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Effective changes

Supply Chain Management

Edited by John T Mentzer

Publishers: Response Books, New Delhi

Price: Rs 895

THE term `Supply Chain Management' has been knocking around in management circles only in the past one decade. The concept, shot into by increasing globalisation, is said to have helped companies bring down costs for many companies dramatically. An examp le, mentioned in the book, is that of Digital Equipment Corporation, which is said to have pared manufacturing costs by $ 167 million and logistics cost by $ 200 million, over a two year period. This came about through a reduction of DEC's manufacturing facilities from 33 to 12.

This book adds to the existing body of literature on SCM, which has cropped up in the last about five years. It comments: ``what is notably lacking is a coherent body of literature that addresses the full complexity of global supply chain management''. H owever, the book is no result of any primary research -- it is a collection of 17 chapters on the subject, by seven authors, who have drawn information from the existing literature.

That the book attempts to be comprehensive is obvious. It walks you through a range of issues, starting from the definition of SCM, its evolution (as a consequence of globalistion), R&D in SCM, the contribution of IT to SCM, financial issues, customer se rvice, measurement of performance of a SCM and management of SCM.

It begins with a simple question: What is SCM ? There are The `Ultimate Supply Chain', the book tells us, involves the `initial supplier', the `supplier', the `firm', the `customer' and the `ultimate customer', and includes the finance provider, the mark et research firm and the third party logistics service provider. The `flow' is not only of materials but also finance and other services. For a large firm, all these elements of the supply chain may be spread across several countries. How to manage this, is what the book is all about.

The early chapters, on Global Environment, Consequences of SCM and the Role of Marketing in SCM, are somewhat ponderous and tend to technicalise what is intuitively understood. These seem to have been brought in to impart the promised comprehensiveness t o the work. It is really from the 5th chapter, on `The Dynamic Role of the Sales Function in SCM,' does the book begin to discuss the heart of the matter. Here, the authors Micheal S Garver and Soonhong Min, note that the traditional model of personal se lling, where salesmen are incentivised for volumes, would be counterproductive to SCM's objectives, which is to build an enduring customer relationship, rather than make a quick sale. ``Clearly, a disconnect exists between SCM and the traditional roles o f the sales function'', the authors note.

The chapter on R&D emphasises that today it is more important to reduce the time taken to put a new product into the market, rather than to stick to the budget. To do this, it says that it is necessary to have cross functional teams in R&D, and to have l aunch processes ready before the design of the product actually begins. It further stresses on inter-firm R&D as a means to reducing cycle times.

In the subsequent chapters, the book discusses the role of forecasting in SCM and the effect of IT on SCM. There is an interesting discussion on e-tailing, which builds some theories about what a e-tailer should do for success.

The chapter on Evolution and Growth of Production, which discusses the metamorphosis of production from craft to mass to lean and the emergence of techniques such as JIT and build to order, have been dealt with in greater detail than necessary, as a huge body of literature exists on the subject.

Of the other chapters, those more interesting than others are perhaps the one on the Role of Logistics in SCM, which is really at the heart of the matter, and the one on Financial Issues, which discusses the evolution of `Supply Chain Costing'.

In sum, the book is more for the practitioner than for the learner. It is a good reference material, rather than a teacher. Two fundamental negatives about the book is that it is far less anecdotal than a good book on the subject ought to be and that its style is ponderous. Two fundamental positives about it are its comprehensiveness, touching upon all aspects of SCM in considerable detail, and its essential nature, since it provides insights and nuggets of information drawn from a wealth of previous re search works.

M. Ramesh