Cover
Title Page
Preface
CHAPTER 1: Key Concepts of Supply Chain Management
1. Nothing Entirely New … Just a Significant Evolution
2. How the Supply Chain Works
3. The Evolving Structure of Supply Chains
4. Participants in the Supply Chain
5. Aligning the Supply Chain with Business Strategy
6. Chapter Summary
CHAPTER 2: Supply Chain Operations: Planning and Sourcing
1. A Useful Model of Supply Chain Operations
2. Demand Forecasting and Planning (Plan)
3. Product Pricing (Plan)
4. Inventory Management (Plan)
5. Credit and Collections (Source)
6. Chapter Summary
CHAPTER 3: Supply Chain Operations: Making and Delivering
1. Product Design (Make)
2. Production Scheduling (Make)
3. Facility Management (Make)
4. Order Management (Deliver)
5. Delivery Scheduling (Deliver)
6. Return Processing (Deliver)
7. Supply Chain Operations Can Be Outsourced
8. Chapter Summary
CHAPTER 4: New Technology Changes How Work Is Done
1. New Technology Is Changing Supply Chain Operations
2. Key Components of Information Technology
3. New Supply Chain Technology
4. Impact on Supply Chain Operations
5. Assessing Technology and System Needs
6. E‐Business and Supply Chain Integration
7. Chapter Summary
CHAPTER 5: Metrics for Measuring Supply Chain Performance
1. Useful Model of Markets and Their Supply Chains
2. Market Performance Categories
3. A Framework for Performance Measurement
4. Customer Service Metrics
5. Internal Efficiency Metrics
6. Demand Flexibility Metrics
7. Product Development Metrics
8. Operations that Enable Supply Chain Performance
9. Collecting and Displaying Performance Data
10. Three Levels of Detail
11. Spotlighting Problems and Finding Opportunities
12. Markets Migrate from One Quadrant to Another
13. Sharing Data Across the Supply Chain
14. Chapter Summary
CHAPTER 6: Supply Chain Coordination
1. The Bullwhip Effect
2. Coordination in the Supply Chain
3. Supply Chain Product Data Standards
4. Collaborative Planning, Forecasting, and Replenishment
5. CPFR in Action
6. How to Start Supply Chain Collaboration
7. Sales and Operations Planning
8. Chapter Summary
CHAPTER 7: Supply Chain Innovation for the Real‐Time Economy
1. Supply Chain Performance Depends on Timely Data
2. Coordination and Collaboration in Supply Chains
3. Use Collaboration to Reinvent Supply Chain Operations
4. Process for Collaborative Supply Chain Operations
5. Chapter Summary
CHAPTER 8: Defining Supply Chain Opportunities
1. The Supply Chain as a Competitive Advantage
2. Identify the Business Opportunity and Define the Goal
3. Create the Strategy
4. Create a Conceptual System Design
5. Strategic Guidelines for Designing Systems
6. Define Project Objectives
7. Create an Initial Project Plan and Budget
8. Estimate the Project Budget and ROI
9. Define the Specific Costs and Benefits
10. Chapter Summary
CHAPTER 9: Creating Supply Chains for Competitive Advantage
1. Charlie Supply, Inc.—Initial Business Situation
2. New Opportunities Emerge—Follow‐on Situation
3. Strategic Alliances for Competitive Advantage
4. Chapter Summary
CHAPTER 10: Promise of the Real‐Time Supply Chain
1. The Start of Something Big
2. Winning at the Game of Real‐Time Supply Chains
3. Chapter Summary
About the Author
Index
End User License Agreement

