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2001
From raw materials to customers: Supply chain
management in the service industry
Jack Cook
Kathy DeBree
Amie Feroleto
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From raw materials to
industry
CU
tomer: upply chain management in the ervice
S.A.M. Advanced Management Journal; Cincinnati; Autumn 2001: "JacK S CooJ,;.KalhY DeBree;Amie
Feroleto:
Volume:
1 ue:
Sta-rt Page:
ISSN:
ubject Terms:
las ificatiou
66
4
14-21
07497075
tudies
Supply chains
Health carc mdustT)'
odes: 9130: ExperImental/theoretical
8320: Health care industry
5330: Inventory management
Abstract:
No company can operate without a supply cham. Recent years have seen change m the way many
companies manage their supply chams - holistically rather than as a series of separate pieces.
Manufacturers have taken the lead In Improving supply cham management, but now the
fast-growing service Industry is adopting these pnndples. A study in the health care area {/fustrates
how service businesses can benefit from the decreased lead times, faster product development,
hIgher quality, and reduced costs that can accompany successful supply chain management.
for Advancement of Management Autumn 2001
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Supply chain management (SCM) is a familiar concept in manufacturing, but service industries are just
now recogniz.ing the value of successfully implementing iL Although cenain concepts should bc applied
while successfully managing a supply chain, companies coordinate their individual supply chains in
many different ways. "Thus, in application, supply chain management practices exist along a continuum,
from more traditional approaches. where the organization focuses only on the direct affects upon itsel r,
to the more expansive. supply chain, channel-wide perspective" (Cooper et a!., 1997, p. 68). Table I
compares the traditional approach to channel management to the supply chain approach (Cooper et aI.,
1997. p. 69).
An effective supply chain is crucial to the success of a business. "Onc recent study of the US Food
Industry estimated that poor coordination among supply chain partners was wasting 530 billion
annually" (Fisher, 1997, p_ 106). This can be illustrated if we consider the traditional view ofa supply
chain as similar to a pipe that carries the service or product being provided. When the pipe becomes
clogged, the entire system must be flushed to solve the problem. Similarly, when a supply chain does not
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wor\.: properly. a busmC'ss must flush the channel hccause 11 cannot pmpomt where the problem is. This
causes companies to lose profits and salts.
I'<ow, howe"er. companies are lmplemennng a new type of supply cham managemC'nt, where the fim]
views the supply channel as 3 Whole system instead of concC'TItratmg of each p3J1 of the process. The
company focuses on all elTorts. from the procurcmC'nt of raw materi31s to the dlstribullon of the finished
product. and how each elTon relates to the othC'f'S (Andraskl. 1998), This allows more communlC:l1lOn to
c:<ist wtthm the pIpe and problems to be morC' easily identified
We \\111 show that Implememmg C'lTecll"e SCM IS an advantagc for companlcs that proqde scrqces.
FIvc tools of SC1\1 that WIll bc descnl>C'd are makmg and keepmg rebllonshlps, Impicmel\lll\g new
technology m the supply channel. the use of forecastmg to Increase supply cham effectlvencss.
outsoureing to mcrease emclcncy. and cost management as a strategIc weapon A case study from the'
health care mdustry wlll bc used to remfo«:e the Importancc and "alue of SC;"l m the servIce s~"Ctor \\' c
will evaluate Implementation steps and the h<:nefits and hmLla110ns of supply cllam management
Finally, a diSCUSSIOn of our conclusions on the subject of SCM m the serVice mdustl')' IS prOVided,
Ser.'lce Onented SO\1
The ser.'lce mdustr;' IS becommg Illcreasmgly dommanl III tile Umted States, and employment IHllnbl'n;
arc shlfimg from monuf3ClUnng loward sel'\'tees. The problem IS that the separation betw~'en the ser.·lce
Il1dustry 'll1d manufactunng IS not alw3}'s as black and wlltle:lS man~· expens thought S0l11cttl11eS therc
IS a gray area, a 111Ixed Il1dustry thaI blends both the manufaclUnng and SCl'\'lec seclOrs. :\n cllcCltve
SUllply cham IS needed to link tllese sectors
As the service sector grows IIllmportallce. II is evidcnt that the faceoftomorrol"s bUSiness is ser\'lce In
fact, "ser.'lces account for mne of ten of the small buslnC$s-dominated mdustnes that v. III log the fastest
grow th through 2005. aceordll1g to analySIS by the U.S Sm311 BUSll1e5S AI!lnllllstmt IOn (S BA)"
(McCune, 1995. p. SO). There arc a number of reasons why sel'\lces arc grO\\ Il1g The number one
reason 15 thaI bab}' OOomers arc gellmg to retirement age (McCune. 1995j, For example. residenllal care
C3me oul 3t the top of the f3StCSt growmg ,ndustnes betwccn 1992 aud 2005. showlIll1 T3ble 2
(McCune, 1995, p. 51).
