In the United States alone, companies spend more than $1 trillion every year on transportation, warehousing, distribution, and associated inventory management. The responsibility for managing that spending falls squarely on the shoulders of supply chain professionals. Their roles may differ from company to company, but their goals are generally the same: develop and position their companies' supply chains so that they can compete and win in today's global marketplace. Many of these professionals work for companies that consider supply chain management and its many subdivisions (e.g., planning, purchasing, transportation, warehousing) largely as cost centers or as the group to blame when deliveries are late or shelves are empty. Yet it's an inescapable fact that many of the biggest and best-run companies got to their positions of dominance thanks to their adoption of best practices to manage their world-class supply chains.
This book, then, is designed to help you figure out how you can get your own company on the “best practices” track. It will explain why there is so much interest in supply chain management today by offering numerous examples of companies that have found success by focusing on specific processes within their supply chains. Through anecdotes, interviews, case studies, research, and analysis, the book will explore the development of supply chain management by looking at some of the people and the businesses largely responsible for its momentum.
Since the late 1990s, thanks to the industry consolidation in my own chosen field (media and publishing), I've worked for three different companies (Penton, Informa, and Endeavor) but the same group of publications. While I've covered such industry sectors as safety, corporate finance, and manufacturing, I've consistently maintained a supply chain beat for well over 20 years. In the course of writing the three editions of this book, I've had the opportunity to visit manufacturing plants, distribution centers, major ports, third-party logistics operations, and various government offices throughout North America and Latin America, Europe, and Asia. In preparing this third edition, I have added a significant amount of new material and additional best practices to each chapter, with the goal of producing as timely and relevant a book as possible.
The second edition was in print for over 10 years, so for this third edition I have updated the material wherever necessary, particularly in areas where the companies mentioned in previous editions have substantially changed their business model, have been acquired or otherwise no longer exist in their previous incarnation, or in some cases, when more recent examples made my points better. Best practices are not etched in stone, and what worked in 2007 or 2010 may have been improved upon, so I've replaced some case studies with more current examples. However, based on the feedback I received from course instructors who have used this book as a textbook and plan to do so in the future, I have kept the same basic structure to the book, and if the best practices mentioned in previous editions are still widely accepted and in use today, I have left those sections intact. And sometimes good stories are still good stories, even a decade later.
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The book is organized into three parts. Part 1 opens with a brief introduction to supply chain management (Chapter 1), looks at examples of some best-in-class supply chains in a number of different industries (Chapter 2), and discusses ways to measure the performance of a supply chain (Chapter 3).
Part 2 presents the traditional core processes of supply chain management. Chapters 4 through 10 follow the progression of plan, source, make, deliver, return, and enable, and related points in between, and discuss in detail the best practices being followed by specific trendsetting companies.
Part 3 looks at best practices in strategic areas that have become increasingly important to supply chain management as we settle into the third decade of this century: third-party logistics (Chapter 11); risk management and business continuity, including a look at how supply chains reacted to the COVID-19 pandemic (Chapter 12); supply chain technology (Chapter 13); sustainability and corporate social responsibility (Chapter 14); and an all-new chapter on supply chain finance (Chapter 15). Finally, Chapter 16 focuses on the ultimate best practice: hiring and developing best-in-class supply chain personnel.
Acknowledgments
The genesis for writing this book came largely from a need to clean up my office. I've been writing about supply chain management for a long time, dating back to the days when nobody even used the words “supply chain,” and being a pack rat, I have several filing cabinets' and countless jumpdrives' worth of notes, interview transcripts, research studies, surveys, press kits, and article clippings, as well as several shelves stuffed with reference books. One day, staring at my daunting collection of supply chain stuff, the thought occurred to me: “Surely, there's got to be a book somewhere in all of this.” And indeed there was—in fact, with this current edition there have been three, and my collection of book material shows no sign of shrinking.
I mention this to dispel the myth that every book emerges fully formed from the divinely inspired mind of the author. Nothing could be further from the truth. This book evolved over time from the writing and editing I've done for the past three decades, especially the two decades I've spent in editorial management of various supply chain publications—including Supply Chain Technology News, Logistics Today, Material Handling & Logistics, and IndustryWeek—for Penton Media/Informa/Endeavor Business Media. Throughout my tenure with the company (the corporate owner of the magazines changed over the years, but I stayed put), I've also edited several other publications not necessarily supply chain–focused but whose readers were heavily influenced and impacted by the vagaries of the supply chain, such as EHS Today and Business Finance, and this book reflects my awareness of how the supply chain's influence continues to spread throughout all areas of an organization.
This book also references the reporting of many fine journalists who have worked with me and for me, and many of the insights on the following pages originated with them (and are duly noted throughout the book). In alphabetical order, I'd like to acknowledge and publicly thank Mary Aichlmayr, Peter Alpern, Tom Andel, Jill Jusko, Jonathan Katz, Brad Kenney, Bill King, Jennifer Kuhel, Steve Minter, Roger Morton, Helen Richardson, Adrienne Selko, Sarah Sphar, John Teresko, Perry Trunick, Laura Walters, Clyde Witt, and Nick Zubko for their contributions.
It's always good to thank your bosses, so thanks to those I've worked for at Penton/Informa/Endeavor since the late 1990s, namely Newt Barrett, Dave Madonia, Teri Mollison, Ron Lowy, Steve Minter, Pat Panchak, Karen Field, Travis Hessman, and John DiPaola. And special thanks to Bob Rosenbaum, not only because he had the good sense to hire me, but because he showed me that it was possible to write a supply chain book in the evenings and on weekends without completely losing your mind.
Not to single anybody out, but I also have to thank Nick Lester, Dick Green, Craig Shutt, Andy Horn, Steve Kane, and Paul Beard—just because.
I'm especially indebted to all the supply chain professionals who shared their experiences and insights with me, and in particular I'm eternally grateful for the collected wisdom and insights of the Material Handling & Logistics