Asupplychainconsistsofallpartiesinvolved,directlyorindirectly,infulfillingacustomerrequest.Thesupplychainincludesnotonlythemanufacturerandsuppliers,butalsotransporters,warehouses,retailers,andevencustomersthemselves.Withineachorganization,suchasamanufacturer,thesupplychainincludesallfunctionsinvolvedinreceivingandfillingacustomerrequest.Thesefunctionsinclude,butarenotlimitedto,newproduct,development,marketing,operations,distribution,finance,andcustomerservice.ConsideracustomerwalkingintoaWal-Martstoretopurchasedetergent.Thesupplychainbeginswiththecustomerandhisorherneedfordetergent.ThenextstageofthissupplychainistheWal-Martretailstorethatthecustomervisits.Wal-Martstocksitsshelvesusinginventorythatmayhavebeensuppliedfromafinished-goodswarehouseoradistributorusingtruckssuppliedbyathirdparty.Thedistributorinturnisstockedbythemanufacturer(say,Procter&Gamble[P&G]inthiscase).TheP&Gmanufacturingplantreceivesrawmaterialfromavarietyofsuppliers,whomaythemselveshavebeensuppliedbylower-tiersuppliers.Forexample,packagingmaterialmaycomefromPactivCorporation(formerlyTennecoPackaging)whilePactivreceivesrawmaterialstomanufacturethepackagingfromothersuppliers.ThissupplychainisillustratedinFigure1—1,withthearrowscorrespondingtothedirectionofphysicalproductflow.Asupplychainisdynamicandinvolvestheconstantflowofinformation,product,andfundsbetweendifferentstages.Inourexample,Wal-Martprovidestheproduct,aswellaspricingandavailabilityinformation,tothecustomer.ThecustomertransfersfundstoWal-Mart.Wal-Martconveyspoint-of-salesdataaswellasreplenishmentorderstothewarehouseordistributor,whotransfersthereplenishmentorderviatrucksbacktothestore.Wal-Marttransfersfundstothedistributorafterthereplenishment.ThedistributoralsoprovidespricinginformationandsendsdeliveryschedulestoWal-Mart.Wal-Martmaysendbackpackagingmaterialtoberecycled.Similarinformation,material,andfundflowstakeplaceacrosstheentiresupplychain.Inanotherexample,whenacustomermakesapurchaseonlinefromDellComputer,thesupplychainincludes,amongothers,thecustomer,Dell'sWebsite,theDellassemblyplant,andallofDell'ssuppliersandtheirsuppliers.TheWebsiteprovidesthecustomerwithinformationregardingpricing,productvariety,andproductavailability.Havingmadeaproductchoice,thecustomerenterstheorderinformationandpaysfortheproduct.ThecustomermaylaterreturntotheWebsitetocheckthestatusoftheorder.Stagesfurtherupthesupplychainusecustomerorderinformationtofilltherequest.Thatprocessinvolvesanadditionalflowofinformation,product,andfundsamongvariousstagesofthesupplychain.Theseexamplesillustratethatthecustomerisanintegralpartofthesupplychain.Infact,theprimarypurposeofanysupplychainistosatisfycustomerneedsand,intheprocess,generateprofitforitself.Thetermsupplychainconjuresupimagesofproductorsupplymovingfromsupplierstomanufacturerstodistributorstoretailerstocustomersalongachain.Thisiscertainlypartofthesupplychain,butitisalsoimportanttovisualizeinformation,funds,andproductflowsalongbothdirectionsofthischain.Thetermsupplychainmayalsoimplythatonlyoneplayerisinvolvedateachstage.Inreality,amanufacturermayreceivematerialfromseveralsuppliersandthensupplyseveraldistributors.Thus,mostsupplychainsareactuallynetworks.Itmaybemoreaccuratetousethetermsupplynetworkorsupplywebtodescribethestructureofmostsupplychains,asshowninFigure1-2.Atypicalsupplychainmayinvolveavarietyofstages,includingthe...