Othcr ser.'lce mdustnes cxpenenemg rapid growth mclude, child care, medlc31 3nd dental Iaboralory.
and mdJVldual and f:uml>, SCI"> Ices. juslto name a fcv. (;"1cCUIIC, 1995). This rcl1ects the increase ll1tllc
dual Income famIly. which IS a pan of many Amencans' hves, As the number ofworkl11g womell grows,
the need for chIld care and counselll1g increases The extreme growth of baby boomer consumers ha.s
mandated an increase m the service se<:tor, Handhng the expandmg volume while proVidIng optimal
CUSlOIl1cr SCl'\'lce rcqul res busll1esscs to rethink their strategies for success. Supply cllall1 management IS
hecomll1g a necessity for comll1ued competitiveness and success
RelatIOnships: The most Imponant contributor to success mthe sel'\'ice industry IS building strong
relanonshlps wnlt customef'S. Compa11les can benefit III numerous ways from loyal customcrs. ll1c1udl11g
tI1creased revenues, predictable sales and profits. low customer turnover, generallon of new business
from word of mouth. and costs that can be amonized ol'n a longer penod (Gwinner ct aL. 1998)
Howe'·er. for the relationship to be successful and long term. the customer mUSl also bencfit. Table J
mdic3tes some of these benefits (Gwinner el a1.. 1998).
There are traditional and modem view's of supply cham management. Similarly. sel'\'ice companics can
choose bctween the bow tie (traditional) and diamond (modem) approaches when bUlldmg relatlonshtps
with each othcr (Cooper ct a1.. 1995). The bow'tle idea provides for interaction only between the buyer
of one business and the seller of another, while the diamond approach allows all functions to
eommUll1cate (Coopcr 0:1 a1.. 1997). These processes are represented III Figure 1 (Cooper et aI., 1997, p.
77).
The tr3dnlOnal process requires a kmd of filter. m the fonn of an account manager (Cooper et aL. 1997).
However. thiS does not ma:<lmlze eommumcallon h<:lween the flnns. WhlCIl may decrease relationships
2 of 8
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and lower efficiency (Cooper el al.. 1997). In Ihe diamond approach. adl'antageous rel:lliollShlPS are
more apt 10 occur and greater communication resuhs. Reasons for formmg relallonships wilhin a service
induSlT)' include necessity, asymmelI)'. reciprocity. efficiency. Slability. and legilimacy (Cooper el aL.
1997).
Technology: Changes in lechnology have eXlreme effecls on how a firm manages us supply chain.
Specifically. elecl10mc commert'e (EC) is eXlendmg value w11hln lhe SCM process. Businesses use EC
to illlcgrale their mtcmal functions with Ihe apphcations of shippers, supphc~. and customers
(Scarborough & Spalarella. 1998). ElectroniC commerce allows shlpmenl Slatus messages 10 be rccewcd
Instanlaneously and provides vendor·managed and conllnuous replemshment Invenlory programs
(DcCovny. 1998). This new technology decreases mvenlory nsks and maximizes Ihe sale orproducls
wnh shon hfe cycles by redUCing Ihe hme lllakes 10 reach the broadesl poSSible markel (Scarborough &
Spalarella. 1998), EC also promoles compelill\'e advanlages by haVing a more accessible order,cnll)'
process. decreased paper handlmg. and less re,keymg of informallon (DeCovny. 1<)98)
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Although there are obVIOUS benefils for companies using EC in their supply chain. bamc~ to Ihis
technology also e:'l:iSl. The problem thaI most often anses IS a security breach wilhin the syslem
(DeCovny, 1998). Another difficulty IS Ihat many orgamzationslack the resources 10 mlegrate EC wilh
their supply chain. including skilled emplo)'ccs (DeCo\'ny, 1998). Some firms choose to seck help from
consul1ams and advisors before makIng mlslakes wnh lheir lechnology procuremenl endeavor
(Scarborough & Spatarella, 1998). This makes the SWllch to electronic commerce qUlle a bil easier.
