|
| |
SUPPLY CHAIN MANAGEMENT.
Term Paper ID:30611
|
|
|
Essay Subject:
Analysis of two books on the topic.... More...
|
10 Pages / 2250 Words
2 sources, 28 Citations,
MLA Format
$40.00
Return to List of Papers
|
Paper Abstract:
Analysis of two books on the topic. Compares the fundamental differences and similarities, one taking the historic view and the other the future factors. "Designing and Managing the Supply Chain" by David Simchi-Levi, and "E-Supply Chain" by Charles C. Poirier. Agreement of both that supply chain management is essential to business profitability.
Paper Introduction:
A COMPARISON OF TWO BOOKS ON THE SUBJECT OF SUPPLY CHAIN
MANAGEMENT:
(1) DESIGNING AND MANAGING THE SUPPLY CHAIN By DAVID SIMCHI-LEVI ET AL
(2) E-SUPPLY CHAIN By CHARLES C. POIRIER ET AL
Introduction.
The two books have a fundamental difference in their approach to supply chain management. Essentially, Simchi-Levi describes what in place now, that is the current utilization of concepts that may be considered “historic” in their usage. On the other hand, Poirier, leads us into the Internet world of e-commerce, explains what will be the future (or at least what should be) for an effective supply chain system. While Simchi-Levi, still dealing with what is “now”, tends to consider the importance of inventory control above all else, while Poirier
Text of the Paper:
The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper.
The difficulty in designingthese mechanisms stems from taking trying to gauge the interactions of thevarious supply chain levels. One can easily think of what ishappening to the banks today, as they realize that retail banking is notprofitable for them, and that some now even charge fees to deal with alive" teller as opposed to using an ATM. Perhaps the key to the different approaches of these two books is theidea of selectivity by Poirier and the added value concept of Simchi-Levy.The differences (as well as the similarities) of dealing with customers andproviding them added value and market selectivity. 29( Helists two techniques, 1) Mathematical optimization and (2) simulationmodels that "provide a mechanism to evaluate specified designalternatives". A part of this process is known as risk pooling, in this case in termsof literally pooling or spreading the risk among a firm's customers. Poirier feels that customer service has to (or should) change,from satisfying every customer, to "develop and retain the best customersin designated profitable growth markets. Poirierinsists that e-commerce is already indispensable, both as a tool and aningredient, to facilitating supply chain development and growth. This new emphasis seeks to learnwhy a customer picks one company over another and examines the entire rangeof services and products that make up a company's overall image and line ofgoods. On the other hand, Poirier, leads us into theInternet world of e-commerce, explains what will be the future (or at leastwhat should be) for an effective supply chain system. As Simchi=Levy pointsout, the influence of government and regulatory agencies' data bases havemade many customers a lot more aware of their "rights" and even aware oftheir opportunities in dealing with their traditional or new suppliers.Because of this new consumer awareness, it seems difficult to totally agreewith the selectivity theories opf Poirier. Essentially, Simchi-Levi describes what in placenow, that is the current utilization of concepts that may be considered"historic" in their usage. Designing and Managing the Supply Chain. It means determining howto cut order entry and payment costs." (p. Thus, inventory can appear in the supplychain as raw material, work in process and finished products, and eachrequires its own inventory control mechanism. 19) is not merely technology, but themeans of transforming that technology into meaningful and profitablerelationships that last.Inventory management Simchi-Levi discusses inventory management in terms of coordinatedinventory decisions. Simchi-Levy does develop the theory of "the dimension of customervalue" (2 ) and lists four dimensions: conformance to requirements,product selection, price and brand, value-added services and relationshipand experiences. 3 ) Among the parts that make up simulation are "1)individual ordering patterns, 2. Both books dwell in their opening chapters on specifics of the supplychain itself and of supply chain modification and design. POIRIER ET ALIntroduction. & Bauer, Michael J. In light of recent economic setbacks in general andInternet declines in particular, more than evident since late in 2 (ifnot sooner), the book (at least in Chapter Two) has an oddly anachronisticfeel - especially since it purports to be on the absolute cutting edge ofmanagement technology. San Francisco: Berrett-Koehler, 2 1.Simchi-Levi, David, Kaminsky, Philip, & Simchi-Levi, Edith. Is it a trade-off,then? There are both wide as well assubtle differences in the approach to supply management, but both booksagree that supply chain management has now become essential for businessgrowth and profitability. The entire business world isn't what itused to be, which, one would think, is one of the reasons for these bookson a vital and constantly-changing (and often improving) supply-chainmanagement. Nor is marketing. Based onaccumulated