Index

ABC approach, to inventory

management, 69
Ace Hardware, 156
Acquisitions, 146147
ACT Manufacturing, 180
Activity-based costing, 152
Advanced information systems, 154
Advanced planning and scheduling
(APS) system, 295
Aggregate forecast, 122123
Aggregation, of data, 2729
Airborne Express, 238
Algorithms, 3637, 302
Amazon.com, 128129, 242, 247, 253
American Airlines, 249, 266
American Express, 258
Amoco Chemical Corporation, 312
Analytical tools, 300303
Apple Computer, 148, 179180, 274
Ariba, 183
Artificial intelligence (AI), 295,
301302
Audio Duplication Services, Inc.
(Case), 163
Auto-ID technology, 275

Baan, 286
Back order levels, 4
Backup in the Espresso Lane (Case),
261264
Bar coding, 205, 275, 298
Barilla SpA (A) (Case), 91100
Barnes and Noble, 131
Base-stock level, 62
Batch ordering, 104
Baxter Healthcare Corp., 152
Beer Game, 12, 319333
Benetton, 218219, 222

Best-of-breed solution, 263265,

290291
BIS Corporation (Case), 2324
Black box, 225
Blockbuster Video, 57
Boeing Aircraft, 4
Boise Cascade, 248, 251252
Book industry, Internet and, 131132
Bookshelf concept, 226
Bottlenecks, 309
Brand names, 244245
British Petroleum, 150
Buffer inventory, 126
Build-to-order model, 242
Bullwhip effect, 101110, 121
Business plans, 6
Business-to-business (B2B),
128, 131
Business-to-consumer (B2C), 131
Buy-back contracts, 5457

Calculators, 300
Capacity, warehouses, 3334
Cases
Audio Duplication Services, Inc.
(ADS), 163
Backup in the Espresso Lane,
261264
Barilla SpA (A), 91100
BIS Corporation, 2324
Dells Direct Business Model,
237238
ERP Brews Instant Success,
264265
FreeMarkets OnLine, Inc., 165178
Great Inventory Correction, 139142
Hewlett-Packard: DeskJet Printer
Supply Chain, 207213

Hewlett-Packard Company: Network

Printer Design for Universality,
230235
Hotel Rooms, 249250
How Kimberly-Clark Keeps Client
Costco in Diapers, 143146
JAM Electronics: Service Level
Crisis, 4344
Meditech Surgical, 1421
Modern Book Distribution, Inc.,
119120
Risk Pooling, 6466
Sport Obermeyer, 7690
Supply Chain Management Smooths
Production Flow, 293294
Swimsuit Production, 4952
Wal-Mart Changes Tactics to Meet
International Tastes, 191194
Caterpillar Corporation, 160
Causal forecasting methods, 72
Celestica, 180, 186
Central versus local facilities, 137138
Centralized control, 136137
Centralized distribution, 6
Chambers, John, 179
Charles Schwab, 254
Chevron Corp., 150
Circuit City, 242
Cisco, 46, 130, 179180, 266
Class rates, 3031
Classification tariff, 30
Client/server, 277278
Clustering technique, 27
Coca-Cola, 201, 253
Collaborative planning, forecasting and
replenishment (CPFR), 111, 128,
282, 311
CommerceOne, 183
Commodity rates, 30

349

350

INDEX

Commodity strategies, 187189

Communication, 275276
Compaq, 3, 238, 248
Computerized Beer Game, 12,
319333
Concurrent processing, 216217
Confidentiality, 156157
Consignment, 156
Consortia based e-markets, 185186
Constant work in progress, 114
Continuous replenishment strategy,
154155
Continuous review, of inventory, 5861
Contracts
buy-back, 5457
quantity-flexibility, 55
revenue sharing, 5556
sales rebate, 55
supply, 9, 5357
Converge, 185
CONWIP, 114
Core competencies, 10, 148
Costs
activity-based, 152
fixed, 32, 47
handling, 32
holding, 4748
inventory, 6, 25, 4748
logistics, 6
menu, 252
overhead, 25, 67, 137
setup, 25, 48
storage, 32, 4748
supply chain, 255
transportation, 6, 25, 3031, 67,
114115, 137
warehousing, 3233
Council of Logistics Management, 2
Covisint, 185186
Craft production, 227
Cross-docking, 7, 10, 110, 114,
133136, 216
Cultural issues, in supply chains,
203204
Customer demand, 46
Customer relationship management
(CRM), 270, 281282, 285
Customer satisfaction, 238, 254
Customer segmentation, 253
Customer service, 116
Customer value
conformance to requirements,
240241
defined, 11, 238239
dimensions of, 240248
information technology and,
256258
measures of, 253256
price and brand, 244245