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Forecasllng: A company can effecll"e1y u~ customer dala to synehronil;e lIS supply cham OperaliOnS
with consumer needs. This can be done through CUSlomer supplied forecasts, "'hich many people decl1l a
necessary pan of managing a supply cham Roben Altabet. who IS "Ice president of business
management in Ihe Duraeell North Allamic Group. states that, "the IateSI emphasis of forecasting has
been in the areas of schedulmg and logistics, renamed 'Supply Cham ~lanagcmenl''' (Allabel. 1998, I'
3), Another anicle S1lyS. "forecast honzons can Impact a host of functional areas m the supply cham"
(Saran. 1998, p. 23)
An accurate sales forecasl can han' numerous advantageous results m Ihe process of SCi\l. Effe<;:t,,'c
forecaSlS provide vendors WIth more accurate data. Improl'e effictencles m product dlstnbullon, reducc
supply chain Illvcmoncs. and cnhance customer sen'lce (Kiely. 199899) In generot forecasllng helps
busmesses servc thclr customers more emclently. Without the conslant fear of e,~cess lflvcntOry
Howe"cr, if SCM uses an crroneous forccast. the results Will be feltthloughout the cnllre system
Outsourcmg Manufactunng and Sell'1Ce mdustnes are grappling wllh the decIsion ofwhelher to make or
buy the parts used 10 manufacture their products. To ans" er thlli qUeSllon. a company must weigh Ihe
cost factors, Expcns bellcve Ihat compames are headmg toward I:l'eater spec13li;t:tllon am! outsourcing
for the mmerials Heeded to make their product {Lalos & i\loschuns. 19(9), ProducI compk\lIy and
<:ommcrclal uncenalmy IS Imked to how much lechnology IS m"olved and the deglee of nsk for Ihe
htlsilless {Lalos &. Mosclwn5, 1999), In lhe sernee mdllslry SlltlSfYlng the customer IS th~ 1111;hcSl
Imonty !3usmcsses mllst ltnk Ihe deciSion to make or buy based on which option pro' Ides optimal
<:tlSlomcr sUtlSfaCllon and the most cost·effecll vc methodology. nlls IS why procurement IS l>elng
recog11l~ed as an 1t1lponallltool for lmprovmg a service corpornllon'S bottom hne (Amlcrson & K.Il/.
1(98), Gencr.lll >'. the end product and uillmately Ihe customer wilt bene fit from olltsouremg In Ihe
service mduslry, nlis lmponance IS bemg pushed on the outsourtcr 10 cnslIre that malenals Will am,'C
on t,me and III good condition. Scrvice fimls must consider quality, reliability. trallSponmlon costs, thc
cOSts of acqulnng and managmg, and the value oflhe fmal product to the customer (Andcrson & Kilt/,
1(98).
COSI Management· COSt management IS an Imponant sttategic weapon for a busmess "E.~temal
purchases of products and scn'ices accoum for more Ihan 50 pereenl of lOla I COSts" (DegraC\c 8.:
Roodhooft, 1999, P 5) Wltholll sacn fiemg quahty, services must crcate a reliable. cOSt eff,:,cuve supply
cham to bc compcutll·e m the marketplace. Teehnology has mCTeased the reliabIlity of COSt managcment
systems through the usc of <:omputcr packages deSigned for specific compames (Anderson & Katz,
1998). A mathcmallcal model has been crealed 10 welgb the ditTerem COSIS ofa supply chaltl The
object,,'e of this model IS to choose the nghl combmation of suppliers. w'ltll the paniculJr cntena
Imponam for the purchasmg deciSIon. The model's benefilS mclude the ability to compare the COSI
savings from one yt.>ar to the next. Results can even be used as a negotialion tool with a fiml'S suppliers
(Anderson & Katz, 1998). An effCCI1\'e way to 5a,'e money IS for a busmess to mcrease efficictlcy
Ihrollgb tcchnology and Improved accouming syslcms.
