Supply Chain Management: A Logistics Perspective, 10th Edition PDF by John J. Coyle, C. John Langley, Robert A. Novack and Brian J. Gibson

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Supply Chain Management: A Logistics Perspective, 10th Edition
By John J. Coyle, C. John Langley, Robert A. Novack and Brian J. Gibson
Supply Chain Management: A Logistics Perspective, 10th Edition

Contents

Preface xxv
About the Authors xxix
Part I
Chapter 1 Supply Chain Management: An Overview 3
SUPPLY CHAIN PROFILE: SAB Distribution: The Final Chapter 4
1-1 Introduction 5
1-2 Shaping the Supply Chains of the Twenty-First Century:
Evolution and Change 6
1-2-1 Globalization 7
1-2-2 Technology 9
1-2-3 Organizational Consolidation and Power Shifts 9
1-2-4 The Empowered Consumer 10
1-2-5 Government Policy and Regulation 10
ON THE LINE: Changing Times for Drugs 11
1-3 Supply Chains: Development and Shaping
for the Twenty-First Century 12
1-3-1 Development of the Concept 12
1-4 Major Supply Chain Issues 18
1-4-1 Supply Chain Networks 18
1-4-2 Complexity 19
1-4-3 Inventory Deployment 19
1-4-4 Information 19
1-4-5 Cost and Value 20
1-4-6 Organizational Relationships 20
1-4-7 Performance Measurement 20
1-4-8 Technology 21
1-4-9 Transportation Management 21
1-4-10 Supply Chain Security 21
1-4-11 Talent Management 22
Summary 22
Study Questions 23
Notes 23
Case 1.1: Lehigh Valley Transport and Logistics Service
(LVTLS) 24
Case 1.2: Central Transport, Inc. 25
Chapter 2 Global Dimensions of Supply Chains 27
SUPPLY CHAIN PROFILE: “The Impact of Changing Weather Patterns” 28
2-1 Introduction 28
2-2 Rationale for Global Trade and Commerce 29
2-3 Contributing Factors for Global Commerce and Supply
Chain Flows 30
2-3-1 Population Size and Distribution 30
ON THE LINE: Economic Growth and the Birth Rate 34
2-3-2 Land and Resources 34
2-3-3 Technology and Information 35
2-4 Global Supply Chain Flows 35
2-5 Supply Chains in a Global Economy 39
ON THE LINE: More Deliveries, Same Cost 40
2-6 Global Markets and Strategy 41
2-7 Supply Chain Security: A Balancing Act 43
2-8 Ports 44
2-9 North American Free Trade Agreement 45
Summary 45
Study Questions 46
Notes 46
Case 2.1: Red Fish, Blue Fish, LLP 48
Chapter 3 Role of Logistics in Supply Chains 51
SUPPLY CHAIN PROFILE: Small Ports Boxed Out by Big Ships 52
3-1 Introduction 52
3-2 What Is Logistics? 54
3-3 Value-Added Roles of Logistics 55
3-3-1 Form Utility 56
3-3-2 Place Utility 56
ON THE LINE: AGE OF THE DRONE: Good News or Bad News??? 56
3-3-3 Time Utility 56
3-3-4 Quantity Utility 57
3-3-5 Possession Utility 58
3-4 Logistics Activities 58
3-4-1 Transportation 58
3-4-2 Storage 59
3-4-3 Packaging 59
3-4-4 Materials Handling 59
3-4-5 Inventory Control 59
3-4-6 Order Fulfillment 60
3-4-7 Forecasting 60
3-4-8 Production Planning 60
3-4-9 Procurement 60
3-4-10 Customer Service 60
3-4-11 Facility Location 61
3-4-12 Other Activities 61
ON THE LINE: “Ups and Wiley Coyote” 61
3-5 Logistics in the Economy: A Macro Perspective 62
3-6 Logistics in the Firm: The Micro Dimension 65
3-6-1 Logistics Interfaces with Manufacturing or
Operations 65
3-6-2 Logistics Interfaces with Marketing 66
3-6-3 Logistics Interfaces with Other Areas 68
3-7 Logistics in the Firm: Factors Affecting the Cost and
Importance of Logistics 68
3-7-1 Competitive Relationships 68
3-7-2 Product Relationships 71
3-7-3 Spatial Relationships 73
