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E CR: EFF ICI E NT CONSUM E R R E SPONS E IS CUSTOM E R DRIV E N SYST E MWH E R E DISTRIBUTORS AND SUPPLI E RS WORK TOG E TH E R AS BUSIN E SS

ALLI E S TO MAXIMIZ E CONSUM E R SATIS F ACTION AND MINIMIZ E COST.

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Major Supply Chain IssuesSupply Chain Networks

The network facilities and supporting transportation is importantIncreased complexity for organizations is a problemInventory D eployments

inventory duplicationthe bullwhip effect

Collection and storage of vast amounts of dataCost/Value

efficiency (cost) and effectiveness (value) prevention of suboptimization

Organizational RelationshipsTradeoffs and optimization

P erformance M easurementWhy and how

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Major Supply Chain IssuesTechnology

challenge is to evaluate and successfullyimplement the technology

Transportation M anagementright product, right time, right quantity, right quality,right cost, right destination

Supply Chain Securityconcern and potential challenge since 9/11

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Cash flow has become one of the most important measures of financial viability in todays global markets. Supply chains are animportant determinant of improved cash flow since they impact order cycle time to customers.

Supply chains are an important determinant of capital consumption

since they impact working capital, inventory levels, and other assetssuch as warehouses.

Efficient and effective supply chains can free up valuable resourcesand improve customer fulfillment systems so as to increase returnon investment or assets and improve shareholder value.

The rate of change in our economy has accelerated the necessity of continuing changes in organizations or even transformation toremain competitive.

Summary

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The rate of change has been driven by a set of external forcesincluding but not limited to globalization, technology, organizationalconsolidation and shifts in power in supply chains, an empoweredconsumer, and government policy and regulations.

The conceptual basis of the supply chain is not new. In fact,

organizations have evolved from physical distribution managementto logistics management to supply chain management.

Supply chains need to focus on the customers at the end of thesupply chain and be flexible and responsive.

Technology is important to facilitate change, but it must follow aprocess and educate people to address problems and issuesappropriately.

Summary (cont.)

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Transportation management and security have become increasinglyimportant in the twenty-first century because of changes that haveoccurred.Supply chains are boundary spanning and require managing threeflowsproducts, information, and financials (cash).

Supply chain management is a journey, not a goal, and there are nosilver bullets since all supply chains are unique.Information is power, and collaborative relationships internally andexternally are a necessary ingredient for success.The performance of supply chains must be measured in terms of

overall corporate goals for success.

Chapter 1 Summary (cont.)