Guide to Supply Chain Management

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Management for Professionals

Colin Scott
Henriette Lundgren
Paul Thompson

Guide to
Supply Chain
Management
An End to End Perspective
Second Edition
Management for Professionals
More information about this series at http://www.springer.com/series/10101
Colin Scott • Henriette Lundgren •
Paul Thompson

Guide to Supply Chain

Management
An End to End Perspective

Second Edition
Colin Scott Henriette Lundgren
Grange Partnership (UK) LLP Grange Partnership (UK) LLP
Droitwich, United Kingdom Droitwich, United Kingdom

Paul Thompson
Grange Partnership (UK) LLP
Droitwich, United Kingdom

ISSN 2192-8096 ISSN 2192-810X (electronic)

Management for Professionals
ISBN 978-3-319-77184-7 ISBN 978-3-319-77185-4 (eBook)
https://doi.org/10.1007/978-3-319-77185-4

Library of Congress Control Number: 2018941880

# Springer International Publishing AG, part of Springer Nature 2011, 2018

Originally published by Springer-Verlag GmbH, Berlin Heidelberg, 2011
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the
material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,
broadcasting, reproduction on microfilms or in any other physical way, and transmission or information
storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
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The publisher, the authors and the editors are safe to assume that the advice and information in this
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the editors give a warranty, express or implied, with respect to the material contained herein or for any
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Cover illustration: eStudio Calamar, Berlin/Figueres.

Printed on acid-free paper

This Springer imprint is published by the registered company Springer International Publishing AG part of
Springer Nature.
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Foreword

This guide is a really useful reminder of what good practice is and how it should be
applied within supply chain management. The book is relevant for students of supply
chain management and professional practitioners alike.
The key aspects of supply chain are laid out clearly—plan, source, make, deliver,
and return. The book is well constructed in totality—and I can envisage revisiting
specific chapters in isolation whilst constructing and delivering supply chain
strategy.
This is the first book that I have come across that is focused more upon the
concepts underpinning the total supply chain rather than the physical execution of
the supply chain. Its range is from forecasting, inventory management and cash
through execution strategy and development. I would add it to my arsenal and
recommend it to others.
The content is relevant; concepts are clearly explained and supported by case
studies that bring the concepts to life. The language used is clear and contemporary;
visualisations re-enforce the concepts well. The additional suggested reading at the
end of each chapter offers an added opportunity to further develop understanding of
specific elements of the supply chain.
Organisations operating on a global stage have to get this stuff right, in both
process and physical terms: it is an essential element to delivering profitable growth.
This book offers an invaluable guide to understanding the specific dynamics of your
supply chain and the fundamentals underpinning it. It provides the framework for
delivering a supply chain strategy based upon recognised best practice.

Dyson Limited Martin McCourt

Wiltshire, UK

v
Preface

Welcome to the second edition. Supply chain management is a fast-changing

business. Recently, it has driven companies around the world to change structure
and—maybe more importantly—the way they think about operating in an increas-
ingly volatile global environment. Everything we consume from the food we eat and
the clothes we wear to the technology we use is configured from components that
have travelled from different corners of the world. As consumers request high-
quality products at lower cost, supply chain management has become as critical as
sales, marketing and finance in today’s organisations.
The goal for supply chain management is to beat the competition and to provide
better service at lower cost with a sustainability remit. A key element of success
within supply chain management is the speed and effectiveness of innovation.
Therefore, within this second edition, we have included more content around this
subject.
During our work with large multinational companies in various industries, we
have met professionals all over the world who are passionate about achieving these
goals. This guide is designed to help professionals, students and everyone else with
an interest in this topic to structure their thoughts and methodologies.
Business practitioners who work in supply chain management and those whose
business functions interact with it have an interest in reading the guide in both the
digital and paper format. Students, whether studying at universities or in vocational
training, find this guide a comprehensive introduction to supply chain management.
But also people working in other contexts, such as charity projects and professional
industry bodies, appreciate this text with its intuitive models and many practical
examples.
In writing this guide, we have tried to connect with our readers by using simple
and straightforward models. By including more real-life case studies of best practice
in this second edition, the guide brings supply chain theory to life. The practical
approach and format enables readers to capitalise on the insights presented in the
guide.
In preparing this book, we have drawn greatly on the thoughts and concepts of
others. If we have omitted to give any credits where credits are due, we apologise
and hope that they will make contact to include in future editions. Learning is an
interactive experience, so we welcome any feedback or ideas of how to improve this

vii
viii Preface

guide. After all, we have learned most from the people we worked with, for which
we are very thankful.
If you would like to get in touch with the authors, please find us online or email
us: supplychain@grangepartnership.com

Grange Partnership (UK) LLP Colin Scott

Droitwich, UK Henriette Lundgren
Paul Thompson
Acknowledgement

We’d like to acknowledge with thanks our families and everyone who supported us
in this project, particularly on the text and case studies.

ix
Contents

1 Introduction to Supply Chain Management . . . . . . . . . . . . . . . . . . 1

2 Guide to Plan in Supply Chain Management . . . . . . . . . . . . . . . . . . 9
3 Guide to Source in Supply Chain Management . . . . . . . . . . . . . . . . 43
4 Guide to Make in Supply Chain Management . . . . . . . . . . . . . . . . . 61
5 Guide to Deliver in Supply Chain Management . . . . . . . . . . . . . . . 87
6 Guide to Return in Supply Chain Management . . . . . . . . . . . . . . . . 107
7 Guide to Strategy in Supply Chain Management . . . . . . . . . . . . . . . 129
8 Guide to People in Supply Chain Management . . . . . . . . . . . . . . . . 143
9 Guide to Finance in Supply Chain Management . . . . . . . . . . . . . . . 161
10 Guide to Customer Service in Supply Chain Management . . . . . . . 175
11 Guide to Outsourcing in Supply Chain Management . . . . . . . . . . . 189

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

xi
About the Authors

Colin Scott is an author, learning specialist and executive coach for global
companies with over 30 years of experience in business and supply chain manage-
ment. In his operational career, he worked for manufacturers and third-party logistics
providers and managed major change projects. He was responsible for international
transport operations as well as systems strategy and implementation, holding Com-
mercial Manager positions, focusing on customer account management and regional
financial responsibility, including the management of client inventory and the
implementation of strategic sourcing processes.
Over the past two decades, Colin has focused on management development,
designing and delivering learning programmes around the globe for some of the
world’s largest companies. He thoroughly enjoys supporting large retailers,
manufacturers, consultancies, transportation and logistics companies in meeting the
ever-increasing challenges in customer service, cost, innovation and sustainability.
Educated at Durham University and Nottingham Business School, Colin holds
diplomas in logistics and management studies and is an accredited trainer and
assessor in Team Management Profiling. He works with some of the world’s leading
business schools supporting their executive leadership and supply chain develop-
ment programmes. Colin is also a non-executive director of a global manufacturing
company.

Henriette Lundgren is an author, coach and business trainer. With more than
15 years of experience, her main focus is on corporate learning and leadership
development for international businesses. Previously, she worked in various line
management and project management positions, leading demand planning and sourc-
ing teams in the consumer goods and chemical industry. She also oversaw the
implementation of SAP systems in manufacturing, planning and customer service at
the international level.
Henriette holds a degree in International Business from Maastricht University
(NL) and a Master in Organizational Psychology from the Open University in
Germany. She also received a Professional Diploma from the Chartered Institute
of Logistics and Transportation (CILT) with distinction and is a member of the
Association for Talent Development (ATD).

xiii
xiv About the Authors

Based in Upstate New York, Henriette has worked and lived in various countries,
including the UK, Italy, Poland, Sweden, Germany and the Netherlands. In her free
time, Henriette enjoys climbing walls and sailing lakes.

