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The Intimate Supply Chain – Part 1

Supply Chain Management Review magazine has a new article titled The Intimate Supply Chain. Writes David F. Ross in the teaser:

After all the excess inventory and nonproductive processes have been removed, what\’s the next stage of supply chain advancement? This article contends that it lies in the creation of “intimate” supply chains. Intimate supply chains create value for customers at every touch point. And by doing so, they enable companies and their channel network partners to do business in a profoundly different way from the competition.

A little later in the article, David recounts the words of supply chain pioneer Arch W. Shaw writing in 1915:

Writing in 1915, supply chain pioneer Arch W. Shaw described distribution as composed of two separate yet interconnected functions: demand creation and physical supply. Demand creation, Shaw wrote, consists in communicating the value to be found in products and services that meet the desires and needs of the customer. However, the customer\’s willingness to expend the effort to make an acquisition would possess no economic value if these goods and services were not available at the time, place, and cost wanted. It is distribution\’s role to solve this basic problem of creating exchange value by ensuring that the flow of the output of production matches the customer\’s requirement as efficiently and as quickly as possible. Shaw felt that finding a solution “was the most pressing problem of the business man today.”

The first thought that crossed my mind when I read the above words – that\’s the very question that Lean and perhaps a whole slew of improvement methodologies seek to address.

Read the rest of this entry »

About me

I am Chris Jacob Abraham and I live, work and blog from Newburgh, New York. I work for IBM as a Senior consultant in the Fab PowerOps group that works around the issue of detailed Fab (semiconductor fab) level scheduling on a continual basis. My erstwhile company ILOG was recently acquired by IBM and I've joined the Industry Solutions Group there.

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August 2006
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