The Future of Supply Chain Management: Shifting from Logistics Driven to a Customer Driven Model

The Future of Supply Chain Management: Shifting from Logistics Driven to a Customer Driven Model

Ketan Vanjara (Microsoft, India)
Copyright: © 2009 |Pages: 15
DOI: 10.4018/978-1-60566-090-5.ch022
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This chapter initiates the concept of a customercentric model in supply chain systems. It discusses various constraints of present-day supply chain systems resulting from their roots being in logistics management and suggests an alternative next-level paradigm of a customer-centric matrix model. This chapter further demonstrates how this model would add value to the customer by taking the example of a healthcare information management system. The chapter also delves into the limitations of and anticipated issues and challenges in implementing the suggested model. Finally, the chapter hints at some broad directions for future research and action in the field. Emergent behavior is what happens when an interconnected system of relatively simple elements begins to self-organize to form a more intelligent and more adaptive higher-level system (Johnson, 2001).
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As per one definition, SCM is the coordination of the demand and supply of products and services between a supplier’s supplier and a customer’s customer. It involves the flow of products, information, and money between the trading partners of a company’s supply chain. The proactive improvement in the efficiency and effectiveness of the flow of goods, services, and knowledge across all stakeholders achieves the goal of reducing total costs and obtaining a competitive advantage for all parties.

Supply chain is the network of facilities (warehouses, factories, terminals, ports, stores, and homes), vehicles (trucks, trains, planes, and ocean vessels), and logistics information systems connected by an enterprise’s suppliers’ suppliers and its customers’ customers. Supply chain flow is optimized when material, information, and money flow simultaneously in real time and without paper.5

SCM revolves around efficient integration of suppliers, manufacturers, warehouses, and stores. Other definitions are more comprehensive and detailed:

The challenge in supply chain integration is to co-ordinate activities across the supply chain encompassing these various players, whose systems are bound to be disparate right from the beginning. It is only with such integration that the enterprises can improve performance, reduce costs and increase their service levels to the end-user, the customer. These integration challenges are met not only by coordinating production, transportation, and inventory decisions but more generally by integrating the front-end of the supply chain, customer demand, to the back-end of the supply chain, the production and manufacturing portion of the supply chain. (Simchi-Levi et al., 2003)

As it can be seen from our discussion thus far and from the voluminous literature on supply chain, the focus is constantly on the network of facilities, logistics, supplies, and suppliers. This is due to two main reasons: (1) the origins of the concept of supply chain lie in logistics and in inventory. and (2) the supply chain is related mostly to manufacturing or tangible goods, and thereby, the developments in the services sector and in the knowledge economy are overlooked.

Some thoughts are emanating gradually on the use of supply chains for customer satisfaction. For instance, “efficient integration of suppliers, manufacturers, … so that enterprise can increase service level” (Simchi-Levi et al., 2003) and “maximize customer service and minimize cost of the same” (Frazelle, 2002). The closest one gets to customer focus is in the following statement:

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Table of Contents
Chapter 1
Mark Xu, Roland Kaye
This chapter discusses the nature of strategic intelligence and the challenges of systematically scanning and processing strategic information. It... Sample PDF
The Nature of Strategic Intelligence: Current Practice and Solutions
Chapter 2
Keith Sawyer, John Gammack
Although it is widely accepted that alignment of knowledge with corporate strategy is necessary, to date there have been few clear statements on... Sample PDF
Developing and Analysing Core Compentencies for Alignment with Strategy
Chapter 3
William Y.C. Wang, Michael S.H. Heng, Patrick Y.K. Chau
Combining with the collaborations between business customers and suppliers, traditional purchasing and logistics functions have evolved into a... Sample PDF
Implementing Supply Chain Management in the New Era: A Replenishment Framework for the Supply Chain Operations Reference Model
Chapter 4
Purnendu Mandal
Since behavioral and cultural factors play a major role in strategic alliances between partners, IT managers must understand the intricacies... Sample PDF
Behavioral Factors and Information Technology Infrastructure Considerations in Strategic Alliance Development
Chapter 5
Yi-chen Lan, Bhuvan Unhelkar
Integrated Supply Chain Management (ISCM) involves the linking of suppliers and customers with the internal business processes of an organization.... Sample PDF
A Methodology for Developing an Integrated Supply Chain Management System
Chapter 6
Summer E. Bartczak, Jason M. Turner, Ellen C. England
It is widely acknowledged that knowledge management (KM) strategy is a desired precursor to developing specific KM initiatives. Strategy development... Sample PDF
Challenges in Developing a Knowledge Management Strategy: A Case Study of the Air Force Materiel Command
Chapter 7
Michael Shumanov, Michael Ewing
While the managerial rationale for adopting customer relationship management (CRM) has been fairly well articulated in the literature, research on... Sample PDF
Developing a Global CRM Strategy
Chapter 8
Richard Welke, Gabriel Cavalheiro, Ajantha Dahanayake
Commercial airlines face an extremely challenging operating and competitive environment. To remain in business they must comply with everchanging... Sample PDF
Improving IT-Enabled Sense and Respond Capabilities: An Application of Business Activity Monitoring at Southern International Airlines
Chapter 9
Quangang Yang, Carl Reidsema
The rapid development of computing technology has facilitated its use in engineering design and manufacturing at an increasing rate. To deliver high... Sample PDF
Intelligent Design Advisor: A Knowledge-Based Information System Approach for Product Development and Design
Chapter 10
Alejandro Vaisman
Today, information and timely decisions are crucial for an organization’s success. A decision support system (DSS) is a software tool that provides... Sample PDF
Data Quality-Based Requirements Elicitation for Decision Support Systems
Chapter 11
Kee-Young Kwahk, Hee-Woong Kim, Hock Chuan Chan
This study proposes a new methodology that facilitates organizational decision support through knowledge integration across organizational units.... Sample PDF
A Knowledge Integration Approach for Organizational Decision Support
Chapter 12
Walter Rodriguez, Janusz Zalewski, Elias Kirche
This article presents a new concept for supporting electronic collaboration, operations, and relationships among trading partners in the value chain... Sample PDF
Beyond Intelligent Agents: E-Sensors for Supporting Supply Chain Collaboration and Preventing the Bullwhip Effect
Chapter 13
Kevin Swingler, David Cairns
This chapter identifies important barriers to the successful application of Computational Intelligence (CI) techniques in a commercial environment... Sample PDF
Making Decisions with Data: Using Computational Intelligence within a Business Environment
Chapter 14
Fen Wang, Guisseppi Forgionne
E-business is far more about strategy than technology, and the strategy of e-business is very important in today’s dynamic and competitive... Sample PDF
EBBSC: A Balanced Scorecard-Based Framework for Strategic E-Business Management
Chapter 15
N. K. Kwak, Chang Won Lee
An appropriate outsourcing and supply-chain planning strategy needs to be based on compromise and more objective decision-making procedures.... Sample PDF
An Application of Multi-Criteria Decision-Making Model to Strategic Outsourcing for Effective Supply-Chain Linkages
Chapter 16
Yingxu Wang, Guenther Ruhe
Decision making is one of the basic cognitive processes of human behaviors by which a preferred option or a course of actions is chosen from among a... Sample PDF
The Cognitive Process of Decision Making
Chapter 17
Abou Bakar Nauman, Romana Aziz, A.F.M. Ishaq
This chapter examines the causes of failure in a Web-based information system development project and finds out how complexity can lead a project... Sample PDF
Information System Development Failure and Complexity: A Case Study
Chapter 18
Fiona Fui-Hoon Nah, Zahidul Islam, Mathew Tan
Enterprise resource planning (ERP) implementations in multinational manufacturing companies have experienced various degrees of success. This... Sample PDF
Empirical Assessment of Factors Influencing Success of Enterprise Resource Planning Implementations
Chapter 19
Shirish C. Srivastava, Thompson S.H. Teo
Most existing studies on technology training address the operational issues of training process (e.g., training needs assessment, learning, delivery... Sample PDF
IT Training as a Strategy for Business Productivity in Developing Countries
Chapter 20
Timothy Shea, Ahern Brown, D. Steven White, Catharine Curran-Kelly, Michael Griffin
Adopting a focus on CRM has been an industry standard for nearly two decades. While evidence suggests that a majority of the attempts to implement... Sample PDF
Customer Relationship Management (CRM) Metrics: What's the Holdup?
Chapter 21
Thorsten Blecker, Wolfgang Kersten, Hagen Späth, Birgit Koeppen
This chapter introduces a game-theoretic approach to supply chain risk management. The focus of this study lies on the risk of a single supply chain... Sample PDF
Supply Chain Risk Management: A Game Theoretic Analysis
Chapter 22
Ketan Vanjara
This chapter initiates the concept of a customercentric model in supply chain systems. It discusses various constraints of present-day supply chain... Sample PDF
The Future of Supply Chain Management: Shifting from Logistics Driven to a Customer Driven Model
Chapter 23
Ronald E. McGaughey, Angappa Gunasekaran
Business needs have driven the design, development, and use of Enterprise Resource Planning (ERP) systems. Intra-enterprise integration was a... Sample PDF
Enterprise Resource Planning (ERP): Past, Present and Future
Chapter 24
Rahul Singh
Organizations rely on knowledge-driven systems for delivering problem-specific knowledge over Internet-based distributed platforms to... Sample PDF
A Multi-Agent Decision Support Architecture for Knowledge Representation and Exchange
Chapter 25
Huizhang Shen, Jidi Zhao, Wayne W. Huang
Review on group decision support systems (GDSS) indicates that traditional GDSS are not specifically designed to support mission-critical group... Sample PDF
Mission-Critical Group Decision-Making: Solving the Problem of Decision Preference Change in Group Decision- Making Using Markov Chain Model1
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