SCt\l in the Health Care IndllstT) (A Case Study)
Increased revenues and enhanced SCT\'lce are key corporale objectives. With this III mInd. hcalth care
agencies arc Irymg to figure OUI ways 10 cuI COSIS bUI sun keep their euslomers saHsfled, and many are
now' lookmg to their supply chains for the answers, A health care supply chain deals with factors such as
the expirotion dates on products. product shipping and deliveT)' location. multiple product mix (to build
custom packages for customers), mulliple deliveT)' locations, multiple distribution POllltS. and multiple
accounts and customers (Smith. 1997). Howevcr, health can: is differem from other industnes because
hospitals arc unable to pinpoint the reasons for decreases m the dcmand for their services (Sm,th, 1997).
This is be<:ause demand is based on each indl\'ldual pallcnl, whosc necds and ltlsurnncc·related
restrictions are di fficult to predict effectively' (Smith. 1997). Health care agencies have to ordcr many
differem lypCS of equipment and supplies based on customers' diverse needs. while slillltll:reJsmg
revenlles and sallsfying the customer (Smith. 1997). This can be nearly Impossible to achle,'e,
The poslllon of a hospl1al malmal manager IS becommg Imponam because oflhe deCISiOnS they make
2'8,029 ..\.\ M
, D<>cumont
that dcal with Im'emory They have Ihe responSlbdlly of ehoosmg what, when, and how mueh \0 order.
Examples of what these managers ean sa\'e a hospaal is shown by the folio" Ing: "Cedars-Smal Health
System, Los Angeles, beat IlS own eSl1mates and savro 56.73 per pauent day_ or 5 1.56 million, In fiscal
year 1998. by eonsolidal1ng matenals management operations" (Supply Chain Streamlinmg ""ets B)~
SaVings. 1998), Another example IS Eisenhower Memonal haspilal. wllleh converted to Just-m·lIme
distributlon and decreased in\'entory from 51.5 million to 5142,000 In Just 18 months (Dejohn, 1998)
These two hospllals were able to rrouce their In'entory levels sigl1lficantly. whkh lllcreased the
hospital's rC\'ClUles, Cedars-Smal has a wcll run, offslle w'archouse labeled "matenals serVice cClllcr."
which IS run mamly b}' new technology. computers. and electronic uckets (Suppl)' Cham Streamhnlllg
Nets Big Savings. 1998). Messages from the nurses to the warehouses 3lld the warehouses to the
distributor are sent e1cclmlllcally. allowmg for greater eommumcatlon between the hospital and the
warehouse. The hospital convened the unus-cd m\'emory rooms Into palient rooms (Supply Chain
Streamhnlng Nets Big Sa"mgs, 1998) The Increasro hcd capacity led to higher tumovcr. grealer 11ro flts.
and lIlcreased eustomer sausfactlon
Eisenhower Mcmonal signed a COntract "'nh AllegIance Health Care Corpornhon. McGraw Park. Ill. \0
h>mdlc tilelr elltlrc mvcntory. and also tmlployed people as "materials se"icc coordinators" to Improve
Ihe effiCiency of their system (Dejohn. 1998) These people wll! work closely v.'llh the phySICians to
unprove relulions between departmems and "Ill ultimately Iukc over thclr tn\ emory responslbill1}'
(DcJohn. 1998), ThiS frees el inlcal stafT lime for patient care The outcomc IS mlpro\'cd CliStOIll~r
sallSfuclion (Dejohn, \998), "hnng people to deal "Hh the lOgiStiCS of the hospital benefits the doclOrs.
