Introduction to

Supply Chain
Management
Technologies
Second Edition

David Frederick Ross

CRC Press
Taylor & Francis Croup
Boca Raton London New York

CRC Press is an imprint of the

Taylor & Francis Croup, an informa business
Contents

Preface xiii
Acknowledgments xix
Author xxi

1 Supply Chain Management: Architecting the Supply Chain for

Competitive Advantage 1
The Foundations of Supply Chain Management 2
The Rise of Supply Chain Management ". 5
Historical Beginnings 5
Stages of SCM Development 6
Defining Supply Chain Management 11
Defining Logistics Management 12
Defining Supply Chain Management 13
Redefining Supply Chain Management 17
A New SCM Definition 17
Redefining Supply Chain Components 17
Channel Configuration 20
Supply Chain Competencies 23
Customer Management 23
Supplier Management 25
Channel Alignment 26
Supply Chain Collaboration 27
Operations Excellence 29
Integrative Technologies 30
The Impact of SCM 31
Summary and Transition 31
Notes : 33
vi Contents

2 Supply Chain Technology Foundations: Exploring the Basics 35

The Importance of Information Technology 37
Basics of Information Technology 37
Using Technology to Automate Knowledge 38
Using Technology to Create Knowledge 39
Using Technology to Integrate and Network Knowledge 40
Defining Integrative Information Technology 41
Enterprise Information Technology Basics 41
Enterprise Technology Architecture 42
Enterprise Business Architecture 45
Inter-Enterprise Business Architecture 49
New Technologies 53
New Generation of Technology Enablers 53
Software-as-a-Service (SaaS) 55
Wireless Technology 58
Global Trade Management Solutions 61
Summary and Transition 62
Notes 63

3 Supply Chain System Foundations: Understanding Today's

Technology Solutions 65
Business Information System Basics 66
The Five Basic Functions of Information Systems ...67
Principles of System Management 69
Enterprise Business Systems Foundations 70
Evolution of Enterprise Business Systems (EBS) 71
EBS System Components 72
Core Functional Areas of Operation 72
Secondary Functional Areas of Operation 76
EBS Networking and Integration Frameworks 80
Standard EBS Systems 83
Enterprise Resource Planning (ERP) 83
EBS Architecture for SCM 87
EBS Benefits and Risks 89
EBS Choices 90
Advent of Internet Business Technologies 92
Defining Internet Business 94
Evolution of Internet Business 95
I-Marketing 97
e-Commerce Storefront 98
e-Business Marketplaces 100
e-Collaboration Marketplaces 104
Today's e-Business MarketplacesSummary 108
 Contents vii

Impact of e-Business on the Supply Chain 109

Customer Service-Driven Elements 110
Supply Chain Operations-Driven Elements 110
Summary and Transition 112
Notes 114
4 Technology-Driven Supply Chain Evolution: Building Lean,
Adaptive, Demand-Driven Supply Networks 117
The Lean Supply Chain 119
Anatomy of Lean Principles 119
Defining Lean SCM 121
Six Components of Lean Supply Chains 123
Lean Improvement Tools 124
Process Standardization 124
Lean SCM Technologies 125
Cross-Enterprise Collaboration 126
Lean SCM Implementation 128
Demand Management 130
The Impact of Lean SCM 131
Adaptive Supply Chains 133
Understanding Supply Chain Risk 133
Advent of the Adaptive Supply Chain 136
Components of Adaptive Supply Chain Management 138
Advantages of Adaptive Supply Chain Management 141
Demand-Driven Supply Networks 141
Defining Demand-Driven Supply Networks 142
Competencies of a DDSN 145
Demand-Driven 145
Demand/Supply Visibility 147
Adaptive Channel Management 149
Lean Optimization 150
Supply Chain Collaboration 151
Fulfillment/Replenishment Flexibility 152
Advantages of Demand-Driven Supply Networks 155
Summary and Transition 155
Notes 157
5 Customer and Service Management: Utilizing CRM to Drive
Value to the Customer 159
Creating the Customer-Centric Supply Chain 160
The Advent of Customer Relationship Management (CRM) 161
Mapping the Cluster of CRM Components 163
Understanding Today's Customer Dynamics 166
Creating the Customer-Centric Organization 169
viii Contents