3-7-4 Logistics and Systems Analysis 75
Summary 76
Study Questions 76
Notes 77
Case 3.1: Jordano Food Products 78
Case 3.2: Senco Electronics Company 80
Appendix 3A Techniques of Logistics System Analysis 81
Short-Run/Static Analysis 81
Long-Run/Dynamic Analysis 82
Appendix 3B Approaches to Analyzing Logistics Systems 84
Materials Management versus Physical Distribution 84
Nodes versus Links 85
Logistics Channels 86
Chapter 4 Distribution and Omni-Channel Network Design 89
SUPPLY CHAIN PROFILE: Why is Tennessee a Hotbed for
Manufacturing? 90
4-1 Introduction 90
4-2 The Need for Long-Range Planning 92
4-2-1 The Strategic Importance of Supply Chain
Network Design 92
4-2-2 Changes to Global Trade Patterns 93
4-2-3 Changing Customer Service Requirements 93
4-2-4 Shifting Locations of Customer and/or
Supply Markets 94
4-2-5 Change in Corporate Ownership/Merger and
Acquisition Activity 94
4-2-6 Cost Pressures 94
4-2-7 Competitive Capabilities 95
4-2-8 Corporate Organizational Change 96
4-3 Supply Chain Network Design 96
4-3-1 Step 1: Define the Supply Chain Network
Design Process 97
4-3-2 Step 2: Perform a Supply Chain Audit 97
4-3-3 Step 3: Examine the Supply Chain Network
Alternatives 98
4-3-4 Step 4: Conduct a Facility Location Analysis 98
4-3-5 Step 5: Make Decisions Regarding Network and
Facility Location 99
4-3-6 Step 6: Develop an Implementation Plan 99
4-4 Major Locational Determinants 99
4-4-1 Key Factors for Consideration 100
ON THE LINE: Supply Chain Managers Target U.S. Cities for Onshoring
Opportunities 103
4-4-2 Current Trends Governing Site Selection 104
4-5 Modeling Approaches 105
4-5-1 Optimization Models 106
4-5-2 Simulation Models 109
4-5-3 Heuristic Models 110
4-5-4 Potential Supply Chain Modeling Pitfalls to
Avoid 111
4-5-5 Example of a Heuristic Modeling Approach:
The Grid Technique 111
4-5-6 Transportation Pragmatics 116
4-6 Omni-Channel Network Design 117
4-6-1 Introduction 117
ON THE LINE: Keynote: Omni-channel’s Impact on Supply Chain Management 118
4-6-2 Channels of Distribution 119
4-6-3 Customer Fulfillment Models 121
ON THE LINE: Distribution: What does it take to be an Omni-channel
Fulfillment DC? 124
Summary 127
Study Questions 128
Case 4.1: Johnson & Johnson 130
Case 4.2: Bigelow Stores 131
Notes 132
Appendix 4A Grid Method—Sensitivity Analyses and Application to
Warehouse Location In a City 133
Grid Method—Sensitivity Analysis 133
Grid Method—Application to Distribution Center
Location in a City 133
Part II
Chapter 5 Sourcing Materials and Services 139
SUPPLY CHAIN PROFILE: Strategic Sourcing Facilitates Innovation,
Transformation, and Cost Reduction 140
5-1 Introduction 140
5-2 Types and Importance of Items and Services
Purchased 142
5-3 Strategic Sourcing Process 145
5-3-1 Step 1: Develop Strategic Plan 146
5-3-2 Step 2: Understand Spend 146
5-3-3 Step 3: Evaluate Supply Sources 147
5-3-4 Step 4: Finalize Sourcing Strategy 147
5-3-5 Step 5: Implement Sourcing Strategy 150
5-3-6 Step 6: Onboarding and Transitioning 151
5-3-7 Step 7: Collaborative Process
Improvement 151
ON THE LINE: Haworth, Inc. Realizes $1.2 Million in Cross-Border
Savings 152
5-4 Supplier Evaluation and Relationships 152
5-5 Total Landed Cost (TLC) 153
5-6 e-Sourcing and e-Procurement 155
5-6-1 Which of These Solutions Should be
Considered 156
ON THE LINE: Transportation Sourcing—Innovative Approaches to Bid
Optimization 158
