David Walters and Geoff Lancaster
Management Decision
2000, Vol 38, Issue 3, pp. 160-78
1) Intro
- a) Four Propositions
- i) SCM is the management of relationships between key stakeholders and functions that occur in wealth maximization
- ii) Customers drive wealth maximization
iii) Wealth Maximization and customer satisfaction are facilitated by effective logistics management
- iv) Logistics management is the management of activities and costs occurring within the supply chain
- b) Task of management
- i) Identify customer needs and priorities
- ii) Identify the channels that can satisfy them
iii) Identify the services/products best suited for those channels
- iv) Identify the inputs and raw materials required to create the product/service
- v) Identify the assets and core competencies essential to the inputs and raw materials
2) Value Chain Model
- a) Value is created by effective response and delivery, facilitated through
- i) Identifying and understanding customer benefits
- ii) Identifying costs
iii) Identifying combinations of organizational knowledge and learning
- iv) Identifying organizational structures
- b) Value Chain processes
- i) A firm’s competitive position depends on the effectiveness of the entire chain, not just it’s direct linkages
- ii) The value chain serves as a design for the business’ mission
iii) The supply chain gives its strategic direction and organizational vehicle
- iv) The operation /implementation role is assumed by logistics management
- c) Effective value chain reconfiguration require structure
- i) Expansion in a company’s structure may require the value chain to change
- ii) Expansion is unlikely to occur without expansion of assets and core competencies
iii) Vertical integration has alternative structural options
(1) Coordination
(2) Integration
(3) Coordination is replacing integration
3) Conclusions/ Key points
- a) Supply chain management and logistics management are supporting functions in an overall value chain
- b) The Objectives of all value chain participants should be maximized to a point where no preferable solution may be found
- c) Information and relationship management determine the effective organizational structure of the value chain and its efficient operational management.