List of Illustrations

Chapter 1
1. EXHIBIT 1.1 Old Supply Chains versus New
2. EXHIBIT 1.2 Supply Chain Structure
Chapter 3
1. EXHIBIT 3.1 Cloud‐Based Training and Collaboration Platform
2. EXHIBIT 3.2 Maps and Satellite Pictures Provide Organizing Context for Real‐Time Data
3. EXHIBIT 3.3 Five‐Step Mission and Operations Planning Process
4. EXHIBIT 3.4 Cost vs. Number of Pool Points Used
5. EXHIBIT 3.5 Estimated Combined Freight Spend Savings Is 25 Percent
6. EXHIBIT 3.6 Value Contribution as the Collaborative Network Expands
Chapter 4
1. EXHIBIT 4.1 EPCglobal Network
2. EXHIBIT 4.2 Physical and Behavioral Policies
3. EXHIBIT 4.3 Proposed Facility Layout
4. EXHIBIT 4.4 Three‐Dimensional Warehouse Simulation
5. EXHIBIT 4.5 Connected Data Drives Machine Learning and Improves Customer Service
6. EXHIBIT 4.6 Supply Chain Events Hub
7. EXHIBIT 4.7 Big‐Data Learning Feedback Loop
Chapter 5
1. EXHIBIT 5.1 Displaying Different Views of Data to Different Audiences
2. EXHIBIT 5.2 Dashboard Designs Are Different at Each Level
3. EXHIBIT 5.3 Market Conditions Shift over Time
4. EXHIBIT 5.4 Benefits of Data Sharing across the Entire Supply Chain
Chapter 6
1. EXHIBIT 6.1 Product Demand Distortion
2. EXHIBIT 6.2 Flow of Work and Inventory through a Factory
3. EXHIBIT 6.3 Flow of Inventory through a Synchronized Supply Chain
4. EXHIBIT 6.4 Global Data Synchronization Network (GDSN)
5. EXHIBIT 6.5 Sales and Operations Planning (S&OP)
Chapter 7
1. EXHIBIT 7.1 Virtuous Cycle Starts with Electronic Connections
2. EXHIBIT 7.2 Supply Chains Need to Respond to Continuous Changes in Demand
3. EXHIBIT 7.3 Supply Chain Performance Scorecard Provides Real‐Time Transparency
4. EXHIBIT 7.4 Products, Facilities, Vehicles, Routes
5. EXHIBIT 7.5 Fantastic Corporation Global Supply Chain
6. EXHIBIT 7.6 Supply Chain Simulation Results
7. EXHIBIT 7.7 Collaborative S&OP with Supply Chain Simulations
8. EXHIBIT 7.8 Cloud‐based Collaboration Platform
9. EXHIBIT 7.9 Proposed New Facilities for Supply Chain
10. EXHIBIT 7.10 Operations at Chicago Distribution Center
11. EXHIBIT 7.11 Modular Technical Architecture
Chapter 8
1. EXHIBIT 8.1 Improve Selected Business Operations to Meet Performance Targets
2. EXHIBIT 8.2 Network Services' Development
3. EXHIBIT 8.3 Diagram of the Business Process Flows
4. EXHIBIT 8.4 A Web‐Enabled Supply Chain
5. EXHIBIT 8.5 Build NSC Integrated Information Infrastructure
Chapter 9
1. EXHIBIT 9.1 Results of Business Analysis for Strategic Plan
2. EXHIBIT 9.2 Charlie Supply Decides to Build on Its Strengths to Differentiate Itself
3. EXHIBIT 9.3 Charlie Supply Strengthens Performance by Improving Four Business Operations
4. EXHIBIT 9.4 Exercise #1: Project Completion Schedule
5. EXHIBIT 9.5 Charlie Supply Continues to Build on Its Strengths for Competitive Advantage
6. EXHIBIT 9.6 Charlie Supply Further Strengthens Customer Service and Improves Product Development Capabilities
7. EXHIBIT 9.7 Exercise #2: Project Completion Schedule
8. EXHIBIT 9.8 A Company and Its Alliance Partners
Chapter 10
1. EXHIBIT 10.1 Three Requirements for Self‐Adjusting Feedback Loops

Essentials Series

The Essentials Series was created for business advisory and corporate professionals. The books in this series were designed so that these busy professionals can quickly acquire knowledge and skills in core business areas.