5-7 e-Commerce Models 159
Summary 160
Study Questions 161
Notes 161
Case 5.1: Alligator, Inc. 162
Case 5.2: Trans-Global, Inc. 164
Appendix 5A The Special Case of Procurement Price 165
Sources of Price 165
Traditional Basic Input Costs 166
Direct Transaction Costs 166
Supplier Relational Costs 167
Landed Costs 167
Quality Costs/Factors 168
Operations Logistics Costs 168
Chapter 6 Producing Goods and Services 171
SUPPLY CHAIN PROFILE: Establishing a Production Footprint:
The VW Journey 172
6-1 Introduction 172
6-2 The Role of Production Operations in Supply Chain
Management (SCM) 173
6-2-1 Production Process Functionality 174
6-2-2 Production Tradeoffs 175
6-2-3 Production Challenges 177
6-3 Operations Strategy and Planning 178
6-3-1 Production Strategies 178
ON THE LINE: A North American Manufacturing Comeback 182
6-3-2 Production Planning 184
6-4 Production Execution Decisions 186
6-4-1 Assembly Processes 186
ON THE LINE: Have it Your Way 187
6-4-2 Production Process Layout 189
6-4-3 Packaging 191
ON THE LINE: Developing More Sustainable Packaging 193
6-5 Production Metrics 194
6-5-1 Total Cost 195
6-5-2 Total Cycle Time 195
6-5-3 Delivery Performance 195
6-5-4 Quality 195
6-5-5 Safety 195
6-6 Production Technology 196
Summary 198
Study Questions 199
Notes 199
Case 6.1: Hudson Guitars 202
Case 6.2: Elvis Golf Ltd. 204
Chapter 7 Demand Management 207
SUPPLY CHAIN PROFILE: The Great Convergence 208
7-1 Introduction 209
7-2 Demand Management 209
7-3 Balancing Supply and Demand 212
ON THE LINE: Volatility in Demand has Become the Norm 212
7-4 Traditional Forecasting 213
7-4-1 Factors Affecting Demand 213
7-5 Forecast Errors 214
7-6 Forecasting Techniques 216
7-6-1 Simple Moving Average 216
7-6-2 Weighted Moving Average 218
7-6-3 Exponential Smoothing 220
ON THE LINE: Practice Change 222
7-7 Sales and Operations Planning 222
7-8 Collaborative Planning, Forecasting, and
Replenishment
224
Summary 227
Study Questions 228
Notes 228
Case 7.1: Tires for You, Inc. 229
Case 7.2: Playtime, Inc. 231
Chapter 8 Order Management and Customer Service 233
E-COMMERCE SURVEY ASKS: Need for Green or Need for Speed? 234
8-1 Introduction 234
8-2 Influencing the Order—Customer Relationship
Management
236
8-2-1 Step 1: Segment the Customer Base by
Profitability
236
8-2-2 Step 2: Identify the Product/Service Package for
Each Customer Segment 237
8-2-3 Step 3: Develop and Execute the Best Processes 237
8-2-4 Step 4: Measure Performance and
Continuously Improve 238
8-2-5 Activity-Based Costing and Customer
Profitability 239
8-3 Executing the Order—Order Management and Order
Fulfillment 245
8-3-1 Order-to-Cash (OTC) and Replenishment Cycles 246
8-3-2 Length and Variability of the Order-to-Cash
Cycle 250
8-4 E-Commerce Order Fulfillment Strategies 252
8-5 Customer Service 252
8-5-1 The Logistics/Marketing Interface 253
8-5-2 Defining Customer Service 253
8-5-3 Elements of Customer Service 255
ON THE LINE: Timely Delivery Matters Most 259
8-5-4 Performance Measures for Customer Service 259
8-6 Expected Cost of Stockouts 261
8-6-1 Back Orders 262
8-6-2 Lost Sales 262
8-6-3 Lost Customer 263
8-6-4 Determining the Expected Cost of Stockouts 263
8-7 Order Management Influences on
Customer Service 263
8-7-1 Product Availability 264
8-7-2 Financial Impact 267
8-7-3 Order Cycle Time 269
8-7-4 Logistics Operations Responsiveness 272