product selection, 241243

relationships/experiences,
246248
revenue management, 249251
strategic pricing, 248253
value-added services, 245246
Customer zone, 27
Customization, mass, 116, 227229
Cycle counting, 69
Cycle time, 47, 255
Data aggregation, 2729
Data exchange, 276, 281
Data mining, 295, 300
Data visualization techniques, 297
Data warehouses, 277, 295
Databases, 276277
Datamarts, 277
Dayton Hudson Corporation, 7
Decentralized control, 136137
Decision-support systems (DSS),
294318
analytical tools, 300303
implementation of, 288291
input data, 298299
inventory management, 312
logistics network design, 3940, 307
material requirements planning
(MRP), 314315
modeling, 296297
operational planning systems,
310312
optimization based, 308
presentation tools, 297, 303307
production scheduling, 313314
selecting a system, 315316
structure of, 297307
supply chain master planning,
307310
transportation planning, 313
uses for, 294295
Decoupling, 216
Delaney, Robert V., 5, 149
Delayed differentiation, 115, 123,
218219
Delivery, on-time, 8
Dell Computer, 5, 46, 123126, 128,
130, 180, 185, 229, 237239,
242248, 251253, 257258
Dells Direct Business Model (Case),
237238
Delphi method, 71
Demand forecasting, 103104, 127, 311
Demand information, 106109
Demand management, 200
Demand planning, 285, 311
Demand shaping, 127, 311
Demand uncertainty, 4952
Demand variability, 252

Design for logistics (DFL)

concurrent and parallel processing,
216217
packaging and transportation,
215216
push-pull boundary, 222
standardization, 217221
supplier integration, 225226
Design for manufacturing (DFM), 214
Differentiation, product, 115, 123,
218219, 222
Dillard Department Stores, 154
Direct business model, 237238
Direct shipment, 133134
Distribution; See also Warehousing
central versus local, 137138
centralized, 6, 9
centralized versus decentralized,
6667, 136137
cross-docking, 7, 9, 110, 114,
133136, 216
direct shipment, 133134
network configuration, 9
transshipment, 136
Distributor integration, 136, 160162
Domain Name System (DNS), 275
Dow Chemical, 149
Downstream inventory, 67
Downward substitution, 220
Dunlop-Enerka, 161
Dynamic pricing, 252
Early supplier involvement, 225226
Eastman Kodak, 149
E-business, 128, 130131
Echelon inventory, 6768
E-commerce, 128, 130131, 279283,
298
Economic lot size model, 4748
Economic order quantity (EOQ), 47
Economies of scale, 137
E-fulfillment logistics, 133
Electronic brokerages, 281
Electronic commerce, 128, 130131,
279283, 298
Electronic data interchange (EDI), 154,
158, 205, 281
Electronic mail, 276
Electronic marketplaces, 165178
Electronic Product Code (ePC), 275
E-markets, 183189
Emerging nations, 203
Enterprise Application Integration
(EAI), 279
Enterprise resource planning (ERP),
272, 285, 288291, 298
E2Open, 185
EOQ, 47
E-procurement, 183189

