This chapter is from the book
This chapter is from the book
This chapter is from the book
Chapter Summary
A supply chain is more than a simplistic set of links along a linear path from raw material extraction to end consumer use. Instead, this chapter has demonstrated that a supply chain is a very complex network through which materials, information, and money flow between key participants. Highly integrated supply chains dynamically draw upon the capabilities and resources of multiple organizations to ensure the timely and efficient fulfillment of customer requirements.
Integration and synchronization of a supply chain do not occur by happenstance. An organization must make supply chain management a strategic priority, assemble the right talent, build key relationships, and invest in essential technological capabilities. These efforts support the development and coordination of interdependent processes in planning, procurement, conversion, and logistics. All are needed to achieve supply chain excellence.
As this chapter has highlighted, supply chain management is not strictly an in-house function. Even the largest global manufacturers rely on the expertise of external entities to provide essential resources and capacity. These key participants include retailers, distributors, manufacturers, and suppliers who have a financial interest in the products flowing through the supply chain. Also needed are facilitators—logistics services providers, technology companies, indirect materials and equipment suppliers, and so on—who enable the key flows and facilitate the safe, efficient execution of supply chain activities.
The payoffs for investing in supply chain processes and cross-chain relationships are many. As companies move from a functional excellence focus toward integration, collaboration, and synchronization, the supply chain becomes more dynamic and capable of achieving fundamental organizational goals. That is, as its supply chain capabilities mature, the organization can achieve efficient fulfillment, meet customer requirements, respond more effectively to change, become more resilient to disruptions, and improve financial performance. Ultimately, these capabilities translate to greater customer utility, performance versus goals, and shareholder value. These trifold benefits fuel the growing interest in supply chain management among CEOs and corporate boards.