8-7-5 Logistics System Information 275
8-7-6 Postsale Logistics Support 277
ON THE LINE: After-Sales Service: The Forgotten Supply Chain 279
8-8 Service Recovery 280
Summary 281
Study Questions 282
Notes 283
Case 8.1: Telco Corporation 284
Case 8.2: Webers, Inc. 286
Part III
Chapter 9 Managing Inventory in the Supply Chain 289
SUPPLY CHAIN PROFILE: Inventory Management Requires an End-to-End
Approach 290
9-1 Introduction 290
9-2 Inventory in the U.S. Economy 291
9-3 Inventory in the Firm: Rationale for Inventory 292
9-2-1 Batching Economies or Cycle Stocks 294
9-2-2 Uncertainty and Safety Stocks 295
9-2-3 Time/In-Transit and Work-in-Process Stocks 295
9-2-4 Seasonal Stocks 297
9-2-5 Anticipatory Stocks 298
9-2-6 Summary of Inventory Accumulation 298
9-2-7 The Importance of Inventory in Other Functional
Areas 298
9-3 Inventory Costs 299
9-3-1 Inventory Carrying Cost 300
9-3-2 Ordering and Setup Cost 303
9-3-3 Carrying Cost Versus Ordering Cost 306
9-3-4 Expected Stockout Cost 307
SUPPLY CHAIN PROFILE: Is RFID Ready for a Reinvention? 311
9-3-5 In-Transit Inventory Carrying Cost 312
9-4 Fundamental Approaches to Managing Inventory 313
9-4-1 Key Differences Among Approaches to Managing
Inventory 313
9-4-2 Principal Approaches and Techniques for Inventory
Management 315
9-4-3 Fixed Order Quantity Approach (Condition of
Certainty) 316
9-4-4 Fixed Order Quantity Approach (Condition of
Uncertainty) 325
9-4-5 Fixed Order Interval Approach 332
9-4-6 Summary and Evaluation of EOQ Approaches to
Inventory Management 333
9-5 Additional Approaches to Inventory Management 334
SUPPLY CHAIN TECHNOLOGY: Distributor of Education Supplies Passes
Inventory Exam 334
9-5-2 Just-in-Time Approach 335
9-5-3 Materials Requirements Planning 338
9-5-4 Distribution Requirements Planning 343
9-5-5 Vendor-Managed Inventory 345
9-6 Classifying Inventory 347
9-6-1 ABC Analysis 347
9-6-2 Quadrant Model 350
9-6-3 Inventory at Multiple Locations—The Square-Root
Rule 351
Summary 353
Study Questions 354
Notes 355
Case 9.1: MAQ Corporation 356
Case 9.2: Baseball Card Emporium 357
Appendix 9A Special Applications of the EOQ Approach 358
Adjusting the Simple EOQ Model for Modal Choice
Decisions—The Cost of Inventory in Transit 358
Adjusting the Simple EOQ Model for Volume Transportation
Rates 361
Adjusting the Simple EOQ Model for Private Carriage 365
Adjusting the Simple EOQ Model for the Establishment and
Application of In-Excess Rates 365
Summary 369
Chapter 10 Distribution—Managing Fulfillment Operations 371
SUPPLY CHAIN PROFILE: The Changing Face of Distribution 372
10-1 Introduction 373
10-2 The Role of Distribution Operations in SCM 373
10-2-1 Distribution Facility Functionality 374
10-2-2 Distribution Tradeoffs 376
10-2-3 Distribution Challenges 378
ON THE LINE: DC Automation: Solving the Labor Dilemma
(and more) 379
10-3 Distribution Planning and Strategy 380
10-3-1 Capability Requirements 380
10-3-2 Network Design Issues 382
10-3-3 Facility Considerations 386
ON THE LINE: Efficient and Environmentally Friendly DCs 389
10-4 Distribution Execution 390
10-4-1 Product-Handling Functions 390
10-4-2 Support Functions 393
10-5 Distribution Metrics 394
10-6 Distribution Technology 396
10-6-1 Warehouse Management Systems 397
ON THE LINE: Convergence is the Word in WMS 398
10-6-2 Automatic Identification Tools 399
Summary 401
Study Questions 402
Notes 402
Case 10.1: Power Force Corporation 404