nurses, and the customer m the long run. Efliclent tnvemory managemcm leads 10 greater profits by
dccreaslllg II\\,cnI00' costs and IIlcrcaslng customcr satIsfaction
With thesc 111lprOVel1lents 1!1 matenals management. hospitals are seardung for more breakthroughs to
help cut cOSts and make the supply cham more elTcctl"e An example of this IS McKesson CorporatlOn,
rcnamed McKesson General Medical after acqUIring Genernl Medical Corporahon McKesson. a
dl stflbulOr. IS plannmg to olTer one-stop shopplllg for phamlaceullcals and medleal·surglc:LI products A
shoner supply ch,J1I1 decreascs the costs 3lld distributions that are IIlvol\'ed and often makes the supply
ch31lllllorc clTeCtl\e and cfliclent This IS the mOl1\'atlon for McKesson Gencrnl t\'ledlcal, although Its
one-stop shopping theory IS hlghl)' risky (Speer. 1997). We behe\'c that the Idca of one·stop shopp1l1g
can he highly profotable If ImplemcnK-d caul1ously, To reduce Ihe nsk. McKesson should :Lilo\\ ils
customers. tile hospitals, to have a stake In the company. This can be accompllshro by selhng shares of
stock and allowlllg mcmbers of the hospital to Sit on ItS hoard and oversee the managcment of the new
system.
Health care agencIes \\ ill be e"aluatlng the elTectl\'eness of one-stop shopplllg. McKesson's goal IS to
hire dlstnbutors that \\ III service all of its UllllS and offer \'olume discoums (Speer, 1997)
Implementation of this approach will necessitate restructunng the new comp311Y. mcludl ng building
highly autom31ed warchouses, offering samc-day scrvice. and reducing Ihe total number of centers
(Speer. 1997). McKesson General MedLcal has already Implememed effccuve supply cham changes,
which mcreased sales. and IS now waltlng to include the one·stop shoppmg idea (Speer. 1997) ThiS
restructuring has extended Its customer base from 39% to ~9%,. says spokesperson John Lawrence
(Speer. 1997), a great success for the company. Howe,·cr. there will al"ays be competition, and the
likelihood of MeKesson General Medical monopoliZing the market IS very unhkely. The prospect of
combimng pharmaceuticals and medical supplies is appeahng to many matenals managef5 wilo wish to
increase revenue for their companies.
To understand the changes that heal1h car~ compames are making, LI is necessary to comprehend what
these businesses are trying to achieve. "Pharmaceuticals are small in size but high in dollar amount.
MroicaVsurgical supplies ar~ the opposite. The t\\'o businesses are completely dilTerent." states Larry
Dooley. "Ice president of distribution servIces al VHA (Speer. 1997, p. ~8), Compal1les are trying to
mesh the different businesses 1I1 order to serve their custome~ better. With tooay's technology and a well
managed system. the opponunity for gro",h with this new merger is extraordmary.
Just-In-Timelnventory Management· \Vllhmthe health care mdustry. there has been a greater reliance
on just-in-ume (JIT) l1l\'emory and total quahty management (TQM). The con(ept of liT. 111 particular.
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is laking hold and companies are restructunng to accommodate n. JusHn·lIme inventory managemell! IS
the proCel;S of rlX'el Villi: ll1ventory exa.tly when needed ll1Slead of ha~ing a stocked warehouse of
supplies. Advanlages indude better dellX'lion of quahly problems. shorter product developmenl cycles,
quicker customer response time. and lower holding cost (Coleman &. Jennings. 1998). For lhese reasons.
JIT syslems have made It possible to substantially increase revenues for many finns who use It JlT ean
be a direcl link belween whal the customer desires and ho" a company can achieve 1I. Service Industries
arc al\\ ays looking for beller ways 10 serve their customers. and fllSler. more fle'l:ible, belleHjUalil i
sen'lce is what cuslomers want Ho"ever, compantes thaI choose to Implement JlT face lhc poSSIbility
ofbemi: left hIgh and dry If their suppliers are unable 10 del]\er (Coleman & Jennmgs, lQ(8). as shown
by the UPS slrike
Health care compames havc made many lmprovemems because Ihey have used a JusHnlUne syslem
Invenlory eoslS arc a St8mficanl liabllily for lhese compames, and. With JlT, a huge portion of Ihc
Iiabllily is em out oflhe equallon (Coleman &. lenlllngs, 1998), Hospitals lhm usc JIT no\\ have more
room for patients, TIlose who don'l use thl5 lype of Il1vernory system are expenencmg excess lIlventory
and lumover dlfficullies (Colem311 &. Jenmngs. 1998). As an example. hospitals lhal hal'c had espln",l
drugs ean'lsellihem al a discount, because they have no market I'alue. They arc Ivaste and have a Illreet
negative affect on the bollom hne
Wilh all oflhe advantages of lIT. some health care compames are Ignonng Ihe disadvantages and
problems that a lIT system can cause The UPS case IS a greal example of the mablllt) of a bus mess 10
compensalc when a product Isn'l delivered (Coleman & Jenmngs. 1998). This case IlIuslraled lhe
advantage of carrYing st&mfieanl 1I11"Crltones to prolect agall1S1 eonllngeneles (Coleman & Jenrungs.
