[PDF]Ebook Supply chain management (6th edition): Part 1.pdf (2022)


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Sixth Edition

Supply Chain Management
S t r at e g y , P l a n n i n g , a n d O pe r at i on
Sunil Chopra
Kellogg School of Management

Peter Meindl
Kepos Capital

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Library of Congress Cataloging-in-Publication Data
Chopra, Sunil
   Supply chain management : strategy, planning, and operation / Sunil Chopra, Kellogg School of Management,
Peter Meindl, Kepos Capital.—Sixth Edition.
  pages cm
   ISBN 978-0-13-380020-3—ISBN 0-13-380020-2
  1.  Marketing channels—Management.  2.  Delivery of goods—Management.  3.  Physical distribution of goods—
Management.  4.  Customer services—Management.  5.  Industrial procurement.  6.  Materials management.
I. Meindl, Peter, 1970–  II.  Title.
  HF5415.13.C533 2015

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10 9 8 7 6 5 4 3 2 1
ISBN 10:    0-13-380020-2
ISBN 13: 978-0-13-380020-3


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I would like to thank my colleagues at Kellogg for all I have learned from
them about logistics and supply chain management. I am grateful for the love
and encouragement that my parents, Krishan and Pushpa, and sisters, Sudha
and Swati, have always provided during every endeavor in my life. I thank my
children, Ravi and Rajiv, for the joy they have brought me. Finally, none of this
would have been possible without the constant love, caring, and support
of my wife, Maria Cristina.
—Sunil Chopra
I would like to thank three mentors—Sunil Chopra, Hau Lee, and Gerry
Lieberman—who have taught me a great deal. Thank you also to my parents
and sister for their love, and to my sons, Jamie and Eric, for making me smile
and teaching me what life is truly all about. Most important, I thank my wife,
Sarah, who makes life wonderful and whom I love with all my heart.
—Peter Meindl

About the Authors
Sunil Chopra
Sunil Chopra is the IBM Distinguished Professor of Operations Management and
­ nformation Systems at the Kellogg School of Management. He has served as the interim
dean and senior associate dean for curriculum and teaching, and the codirector of the
MMM program, a joint dual-degree program between the Kellogg School of Management and the McCormick School of Engineering at Northwestern University. He has a
PhD in operations research from SUNY at Stony Brook. Prior to joining Kellogg, he
taught at New York University and spent a year at IBM Research.
Professor Chopra’s research and teaching interests are in supply chain and logistics
management, operations management, and the design of telecommunication networks.
He has won several teaching awards at the MBA and Executive programs of Kellogg. He
has authored more than 40 papers and two books.
He has been a department editor for Management Science and an associate editor for Manufacturing & Service Operations Management, Operations Research, and Decision ­Sciences
Journal. His recent research has focused on understanding supply chain risk and devising
­ ffective risk mitigation strategies. He has also consulted for several firms in the area of supply
chain and operations management.

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Peter Meindl
Peter Meindl is a portfolio manager with Kepos Capital in New York. Previously, he was
a research officer with Barclays Global Investors, a consultant with the Boston Consulting Group and Mercer Management Consulting, and the director of strategy with
i2 ­ echnologies. He holds PhD, MS, BS, and BA degrees from Stanford, and an MBA
from the Kellogg School of Management at Northwestern.
The first edition of this book won the prestigious Book of the Year award in 2002 from the
Institute of Industrial Engineers.

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Preface  x

Part I

Building a Strategic Framework to Analyze Supply

(Video) #1 SUPPLY CHAIN MANAGEMENT IN HINDI | Meaning & Concept | Supply Chain | BBA/MBA/Mcom | ppt

Chapter 1 Understanding the Supply Chain  1

What Is a Supply Chain?  1
The Objective of a Supply Chain  3
The Importance of Supply Chain Decisions  5
Decision Phases in a Supply Chain  6
Process Views of a Supply Chain  8
Examples of Supply Chains  13
Summary of Learning Objectives  17
Discussion Questions  17  •  Bibliography  18

Chapter 2 Supply Chain Performance: Achieving Strategic
Fit and Scope  19

Competitive and Supply Chain Strategies  19
Achieving Strategic Fit  21
Expanding Strategic Scope  31
Challenges to Achieving and Maintaining
Strategic Fit  34
Summary of Learning Objectives  35

Discussion Questions  36  •  Bibliography  36
▶ CASE STUDY: The Demise of Blockbuster  37

Chapter 3 Supply Chain Drivers and Metrics  40
3.1 Financial Measures of Performance  40
3.2 Drivers of Supply Chain Performance  44
3.3 Framework for Structuring Drivers  46
3.10 Summary of Learning Objectives  59
Discussion Questions  60  •  Bibliography  61
▶ CASE STUDY: Seven-Eleven Japan Co.  61
▶ CASE STUDY: inancial Statements for Walmart Stores Inc. and
Macy’s Inc.  67

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What is supply chain management answers? ›

Supply chain management is the handling of the entire production flow of a good or service — starting from the raw components all the way to delivering the final product to the consumer.