Case 10.2: TV Gadgetry 406
Appendix 10A Materials Handling 408
Objectives and Principles of Materials Handling 408
Materials-Handling Equipment 409
Summary 415
Notes 416
Chapter 11 Transportation—Managing the Flow of the Supply
Chain 417
SUPPLY CHAIN PROFILE: A Transportation “Perfect Storm” 418
11-1 Introduction 419
11-2 The Role of Transportation in Supply Chain
Management 419
11-2-1 Role Inhibitors 420
11-3 Modes of Transportation 422
11-3-1 Motor Carriers 423
11-3-2 Railroads 425
11-3-3 Air Carriers 427
11-3-4 Water Carriers 428
11-3-5 Pipelines 430
11-3-6 Intermodal Transportation 432
ON THE LINE: The Sixth Mode of Transportation 434
11-4 Transportation Planning and Strategy 434
11-4-1 Functional Control of Transportation 435
11-4-2 Terms of Sale 435
11-4-3 Decision to Outsource Transportation 437
11-4-4 Modal Selection 439
11-4-5 Carrier Selection 443
ON THE LINE: Courting the Carrier Community 444
11-4-6 Rate Negotiations 445
11-5 Transportation Execution and Control 445
11-5-1 Shipment Preparation 445
11-5-3 Freight Documentation 446
11-5-4 Maintain In-Transit Visibility 448
11-5-5 Transportation Metrics 448
11-5-6 Monitor Service Quality 450
11-6 Transportation Technology 451
ON THE LINE: Freight Visibility Solutions 452
11-6-1 Transportation Management Systems 453
Summary 454
Study Questions 455
Notes 456
Case 11.1: Vibrant Video 458
Case 11.2: Bob’s Custom BBQs 460
Appendix 11A Federal Regulation of the Transportation Industry 462
Economic Regulation 464
Safety Regulation 465
Summary 466
Notes 467
Appendix 11B Basis of Transportation Rates 468
Cost of Service 468
Value of Service 469
Distance 470
Weight of Shipment 471
Commodity Characteristics 471
Level of Service 472
Summary 473
Notes 473
Part IV
Chapter 12 Aligning Supply Chains 477
SUPPLY CHAIN PROFILE: Why is Strategic Alignment So Hard? 478
12-1 Introduction 479
12-1-1 Intensity of Involvement 480
12-1-2 Model for Developing and Implementing
Successful
Supply Chain Relationships 481
12-1-3 Imperative for Collaborative Relationships 485
12-2 Third-Party Logistics—Industry Overview 488
ON THE LINE: Collaborative Distribution to Achieve Strategic Goals 488
12-2-1 Definition of Third-Party Logistics 489
12-2-2 Example Services of 3PL Providers 491
12-2-3 Global 3PL Market Size and Scope 492
12-3 Third-Party Logistics Research Study—Industry
Details 494
12-3-1 Profile of Logistics Outsourcing Activities 494
12-3-2 Strategic Role of Information Technology 496
ON THE LINE: Collaboration Technologies Facilitate 3PL-Customer
Relationships 496
12-3-3 Management and Relationship Issues 498
12-3-4 Customer Value Framework 499
12-3-5 A Strategic View of Logistics and the Role
of 3PLs 500
Summary 500
Study Questions 501
Notes 502
Case 12.1: Quik Chips, Inc. 503
Case 12.2: HQ Depot 505
Chapter 13 Supply Chain Performance Measurement and Financial
Analysis 507
SUPPLY CHAIN PROFILE: CLGN Book Distributors.com 508
13-1 Introduction 510
13-2 Dimensions of Supply Chain Performance Metrics 510
13-3 Developing Supply Chain Performance Metrics 515
ON THE LINE: Establishing Ocean-Alliance KPIs 516
13.4 Performance Categories 516
13-5 The Supply Chain–Finance Connection 521
13-6 The Revenue–Cost Savings Connection 522
13-7 The Supply Chain Financial Impact 523
ON THE LINE: What’s the ROI on a Managed Transportation Services
Relationship? 527
13-8 Financial Statements 527