data, algorithms are then provided for exact solutions to thequestions raised by the above. E-Supply Chain. On the other hand, Simchi-Levi atates that companies have evolved fromsimple internal quality checks to external customer satisfaction and now towhat is called "customer value" (199). Poirier says, at the outset of his chapterthat "selling isn't what it used to be. 65) On this subject alone, a student's ormanager's choice would be this, rather than the Poirier text, especiallywhen the first rule Simchy-Levy mentions is that "forecast demand is alwayswrong"(p 65), followed by his second rule that "aggregate demandinformation is always more accurate than disaggregate data." (p. 149) But, surely this is nothing newto any manager, new or experienced. Are growth markets and potential new customer bases worth ignoringlong-standing customer ties in mature markets? What both texts seem to make obvious is that today's salesrepresentative must emerge from the status of simple order taker andinformation provider to "a valued external resource for accomplishinginterorganizational objectives and jointly developing new business" (154). On the other hand, Poirier starts with the indispensability ofthe supply chain as a given and seeks to demonstrate the necessity ofbuilding upon that to develop a truly systematized network in which theInternet plays a large, if not the largest, role.Logistics Network Configurations. (p. Again, in the simplest terms, he explains thefunctions of these sectors. Because of the new importance of supply chain management, logisticshas emerged from the back office into a very visible part of managementconcerns - something, incidentally, that Poirier has asserted all along.What is at statke here, as Simchi-Levy sees it, is a trade-off between lowprices or superior customer support services, product availability,distribution and delivery (199). Instead, he transfers his attention to secure electronictransactions, and how to link data networks: "the process developers mustbe aware of what makes the most sense for the network being enhanced." (p.119) In other words, good logic and common sense are not supplanted byemerging technologies, and it serves as a sort of warning that one shouldnot rely entirely on electronics, data banks, or linkage networks. Simchi-Levi in particular discusses logistics network configurationin some detail, focusing on the nuts and bolts of warehouse location,sizing and interior space allotment, as well as deciding how manywarehouses there should be and which customers should receive merchandizefrom which ones. Nor is theconcept of service to a customer." (p. He notes that a supply chain typically consists ofsuppliers and manufacturers who convert raw materials into finishedproducts, and distribution centers and warehouses, that ship (distribute)finished products to customers. Even if, as Simchy-Levy points out, inventory decisionsare made by a single decision-maker whose objective is to minimize costs,and that he has access to inventory information not only at the warehouse,but also at retailers, he considers the most effective inventory policy tobe a "so-called echelon inventory" (p. The formation of this firm,using both internal and external applications is, of course, the simplestform of the supply-chain. For example, hestates "The importance of validation cannot be overstated." (p. The majorproblem, of course, is bottlenecks, not to mention over-supply of inventorythat is not moving, and may be seriously out of date. As this text continues, it becomes obvious that a single warehousefacility is only a starting point, and that many companies now rely ondecentralization. Poirier gets into the specifics of inventory management (p 119) bystating "Uncertainty breeds higher inventory and safety stock". Poirier developsthe rationale of a nucleus firm, which he explains is " a company thatassumes the central role in bringing an external orientation to a supplychain and solicits the help of willing business partners on either side ofthe chain, so a full network can be generated." (p. Boston: McGraw-Hill, 2 . Inother words, the problem is postulated: How can a company meet or exceedits previous delivery record with one warehouse instead of two or more?According to Simchi-Levi, "with random demand, it is very likely that ahigher-than-average demand at one retailer will be offset by a lower-than-average demand at another. A COMPARISON OF TWO BOOKS ON THE SUBJECT OF SUPPLY CHAIN MANAGEMENT:(1) DESIGNING AND MANAGING THE SUPPLY CHAIN By DAVID SIMCHI-LEVI ET AL(2) E-SUPPLY CHAIN By CHARLES C. Supplier costs, product quality, deliverytimes and changing customer demand must all somehow be measured with thegreatest possible accuracy. Again, Poirier is a little behind the times in his comments that "Amark of business change in the last half of the 199 s is how a few industryleaders transformed their focus from an exclusively internal excellencedrive to looking at supply-chain network structure." (p. He speaksof it in glowing terms with such phrases as "tsunami of change" and refersto the "e-supply chain [that] must be an integral part of any businessstrategy intended to take an organization forward in the next ten years"(23). Simchi-Levy seems more "basic" in its explanations. 