What are the 5 basic steps of supply chain management PDF? ›

Supply management is made up of five areas: supply planning, production planning, inventory planning, capacity planning, and distribution planning.

What is supply chain PDF? ›

definition, the supply chain encompasses processes that cover a broad range of activities. including sourcing, manufacturing, transporting, and selling physical products and services.

What are the 6 components of supply chain management? ›

CIO, the business magazine from Boston's International Data group, have identified six core components of good SCM: Planning, Sourcing, Making, Delivering, Returning, and Enabling.

What are the four 4 stages of supply chains? ›

What are the components of your supply chain you should be focusing on right now?
  • INTEGRATION. Integration starts at your strategic planning phase and is critical throughout your communications and information sharing and data analysis and storage. ...

What are the 5 types of supply chain? ›

Supply chain management has five key elements—planning, sourcing raw materials, manufacturing, delivery, and returns.

What are the 5 pillars of SCM? ›

The five pillars of supply chain resilience
  • Pillar 1 – Vulnerability. ...
  • Pillar 2 – Management Culture. ...
  • Pillar 3 – Procurement. ...
  • Pillar 4 – Operations. ...
  • Pillar 5 – Demand & Visibility.

What are the 7 R's of supply chain management? ›

The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.

What are the 4 main areas of supply chain? ›

Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.

What is the difference between supply chain and supply chain management PDF? ›

A supply chain is one of the core activities of the organization that is associated with the delivery of goods and services to customers. Supply chain management is defined as the management of flow of goods as well services and includes processes involved in transforming raw materials to final products.

What is supply very short answer? ›

In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual.

What are the 5 biggest supply chain issues? ›

Here are five major challenges that companies continue to face in their supply chains–and the solutions that will help logistics providers prepare for the future.
  • 1 - Huge E-commerce Growth. ...
  • 2 - Sudden Shortages. ...
  • 3 - Centralized Inventory. ...
  • 4 - Limited or Insufficient Visibility. ...
  • 5 - Patchwork Logistics.
3 May 2022

What is the three 3 components of SCM? ›

a) The specific jobs or activities. Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery).

What are the six 6 major drivers of supply chain performance? ›

Five supply chain drivers, Production, Inventory, Location, Transportation, and Information, influence the performance of the supply chain. Companies can develop and manage these drivers to emphasize the ideal balance between responsiveness and efficiency, depending on your business and financial requirements.

What are the 3 types of supply chain strategies? ›

The three levels of supply chain management are strategic, tactical and operational.
  • Strategic Planning. This level of supply chain management is responsible for developing long-term plans that outline the company's overall objectives and goals. ...
  • Tactical Planning. ...
  • Operational Execution.

What is the cycle of SCM? ›

These six stages are: Plan, Analyze, Develop, Integrate, Deliver, and Return. known as a Plan.

What are the two 2 stages in a supply chain? ›

Often, different stages within the supply chain are referred to as upstream or downstream. Upstream operations are those in which the materials flow into the organization. Downstream operations are those in which materials (mostly in the form of finished products) flow away from the organization to the customers.

What are 4 P's of supply chain management? ›

The four Ps are the key considerations that must be thoughtfully considered and wisely implemented in order to successfully market a product or service. They are product, price, place, and promotion.

What are the 3 disadvantages of SCM? ›

  • Expensive to implement.
  • Complicated.
  • Lack of co-ordination among departments.
  • Requires trained and personalized staff.
  • Lack of reliability.

What is the main aim of SCM? ›

At its most fundamental level, supply chain management's objective is to ensure that inventory is readily available in customer-facing positions to meet demand. Organisations must strive to match supply and demand on time by making the best use of cross-chain resources.

What are the 5 P's of logistics? ›


What are the 7 principles of procurement? ›

7. Principles of Procurement
  • Accountability. ...
  • Competitive Supply. ...
  • Consistency. ...
  • Effectiveness. ...
  • Value for Money. ...
  • Fair-dealing. ...
  • Integration. ...
  • Integrity.