Paul Thompson is an author, coach and business learning specialist with extensive
experience in designing and running global programmes for large corporations. He
enjoys working with leading companies and has developed and delivered learning
activities across a wide range of industries. Many of Paul’s programmes include the
use of business simulations, which improve interaction during the event and increase
learning transfer after it. He is a qualified assessor for the Margerison–McCann
Team Management Wheel.
After graduating with a first-class degree in manufacturing sciences, Paul spent a
decade managing different parts of the business for two of the world’s largest and
most successful companies. In his roles, Paul has managed sales, finance, planning,
supply chain, logistics, warehousing and manufacturing operations.
He has led major change management projects including outsourcing interna-
tional warehousing and distribution and implementing customer service excellence
systems. In addition, he also oversaw the implementation of both SAP and JD
Edwards successfully within the supply chain.
In his free time, Paul coaches local sports teams and supports local community
projects.
Abbreviations

2D Two-dimensional
3PL Third-party logistics
AI Artificial intelligence
AS Average stockholding
ASN Advanced shipment notice
B2B Business to business
B2C Business to consumer
CFO Chief financial officer
CILT Chartered Institute of Logistics and Transportation
CLSC Closed-loop supply chain
CM Category management
COC Cost of capital
COFC Container on flat car
COG Centre of gravity
CRP Capacity requirements planning
CS Category sourcing
CSR Corporate social responsibility
DC Distribution centre
DRP Distribution requirements planning
DSD Direct store delivery
EDI Electronic data interchange
ELV End-of-life vehicle
EOQ Economic order quantity
EPA Environmental Protection Agency
EURIDICE European Interdisciplinary Research on Intelligent Cargo for Effi-
cient, Safe and Environmentally Friendly Logistics
FA Forecast accuracy
FE Forecast error
FG Finished goods
FMCG Fast-moving consumer goods
FTL Full truck load
GHG Greenhouse gas
GSCM Green supply chain management

xv
xvi Abbreviations

HAZMAT Hazardous material

IF In full
IP Intellectual property
ITT Invitation to tender
JIT Just in time
KPI Key performance indicator
L&D Learning and development
LCA Life cycle assessment
LNG Liquid natural gas
LT Lead time
LTL Less than a truck load
MAPE Mean absolute percentage error
MPS Master production schedule
MRP Materials requirements planning
NDC National distribution centre
NLP Neuro-linguistic programming
NVA Non-value added
OEE Overall equipment effectiveness
OEM Original equipment manufacturer
OOS Out of stock
OT On time
OTIF On time in full
P&L Profit and loss
Q Order quantity
R&D Research & Development
RCCP Rough cut capacity planning
RDC Regional distribution centre
RFI Request for information
RFID Radio frequency identification
RFP Request for proposal
RFQ Request for quotation
RL Reverse logistics
RM Raw materials
ROCE Return on capital employed
RRT Rolling road train
S&OP Sales and operations planning
SC Supply chain
SCC Supply Chain Council
SCM Supply chain management
SCOR Supply chain operations reference
SKU Stock keeping unit
SLA Service level agreement
SLF Service level factor
SRM Supplier relationship management
Abbreviations xvii

SS Safety stock
SU Supplier uncertainty
TCO Total cost of ownership
TOC Theory of constraints
TOFC Trailer on flat car
TPS Toyota Production System
TQM Total quality management
ULD Unit load device
VARK Visual, auditory, read/write, kinaesthetic
VFFS Vertical form fill and seal
WACC Weighted average cost of capital
WEEE Waste electrical and electronic equipment
WEF World Economic Forum
WIP Work in progress
Introduction to Supply Chain Management
1

1.1 What Starts a Supply Chain?

Whether you are a tea or coffee drinker—have you ever wondered how your hot
drink makes its way onto your breakfast table? Have a look at the supply chain
diagram in Fig. 1.1. What do you see?
Firstly, let’s consider the flow of materials—these are depicted in the middle part
of the diagram. They range from raw materials (tea leaves), to work in progress
(silo), all the way to finished goods (a cup of tea). This goods flow encompasses the
supplier’s supplier through to the end consumer.
Secondly, we have the flow of information, e.g. order confirmation or dispatch
advice.
In addition, there are also reverse flows. These reverse flows can be in the form of:

• Goods, e.g. quality defect products or obsolete products

• Information, e.g. customer feedback
• Packaging material, e.g. outer cartons
• Transportation equipment, e.g. cages, pallets or containers

We also have the reverse flow of funds. This is the money that flows back into the
supply chain. Ultimately, the supplier’s supplier wants to be paid for the delivery of
tea leaves!
Thus, tracking your breakfast drink all the way back from its source of raw
materials shows a number of nodes and processes involved. In fact, a definition of a
supply chain can be considered all the nodes and processes encompassed within
these flows.
Figure 1.1 also depicts two forces in this chain of goods, information and funds,
which are:

1. Product supply
2. Customer demand

# Springer International Publishing AG, part of Springer Nature 2018 1

C. Scott et al., Guide to Supply Chain Management, Management for Professionals,
https://doi.org/10.1007/978-3-319-77185-4_1
2 1 Introduction to Supply Chain Management

Goods
Information

Product supply Customer demand

Raw materials Work in progress Finished good

Supplier’s supplier End consumer

Reverse
Funds

Fig. 1.1 The supply chain of a cup of tea

Which of these two starts the supply chain?

Imagine a scenario where a retail outlet is operating from customer demand. You
enter as a consumer with the intention to buy some tea bags. You find the tea and
coffee shelf empty. Instead of the full assortment of black, green, fruit and herbal tea,
there is a sign over the counter saying, “Please order your favourite tea here”.
Irritated by the absence of product supply you would probably go and see the
shop assistant for clarification. They would then explain to you that the shop is
running a customer demand driven tea supply chain where the end consumer can
place an order directly in the shop. The order is then automatically transmitted to the
tea bag supplier in India in order to grow, pick and process the required amount of
tea leaves that are filled into tea bags. Does that work?
It probably does not. Commodities, such as tea, coffee, rice, bread, milk and most
other basic consumer products that you find in supermarkets are more likely to be
produced on a product supply basis. This means that the supply chain starts supplying
before you come into the supermarket to buy some tea bags. As a consequence, you
find supermarket shelves full of products for everyday use. The same applies to small
household equipment, electronics and general fashion clothes—mostly these are
sourced, produced and shipped in advance. So in these cases, product supply also
starts the supply chain.
Unlike tea bags, some products are produced based on customer demand. These
products are typically characterised by a high degree of customisation or product
innovation.
Here, the customer order starts the chain of supply, manufacturing and transport
activities of your desired product. Some typical products of customer demand driven
products are: tailor-made clothes, customised tools and dinner in an up-market fish
restaurant. Here customers see the fish that they are going to eat later on still swimming
1.2 A Functional View of Supply Chain Management 3

in the fish tank when they enter the restaurant. The chain starts moving after you have
expressed your wish or after you have set your order. Thus, the supply chain starts with
customer demand.
To summarise, supply chains can be triggered by product supply (commodities)
or by customer demand (customised products). The degree of customisation dictates
how much and in which format the supplying company holds inventory: no stock at
all, raw or basic materials only or sub-assemblies of their products. The strategies
and associated decoupling of product supply from customer demand form a crucial
part of supply chain management (see Chap. 7 on Strategy).

1.2 A Functional View of Supply Chain Management

In order to understand the supply chain better, it makes sense to consider the broad
spectrum of generic functional processes in the supply chain (see Fig. 1.2).
Let’s go back to our first example in this chapter: the tea bag supply chain.
Imagine that you are the manufacturer of these tea bags. When you startengaging
in supply chain management, you will most likely be confronted with some of these
questions:

• How many tea bags are you going to sell?

• Where are you going to sell them and when?
• How much production do you need to schedule in your factory?
• What are your raw and packaging materials you need in order to fulfil the
production plan?