19) The fact isnot so nmuch that industry leaders altered theirt focus, but that more andmore global competition forced them into re-=thinking how their supply-chain commitments could serve their bottom line better, The "coveted marketadvantage" Poirier refers to (p. What the curious reader will want tio know, even though it surelyappears in later chapters is- how do I use these functions to overcomecompetitive and global pressures. 61) In comparing these two books, it is obvious that Simchy-Levy is morecurrent and his rationale more meaningful, if for nothing else than hespends more pages and space on a careful dissection of "matching supply anddemand in the supply chain". Some competitive banks are usingthis "selectivity" as a means of attracting customers. While Simchi-Levi,still dealing with what is "now", tends to consider the importance ofinventory control above all else, while Poirier discusses that as simplyone among many supply chain factors. This task must be accomplished ona network basis..." (p.15 ) He, in essence, takes the customer servicesatisfaction mode out of a personal and traditional basis and places it inthe hands of technology: "Customer relationship management becomes anetwork effort." (p. As earlier, the benefits versus the downsideof one warehouse versus several must be calculated. 6 ) What makes this question,and potential answers important, is the fact that so many companies are nowgoing global, which tends to reduce the opportunities for centralization.The trade offs he mentions (pp 6 -61) are safety stock, service level,overhead costs, customer lead time and transportation costs. 15 ) This being a book comparison, there is littleroom here to argue forcefully with Poirier regarding aspects of customerservice and satisfaction. Poirier does not getinto this here. 33) It would seem, then,that such a simple dissection of a simulation model is designed for abeginning student, and not for an experienced manager. 65) Giventhese two rules, the Simchy-Levy text is a far more valuable addition toany texts on inventory management and the supply chain.Customer Service The difference between these two books can be seen in the chaptertitles which cover customer service: Simchi-Levi calls this chapter,"Customer Value and Supply Chain Management," and begins: "Not long agothis chapter would have been titled "Customer Service and Logistics" (198). Simchi-Levi then points out that increasing the number ofwarehouses has both good effects, such as better customer service and lowertransportation costs from warehouse to customer (outbound); and badeffects, such as higher costs for overhead, setup, inventory andtransportation from manufacturer/supplier to warehouse (inbound). Simchi-Levi, in effect, takes more time definingsupply chain fundamentals, elaborating on the intricacies of conflictingobjectives and dynamics that can stymie even the cleverest and best-intentioned efforts to implement modern and systematic supply chainmanagement. Ofcourse, he makes it clear that e-business will be "only as strong as thecollective supply chain infrastructure supporting the business and thecapabilities of that network's constituent members" (39). Interestingly, Poirier's title for this chapter reads, "The Impact onMarketing, Sales, and Customer Service." So, one wonders, whose book is onthe cutting edge, after all? While the shape and definitionsof functions are obviously the pattern for most business today, it shouldbe regarded as merely the very foundation from which more complex andsophisticated business and supply-chain management functions need tospring. One thing is certain,according to Simchi-Levy "Supply chain management strategy affects customervalue" (213) while Poirier is set on "an organizational restructuring thatcreates the integrated perspective necessary to meet the demand ofsophisticated customers and consumers..." (166) WORKS CITEDPoirier, Charles C. He poses a very vital question: "What are the trade-offs that we need to consider comparing centralized distribution systemswith decentralized distribution systems?" (p. Specific inventory policies, and 3.Inventory movements inside the warehouse." (p. (p. Simchy-Levy is far more precise and expansive in his description ofinventory management. Though the book bears a copyright date of 2 1, it is clear fromspecific references that the material was written no later than 1999 andnever updated. For example, in the buying sector, he statesthat "This does ot mean just getting lower prices. 6), with the nucleus firm in thecenter core, outside of which there are six functions: Making, buying,selling, technology, inventory, and delivery. 5) He offers the same sort ofexplanation for the other five functions. As the number of retailers served by awarehouse goes up, this likelihood also goes up" (57). Poirier is primarily concerned with taking the fundamentals of Simchi-Levi's modernized supply chain and melding it with the Internet. The two books have a fundamental difference in their approach tosupply chain management. 4) Poirier designs a hexagon shape (p. Poirier at this point focuses almost entirely on the Internet as thismajor factor in the supposedly gigantic new world of e-commerce.
If this paper is not what you are looking for, you can search again:
or
Click here to request an essay written just for you.
|
|
|