Applying Technology to CRM 172

CRM and Internet Sales 174
Sales Force Automation (SFA) 176
e-CRM Marketing 178
Customer Service Management (CSM) 181
CRM and the Supply Chain 185
Partner Relationship Management (PRM) 185
Electronic Bill Presentment and Payment (EBPP) 188
CRM Analytics 189
Implementing CRM 190
New Concepts in Customer Management Technologies 193
Emergence of Customer Experience Management 193
Merging CRM and CEM 196
Redefining CRM Technologies to Embrace CEM 197
The Advent of Social Networking 198
Defining the Content of Social Networking Technologies 200
Summary and Transition 202
Notes 204

Manufacturing and Supply Chain Planning: Linking

Product Design, Manufacturing, and Planning to Increase
Productivities 207
Manufacturing in the Age of the Global Enterprise 209
Demand-Driven Manufacturing 211
Challenges to the Manufacturing Infrastructure 212
Outsourcing and Supplier Partnerships 214
Changing Performance Targets 216
. The Future of Manufacturing 217
Impact of Technology on Manufacturing 218
Short History of Manufacturing Planning and Control Systems ....219
Geography of Today's Manufacturing Systems 222
Manufacturing Planning 222
Production and Process Management 224
Product Design and Engineering 224
Plant Maintenance and Quality Management 225
Product Life Cycle Management (PLM) 226
Impact of Internet Networking Technologies 228
Collaborative Product Commerce 231
Defining CPC 231
Linking Supply Chain Design Capabilities 233
Detailing the Contents of CPC 234
Managing Manufacturing Planning Functions 236
Advanced Production and Scheduling Systems 238
 Contents ix

Accurate Data 238

Planning Timeframe 239
Planning Model 239
Schedule Management 240
Supply Chain Optimization Tools 241
Collaborative Planning, Forecasting, and Replenishment (CPFR) 244
Summary and Transition 247
Notes -.: 249

7 Supplier Relationship Management: Integrating Suppliers into

the Value Chain 251
Defining Purchasing and Supplier Relationship Management (SRM) ....252
Defining the Purchasing Function 253
Defining SRM 255
Components of SRM 258
Strategic Sourcing and Supply Chain Management 259
Applying Technology to the Management of SRM 260
SRM-Driven Infrastructures and Operations 261
The Internet-Driven SRM Environment ...262
e-SRM Structural Overview 263
EBS Backbone Functions 265
e-SRM Services Functions 266
e-SRM Processing 268
e-SRM Technology Services 272
Anatomy of the e-SRM Marketplace Exchange Environment 274
Emergence of Today's B2B Marketplace 275
Foundations 276
Rise of Collaborative Commerce 276
Development of Networked Exchanges 276
Defining the Trading Exchange 277
Future of B2B e-Marketplaces 280
Implementing e-SRM 282
e-SRM Value Discovery 283
Infrastructure Analysis 283
Preparing for Organizational Change 284
Spend Analysis 284
Item/Service Analysis 284
e-SRM Technology Choices 285
Performance Measurement 286
Summary and Transition 287
Notes 289
 Contents

8 Logistics Resource Management: Utilizing Technology to

Enhance Logistics Competitive Advantage 293
Defining Logistics Resource Management (LRM) 294
Logistics Performance Management 297
Fulfillment Planning and Execution 299
Logistics Partnership Management 301
Shipment Visibility 302
Fulfillment Event Management 303
Dealing with Logistics Uncertainties 305
Defining LRM in the Age of the Global Internet 306
Applying Internet Technologies to LRM 307
Internet-Enabled LRM Technologies 311
Enterprise Performance Measurement 311
Warehouse Management 312
Transportation Management 315
Understanding the Third Party Logistics Network 318
Role of the 3PL 319
Internet-Driven LSPs 321
Today's LSP Marketplace Challenges 323
Choosing and Implementing an LSP Solution 325
LSP Business Models 326
Steps in LRM Strategy Development 328
Summary and Transition 330
Notes.... 332

9 Developing SCM Technology Strategies: Creating the Game Plan

for the Successful Implementation of SCM Technologies 335
Changing Views of Enterprise Strategy 336
Overview 338
The Primacy of Value Chains 339
Barriers to Internet-Driven SCM Technologies 342
Preliminary Steps in SCM Technology Deployment Strategy 346
Opening Issues in SCM Technology Strategy Development 347
Preliminary Steps 348
Developing the SCM Technology Strategy 356
Constructing the Business Value Proposition 357
Defining the Value Portfolio 358
Structuring the Scope of Collaboration 360
Ensuring Effective Resource Management 366
Pursuing Growth Management 369
Focus on Supply Chain Costs 369
Focus on Supply Chain Value 371
Design an Effective Performance Measurements Program 373
 Contents xi

Summary 379
Notes 381
Afterword 383
Notes 386
Index 387