What are the 10 key elements of supply chain management? ›

What are the 10 Basic Elements of Supply Chain Management?
  • Integration. Every business needs strategic planning for the better functioning of operations. ...
  • Operations. ...
  • Purchasing. ...
  • Distribution. ...
  • Agility. ...
  • Innovation. ...
  • Performance Measurement. ...
  • Alignment.
8 Jul 2022

What is the most important part of supply chain? ›


This is one of the most important stages. Before the beginning of the entire supply chain, it is essential to finalise the strategies and put them into place. Checking the demand for the product or service, checking the viability, costing, profit, and manpower etc., are vital.

What are the two main factors of a supply chain? ›

There are two main factors that add value to your products: flexibility and quality. That's because complex markets, fierce competition, and fast changes in demand require you to be ready to react promptly to customers' needs.

What are the 3 Vs of supply chain? ›

That framework is the "3 V's of Supply Chain," those V's for the few who probably can't readily cite them, are Visibility, Variability and Velocity.

Is supply chain management a good career? ›

Yes, Supply Chain Management is a good career as it offers a plenty of job opportunities with good salaries and a lot to learn ensuring positive growth in career. It is one of the most diverse field in the business sector as it is interconnected with all other functions.

Why is supply chain important? ›

Accurate information about a supply chain saves companies money. It helps manufacturers and retailers produce and transport only what they can sell. This eliminates the unnecessary expenses associated with producing, insuring, and shipping inventory a company can't sell.

What are the 4 basic laws of supply and demand? ›

1) If the supply increases and demand stays the same, the price will go down. 2) If the supply decreases and demand stays the same, the price will go up. 3) If the supply stays the same and demand increases, the price will go up. 4) If the supply stays the same and demand decreases, the price will go down.

What is full supply? ›

adj. 1 holding or containing as much as possible; filled to capacity or near capacity. 2 abundant in supply, quantity, number, etc.

What is supply in short answer? ›

What Is Supply? Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph.

What is supply chain explanation? ›

A supply chain is a connected system of organizations, activities, information and resources designed to source, produce and move goods from origination to a final destination—typically from a supplier to an end customer. Modern supply chains are often very complex, spanning multiple countries and involving many steps.

What is supply chain management with example? ›

SCM encompasses the integrated planning and execution of processes required to manage the movement of materials, information and financial capital in activities that broadly include demand planning, sourcing, production, inventory management and storage, transportation -- or logistics -- and returning excess or ...

What is supply chain management and introduction? ›

Supply chain management (SCM) is the discipline that manages the flow of supplies through all of the stages of a production cycle. SCM applies to any organization that executes projects, produces goods or provides services, as those activities require a supply chain to maintain a steady flow of resources.

What are the 4 types of supply? ›

There are five types of supply—market supply, short-term supply, long-term supply, joint supply, and composite supply.

What are the 3 types of supply? ›

  • A. Joint or complementary supply. If two or more commodities are produced and supplied from one source, it is called joint or complementary supply. ...
  • B. Composite supply. If a particular commodity can serve two or more purposes, it is said to be in composite supply. ...
  • C. Competitive supply.

What are the 8 factors of supply? ›

Determinants of Supply:
  • i. Price:
  • ii. Cost of Production:
  • iii. Natural Conditions:
  • iv. Technology:
  • v. Transport Conditions:
  • vi. Factor Prices and their Availability:
  • vii. Government's Policies:
  • viii. Prices of Related Goods:

What are the 3 basic supply chain? ›

There are three main flows of supply chain management: the product flow, the information flow, and the finances flow.

What are the 4 main areas of supply chain? ›

Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.

What is the main role of supply chain? ›

SCM provides centralized control for the planning, design, manufacturing, inventory, and distribution phases required to produce and sell a company's products. A goal of supply chain management is to improve efficiency by coordinating the efforts of the various entities in the supply chain.

What are the main two types of supply chain? ›

The 2 Types of Supply Chains
Reactive Supply Chain StrategyData-Driven Supply Chain Strategy
Operational improvements based on guesswork or imitating competitorsA data-driven approach helps even best-in-class manufacturing operations find new ways to improve efficiency[iii]
5 more rows

What are the 7 R's of supply chain management? ›

The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.

Who introduced SCM? ›

The term "supply chain management" was first coined by Keith Oliver in 1982. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line.

What are the benefits of supply chain? ›

Important benefits of supply chain management
  • Better collaboration with suppliers.
  • Better quality control.
  • Shipping optimisation.
  • Reduced inventory and overhead costs.
  • Improved risk mitigation.
  • Stronger cash flow.
  • A more agile business.
  • Better visibility and data analytics.
26 Jan 2022


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