All of these belong to the functional plan process, where demand and supply are
balanced to develop a course of action to meet sourcing, production and delivery

Plan

Plan Plan

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Returns Returns
Returns Returns Returns Returns Returns Returns

Supplier’s Supplier Your company Customer Customer’s

supplier Internal or external Internal or external customer

Fig. 1.2 Broad spectrum of generic functional processes in the supply chain. Source: http://www.
supply-chain.org, SCOR model, Supply Chain Council Inc., Copyright # 2010
4 1 Introduction to Supply Chain Management

needs. The plan process aligns the supply chain plan with the financial plan (see
Chap. 2 on Plan).
The next step is to find suppliers of tea leaves, tea bag sachets and outer
packaging cartons in order to source your materials that you need for production.
You might also decide to source services such as transport and warehousing. This
source function is sometimes called purchasing or procurement, and it describes the
process of buying goods or services to meet planned or actual demand. The emphasis
in this stage of the process is on selecting suppliers, establishing policies and
assessing performance (see Chap. 3 on Source).
Once demand and supply are planned, and materials are sourced, you can start
with the actual manufacturing or making of tea bags. Thus, the header make in this
model describes all processes that transform your raw materials or sub-assemblies
into the finished product with the aim to meet customer demand. This process within
the supply chain operations reference model looks at questions such as:

• How to set up manufacturing?

• How to make sure the production runs efficiently?
• How to improve the making process? (see Chap. 4 on Make)

After manufacturing, your products are ready for distribution or delivery. Under
the deliver function, all supply chain processes are included that provide finished
goods to customers. Thus, the order management, warehousing and transport man-
agement of your tea bags all form part of this process (see Chap. 5 on Deliver).
The last process in the chain concerns reverse logistics or product return. This
functional process comprises all tasks that are associated with the return of product.
Returns can occur for quality reasons, for recycling or for post delivery customer
support (see Chap. 6 on Return).

1.3 Supply Chain Architecture

Let’s now have a look at the make up and architecture of a supply chain. In its
simplest format, a supply chain consists of three nodes. The company, e.g. the
producer of tea bags, the supplier, e.g. local companies that produce raw and
packaging materials, and the customer of that company, e.g. local supermarkets as
demonstrated in the following example (see Fig. 1.3).
In an extended supply chain, we consider three additional supply chain nodes. On
the upstream side (towards supply), there is the supplier’s supplier or the ultimate
supplier at the beginning of the extended chain. In our tea bag example, it could be
the cotton farmer in Texas who provides the raw material for the supplier to produce
tea bag sachets. At the downstream side (towards demand), there is the customer’s
customer or the end consumer at the end of the extended supply chain. The
distinction here is the different kind of customers that exist between your company
and the end consumer.
1.3 Supply Chain Architecture 5

Your
Supplier Customer
company

Supplier’s Your Customer’s

Supplier Customer
supplier company customer

Service
provider
Upstream Downstream

Fig. 1.3 Supply chain architectures. (a) Simple supply chain (b) Extended supply chain

Customers in supply chains can be distributors, wholesalers or retailers.

Distributors are companies that take inventory in bulk from manufacturers and
deliver an assortment of related product lines to customers. Distributors are common
in regions where retailing is fragmented, e.g. in some parts of Latin America, and for
certain channels of distribution, e.g. petrol stations and airports. Wholesalers—often
known as cash and carry markets—buy from distributors or manufacturers directly.
They often specialise in certain product ranges and supply special industries, like
hotels, restaurants and catering, with larger quantities of products. Retailers, on the
other hand, stock products in smaller quantities and sell them to the general public.
These are the different kinds of customers in a product supply chain.
In this guide, we will sometimes refer to supply chain or product companies.
These are companies that sit in the middle of the chain—just like in the example of
the simple or extended supply chains—and bring products to market together with
their supply chain partners.
Finally, there are entire categories of companies that are service providers to other
nodes in the supply chain. These perform services in areas such as:

• Transportation
• Warehousing
• Finance
• Market research
• New product design
• Technology
• Sustainability

Service providers specialise in certain skills and expertise. They are often able to
provide these services more efficiently than manufacturers, distributors, wholesalers,
retailers or end consumers.
6 1 Introduction to Supply Chain Management

Supply chain structures, however, may have many more nodes involved if you
look at them from the very beginning until the very end. Drawing your own or your
customer’s supply chain can help you understand the supply chain dynamics better.
When you look at your finished supply chain map, you probably find multiple
upstream and downstream nodes, including some of service providers. You could
further ask yourself:

• What’s the geography of my supply chain map?

• What happens when a flow is interrupted?
• Who pays for the cost of inefficient supply chains?

1.4 Supply Chain Dynamics

Although their set-up often appears to be static, supply chains in reality are quite
dynamic. Ideally, supply chains react to changes in their environment. Maybe it
helps to draw another picture to illustrate this point. A supply chain can be compared
to a huge water reservoir, like the Hoover Dam close to Las Vegas (see Fig. 1.4): it
reacts to how much water is needed in a given period (rate of customer demand) and
opens its reservoir accordingly (rate of product supply). It is important that the rate of
supply mirrors the rate of demand; otherwise the outcome will be very unfavourable
for Las Vegas.
The same is true for the different nodes in the supply chain. Their task is to
balance the rate of product supply in accordance with the rate of customer demand.
This is, as practitioners of supply chains will know, very difficult at times. External
influences will affect the equilibrium. The demand for ice cream, for example,
depends on how hot it is during the summer. Price cuts and promotional activities
will influence the sale of cars. Other macroeconomic factors such as exchange rates,

Fig. 1.4 Balancing supply Rate of

and demand product
supply

Rate of
customer
demand
1.4 Supply Chain Dynamics 7

Out of stock higher Increase inventory

Same level of service Keep inventory the same

Out of stock lower Reduce inventory

Fig. 1.5 The inventory challenge

affect world travel and consumption. Yet, it is useful to keep the water reservoir
image in mind when working in supply chains.
Managing supply chains can feel at times like surfing. It is constant rolling, riding
and gliding on and off the waves (see Fig. 1.5).
As a surfer, you are aiming to stay on top of the wave! In supply chains, the wave
stands for inventory and you are constantly managing the level of inventory against
the risk of being out of stock. You may decide to increase your level of inventory and
therefore reduce the level of stock outs. This situation feels comfortable as long as
your Finance Director does not push for a reduction in working capital and higher
returns on capital employed (see Chap. 9 on Finance). Thus, inventory reduction
might become necessary despite being paired with an increased risk of out of stocks.
The challenge in supply chain management is to balance the level of inventory while
maintaining a high level of service (see Chap. 10 on Customer Service).
A famous simulation of dynamics in the supply chain is the beer game. The set-up
is simple: there are four nodes (factory, distributor, wholesaler and retailer) that
source, produce and move beer within the supply chain. The aim is to minimise total
supply chain costs, which can be achieved through holding little (but not too little!)
inventory. Then it happens: the bullwhip effect! A small change in real customer
demand leads to a huge amplification of the upstream demand signal and increased
volatility of orders through to suppliers. The initial out of stock situation soon
becomes a massive excess stock problem. In order to improve the situation, we
need to communicate, share a demand forecast between the different nodes and
reduce information and product flow lead-times.
In addition to those just mentioned, there are more learning points from the beer
game that lead to best practice in supply chain management. The human factor, for
example, becomes highly important in supply chain performance. Silo thinking
(thinking in isolation) needs to be avoided and a lack of supply chain understanding
needs to be addressed (see Chap. 8 on People). Also, loss of control, lack of service
and frequent quality problems can be the consequence when dealing with many nodes
in the supply chain. Therefore, the management of partners in the supply chain,
e.g. third party logistics providers, becomes crucial (see Chap. 11 on Outsourcing).
8 1 Introduction to Supply Chain Management

The first part of this book will guide you through the functional processes of the
supply chain operations reference model (Chaps. 2–6), whilst the second part
(Chaps. 7–11) is dedicated to strategic questions of supply chain management.
Each chapter builds up in an easy way: first, the chapter topic is introduced. The
chapter continues with an explanation why the topic is important in the context of
supply chain management. Next, practical tools for improvement will be given.
Finally, each chapter concludes with one or more case studies of best practices from
companies around the globe.
You will find some suggestions for further reading at the end of each chapter.
Guide to Plan in Supply Chain Management
2

