Supply Chain ManagementSupply chain management is a total systems approach to delivering manufactured products to the end customer.Using information technology to coordinate all element of the supply chain from parts suppliers to retailers achieves a level of integration that is a competitive advantage not available in traditional logistics systems.Consider,for example, the decision of Hewlett-Packard to manufacture a generic DeskJet printer and allow distributors the option to localize the printer by adding the proper manuals and power cords.The result was a significant reduction of finished goods inventory because demand was then consolidated into one generic printer,which eliminated the need for separate inventories for each country.This postponement strategy also produced unexpected saving in shipping costs because generic printers can be packed more densely.Taco Bell took an approach to their supply chain not unlike Hewlett-Packard.The first stage of Taco Bells supply chain consists of the natural resources supplied form agriculture(e.g.,meat,vegetables,spices,and grain).These ingredients are purchased in bulk and held at regional distribution centers for supply to the retail stores.Because final demand is so difficult to forecast,considerable waste food resulted at the retail stores.Removing the kitchen from the retail store to a central location allowed for consolidation of demand and reduction of waste.The production process at retail store is changed from make-to-order to assemble-to-order.Customers are delighted because wait times are shorter,the facility is cleaner,and extra room is allowed for dining-in.Supply chain management for manufactured goods offers benefits obtained by taking a total systems view of the value chain from product design to after-sale customer service .Information technology has been the driving force behind the ability to coordinate the many interrelated activities commonly performed by independent companies.service supply management,however,is best depicted as a relationship rather than a chain of activities because of the customer-supplier duality found in service.An example of home health care is used to demonstrate the sources of value in service supply relationship. Shortened product life cycles and increasing globalization of markets require total systems view of the entire supply chain.Many high-tech product now are almost obsolete when introduced,so making manufacturing capacity plans, agreeing on production schedules, and setting inventory stocking levels are challenges because no historical sales data are available.Poor planning can result either in lost sales opportunities or in expensive end-of-life inventory write-offs.Competitive pressures require firms to think in global terms when seeking out suppliers and locating manufacturing operation. For example,a personal computer may have subassemblies manufactured in the Unite States with parts supplied form Asia,and final assembly-to-order near customer in Europe.The challenge of supply chain management is to balance the requirements of reliable and prompt customer delivery with manufacturing and inventory costs. The supply chain modeling enables managers to evaluate which options will provide the greatest improvement in customer satisfaction at reasonable costs.The supply chain is modeled as a network that captures the relationship between asset cost(i.e,inventory and capital equipment) and the time domain characteristics of customer service(i.e,responsiveness and reliability in customer delivery)A comprehensive total systems view that incorporates the interactions among the participants will facilitate a collaborative search for effective measures to meet customer demands.Unreliable deliveries either increase inventory investments in safety stocks or result in unsatisfied customers and lost sales. Success,however,is achieved only with the formation of effective partnerships and cooperation among participants throughout the entire supply chain.In an uncoordinated supply chain,abullwhip effectresults in which a small change in retail orders is magnified as we move back up the supply chain to the distributor and finally to the manufacturer.The independent stages in the supply chain,unaware of the true nature of final demand,overreact to orders from downstream customers,and delays in orders being filled create the oscillation in inventory stocks that are propagated upstream. The lack of supply chain coordination results in self-imposed system destabilization,creating simultaneously overstocking of inventory at one point in time followed by later stockouts.Managing UncertaintyManaging a supply chain world be straightforward expect for uncertainty arising form three sources:supplier deliverly performance, manufacturing reliability, and customer demand.Inventory is used as insurance in this uncertain world.To meet customer service level objectives (e.g,experience stockouts less than 5 percent of the time),a li