INDEX

ERP Brews Instant Success (Case),

264265
ERP II, 272273
ESI, 225226
Everyday low pricing (EDLP) strategy,
109
Exact algorithms, 3637, 302
Exception rates, 30
Exchange platforms, 276
Exchange rates, 197198, 202
Exchanges, 279
Exel Logistics, 152
Exostar, 185
Expert systems, 301
Exponential smoothing, 71
Export restrictions, 197
eXtensible Markup Language (XML),
273
Extranets, 279
Federal Express, 152, 244, 266, 268
Fingerhut Business Services, 132
Finished product inventory, 45
First Brands, 154, 157
Fisher, Marshall, 240
Fixed costs, 32, 47
Flexible strategies, 199
Flextronics, 180
Ford, 3
Forecasting
aggregate, 122123
bullwhip effect, 121
causal methods, 72
demand, 103104, 127, 311
errors in, 127
judgment method, 71
manufacturer, 110
market research methods, 71
principles of, 49, 70
probabilistic, 49
retailer, 110
selecting technique, 7273
smoothing, 71, 103
time-series methods, 7172
Forrester Research, 128
Free trade zones, 202
FreeMarkets OnLine, Inc. (Case),
165178
Freight rates, 3031
Fulfillment, 126, 132133, 200
Furniture.com, 129
Gartner Group, 272
Gateway, 242
GATX, 152
General Motors, 45, 125, 150, 243
Geographic information systems (GIS),
297, 303307

Gerstner, Lou, 292

Global optimization, 24, 54, 5657,
111
Global Positioning System (GPS), 276
Goodyear Tire & Rubber, 245
Grainger, William W., 241
Great Inventory Correction (Case),
139142
Green Mountain Coffee Roasters Inc.,
264265
Grey box, 225
Grocery industry, Internet and, 131
Groupware, 276277
Handling costs, 32
Harris, Ford W., 47
Hedge strategies, 198199
Henkel, 283
Herman Miller Inc., 280
Heuristics, 3637, 302
Hewlett-Packard, 5, 223224, 238
Hewlett-Packard: DeskJet Printer
Supply Chain (Case), 207213
Hewlett-Packard Company: Network
Printer Design for Universality
(Case), 230235
Hitachi, 202
Holding costs, 4748
Holts method, 72
Home Depot Inc., 7, 242
Honda, 201, 243
Hoole, Richard, 199
Hotel Rooms (Case), 249250
How Kimberly-Clark Keeps Client
Costco in Diapers (Case), 143146
Human resources, 205
HyperText Markup Language (HTML),
275, 278
IBM, 34, 46, 148149, 181, 185, 238,
245, 248, 271, 273, 292
Ikea, 215
Indirect materials, 188
Individual Inc., 246
Inflated orders, 104
Information technology (IT); See also
Internet
artificial intelligence, 295, 301302
capabilities required, 284286
customer value and, 256258
decision support systems; See
Decision-support systems (DSS)
electronic commerce, 128, 130131,
279283, 298
enterprise resource planning, 272,
285, 288291, 298
goals of, 267271
implementing, 286291

351

importance of, 266267

infrastructure
communications, 275276
databases, 276277
interface devices, 274275
system architecture, 277279
standardization, 271274
system components, 283286
Ingram Book Group, 131
Intel, 3, 148, 197
Intelligent agents, 301
Interface devices, 274275
International supply chain management
cost forces, 196
cultural issues, 203204
examples of, 191194
human resources, 205
implementation of, 199200
international versus regional
products, 201
local versus central control, 201202
market forces, 195196
performance evaluation, 204205
political and economic forces,
196197
regional issues, 203
risks and advantages, 197200, 202
technological forces, 196
types of chains, 194195
Internet
benefits of, 256257, 272
electronic commerce, 128, 130131,
279283, 298
e-mail, 276
e-procurement, 183189
impact on supply chain, 128133
impact on transportation/fulfillment,
132133
information technology (IT); See
Information technology (IT)
intranet, 279
online bidding, 165178
Interoperability, 278
Intranets, 279
Inventory
buffer, 126
costs, 6, 25, 4748
downstream, 67
echelon, 6768
finished product, 45
position, 59
raw material, 45
reasons for, 45
reduction strategies, 6970
replenishment, 7
turnover of, 78, 33, 6970
work-in-process, 45