2.1 Inventory and Supply Chains

The term inventory can be defined as the quantity of goods that is available on hand
or in stock. There are three main formats of inventory: raw material, work in progress
and finished goods. These depict the different product stages on a continuum from
product supply to customer demand. In order to understand the role of inventory in
the supply chain it may be sensible to ask the question: Why hold inventory? There
may be several answers (see Fig. 2.1).
First and foremost, inventory is held to protect against uncertainty. Uncertainty
can be caused by variations in demand or by restrictions in supply. We will go into
more detail when we talk about safety stock later in this chapter.
Cost reduction through inventory is achieved when stock is held close to the
customer. IKEA for example holds their furniture in stores so that customers can pay
for their products and immediately take them home. IKEA thus minimises its
transportation cost to customers.
Another important reason for holding inventory is to protect against quality
defects. A product that is faulty can be substituted quickly when inventory is held.
If there was no inventory in the supply chain and a product was damaged on the way
to its customer, the customer would have to wait a long time until a substitute was
available.
Inventory can also be used to stabilise manufacturing. For example, the demand
for ice cream increases substantially in the summer. To be able to meet this demand,
ice cream is produced throughout the year and kept in stock. This approach, which
can be seen in the production of many seasonal items, is especially important where
manufacturing technology is expensive and therefore needs to be utilised throughout
the year in order to get a good return on investment.
Anticipation stock is similar to the example just mentioned. However, the reason
for this sort of inventory is rather demand than supply driven. Before the launch of a
product innovation like the iPhone, for which the level and rate of demand was fairly

# Springer International Publishing AG, part of Springer Nature 2018 9

C. Scott et al., Guide to Supply Chain Management, Management for Professionals,
https://doi.org/10.1007/978-3-319-77185-4_2
10 2 Guide to Plan in Supply Chain Management

Fig. 2.1 Reasons for holding

inventory
Protect against
uncertainty

Balancing
Cost
supply and
reduction
demand

Why hold
inventory?

Anticipation Protect against

stock quality defects

Stabilise
manufacturing

unknown, Apple Inc. might have decided to build up pre-launch anticipation stock to
buffer against demand uncertainty.
To summarise, managing inventory is essentially about balancing supply and
demand. This job would be very easy in a situation where end customers tell us
exactly how much they require and give us time to order from suppliers. Also,
ideally suppliers deliver exactly when we need it and in full. If these three conditions
were true, we wouldn’t need a buffer but could order from a supplier and ship it on to
customers in time to satisfy their need.

2.1.1 Different Types of Inventory

Now that we have understood the necessity of holding inventory, let’s distinguish
between several different types of inventory:

• Cycle or replenishment stock: This stock keeps the supply chain moving. Cycle
stock is the inventory necessary to meet the normal daily demand.
• Safety stock: This stock buffers against forecast error and the supplier’s
unreliability.
• In-transit stock: This stock is in the process of being transported to a stocking or
delivery point.
• Seasonal stock: This stock is built up in advance to meet increased sales volumes
during a particular time of the year.
• Promotional stock: This stock feeds into marketing campaigns and advertising.
2.1 Inventory and Supply Chains 11

• Speculative stock: This stock is held to protect against price increases or periods
of limited availability.
• Dead or obsolete stock: This stock is no longer usable or saleable in the market.

Although all types of inventory are important, cycle stock and safety stock are
those types that are most looked after in inventory management. We will therefore
discuss these two types of stock in more detail in the next sections.

2.1.2 Cycle Stock

In order to understand the concept of cycle stock, let’s look at a simple example. A
fruit vendor operates out of Majorca and sells oranges. The business is small and
sales are constant: the fruit vendor sells just one orange every day of the week. The
vendor sources oranges from a local fruit supplier who delivers once a week on
Monday morning to the small shop in Majorca (see Fig. 2.2).
Thus, the amount of seven oranges that the fruit man gets delivered every week
on Monday morning into stock is called cycle stock.
When talking about cycle stock, it is worthwhile looking at how much stock we
hold throughout the year. The average stock holding calculation is based on the order
quantity. In the example above, the stock holding was highest on Monday morning
when he had just received the weekly delivery. It was lowest on Sunday evening
when all stock had been sold. Therefore, as the level of stock varies between the
maximum at the time of receipt and the minimum just before the next delivery, we
can define the average stockholding as:

Q
AS ¼ ð2:1Þ
2
where AS ¼ average stockholding and Q ¼ order quantity.

Delivery Sales Cycle Stock

Monday 7 1 6

Tuesday - 1 5

Wednesday - 1 4

Thursday - 1 3

Friday - 1 2

Saturday - 1 1

Sunday - 1 0

Total 7 7 -

Fig. 2.2 Cycle stock example

12 2 Guide to Plan in Supply Chain Management

Fig. 2.3 Cycle stock—

average stock holding
Q = 400

Demand
Q/2 = 200 Quantity

Time

Let’s consider another example. An electronics retailer annually sells 400 Plasma
TV’s, orders once a year and receives one delivery per year. In this example average
stock holding can be determined as

400=2 ¼ 200

The average stock holding can also be depicted graphically (see Fig. 2.3).
From the average cycle stock holding quantity, we can derive the average cycle
stock investment taking into consideration the product price of one unit of stock.
Let’s assume that one TV costs €5000. Then the average cycle stock investment
would equal average stockholding multiplied by the cost of one TV, thus:

200  EUR 5000 ¼ EUR 1,000,000:

One million Euros of average capital investment might be quite a stretch for a
small electronics retailer. Instead of ordering once a year, the electronics retailer
could order twice a year and thus reduce its cycle stock investment. By ordering
more often the average inventory costs would now be

200=2  EUR 5000 ¼ EUR 500,000:

2.1.3 Safety Stock

We have just explored the concept of cycle stock and average cycle stock invest-
ment. Safety stock is different from cycle stock as it does not cover the regular rate of
sales but protects against uncertainty.
To understand the concept of safety stock, let’s revisit the fruit vendor in Majorca.
He still sells one orange per day, seven oranges a week and receives one weekly
delivery of seven oranges on Monday morning. But then 1 week something
2.1 Inventory and Supply Chains 13

unexpected happens. The fruit supplier does not show up on Monday morning, or on
Tuesday morning, but only on Wednesday morning. The vendor is angry with his
supplier since he had an out-of-stock (OOS) of oranges for 2 days. As a conse-
quence, he decides to order more oranges—exactly two more—to protect himself
from the fruit supplier coming 2 days late again. These extra two oranges can be
considered as safety stock as they are meant to protect the fruit man against the
uncertainty of the supplier coming late.
There is a more elaborate way to estimate safety stock. In fact, there are two parts
of the equation to account for in the safety stock calculation:

(a) Safety stock supply that covers unplanned production and delivery delays
(b) Safety stock demand that covers unplanned changes in demand

For modelling total safety stock this formula, modified from the approach from
Donald Waters (Waters 2003), describes two approximate safety stock requirements
(see Fig. 2.4).
For the first part of the formula—safety stock supply—you need two input
variables: average demand and supplier uncertainty. Average demand can be simply
calculated by summing up demands from a number of time periods and dividing the
sum by the number of time periods. Supplier uncertainty arises from orders taking
different lengths of time to arrive from suppliers. It thus describes how reliable your
supplier is. Let’s take an example where:

Average daily demand ¼ 500

Supplier uncertainty ¼ 2 days

The equation of part (a) of the safety stock formula would look like this:

500  2 ¼ 1000

Thus, in this example the safety stock held to protect for uncertainty in supply
would be 1000 units.
The second part of the formula is slightly more complicated. Let’s therefore have
a closer look at the safety stock held for demand uncertainty in more detail. The
mathematical definition of standard deviation of demand is more difficult to

Fig. 2.4 Modelling safety Safety stock = (a) + (b)

stock—approximation
(a) = Safety stock supply
(b) = Safety stock demand

(a) Safety stock supply

= Average demand x supplier uncertainty (SU)