13-9 Financial Impact of Supply Chain Decisions 528
13-10 Supply Chain Service Financial Implications 533
Summary 541
Study Questions 541
Notes 543
Case 13.1: Wash & Dry, Inc. 544
Case 13.2: Paper2Go.com 545
Appendix 13A Financial Terms 546
Chapter 14 Supply Chain Technology—Managing Information Flows 549
SUPPLY CHAIN PROFILE: Omni-channel Retailing Runs on
Information 550
14-1 Introduction 551
14-2 Information Requirements 551
14-2-1 Meet Quality Standards 552
14-2-2 Support Multidirectional Flows 554
14-2-3 Provide Decision Support 554
14-3 Systems Capabilities 555
14-3-1 Enable Process Excellence 555
14-3-2 Link Network Elements 557
14-3-3 Mitigate Known Risks 558
14-4 SCM Software 559
14-4-1 Planning 560
ON THE LINE: Planning Software Drives Forecast Accuracy 561
14-4-2 Execution 562
14-4-3 Event Management 563
14-4-4 Business Intelligence 563
14-4-5 Facilitating Tools 564
ON THE LINE: RFID Supports Omni-channel Success 566
14-5 SCM Technology Implementation 566
14-5-1 Needs Assessment 566
14-5-2 Software Selection 567
14-5-3 Implementation Issues 569
14-6 Supply Chain Technology Innovations 570
14-6-1 Internet of Things 570
14-6-2 Mobile Connectivity 571
14-6-3 Functional Automation 572
Summary 573
Study Questions 574
Notes 574
Case 14.1: Inflate-a-Dome Innovations 578
Case 14.2: Grand Reproductions Inc. 580
Chapter 15 Strategic Challenges and Change for Supply Chains 581
SUPPLY CHAIN PROFILE: Adapting Your Supply Chain for the
Future…Now 582
15-1 Introduction 582
15-2 Principles of Supply Chain Management 583
15-2-1 Principle 1: Segment Customers Based on
Service Needs 583
15-2-2 Principle 2: Customize the Logistics
Network
584
15-2-3 Principle 3: Listen to Signals of Market Demand
and Plan Accordingly 585
15-2-4 Principle 4: Differentiate Products Closer to the
Customer 585
15-2-5 Principle 5: Source Strategically 586
15-2-6 Principle 6: Develop a Supply Chain-Wide
Technology Strategy 586
15-2-7 Principle 7: Adopt Channel-Spanning
Performance
Measures 587
15-2-8 An Update on the Seven Principles of SCM 587
15-3 Supply Chain Analytics and Big Data 588
ON THE LINE: The Changing Geography of Supply Chains 588
15-3-1 Supply Chain Analytics Maturity Model 589
15-3-2 Analytical Resources 591
15-3-3 Big Data and the Supply Chain 591
15-4 Omni-Channel 593
15-4-1 Strategies for Success 593
15-4-2 The Future of Omni-Channel 595
15-5 Sustainability 596
15-5-1 Benefits and Challenges 596
15-5-2 Social and Environmental Responsibility 597
15-5-3 Reducing Risk 598
15-5-4 “R’s” of Sustainability 598
15-5-5 Reverse Flows 599
15-6 3-D Printing 600
15-6-1 An Inside Look at 3-D Printing 601
15-6-2 Illustrative Examples of 3-D Printing 601
ON THE LINE: Maersk Uses 3-D Printing for Spare Parts on Ships 602
15-6-3 3-D Printing Strategic Impacts on Supply Chains
and Logistics 603
15-7 The Growing Need for SCM Talent Management 603
ON THE LINE: Employer Branding in Action 606
15-8 Closing Thoughts 606
Summary 608
Study Questions 608
Notes 609
Case 15.1: Snoopze’s P. O. Plus 611
Case 15.2: Peerless Products, Inc. 613
Appendix 15A Reverse Logistics Systems versus Closed Loops 614
Customer Returns 616
Environmental Challenges 617
Economic Value 617
Achieving a Value Stream for Reverse Flows 618
Managing Reverse Flows in a Supply Chain 619
Subject Index 621
Name Index 635
 
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