352

INDEX

Inventory management
ABC, 69
bar coding, 205, 275, 298
centralizing, 66
consignment, 156
continuous review, 5861
cycle counting, 69
decision-support systems and, 312
demand uncertainty, 4952
economic lot size model, 4748
factors affecting, 46
min-max, 52, 103104
multiple order opportunities, 58
periodic review, 58, 6263, 69
safety stock, 59, 63, 6667, 69, 103,
137
service levels, 67
supplier managed, 69, 110, 154158,
282
supply contracts, 5357
warehouse capacity, 3334
Inventory Spreadsheet, 342
Inventory velocity, 237
Ivester, Doug, 253
Jabil Circuit, 180
JAM Electronics: Service Level Crisis
(Case), 4344
JC Penney, 27, 134, 154
Judgment forecast method, 71
Just-in-time (JIT), 5
Kanban, 5, 114
Kellogg Co., 195
Kmart, 7, 154, 157, 239
Kogut, Bruce, 198
Lead country status, 201
Lead times
customer, 67
management of, 69
reduction, 109110, 112, 137
tight, 3
variable, 62, 104
Lean manufacturing, 5
Lee, Hau, 214
Legacy databases, 276277
Less than truckload (LTL), 3031, 114
Levi Strauss, 201
Lewis, Jordan, 147
Lexus, 254
Licensing fee, 185
Life cycles, 8
Liz Claiborne, 46
Local area networks (LAN), 277
Local optimization, 111
Localization, 223

Logistics; See also Supply chain

management
costs, 6, 3233
defined, 12, 2425
design for logistics; See Design for
logistics (DFL)
e-fulfillment, 133
network configuration
data aggregation, 2729
data collection, 2535
key features, 3940
mileage estimation, 3132
model and data validation, 35
solution techniques, 3538
transportation rates, 3031
warehouse capacity, 3334
network design, 307
reverse, 133
third-party, 149153
Lot sizes, 114
McDonalds, 201, 258
McGrath, Michael, 199
Mail-in-rebates, 251252
Maintenance, repair, and operating
(MRO) supplies, 188, 241
Make or buy analysis, 182183
Marconi, 180
Marginal cost/profit, 50
Market mediation, 240
Market research methods, 71
Market surveys/testing, 71
Mass customization, 116, 227229
Master planning, 295, 307310
Material requirements planning (MRP),
314315
Mathematical models, 302
Mathematical optimization techniques,
3637
Matsushita, 228
Mead-Johnson, 159
Meditech Surgical (Case), 1421
Menlo Logistics, 152
Menu costs, 252
Michelin, 199
Microsoft, 148, 273274
Middleware, 278279
Mileage estimation, 3132
Milliken and Company, 154
Min-max policy, 52, 103104
Minnesota Mining & Manufacturing,
149
Mixed-integer linear programs, 308
Mobil Oil Corporation, 314315
Model and data validation, 35, 298
Modern Book Distribution, Inc. (Case),
119120
Modular process/product, 218
Motorola, 3

Moving average, 71
MRO, 188, 241
MRP, 314315
Multiple order opportunities, 58
Nabisco, 6
National Bicycle, 228
National Motor Freight Classification,
30
National Semiconductor, 3, 6, 10
National Transportation Exchange, 281
NEC Computers, 180
Nestle, 195
Nike, 179181
Nikon, 248249, 251
Nissan, 186, 201
Nortel, 180
Object databases, 277
Object Naming Service (ONS), 275
Office Max, 242
Offshore manufacturing, 194
Okuma America Corporation, 161
One-to-one enterprise, 246
On-line analytical processing (OLAP)
tools, 300
Online bidding, 165178
On-time delivery, 8
Operational execution systems, 295
Operational level decisions, 9
Operational planning, 285, 295
Operations research (OR), 295
Optimization-based decision-support
system, 308
Oracle, 286
Order fulfillment, 126, 132133, 200
Ordering
back, 4
batch, 104
economic lot size, 4748, 114
inflated, 104
multiple opportunities, 58
reorder point, 103
Order-up-to-level, 103
Outsourcing
benefits and risks, 180182
examples, 178180
logistics, 149153
make or buy analysis, 182183
questions to ask, 10
Overhead costs, 25, 67, 137
Packaging, 215216
Parallel processing, 216217
Part standardization, 218220
Partnerships, 6, 10, 110, 153160
Peapod, 129, 131, 246, 254