(b) Safety stock demand

= Standard deviation of demand x service level factor x LT + SU

14 2 Guide to Plan in Supply Chain Management

Fig. 2.5 Modelling safety

stock—standard deviation of Product A
demand realised demand

Quantity
Forecasted demand

Product B
realised demand

Time

understand than the concept. If you have a look at the next graph (see Fig. 2.5),
which product has the greater standard deviation of demand?
By looking at the graph, we can clearly identify product A as the one with the
greatest standard deviation of demand if we measure the distances of peaks and
troughs of the line in comparison to the dotted forecasted demand line. The standard
deviation of demand (or forecast error) is a measure of the deviation of the actual
realised demand quantity from the forecasted quantity (see also Sect. 2.2.3 on
demand planning improvements).
Next, we need to define the service level factor. For mathematical reasons, we
cannot just insert our agreed service level of 95% into the safety stock formula.
Instead we need to convert the 95% to a corresponding real number. In most
inventory systems, it is assumed that items follow a demand distribution called the
normal distribution. Statisticians have documented this in mathematical tables so
that service levels can be equated to a number of standard deviations in order to
derive the equivalent service level factor. A part of the conversion from service level
percentage into service level factor can be seen in the next table (see Fig. 2.6).
Thus, if we have agreed a service level of 95% with our customer the correspond-
ing service level factor would equal 1.64. An example will now show how the safety
stock demand can be calculated. Let’s assume that:

Forecast error ¼ 50
Service level factor ¼ 1.64
Lead-time ¼ 4 days
Supplier uncertainty ¼ 2 days

The equation for part (b) of the formula would look like this:
pffiffiffiffiffiffiffiffiffiffiffi
50  1:64  2 þ 4 ¼ 200:85  201 ð2:2Þ

Thus, in this example the safety stock held to protect for uncertainty in demand
would be 201 units of inventory.
In order to get the total safety stock, we need to add up part (a) ¼ 1000 units and
part (b) ¼ 201 units. The final result of the approximate safety stock calculation
would be 1201 units.
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tomahawk accompanies him everywhere and always. He needs it to
defend himself against the wild boars and also against the spirit of
his dead wife, who might take a fancy to come and play him some
mischievous prank; for the souls of the dead come back often and
their visit is far from being desired, inasmuch as all the spirits without
exception are bad and have no pleasure but in harming the living.
Happily people can keep them at bay by a stick, fire, an arrow, or a
tomahawk. The condition of a widower, far from exciting pity or
compassion, only serves to render him the object of horror and fear.
Almost all widowers, in fact, have the reputation of being more or
less sorcerers, and their mode of life is not fitted to give the lie to
public opinion. They are forced to become idlers and thieves, since
they are forbidden to work: no work, no gardens; no gardens, no
food: steal then they must, and that is a trade which cannot be plied
without some audacity and knavery at a pinch.”148.1
It would be easy, but superfluous, to multiply
The widespread evidence of the terror which a belief in ghosts has
fear of ghosts
among mankind spread among mankind, and of the consequences,
has probably had sometimes tragical, sometimes ludicrous, which
the effect of making
men less ready to that belief has brought in its train.149.1 The
take each other’s preceding instances may suffice for my purpose,
lives. which is merely to indicate the probability that this
widespread superstition has served a useful
purpose by enhancing the sacredness of human life. For it is
reasonable to suppose that men are more loth to spill the blood of
their fellows when they believe that by so doing they expose
themselves to the vengeance of an angry and powerful spirit whom it
is difficult either to evade or to deceive. Fortunately in this matter we
are not left wholly to conjecture. In the vast empire
In China the faith in of China, as we are assured by the best living
the power of ghosts
is universal. authority on Chinese religion, the fear of ghosts
has actually produced this salutary result.
Amongst the Chinese the faith in the existence of the dead, in their
power to reward kindness and avenge injury, is universal and
inveterate; it has been handed down from an immemorial past, and it
is nourished in the experience, or rather in the mind, of everybody by
hundreds of ghost stories, all of which are accepted as authentic.
Nobody doubts that ghosts may interfere at any moment for good or
evil in the business of life, in the regulation of human destiny. To the
Chinese their dead are not what our dead are to most of us, a dim
sad memory, a shadowy congregation somewhere far away, to
whom we may go in time, but who cannot come to us or exercise
any influence on the land of the living. On the contrary, in the opinion
of the Chinese the dead not only exist but keep up a most lively
intercourse, an active interchange of good and evil, with the
survivors. There is, indeed, even in China, a line of demarcation
between men and spirits, between the living and the dead, but it is
said to be very faint, almost imperceptible. This perpetual commerce
between the two worlds, the material and the spiritual, is a source
both of bane and of blessing: the spirits of the departed rule human
destiny with a rod of iron or of gold. From them man has everything
to hope, but also much to fear. Hence as a natural consequence it is
to the ghosts, to the souls of the dead, that the Chinaman pays his
devotions; it is around their dear or dreadful figures as a centre that
his religion revolves. To ensure their goodwill and help, to avert their
wrath and fierce attacks, that is the first and the last object of his
religious ceremonies.150.1
This faith of the Chinese in the existence and
In China respect for power of the dead, we are informed, “indubitably
human life is
enforced by fear of exercises a mighty and salutary influence upon
ghosts. morals. It enforces respect for human life and a
charitable treatment of the infirm, the aged and the
sick, especially if they stand on the brink of the grave. Benevolence
and humanity, thus based on fears and selfishness, may have little
ethical value in our eye; but for all that, their existence in a country
where culture has not yet taught man to cultivate good for the sake
of good alone, may be greeted as a blessing. Those virtues are even
extended to animals, for, in fact, these too have souls which may
work vengeance or bring reward. But the firm belief in ghosts and
their retributive justice has still other effects. It deters from grievous
and provoking injustice, because the wronged party, thoroughly sure
of the avenging power of his own spirit when disembodied, will not
always shrink from converting himself into a wrathful ghost by
committing suicide,” in order to wreak in death that vengeance on his
oppressor which he could not exact in life. Cases of suicide
committed with this intention are said to be far from rare in
China.150.2 “This simple complex of tenets,” says Professor de Groot,
“lays disrespect for human lives under great restraint. Most salutarily
also they work upon female infanticide, a
In particular, the monstrous custom practised extensively among
fear of ghosts acts
as a check on the the poor in Amoy and the surrounding farming
practice of districts, as in many other parts of the Empire. The
infanticide. fear that the souls of the murdered little ones may
bring misfortune, induces many a father or mother
to lay the girls they are unwilling to bring up, in the street for adoption
into some family or into a foundling-hospital.” Humane and well-to-do
people take advantage of these superstitious fears to inculcate a
merciful treatment of female infants; for they print and circulate
gratuitously tracts which set forth many gruesome examples of
punishments inflicted upon unnatural fathers and mothers by the
ghosts of their murdered daughters. These highly-coloured
narratives, though they bear all the marks of a florid fancy, are said
to answer their benevolent purpose perfectly; for they sink deep into
the credulous minds to which they are addressed: they touch the
seared conscience and the callous heart which no appeal to mere
natural affection could move to pity.151.1
But while the fear of the ghost has thus
The fear of ghosts operated directly to enhance the sanctity of human
operates in a
twofold way to life by deterring the cruel, the passionate, and the
enforce respect for malignant from the shedding of blood, it has
human life: it operated also indirectly to bring about the same
furnishes the
individual with a salutary result. For not only does the hag-ridden
motive for murderer himself dread his victim’s ghost, but the
abstaining from
murder, and it
whole community, as we have seen, dreads it also
furnishes the and believes itself endangered by the murderer’s
community with a presence, since the wrathful spirit which pursues
motive for punishing
the murderer.
him may turn on other people and rend them.
Hence society has a strong motive for secluding,
banishing, or exterminating the culprit in order to free itself from what
it believes to be an imminent danger, a perilous pollution, a
contagion of death.151.2 To put it in another way, the community has
an interest in punishing homicide. Not that the treatment of
homicides by the tribe or state was originally conceived as a
punishment inflicted on them: rather it was viewed as a measure of
self-defence, a moral quarantine, a process of spiritual purification
and disinfection, an exorcism. It was a mode of cleansing the people
generally and sometimes the homicide himself from the ghostly
infection, which to the primitive mind appears to be something
material and tangible, something that can be literally washed or
scoured away by water, pig’s blood, sheep’s blood, or other
detergents. But when this purification took the form of laying the
manslayer under restraint, banishing him from the country, or putting
him to death in order to appease his victim’s ghost, it was for all
practical purposes indistinguishable from punishment, and the fear of
it would act as a deterrent just as surely as if it had been designed to
be a punishment and nothing else. When a man is about to be
hanged, it is little consolation to him to be told that hanging is not a
punishment but a purification. But the one conception slides easily
and almost imperceptibly into the other; so that what was at first a
religious rite, a solemn consecration or sacrifice, comes in course of
time to be a purely civil function, the penalty which society exacts
from those who have injured it: the sacrifice becomes an execution,
the priest steps back and the hangman comes forward. Thus
criminal justice was probably based in large measure on a crude
form of superstition long before the subtle brains of jurists and
philosophers deduced it logically, according to their various
predilections, from a rigid theory of righteous retribution, a far-
sighted policy of making the law a terror to evil-doers, or a
benevolent desire to reform the criminal’s character and save his
soul in another world by hanging or burning his body in this one. If
these deductions only profess to justify theoretically the practice of
punishment, they may be well or ill founded; but if they claim to
explain it historically, they are certainly false. You cannot thus
reconstruct the past by importing into one age the ideas of another,
by interpreting the earliest in terms of the latest products of mental
evolution. You may make revolutions in that way, but you cannot
write history.
 If these views are correct, the dread of the ghost has operated in a
twofold way to protect human life. On the one
When the fear of hand it has made every individual for his own sake
ghosts has more reluctant to slay his fellow, and on the other
diminished, the fear hand it has roused the whole community to punish
of the law remains
to protect the lives the slayer. It has placed every man’s life within a
of peaceful citizens. double ring-fence of morality and law. The hot-
headed and the cold-hearted have been furnished
with a double motive for abstaining from the last fatal step: they have
had to fear the spirit of their victim on the one side and the lash of
the law on the other: they are in a strait between the devil and the
deep sea, between the ghost and the gallows. And when with the
progress of thought the shadow of the ghost passes away, the grim
shadow of the gallows remains to protect society without the aid of
superstitious terrors. It is thus that custom often outlives the motive
which originated it. If only an institution is good in practice, it will
stand firm after its old theoretical basis has been shattered: a new
and more solid, because a truer, foundation will be discovered for it
to rest upon. More and more, as time goes on, morality shifts its
ground from the sands of superstition to the rock of reason, from the
imaginary to the real, from the supernatural to the natural. In the
present case the State has not ceased to protect the lives of its
peaceful citizens because the faith in ghosts is shaken. It has found
a better reason than old wives’ fables for guarding with the flaming
sword of Justice the approach to the Tree of Life.
 VI.
CONCLUSION

