regularly reshape themselves to create and deliver the best value to customers. That ability to change—or more accurately, the insistence on change—is critical, he argues. The reason is simple: The things that customers value change rapidly, and the pace of change will only accelerate in the years to come.

There are five attributes of value creation, or shape shifting—quality, service, cost, speed, and innovation. And the shape of the organization and its ability to deliver value to the customer, Mariotti argues, is based on how those attributes are balanced. The point is illustrated graphically through a "pentastar." Place each of the attributes at the end of a line radiating from a central core, with each line representing a scale from one to 10. Each attribute is weighted for a particular product or service. When the lines are connected, the "shape" of the value proposition is revealed. Business success depends on how well that shape conforms to what the customer wants. Further, the ability to change that shape to meet changing requirements is critical.

Mariotti attempts to overlay that image onto another, a pentagon representing what he defines as the five dimensions of the business-purpose, culture, relationships, processes, and structure. Although he defines these terms reasonably well and makes a good case that they adequately define the enterprise, the effort to layer one graphical image on top of another is labored and distracting. The numerous case studies throughout the text that illustrate a variety of points usefully and succinctly prove far more interesting reading than much of the esoteric discussion of the graphical images.

Fully a third of the book is devoted to explaining why the author believes the ability to change rapidly is essential, and his selections of cases illustrating failures, successes, and mixed results reinforce the point. He also draws heavily on other authors' work, but attempts to take their thinking another step further—or in some cases, to show what he considers to be the weaknesses of some business thinking.

The book is much more than academic analysis and case studies. Mariotti offers numerous practical recommendations, too. The chapters on employee compensation, supplier partnerships, and structural organization are especially instructive.

The pace of change no longer surprises most people in business. The constant challenge is operating successfully in that environment over the long term. While The Shape Shifters cannot assure a smooth path through that difficult competitive jungle, it does provide a useful roadmap.