1998) II supports lhe old saymg "e~pect the unexpected." Allhough l\ IS valuable 10 prcpare for
une~pected eVCnlS, II IS also not producl"'e to alw3ys second-guess yourself Busmesses mUSI find lhe
proper amount of ml'entory that is neither e~cessive nor unsafe 111 lhe case ofunnpeeted e>ems
Evaluation of SCM
Irt
Ihe Servlcc Industry
A service business must be eaUllOUS when lmplemennng SCM. The conCepl ofSC/I'lls hollslle and IllUSl
focus 011 all efforts. "An understandmg of he" cost aceumulales lhrough lhe supply cham m a hollsll<:
way, based on the combinallons of products and customers. IS essential to handlmg the huslness Issues
a.~soc'ated With the supply cham" (Bnuthw311e & Samakh. 1998. p. 75). It 15 also mlportanlthat hoth
Illtcmal and external cuslomers are taken Into :!Ceoum "hen establishIng a supply cham Although IllOSI
eompames realize lhat the supply eh:lln IS affected by eXlemal hnks wnh such members:ls suppliers.
I,anners. and customers, lhey often forget that success also depends on 1I}lemal dcpanmcnls thai servt'
one anolher and conuibule to the value add,ng proee.s (Morash & Clinton. 1997).
Benefils of SCM. There are many benefits to SCM. \\hlch outweigh lhe added energy thaI must be
spent. TI,cse include decreased lead limes. faster product development. Increased quallly, aud reduced
costs (Choi & Rungtusanatbam, 1999). Also. SCM greally Improves customer sen'lce and contributes to
synergy within the process. This 's especially crucial in service induslnes. where the emphaSIS IS on
meeting the cuslomer's needs. All oflhe henefilS lead to greater competitiveness. As oue anlcle slaled.
"the reward - a remarkable compemive advantage thaI generales high groWlh III sales and proflls" (Pagh
& Cooper. 1998. p. 28),
Limnations of SCM: There may be seV'ere resIstance within the company when implementmg SCM.
blX'ause il requires modification of the altitudes and behavior of lhose inl'olved in the syslem employees and the employer. Resistance to change IS common and predlctmg employee behavior IS
difficult. A lack of underslanding by senior management is anolher possible reason for the reslSlance 10
supply chain managemenl (Andraski. 1998), gil'en thaI an un"Tltten rule of business is to mimmize risk
and cover all angles. Execulivcs may feel that 50"1 is 100 simple and IS merely a passIng whim
(AndrnskJ. 1(98). however. the,r commitme11l is "'lal 10 guide olher employees and 10 oblam r~'qulred
resources.
ConclUSIon
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hllp;r ptoqu"".ull\.Lcom pqdwcb'.'T$-.,.-l &Djd-000Q00094~69~., I &~ltd= I,~ ~""--
Supply chain management In the sernee Industry has taken off In reeem years. and many conlpantCS are
conStdenng It How a manager handlt's hiS company's supply chain will help dctenmnc if ItS prOOtlct will
make a profit In the marketplace. Because Ihere tS a lack of know ledge and understandm!,'. 10 asSist
managers In the sen 'ICe sector. II is crucial Ihat today-'s mana!;crs oblaln a full appreclJlion for" hal
supply chain managemel1t 15 and how 11 can be ,mplemenled successfully
A better appreciation for the supply cham management process can bl.' gameti by underslan<1mj: sen'Ice
lnduSlnl.'S. A crucial example 's the hcalth ll1dustf). "hlCh IS cxpected 10 be oncofthc faslcst gro\\Ing
mdustnes in Ihe fUlure, Health care '5 altempung 10 ,mplemem a supply cham that <1eihers quailty
producis a, tlllnnnal cOSt Some oflhe problems that have :lr1sen have to do "Ith the lack of an etliclell1
prog....m to deal pmnari Iy wllh health care faclllt,es and Jusl-tn·t,me managemcnl Bencfils. 1'[111tallons.
