SUPPLY CHAIN Project Management
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SUPPLY CHAIN Project Management A Structured Collaborative and Measurable Approach Second Edition Series on Resource Management Supply Chain Project Management: A Structured Collaborative and Measurable Approach, Second Edition by James B. Ayers ISBN: 978-1-4200-8392-7 Modeling and Benchmarking Supply Chain Leadership: Setting the Conditions for Excellence by Joseph L. Walden ISBN: 978-1-4200-8397-2 New Methods of Competing in the Global Marketplace: Critical Success Factors from Service and Manufacturing by William R. Crandall and Richard E. Crandall ISBN: 978-1-4200-5126-1 Supply Chain Risk Management: Minimizing Disruptions in Global Sourcing by Robert Handeld and Kevin P. McCormack ISBN: 978-0-8493-6642-0 Rightsizing Inventory by Joseph L. Aiello ISBN: 978-0-8493-8515-5 Handbook of Supply Chain Management, Second Edition by James B. Ayers ISBN: 978-0-8493-3160-2 Supply Market Intelligence: A Managerial Handbook for Building Sourcing Strategies by Robert B. Handeld ISBN: 978-978-0-8493-2789-6 The Portal to Lean Production: Principles & Practices for Doing More With Less by John Nicholas and Avi Soni ISBN: 0-8493-5031-3 The Small Manufacturer’s Toolkit: A Guide to Selecting the Techniques and Systems to Help You Win by Steve Novak ISBN: 978-0-8493-2883-1 Velocity Management in Logistics and Distribution: Lessons from the Military to Secure the Speed of Business by Joseph L. Walden ISBN: 978-0-8493-2859-6 Supply Chain for Liquids: Out of the Box Approaches to Liquid Logistics by Wally Klatch ISBN: 978-0-8493-2853-4 James B. Ayers SUPPLY CHAIN Project Management A Structured Collaborative and Measurable Approach Second Edition Auerbach Publications Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2010 by Taylor and Francis Group, LLC Auerbach Publications is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed in the United States of America on acid-free paper 10 9 8 7 6 5 4 3 2 1 International Standard Book Number: 978-1-4200-8392-7 (Hardback) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmit- ted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www.copyright. com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Ayers, James B. Supply chain project management : a structured collaborative and measurable approach / James B. Ayers. -- 2nd ed. p. cm. Includes bibliographical references and index. ISBN 978-1-4200-8392-7 (hardcover : alk. paper) 1. Business logistics. I. Title. HD38.5.A94 2010 658.7--dc22 2009028808 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the Auerbach Web site at http://www.auerbach-publications.com Dedication To MoJo and Alex—the dream team teens. What a project! Contents Preface ..........................................................................................................xxi Why This Book? ........................................................................................xxi How the Book Is Organized .....................................................................xxii Section I: SCM Execution—Foundation Concepts ........................xxii Section II: Project Management and SCM .....................................xxii Section III: SCM Project Processes ................................................xxiii Appendices ...................................................................................xxiii How Should You Use This Book? ............................................................xxiii Acknowledgments .......................................................................................xxv About the Author ......................................................................................xxvii CTION ISE SCM EXECUTION—FOUNDATION CONCEPTS 1 Purpose and Overview ...........................................................................3 1.1 Book’s Purpose ..................................................................................3 1.2 Project Management and SCM Knowledge Areas .............................5 1.3 Book Road Map ................................................................................7 Notes ...........................................................................................................9 2 Defining Supply Chain Management ...................................................11 2.1 Seven Principles of SCM .................................................................11 2.2 Professional Organization Perspectives ............................................12 2.3 Competing Supply Chain to Supply Chain .....................................15 2.4 The Value Chain and Other Perspectives .........................................17 2.4.1 Supply Chain Definitions ...................................................17 2.4.2 The “Value Chain” ..............................................................19 2.4.3 Viewpoints Encountered in Industry ..................................20 2.5 Implications for SCM Project Management ....................................21 Notes .........................................................................................................21 vii viii Contents 3 Drivers of Supply Chain Change ..........................................................23 3.1 Drivers Are Important .....................................................................23 3.2 PESTEL ..........................................................................................25 3.3 Extended Products ...........................................................................30 3.4 Globalization ...................................................................................31 3.5 Flexibility Imperative—The Ultimate Capability .............................33 3.5.1 Management Mind-Set .......................................................36 3.5.2 Defining Needed Flexibility ...............................................37 3.6 Process-Centered Management .......................................................39 3.7 Collaboration ................................................................................. 40 3.7.1 Definitions of Collaboration ...............................................41 3.7.2 Stage 3 (Multicompany) SCM ........................................... 46 3.8 Know Your Drivers ......................................................................... 46 Notes .........................................................................................................47 4 Five SCM Tasks—Foundation for SCM Knowledge ............................49 4.1 Introduction to the Five SCM Tasks ...............................................49 4.2 Task 1: Designing Supply Chains for Strategic Advantage ...............51 4.2.1 The Nature of Markets and Products ..................................52 4.2.2 Model for Competing through SCM ..................................56 4.2.3 SCM Strategy Tools............................................................57 4.2.3.1 Industry Best Practice Approach .........................58 4.2.3.2 Activity Systems .................................................60 4.2.4 New Products and Processes .............................................. 64 4.3 Task 2: Implementing Collaborative Relationships ..........................65 4.3.1 Functional or Process-Centric Organizations .....................68 4.3.2 Product-Centric Organizations ...........................................69 4.3.3 Customer-Centric Organizations ........................................70 4.4 Task 3: Forging Supply Chain Partnerships .....................................71 4.4.1 Spheres: Businesses Inside the Business ...............................71 4.4.2 Classifying Partnerships .....................................................73 4.4.2.1 Purpose...............................................................74 4.4.2.2 Direction ............................................................74 4.4.2.3 Choice ................................................................74 4.5 Task 4: Managing Supply Chain Information