To sum up this brief review of the influence which

Summary of results. superstition has exercised on the growth of
institutions, I think I have shewn, or at least made
probable:—
I. That among certain races and at certain times superstition has
strengthened the respect for government, especially monarchical
government, and has thereby contributed to the establishment and
maintenance of civil order:
II. That among certain races and at certain times superstition has
strengthened the respect for private property and has thereby
contributed to the security of its enjoyment:
III. That among certain races and at certain times superstition has
strengthened the respect for marriage and has thereby contributed to
a stricter observance of the rules of sexual morality both among the
married and the unmarried:
IV. That among certain races and at certain times superstition has
strengthened the respect for human life and has thereby contributed
to the security of its enjoyment.
But government, private property, marriage, and
By strengthening respect for human life are the pillars on which
the respect for
government, private rests the whole fabric of civil society. Shake them
property, marriage, and you shake society to its foundations.
and human life Therefore if government, private property,
superstition has
rendered a great marriage, and respect for human life are all good
service to humanity. and essential to the very existence of civil society,
then it follows that by strengthening every one of
them superstition has rendered a great service to humanity. It has
supplied multitudes with a motive, a wrong motive it is true, for right
action; and surely it is better, far better for the world that men should
do right from wrong motives than that they should do wrong with the
best intentions. What concerns society is conduct, not opinion: if only
our actions are just and good, it matters not a straw to others
whether our opinions be mistaken. The danger of false opinion, and
it is a most serious one, is that it commonly leads to wrong action;
hence it is unquestionably a great evil and every effort should be
made to correct it. But of the two evils wrong action is in itself
infinitely worse than false opinion; and all systems of religion or
philosophy which lay more stress on right opinion than on right
action, which exalt orthodoxy above virtue, are so far immoral and
prejudicial to the best interests of mankind: they invert the true
relative importance, the real ethical value, of thought and action, for
it is by what we do, not by what we think, that we are useful or
useless, beneficent or maleficent to our fellows. As a body of false
opinions, therefore, superstition is indeed a most dangerous guide in
practice, and the evils which it has wrought are incalculable. But vast
as are these evils, they ought not to blind us to the benefit which
superstition has conferred on society by furnishing the ignorant, the
weak, and the foolish with a motive, bad though it be, for good
conduct. It is a reed, a broken reed, which has yet supported the
steps of many a poor erring brother, who but for it might have
stumbled and fallen. It is a light, a dim and wavering light, which, if it
has lured many a mariner on the breakers, has yet guided some
wanderers on life’s troubled sea into a haven of rest and peace.
Once the harbour lights are passed and the ship is in port, it matters
little whether the pilot steered by a Jack-o’-lantern or by the stars.

That, ladies and gentlemen, is my plea for

Superstition at the Superstition. Perhaps it might be urged in
bar. Sentence of
death. mitigation of the sentence which will be passed on
the hoary-headed offender when he stands at the
judgment bar. Yet the sentence, do not doubt it, is death. But it will
not be executed in our time. There will be a long, long reprieve. It is
as his advocate, not as his executioner, that I have appeared before
you to-night. At Athens cases of murder were tried before the
Areopagus by night,156.1 and it is by night that I have spoken in
defence of this power of darkness. But it grows late, and with my
sinister client I must vanish before the cocks crow and the morning
breaks grey in the east.
 THE SCOPE OF
SOCIAL ANTHROPOLOGY
 THE SCOPE OF
SOCIAL ANTHROPOLOGY
[A lecture delivered before the University of Liverpool, May 14th,
1908.]

The subject of the chair which I have the honour to

Social hold is Social Anthropology. As the subject is still
Anthropology.
comparatively new and its limits are still somewhat
vague, I shall devote my inaugural lecture to defining its scope and
marking out roughly, if not the boundaries of the whole study, at least
the boundaries of that part of it which I propose to take for my
province.
Strange as it may seem, in the large and thriving
Anthropology a family of the sciences, Anthropology, or the
study of recent
date. Science of Man, is the latest born. So young
indeed is the study that three of its distinguished
founders in England, Professor E. B. Tylor, Lord Avebury, and Mr.
Francis Galton, are happily still with us. It is true that particular
departments of man’s complex nature have long been the theme of
special studies. Anatomy has investigated his body, psychology has
explored his mind, theology and metaphysics have sought to plumb
the depths of the great mysteries by which he is encompassed on
every hand. But it has been reserved for the present generation, or
rather for the generation which is passing away, to attempt the
comprehensive study of man as a whole, to enquire not merely into
the physical and mental structure of the individual, but to compare
the various races of men, to trace their affinities, and by means of a
wide collection of facts to follow as far as may be the evolution of
human thought and institutions from the earliest times. The aim of
this, as of every other science, is to discover the general laws to
which the particular facts may be supposed to conform. I say, may
be supposed to conform, because research in all departments has
rendered it antecedently probable that everywhere law and order will
be found to prevail if we search for them diligently, and that
accordingly the affairs of man, however complex and incalculable
they may seem to be, are no exception to the uniformity of nature.
Anthropology, therefore, in the widest sense of the word, aims at
discovering the general laws which have regulated human history in
the past, and which, if nature is really uniform, may be expected to
regulate it in the future.
Hence the science of man coincides to a certain
The scope of Social extent with what has long been known as the
Anthropology more
limited than that of philosophy of history as well as with the study to
Sociology; it which of late years the name of Sociology has
includes only the been given. Indeed it might with some reason be
rudimentary phases
of human society. held that Social Anthropology, or the study of man
in society, is only another expression for
Sociology. Yet I think that the two sciences may be conveniently
distinguished, and that while the name of Sociology should be
reserved for the study of human society in the most comprehensive
sense of the words, the name of Social Anthropology may with
advantage be restricted to one particular department of that
immense field of knowledge. At least I wish to make it perfectly clear
at the outset that I for one do not pretend to treat of the whole of
human society, past, present, and future. Whether any single man’s
compass of mind and range of learning suffice for such a vast
undertaking, I will not venture to say, but I do say without hesitation
or ambiguity that mine certainly do not. I can only speak of what I
have studied, and my studies have been mostly confined to a small,
a very small part of man’s social history. That part is the origin, or
rather the rudimentary phases, the infancy and childhood, of human
society, and to that part accordingly I propose to limit the scope of
Social Anthropology, or at all events my treatment of it. My
successors in the chair will be free to extend their purview beyond
the narrow boundaries which the limitation of my knowledge imposes
on me. They may survey the latest developments as well as the
earliest beginnings of custom and law, of science and art, of morality
and religion, and from that survey they may deduce the principles
which should guide mankind in the future, so that those who come
after us may avoid the snares and pitfalls into which we and our
fathers have slipped. For the best fruit of knowledge is wisdom, and
it may reasonably be hoped that a deeper and wider acquaintance
with the past history of mankind will in time enable our statesmen to
mould the destiny of the race in fairer forms than we of this
generation shall live to see.

