Definition and goals
A supply chain links suppliers, manufacturers, distributors, retailers and customers. SCM seeks chain-wide reductions in inventory, lead time and cost while raising service levels.
Bullwhip effect
Small changes in consumer demand amplify into large order swings upstream. Lee, Padmanabhan and Whang (1997) cited demand forecast updating, order batching, price fluctuations and rationing games; remedies include sharing POS data, vendor-managed inventory, everyday low pricing and shorter lead times.
SCOR model
The Supply Chain Council's (now ASCM) reference model standardises processes: Plan, Source, Make, Deliver, Return and Enable, with performance attributes of reliability, responsiveness, agility, cost and asset management efficiency. The newer SCOR Digital Standard reorganises these processes.
Strategic fit
Fisher (1997) matched functional products with efficient chains and innovative products with responsive chains.
Dell
Dell's direct, build-to-order model removed intermediaries and cut inventory days; collecting from customers before paying suppliers produced a negative cash conversion cycle.
References
- Lee, H. L., Padmanabhan, V., & Whang, S. (1997). The bullwhip effect in supply chains. Sloan Management Review, 38(3), 93-102.
- Fisher, M. L. (1997). What is the right supply chain for your product? Harvard Business Review, 75(2), 105-116.
- Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation (6th ed.). Pearson.
- Magretta, J. (1998). The power of virtual integration: An interview with Dell Computer's Michael Dell. Harvard Business Review, 76(2), 72-84.