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Essentials of Accounts Payable by Mary S. Schaeffer
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Essentials of Business Ethics by Denis Collins
Essentials of Business Process Outsourcing by Thomas N. Duening and Rick L. Click
Essentials of Capacity Management by Reginald Tomas Yu‐Lee
Essentials of Cash Flow by H.A. Schaeffer, Jr.
Essentials of Corporate and Capital Formation by David H. Fater
Essentials of Corporate Fraud by Tracy L. Coenen
Essentials of Corporate Governance by Sanjay Anand
Essentials of Corporate Performance Measurement by George T. Friedlob, Lydia L.F. Schleifer, and Franklin J. Plewa, Jr.
Essentials of Cost Management by Joe and Catherine Stenzel
Essentials of Credit, Collections, and Accounts Receivable by Mary S. Schaeffer
Essentials of CRM: A Guide to Customer Relationship Management by Bryan Bergeron
Essentials of Enterprise Compliance by Susan D. Conway and Mara E. Conway
Essentials of Financial Analysis by George T. Friedlob and Lydia L. F. Schleifer
Essentials of Financial Risk Management by Karen A. Horcher
Essentials of Foreign Exchange Trading by James Chen
Essentials of Intellectual Property, Second Edition by Alexander I. Poltorak and Paul J. Lerner
Essentials of Knowledge Management by Bryan Bergeron
Essentials of Licensing Intellectual Property by Paul J. Lerner and Alexander I. Poltorak
Essentials of Managing Corporate Cash by Michele Allman‐Ward and James Sagner
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Essentials of Online Payment Security and Fraud Prevention by David Montague
Essentials of Patents by Andy Gibbs and Bob DeMatteis
Essentials of Payroll Management and Accounting by Steven M. Bragg
Essentials of Risk Management in Finance by Anthony Tarantino with Deborah Cernauskas
Essentials of Sarbanes‐Oxley by Sanjay Anand
Essentials of Shared Services by Bryan Bergeron
Essentials of Supply Chain Management by Michael Hugos
Essentials of Technical Analysis for Financial Markets by James Chen
Essentials of Trademarks and Unfair Competition by Dana Shilling
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Library of Congress Cataloging‐in‐Publication Data:

Names: Hugos, Michael, author.
Title: Essentials of supply chain management / Michael Hugos.
Description: Fourth Edition. | Hoboken : Wiley, 2018. | Series: Essentials series | Revised edition of the author’s Essentials of supply chain management, 2011. | Includes index. |
Identifiers: LCCN 2017056763 (print) | LCCN 2017058101 (ebook) | ISBN 9781119464464 (epub) | ISBN 9781119461104 (paperback) | ISBN 9781119464457 (ePDF)
Subjects: LCSH: Business logistics. | BISAC: BUSINESS & ECONOMICS / Decision‐Making & Problem Solving.
Classification: LCC HD38.5 (ebook) | LCC HD38.5 .H845 2018 (print) | DDC 658.7—dc23
LC record available at https://lccn.loc.gov/2017056763

Cover Design: Wiley
Cover Image: © FarukUlay/Getty Images

Preface

My intention in this book is to speak to a wide audience of business, technical, and professional people and others looking to understand this increasingly import area of activity. I provide a clear framework for understanding supply chain theory, operations, and opportunities. I then build on that framework and show ways to create supply chains with the performance levels needed for success in this real‐time global economy we live in.

I know you are busy and your time is valuable. So, I've worked hard to get to the point quickly and explain things clearly and concisely. This book provides a framework to understand the structure and operation of any supply chain. It also provides guidance and insights for how to make good use of the flood of new supply chain technologies. Ideas are provided for combining technology, people, and business processes to deliver greater levels of supply chain performance.

Chapters 1, 2, and 3 provide an introduction to the basic principles and practices that drive supply chain operations. Chapters 4, 5, and 6 discuss technologies, metrics, and techniques that are making significant impacts on the way supply chains are designed, monitored, and managed.

Chapter 7 is an exploration of how new technology can be combined with supply chain best‐practices such as sales and operations planning (S&OP) to deliver a new level of supply chain performance through effective collaboration between companies working together in supply chains. The potential for using cloud computing and presently available software applications to build real‐time supply chain collaboration platforms is presented.

Chapters 8 and 9 provide a pragmatic approach based on personal experience for defining supply chain opportunities, and designing and building systems to effectively respond to those opportunities. I present two case studies and show how companies can develop supply chain capabilities to support their evolving business goals.

The last chapter, Chapter 10, outlines opportunities for individual companies and alliances of companies to work together and employ the power of the self‐adjusting feedback loop to drive real‐time operations. Real‐time and collaborative supply chains are the next step in the evolution of supply chain management. Self‐adjusting supply chains and the economic growth and stability they make possible are central to the creation and preservation of wealth in this century.

What I say in this book is based on decades of personal experience in building and operating supply chains, plus many conversations with fellow practitioners and researchers. I am also much influenced by reading the works of other authors whom I quote and acknowledge in these chapters.

MICHAEL HUGOS
Chicago, IL USA
www.scmglobe.com
mhugos@scmglobe.com

ESSENTIALS of Supply Chain Management