“Ah Love! could you and I with Him conspire

To grasp this sorry Scheme of Things entire,
Would we not shatter it to bits—and then
Re-mould it nearer to the Heart’s desire!”

But if you wish to shatter the social fabric, you

At least the present must not expect your professor of Social
lecturer limits
himself to these Anthropology to aid and abet you. He is no seer to
phases. discern, no prophet to foretell a coming heaven on
earth, no mountebank with a sovran remedy for
every ill, no Red Cross Knight to head a crusade against misery and
want, against disease and death, against all the horrid spectres that
war on poor humanity. It is for others with higher notes and nobler
natures than his to sound the charge and lead it in this Holy War. He
is only a student, a student of the past, who may perhaps tell you a
little, a very little, of what has been, but who cannot, dare not tell you
what ought to be. Yet even the little that he can contribute to the
elucidation of the past may have its utility as well as its interest when
it finally takes its place in that great temple of science to which it is
the ambition of every student to add a stone. For we cherish a belief
that if we truly love and seek knowledge for its own sake, without any
ulterior aim, every addition we may make to it, however insignificant
and useless it may appear, will yet at last be found to work together
with the whole accumulated store for the general good of mankind.
Thus the sphere of Social Anthropology as I
Social Anthropology understand it, or at least as I propose to treat it, is
embraces the study,
first, of savagery, limited to the crude beginnings, the rudimentary
and, second, of development of human society: it does not include
folklore, that is, of the maturer phases of that complex growth, still
the traces of
savagery in less does it embrace the practical problems with
civilization. which our modern statesmen and lawgivers are
called upon to deal. The study might accordingly be described as the
embryology of human thought and institutions, or, to be more
precise, as that enquiry which seeks to ascertain, first, the beliefs
and customs of savages, and, second, the relics of these beliefs and
customs which have survived like fossils among peoples of higher
culture. In this description of the sphere of Social
All civilization Anthropology it is implied that the ancestors of the
evolved from
savagery. civilized nations were once savages, and that they
have transmitted, or may have transmitted, to their
more cultured descendants ideas and institutions which, however
incongruous with their later surroundings, were perfectly in keeping
with the modes of thought and action of the ruder society in which
they originated. In short, the definition assumes that civilization has
always and everywhere been evolved out of savagery. The mass of
evidence on which this assumption rests is in my opinion so great as
to render the induction incontrovertible. At least, if any one disputes
it I do not think it worth while to argue with him. There are still, I
believe, in civilized society people who hold that the earth is flat and
that the sun goes round it; but no sensible man will waste time in the
vain attempt to convince such persons of their error, even though
these flatteners of the earth and circulators of the sun appeal with
perfect justice to the evidence of their senses in support of their
hallucination, which is more than the opponents of man’s primitive
savagery are able to do.
Thus the study of savage life is a very important
Hence a study of part of Social Anthropology. For by comparison
savagery essential
to an understanding with civilized man the savage represents an
of the evolution of arrested or rather retarded stage of social
humanity. development, and an examination of his customs
and beliefs accordingly supplies the same sort of
evidence of the evolution of the human mind that an examination of
the embryo supplies of the evolution of the human body. To put it
otherwise, a savage is to a civilized man as a child is to an adult; and
just as the gradual growth of intelligence in a child corresponds to,
and in a sense recapitulates, the gradual growth of intelligence in the
species, so a study of savage society at various stages of evolution
enables us to follow approximately, though of course not exactly, the
road by which the ancestors of the higher races must have travelled
in their progress upward through barbarism to civilization. In short,
savagery is the primitive condition of mankind, and if we would
understand what primitive man was we must know what the savage
now is.
But here it is necessary to guard against a
Savages of the common misapprehension. The savages of to-day
present day are
primitive only in a are primitive only in a relative, not in an absolute
relative sense, sense. They are primitive by comparison with us;
namely by but they are not primitive by comparison with truly
comparison with
civilized peoples; primæval man, that is, with man as he was when
their customs and he first emerged from the purely bestial stage of
beliefs are in fact
the product of a
existence. Indeed, compared with man in his
long course of absolutely pristine state even the lowest savage of
evolution as to to-day is doubtless a highly developed and
which we can know
little or nothing.
cultured being, since all evidence and all
probability are in favour of the view that every
existing race of men, the rudest as well as the most civilized, has
reached its present level of culture, whether it be high or low, only
after a slow and painful progress upwards, which must have
extended over many thousands, perhaps millions, of years.
Therefore when we speak of any known savages as primitive, which
the usage of the English language permits us to do, it should always
be remembered that we apply the term primitive to them in a relative,
not in an absolute sense. What we mean is that their culture is
rudimentary compared with that of the civilized nations, but not by
any means that it is identical with that of primæval man. It is
necessary to emphasize this relative use of the term primitive in its
application to all known savages without exception, because the
ambiguity arising from the double meaning of the word has been the
source of much confusion and misunderstanding. Careless or
unscrupulous writers have made great play with it for purposes of
controversy, using the word now in the one sense and now in the
other as it suited their argument at the moment, without perceiving,
or at all events without indicating, the equivocation. In order to avoid
these verbal fallacies it is only necessary to bear steadily in mind
that while Social Anthropology has much to say of primitive man in
the relative sense, it has nothing whatever to say about primitive
man in the absolute sense, and that for the very simple reason that it
knows nothing whatever about him, and, so far as we can see at
present, is never likely to know anything. To construct a history of
human society by starting from absolutely primordial man and
working down through thousands or millions of years to the
institutions of existing savages might possibly have merits as a flight
of imagination, but it could have none as a work of science. To do
this would be exactly to reverse the proper mode of scientific
procedure. It would be to work a priori from the unknown to the
known instead of a posteriori from the known to the unknown. For we
do know a good deal about the social state of the savages of to-day
and yesterday, but we know nothing whatever, I repeat, about
absolutely primitive human society. Hence a sober enquirer who
seeks to elucidate the social evolution of mankind in ages before the
dawn of history must start, not from an unknown and purely
hypothetical primæval man, but from the lowest savages whom we
know or possess adequate records of; and from their customs,
beliefs, and traditions as a solid basis of fact he may work back a
little way hypothetically through the obscurity of the past; that is, he
may form a reasonable theory of the way in which these actual
customs, beliefs, and traditions have grown up and developed in a
period more or less remote, but probably not very remote, from the
one in which they have been observed and recorded. But if, as I
assume, he is a sober enquirer, he will never expect to carry back
this reconstruction of human history very far, still less will he dream
of linking it up with the very beginning, because he is aware that we
possess no evidence which would enable us to bridge even
hypothetically the gulf of thousands or millions of years which divides
the savage of to-day from primæval man.
It may be well to illustrate my meaning by an
For example, the example. The matrimonial customs and modes of
marriage customs
and systems of tracing relationships which prevail among some
relationship savage races, and even among peoples at a
prevalent among higher stage of culture, furnish very strong
many savage tribes
appear to have grounds for believing that the systems of marriage
been evolved from and consanguinity which are now in vogue among
a preceding, but not
necessarily civilized peoples must have been immediately
primitive, state of
sexual promiscuity.preceded at a more or less distant time by very
different modes of counting kin and regulating
marriage; in fact, that monogamy and the forbidden degrees of
kinship have replaced an older system of much wider and looser
sexual relations. But to say this is not to affirm that such looser and
wider relations were characteristic of the absolutely primitive
condition of mankind; it is only to say that actually existing customs
and traditions clearly indicate the extensive prevalence of such
relations at some former time in the history of our race. How remote
that time was, we cannot tell; but, estimated by the whole vast period
of man’s existence on earth, it seems probable that the era of sexual