INDEX

PeopleSoft, 286
Periodic inventory review, 58, 6263,
69
Personal digital assistants (PDAs), 274
Physical inventory, 69
Pidd, Michael, 296
Pine, Joseph, 214, 227
Planning
demand, 285, 311
master, 295, 307310
MRP, 314315
operational, 285, 295
production, 1718
sequential, 112113
supply chain, 284, 295, 307310
transportation, 313
Planning horizon, 252, 285286, 295
Plexus, 180
Point-of-sale (POS), 112, 135, 298
Postponement, 123, 218, 222223
Presentation tools, 297, 303307
Pricing
customized, 251252
dynamic, 252
everyday low pricing strategy, 109
fluctuation of, 104
products, 244245
revenue management, 249251
smart, 251253
strategies, 248253
transaction, 153
Probabilistic forecast, 49
Process reference model, 255
Process standardization, 218220, 223
Procter & Gamble, 6, 10, 101, 111, 154,
244
Procurement
commodity strategies, 187189
e-procurement, 183189
internationally, 200
standardization, 220
strategies, 10
Product development
design for logistics; See Design for
logistics (DFL)
international markets, 200
standardization, 217221
supplier integration, 225226
supply chain management and, 1011
Product differentiation, 115, 123,
218219, 222
Product life cycles, 8
Product Markup Language (PML), 275
Product standardization, 220
Production planning, 1718
Production scheduling, 285, 313314
Profit, marginal, 50
Proprietary systems, 271
Protectionism, 202

Pull-based supply chain, 121122, 131

Purchasing; See Procurement
Push-based supply chain, 121, 131
Push-pull supply chain, 122123,
125127, 222
Quantity-flexibility contracts, 55
Queries, 300
Quick response strategy, 153155, 158
Quotas, 197
Radio frequency, 275
Rapid replenishment, 154155
Rate basis number, 30
Raw material inventory, 45
Rebates, 251252
Regression analysis, 72
Relational databases, 276
Renault, 186
Reorder point, 103
Replenishment, of inventory, 7
Requests for quotation (RFQ), 168,
170171
Resequencing, 218
Retail industry, Internet and, 132
Retailer-supplier partnerships, 153160
Return on investment (ROI), 283, 286
Revenue management, 249251
Revenue sharing contracts, 5556
Reverse logistics, 133
Risk Pool Game, 1213, 334341
Risk pooling, 13, 49, 6466, 115, 135,
180
Risk Pooling (Case), 6466
Roadway Logistics, 152
RosettaNet, 273
Rubbermaid, 215
Ryder Dedicated Logistics, 150151
S policy, 52, 5960
Safety stock, 59, 63, 6667, 69, 103,
137
Sales rebate contracts, 55
Sales-force composite, 71
Salvage value, 50
Sanmina, 180
SAP, 286287
Saw-toothed inventory pattern, 47
Scalability, 274
Scheduling, 1718, 313314
Schneider National, 152
SCI Systems, 180
Sears Roebuck, 149, 242
Seasonal decomposition, 72
Seasonality, 252
Security, 274
Selectron, 186

353

Sequential planning, 112113

Sequential supply chain, 54
Service level, 67, 254
Setup costs, 25, 48
Seybold, Patricia, 248
SGML, 273
Sharp, 248249, 251
Shaw Furniture Gallery, 129
Siemens, 3
Silicon Graphics, 180, 247
Simmons Company, 151
Simulation, 38, 300301
SmithKline Corporation, 202
Smoothing, 71, 103
SOAP (Simple Object Access
Protocol), 273
Solectron, 180
Solvik, Peter, 179
SonicAir, 151
Sony, 238
Spartan Stores, 159
Specifications, 166
Speculative strategies, 198
Sport Obermeyer, 126
Sport Obermeyer (Case), 7690
Sportmart, 242
Stand-alone systems, 271
Standard deviation, 127
Standard forecast smoothing, 103
Standardization, 217221, 271274
Standards, 271274
Starbucks Corp., 261264
Statistical analysis, 300
Storage costs, 32, 4748
Strategic alliances
advantages/disadvantages, 148149,
158
distributor integration, 160162
retailer-supplier, 153160
third-party logistics, 149153
value of, 147148
Strategic level decisions, 9
Strategic network design, 284, 295
Strategic partnerships, 6, 10, 110,
153160; See also Strategic
alliances
Strategic pricing, 248253
Structured Query Language (SQL), 276
Subscription fee, 185
Substitution, downward, 220
Sun Microsystems, 185, 273
Sunrise Plywood and Furniture, 202
Supplier integration, 225226
Supplier managed inventory, 69, 110,
154158, 282
Supplier relationship management
(SRM), 270, 281282, 285
Supplier selection, 226