and the lmplementa'lOn steps of SCM help show where Ihe new hcallh care phenomena arc headed
SCl\1 IS not a passlllg fad but rather aJl C\'OluIIOJl m thc operanons ofscrnces. We prcd,cllhat sen ,ees
entenng the SC\I gate \\ ,II Sen'e mllhons of doHars that \\ould olhen\ ISC be spent because of a
dysf'llletlonal supply cham Smcc ,he SC\1 COJlccpt IS fa,r1y nc\\. U IS \'Uallhat manager~ do nO'I11:llo.e.1
"leap of faIth." so 10 SPClllo.. bu' r~scarth Ihe process thoroughly This should ...,.,able Ihem 10 ... b~),c .1
supply chain that \\111 be most benefiCIal In obtaining the main obJcctl\ ... for any' company. "h,cl1 LS to
milkc n profit,
[Referen...... 1
REFERENCES
[RefHeneel
AI,all<ll. II (1998. Fall) Th~ for«ast~' as a "e. Il¥m_ cI 'M et,atl'g'~ llIIIM'''Ill~am TM Jou,nal ot Bu"nes. Fore<:a,Mg
Me<ho<l. & S.s,~m •• 17 (3), 3·6
AM~'S/)n. M G. to Kau. P B. (1998) Str&tl!'\l'C _'1:"'9 TM !nter""uonaL JOUmlll cI ~'Sl'" M.n~9~men, 9 11 J 1 'J
[RefHcncc!
Mora.~"
1. C. (199B)
l~M~..n,o
ana
'h~ ,~~I"alJ(l(l
of 'UOlltv <M,n <Q1
~""'al<On.
)oumll'
ot
9-11
B"'\h"'.,le. A.•
69-B4
& s"makh.
E. (199B). TM Cool-t<>-WO"'e meUu:>:l. The lnlemol>Oflal 1",-",,,,,1 01
Bu."'e•• lOO,'''CS. 19 (2),
log,.,,,. Monaoemeot, 9 (ll.
[Reference)
cnOI. T.•.. II< IIU"OtU"'''''lnom.''' (1999. Wmlet). Compa"..,., cI Q"".ty managell¥n' !l'KttCK: ""'ross tM! '''00'. eh.'h
aM InO"st"e., Tn~ JoutrUll or Suoo'~ CN,n ""'''''Qf'''''''''I. 35 (I l. 20·27.
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Coo~" M, C. Ellram. l. M" C.r<lne<'. 1. r
& H.n~,. A M 1l'l'l7) M~,"II m"!t,p~.II.. no~. 1Q<Jrn.' 01 8",,"esslo9'SllC',
lB (1J. 61-89,
DeCovny, S (199B, tlovemll<l,/De<:emberl. Th~ e!<:am'"< CCmrnen::e comes cI .Qf'. JOU,,,,,,I 01 Bu.,~ .. Str.,.... , 19 (6),
38-44
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DeO'o..", Z.• 5. ll000hooll. F (1999.
Supply Choln Monog""",nl,
35
(I),
W'''l....). Effect".,v ",:ea,"O .uppr....
5'10
u.,nO lotol co.l 01 owne""',p. The Jpurn.' of
DelOM. P. (1998.1"""), Ne.. mal ......'. 'QKOOI'''.oaa PO'fSCVUlI tQIJ'h to .uOPI. <no.n. HOSO,,,.' Molena" MoMgem..nl. 23
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FI<Me" 1'1. L (1991. Mor<hl"'pnl). wn., " the "Vnl 'UPlltv eno,n to' you' orn<luet' HO"'or<l 8".'n.... Rev''''''. 7S (2), 105· 116,
IReferencel
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D. 0 .. &. 811""'. 1'1 1. (1996. Spnng). R.. "'tIOMI l>er>eH. ,n ......" ... mau'ttles' rn.. cu'lom.. ~.
perspea"... Joumo' of lhe Aooa..my or "'001<..1"'9 sa..""... 26 (2). lOI'1I4
K,el •• D. (1996/'999. W,nt"'). Synen,,,,,,,.,no .upply eN'" pperatlOtl. w"h COMu""', aeman<l
<u5lomer Oot. Tn..
