Supply
CHAPTER
3
Supply Chain Drivers and Metrics
LEARNING OBJECTIVES
After reading this chapter, you will be able to:
I. Identify the major drivers of supply chain performance. 2. Discuss the role of each driver in creating strategic fit between the supply chain strategy and the competitive strategy. 3. Detine the key metrics that track the performance of the supply chain in terms of each driver.
In this chapter, we introduce the three logistical drivers-facilities, inventory, and transportation-and the three cross-functional drivers-information, sourcing, and pricing-that determine the performance of any supply chain.
We discuss how these drivers are used in the design, planning, and operation of the supply chain. We define several metrics that can be used to gauge the performance of each driver.
3.1 DRIVERS OF SUPPLY CHAIN PERFORMANCE
The strategic fit discussed in Chapter 2 requires that a company 's supply chain achieve the balance between responsiveness and efficiency that best supports the company 's competitive strategy. To understand how a compa- ny can improve supply chain performance in terms of responsiveness and efficiency, we must examine the logisti- cal and cross-functional drivers of supply chain performance: facilities, inventory, transportation, information, sourcing, and pricing. These drivers interact with each other to determine the supply chain 's performance in terms of responsiveness and efficiency. The goal is to structure the drivers to achieve the desired level of responsiveness at the lowest possible cost.
First we define each driver and discuss its impact on the performance of the supply chain. 1. Facilities are the actual physical locations in the supply chain network where product is stored, assembled, or fabricated. The two major types of facilities are production sites and storage sites. Decisions regarding the role, location, capacity, and flexibility of facilities have a significant impact on the
3
Supply Chain Drivers and Metrics
LEARNING OBJECTIVES
After reading this chapter, you will be able to:
I. Identify the major drivers of supply chain performance. 2. Discuss the role of each driver in creating strategic fit between the supply chain strategy and the competitive strategy. 3. Detine the key metrics that track the performance of the supply chain in terms of each driver.
In this chapter, we introduce the three logistical drivers-facilities, inventory, and transportation-and the three cross-functional drivers-information, sourcing, and pricing-that determine the performance of any supply chain.
We discuss how these drivers are used in the design, planning, and operation of the supply chain. We define several metrics that can be used to gauge the performance of each driver.
3.1 DRIVERS OF SUPPLY CHAIN PERFORMANCE
The strategic fit discussed in Chapter 2 requires that a company 's supply chain achieve the balance between responsiveness and efficiency that best supports the company 's competitive strategy. To understand how a compa- ny can improve supply chain performance in terms of responsiveness and efficiency, we must examine the logisti- cal and cross-functional drivers of supply chain performance: facilities, inventory, transportation, information, sourcing, and pricing. These drivers interact with each other to determine the supply chain 's performance in terms of responsiveness and efficiency. The goal is to structure the drivers to achieve the desired level of responsiveness at the lowest possible cost.
First we define each driver and discuss its impact on the performance of the supply chain. 1. Facilities are the actual physical locations in the supply chain network where product is stored, assembled, or fabricated. The two major types of facilities are production sites and storage sites. Decisions regarding the role, location, capacity, and flexibility of facilities have a significant impact on the
Bibliography: Hofman, Debra. "The Hierarchy of Supply Chain Metrics." Supply Chain Management Review (September 2004): 28-37 Marien, Edward J. "The Four Supply Chain Enablers." Supply Chain Management Review (March-April 2000): 60-68 O 'Marah, Kevin. "The Top Twenty Five Supply Chains" Supply Chain Management Review (September 2007): 16-22 (September 2007): 32-38. 60 Part I • Building a Strategic Framework to Analyze Supply Chains States. On September 1, 2005, Seven & I Holdings Co., Ltd., was established as the holding company for Seven-Eleven resulting in 12,034 stores by 2007. On October 24, 1990, the Southland Corporation entered into bankruptcy protection. Southland asked for Ito-Yokado 's help, and on March 5, 1991, IYG Holding was TABLE 3-2 Financial Figures for Seven-Eleven Japan (2000-2004) For Fiscal Years Ending | | | | | |