354

INDEX

Supply and demand

management of, 128
matching, 4
Supply chain
centralized, 106107
costs, 255
decentralized, 107108
integration of, 10
performance measures, 255
pull-based, 121122, 131
push-based, 121, 131
push-pull, 122123, 125127, 222
sequential, 54
strategy selection, 123125
time line, 122
Supply Chain Event Management
(SCEM), 276
Supply chain management
defined, 12
demand driven strategies, 127128
global optimization, 24
importance of, 58
international; See International
supply chain management
Internet and, 128133
key issues, 811
versus logistics management, 2
managing uncertainty, 45
objectives of, 12
Supply Chain Management Smooths
Production Flow (Case),
293294
Supply chain master planning, 284,
295, 307310
Supply Chain Operations Reference
Model (SCOR), 255256
Supply contracts, 9, 5357
Swaminathan, Jayashankar, 217
Swimsuit Production (Case),
4952
System architecture, 277279
Tactical level decisions, 9
Tanner Companies, 313
Target, 7, 242
Tariffs, 197
Texas Instruments, 197
Third world nations, 203
Third-party logistics, 149153

TIGER, 306
Time Warner, 149
Time-series forecast methods, 7172
Toshiba, 202
Total quality management (TQM), 5
Toyota, 182
Trade-Ranger, 185
Transaction fee, 184
Transaction pricing, 153
Transportation
costs, 6, 25, 3031, 67, 114115, 137
Internet and, 132133
planning, 285, 313
product design and, 215216
product tracking, 276
Transshipment, 136
Truckload (TL), 3031, 114
Turnover, of inventory, 78, 33, 6970

UDDI (Universal Description, Discover

and Integration), 273
Uncertainty, management of, 45
Uniform Code Council, 275
Uniform Freight Classification, 30
Unilever, 312
U.S. Census Bureau, 306
U.S. Surgical Corporation, 4
Universal Product Code (UPC), 275
UPS, 151152, 238
USAA, 246
USCO, 152

Value, customer
conformance to requirements,
240241
defined, 238239
dimensions of, 240248
information technology and,
256258
measures of, 253256
price and brand, 244245
product selection, 241243
relationships/experiences,
246248
revenue management, 249251
strategic pricing, 248253
value-added services, 245246

Vendor managed inventory (VMI), 69,

110, 154158, 282
VF Corporation, 159
Virtual integration, 237
Virtual manufacturing environment,
266
Volkswagen, 199
Voluntary Interindustry Commerce
Standards Association (VICS), 282
Wal-Mart, 7, 9, 27, 69, 111, 132,
134135, 154, 156, 159, 185,
191194, 215, 239, 242, 244, 258,
266
Wal-Mart Changes Tactics to Meet
International Tastes (Case),
191194
Warehousing; See also Distribution
capacity, 3334
centralized, 6, 10
centralized versus decentralized,
6667
costs, 3233
cross-docking, 7, 10, 110, 114,
133136, 216
distribution network configuration, 9
increase in numbers, 25
location, 25, 34
service level, 34
shared, 6
Warner-Lambert, 111
Western Publishing, 159
White box, 225
Whitehall Robbins, 157
Wide area networks (WAN), 277
Wilson, Roslyn, 5, 149
Winters method, 72
Work-in-process (WIP) inventory, 45
World Wide Web Consortium (W3C),
273
XML, 273
Yellow Logistics, 152
Zero inventory ordering property, 47