This book grew out of a number of supply chain management courses and Executive Education programs we have taught at Northwestern University over the past several years, as well as numerous consulting projects and supply chain decision support systems we have developed at LogicTools. The courses, taught in the Master of Management in Manufacturing (MMM) program, a joint MBA program between Kellogg School of Business and McCormick School of Engineering at Northwestern University, and in Executive Education programs sponsored by Kellogg, have spawned many innovative and effective supply chain education concepts. The focus in these programs has been on presenting, in an easily accessible manner, recently developed state-of-art models and solution methods important in the design, control, and operation of supply chains. The consulting projects and decision support systems developed by LogicTools have focused on applying these advanced techniques to solve specific problems faced by our clients.
Interest in supply chain management, both in industry and in academia, has grown rapidly over the past several years. A number of major forces have contributed to this trend. First, in recent years it has become clear that many companies have reduced manufacturing costs as much as practically possible. Many of these companies are discovering the magnitude of savings that can be achieved by more effectively planning and managing their supply chain. Indeed, a striking example is Wal-Mart's success, which is partly attributed to implementing a new logistics strategy, called cross-docking. At the same time, information and communication systems have been widely implemented, and provide access to comprehensive data from all components of the supply chain. Finally, deregulation of the transportation industry has led to the development of a variety of transportation modes and reduced transportation costs, while significantly increasing the complexity of logistics systems.
It is therefore not surprising that many companies are involved in the analysis of their supply chains. Yet, in most cases, this is done based on experience and intuition; very few analytical models or design tools have been used in this process. In contrast, in the last two decades, the academic community has developed various models and tools for supply chain management. Unfortunately, the first generation of this technology was not robust or flexible enough to allow industry to use it effectively. This, however, has changed over the last few years, during which improved analysis and insight, and effective models and decision support systems, have been developed, but these are not necessarily familiar to industry. Indeed, to our knowledge, there is no published work that discusses these problems, models, concepts and tools at an appropriate level.
In this book, we intend to fill this gap by providing state-of-the-art models, concepts and solution methods important in the design, control, operation and management of supply chain systems. In particular, we have attempted to convey both the intuition behind many key supply chain concepts, and provide simple techniques which can be used to analyze various aspects of the supply chain.
The emphasis is on a format that will be accessible to executives and practitioners, as well as students interested in careers in related industries. In addition, it will introduce the readers to information systems and decision support tools that can aid in the design, analysis and control of supply chains.
The book is written to serve as:
Of course, supply chain management is a very broad area, and it would be impossible for a single book to cover all of the relevant areas in depth. Indeed, there is considerable disagreement in academia and industry about exactly what all of the relevant areas are. Nevertheless, we have attempted in this book to provide a broad introduction to many critical facets of supply chain management. Although many essential supply chain management issues are interrelated, we have strived wherever possible to make each chapter as self contained as possible, so that the reader can refer directly to chapters covering topics of interest. Topics covered range from a basic discussion of inventory management, logistics network design, distribution systems, and customer value, to more advanced discussions of strategic alliances, the value of information in the supply chain, information technology and decisions support systems, and international issues in supply chain management. Each chapter utilizes numerous case studies and examples, and mathematical and techical sections can be skipped without loss of continuity.
In addition, the book includes two software packages, the Computerized Beer Game and the Risk Pool Game, which help to illustrate many of the concepts discussed in the book. Indeed, teaching executives and MBA students, we have found that these games help students better understand issues and concepts such as the Bullwhip Effect, the value of information in the supply chain, and the impact of lead times, centralized decision making, and risk pooling, on supply chain operations.