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This chapter is from the book

Chapter Summary

The following summarizes key takeaways from this chapter:

  • The supply chain concept has emerged as the cornerstone of the twenty-first century’s competitive business strategy, although similar concepts such as integrated logistics management, value chain, and demand chain have existed in the past. A key to the supply chain success is how efficiently and effectively multiple business functions and firms across the traditional organizational boundaries break their barriers to create synergies among themselves.
  • Although supply chain management is more than a fad, organizations that are interested in supply chain transformations should examine whether their strategic fits, structures, and cultures are right for such transformations. Prior to taking advantage of enormous benefit potentials of supply chain integration, one should be aware of potential challenges and risks associated with such integration.
  • To induce the business partners into supply chain transformations, the firm should provide those partners with measurable (quantifiable) benefits and risks accrued from supply chain integration. Thus, the firm should clearly understand the specific impacts of supply chain integration on its business bottom lines, such as return on assets, profitability, revenue growth, and market shares.
  • Once supply chain partnerships are built, each supply chain partner (including the focal company) needs to understand its specific role and mission to avoid duplicated efforts that would defeat the purpose of supply chain integration.
  • The level of supply chain potency is often dictated by the performances of the weakest supply chain links. Therefore, the theory of constraints can be a useful tool for supply chain management.
  • Before jumping onto the supply chain bandwagon, the firm should prepare for a radical change brought about by supply chain transformations. That is to say, change management should always precede supply chain management.
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