)o"rno' ot 8".'n.... Fo'"oo,ton~ "'et't>oo. &. SySlem•• 17(4).3,9,
""'''9
IReferel"lce]
~Po"<" ,nvesh9"tIOn of outsourn"ll ""dSlOr1< Journo' 01 Supply C""'"
MonOQf'ment, 35 (I). ))·41
M<Cun~. J. (1995. Ma.llune), The flH;e 01 ,''''''''''OW. The lOutrUll of Bu"""" St,.,"'Oy. 16 (3). 50· S5
MOfa.n, EA.• &. (:J,nlPfl. 5. R. (1997. Spn"9l. The role of I,an<o<>rto""" ""POO'I,t.... ,n InU,mat'Pflal '''PPI. cMam
,""".oe"",n,. T",n'oortotfOh Jour""l. 36 (3). 5'17
Pagn, J. D.• & Cooper. 1'1 C. (1998). S"OPly cnU\ POSt:P<>nM>fOnt .nd 'P<'CU'Ohon "'oteg,... : How to cMoo,," 1M right
....,0•• t .• II< ,,,,,.,,\,,,,., 5, (1999. w,nt..,), An
7 oft
28,02 911
A~
hUt>"' p'oques"uml.<om pqd..'.b?TS-.. ,-I & D,d.-(l()OOO(l(l94569 S7 J & M ,d-I & r mt-4
Documcn'
•
<trllt~y. Joumlll 01 lIu.,""" lD<;i<tI«. 19 (2). 13·33
Soran. V. (1998, Sr>nI\9}, The role 01 hIe cydfl and lena.t hc>nZo<I5 ,n a
Journal of 8u<jnM< ForeI:.'Jst,ng Memoc. &. System•• 17 (I}. 23. 28.
lo~.t,ng
sy.tem Reebok'. perspeC\,ve. The
[Referencel
Sc.rt!OrOlJgh, M. C" &. SPlIt.",lla. J, J, (1998. July/Augu.t), GeWn9 beh'nd the bu...,.... 01 .'Klron" COm_reo TMA )""mel,
18 (4). 42·44
J. (1999, Jan""ry). let ,uPlllle.. IleIP PIIIn tlUrelUl.. """"•. HOSPItal M.~""t. Management, 24 (I). 12·13 Speer, T
c. (1997, August 5), ~r-om dod« 10 doC<. HOSpitalS &. Healltl NetwO<1<$. 71 (IS). 48-50
Su~y Cha,n S,",a",I,nlng Net. 8", saVing. (1998. t1..-nber). HOSPItal M.'''''<IIls Man.gement. 23 (II). 2. 10
sm,,",
IAulltor notel
lack S Cook. Rodl...ter ]n.t ,ute ol Tedlroology
IAulhor notel
.... J-on... Sd>t>oI oIlIuol_•• Stele Un",~"," 01 New Vo<S<-Geneseo
lone-< 5<:1>001 ol lIu<>.,...•. State Un"'.... ,ty 01 New Vo<S<·Geneseo
~.tny O~r
Am'e
~e",leto.
IAulhor notcl
.
_.UO<1.
Or. Cook .peclallze. In e~r-on", commerce. 'nlorm<l""" syStems. Md P"Od\lCllOll.nd
management ~.thy De\l,ee
'. a....t.n, employee "'P'O'Sent.,lve.t W~m.n. I'oocl M."'et. A""" ~_etl !lumen Resourees Deportment sUpC,,-"soc.t
5 .. flag. Da...n La.e
Rq",xlu"od ""n penn""011 of lho Cop)Tlghl o"n., Furth.. 'ep<od"""on Of d..u,bullOn .. p'oh'b".d ""hOUl pcm\l>!,nn
80f8