communism to which the evidence points was comparatively recent;
in other words, that for the civilized races the interval which divides
that era from our own is to be reckoned by thousands rather than by
hundreds of thousands of years, while for the lowest of existing
savages, for example, the aborigines of Australia, it is possible or
probable that the interval may not be greater than a few centuries.
Be that as it may, even if on the strength of the evidence I have
referred to we could demonstrate the former prevalence of a system
of sexual communism among all the races of mankind, this would
only carry us back a single step in the long history of our species; it
would not justify us in concluding that such a system had been
practised by truly primæval man, still less that it had prevailed
among mankind from the beginning down to the comparatively
recent period at which its existence may be inferred from the
evidence at our disposal. About the social condition of primæval
man, I repeat, we know absolutely nothing, and it is vain to
speculate. Our first parents may have been as strict monogamists as
Whiston or Dr. Primrose, or they may have been just the reverse. We
have no information on the subject, and are never likely to get any. In
the countless ages which have elapsed since man and woman first
roamed the happy garden hand in hand or jabbered like apes among
the leafy boughs of the virgin forest, their relations to each other may
have undergone innumerable changes. For human affairs, like the
courses of the heaven, seem to run in cycles: the social pendulum
swings to and fro from one extremity of the scale to the other: in the
political sphere it has swung from democracy to despotism, and back
again from despotism to democracy; and so in the domestic sphere it
may have oscillated many a time between libertinism and
monogamy.
If I am right in my definition of Social
The second Anthropology, its province may be roughly divided
department of
Social Anthropology into two departments, one of which embraces the
is folklore, or the customs and beliefs of savages, while the other
study of savage includes such relics of these customs and beliefs
survivals in
civilization. as have survived in the thought and institutions of
more cultured peoples. The one department may
be called the study of savagery, the other the study of folklore. I have
said something of savagery: I now turn to folklore, that is, to the
survivals of more primitive ideas and practices among peoples who
in other respects have risen to a higher plane of culture. That such
survivals may be discovered in every civilized nation will hardly now
be disputed by anybody. When we read, for example, of an
Irishwoman roasted to death by her husband on a suspicion that she
was not his wife but a fairy changeling,166.1 or again, of an
Englishwoman dying of lockjaw because she had anointed the nail
that wounded her instead of the wound,166.2 we may be sure that the
beliefs to which these poor creatures fell victims were not learned by
them in school or at church, but had been transmitted from truly
savage ancestors through many generations of outwardly though not
really civilized descendants. Beliefs and practices of this sort are
therefore rightly called superstitions, which means literally survivals.
It is with superstitions in the strict sense of the word that the second
department of Social Anthropology is concerned.
If we ask how it happens that superstitions
Such survivals are linger among a people who in general have
due to the essential
inequality of men, reached a higher level of culture, the answer is to
many of whom be found in the natural, universal, and ineradicable
remain at heart inequality of men. Not only are different races
savages under a
civilized exterior. differently endowed in respect of intelligence,
courage, industry, and so forth, but within the
same nation men of the same generation differ enormously in inborn
capacity and worth. No abstract doctrine is more false and
mischievous than that of the natural equality of men. It is true that
the legislator must treat men as if they were equal, because laws of
necessity are general and cannot be made so as to fit the infinite
variety of individual cases. But we must not imagine that because
men are equal before the law they are therefore intrinsically equal to
each other. The experience of common life sufficiently contradicts
such a vain imagination. At school and at the universities, at work
and at play, in peace and in war, the mental and moral inequalities of
human beings stand out too conspicuously to be ignored or disputed.
On the whole the men of keenest intelligence and strongest
characters lead the rest and shape the moulds into which, outwardly
at least, society is cast. As such men are
Mankind dominated necessarily few by comparison with the multitude
by an enlightened
minority. whom they lead, it follows that the community is
really dominated by the will of an enlightened
minority167.1 even in countries where the ruling power is nominally
vested in the hands of the numerical majority. In fact, disguise it as
we may, the government of mankind is always and everywhere
essentially aristocratic. No juggling with political machinery can
evade this law of nature. However it may seem to lead, the dull-
witted majority in the end follows a keener-witted minority. That is its
salvation and the secret of progress. The higher human intelligence
sways the lower, just as the intelligence of man gives him the
mastery over the brutes. I do not mean that the ultimate direction of
society rests with its nominal governors, with its kings, its statesmen,
its legislators. The true rulers of men are the
The uncrowned thinkers who advance knowledge; for just as it is
kings.
through his superior knowledge, not through his
superior strength, that man bears rule over the rest of the animal
creation, so among men themselves it is knowledge which in the
long run directs and controls the forces of society. Thus the
discoverers of new truths are the real though uncrowned and
unsceptred kings of mankind; monarchs, statesmen, and law-givers
are but their ministers, who sooner or later do their bidding by
carrying out the ideas of these master minds. The more we study the
inward workings of society and the progress of civilization, the more
clearly shall we perceive how both are governed by the influence of
thoughts which, springing up at first we know not how or whence in a
few superior minds, gradually spread till they have leavened the
whole inert lump of a community or of mankind. The origin of such
mental variations, with all their far-reaching train of social
consequences, is just as obscure as is the origin of those physical
variations on which, if biologists are right, depends the evolution of
species, and with it the possibility of progress. Perhaps the same
unknown cause which determines the one set of variations gives rise
to the other also. We cannot tell. All we can say is that on the whole
in the conflict of competing forces, whether physical or mental, the
strongest at last prevails, the fittest survives. In the mental sphere
the struggle for existence is not less fierce and internecine than in
the physical, but in the end the better ideas, which we call the truth,
carry the day. The clamorous opposition with which at their first
appearance they are regularly greeted, whenever they conflict with
old prejudices, may retard but cannot prevent their final victory. It is
the practice of the mob first to stone and then to
The tombs of the erect useless memorials to their greatest
prophets.
benefactors. All who set themselves to replace
ancient error and superstition by truth and reason must lay their
account with brickbats in their life and a marble monument after
death.
I have been led into making these remarks by
Superstition the the wish to explain why it is that superstitions of all
creed of the
laggards in the sorts, political, moral, and religious, survive among
march of intellect. peoples who have the opportunity of knowing
better. The reason is that the better ideas, which
are constantly forming in the upper stratum, have not yet filtered
through from the highest to the lowest minds. Such a filtration is
generally slow, and by the time that the new notions have penetrated
to the bottom, if indeed they ever get there, they are often already
obsolete and superseded by others at the top. Hence it is that if we
could open the heads and read the thoughts of two men of the same
generation and country but at opposite ends of the intellectual scale,
we should probably find their minds as different as if the two
belonged to different species. Mankind, as it has been well said,
advances in échelons; that is, the columns march not abreast of
each other but in a straggling line, all lagging in various degrees
behind the leader. The image well describes the difference not only
between peoples, but between individuals of the same people and
the same generation. Just as one nation is continually outstripping
some of its contemporaries, so within the same nation some men are
constantly outpacing their fellows, and the foremost in the race are
those who have thrown off the load of superstition which still burdens
the backs and clogs the footsteps of the laggards. To drop metaphor,
superstitions survive because, while they shock the views of
enlightened members of the community, they are still in harmony
with the thoughts and feelings of others who, though they are drilled
by their betters into an appearance of civilization, remain barbarians
or savages at heart. That is why, for example, the barbarous
punishments for high treason and witchcraft and the enormities of
slavery were tolerated and defended in this country down to modern
times. Such survivals may be divided into two
Superstitions either sorts, according as they are public or private; in
public or private.
other words, according as they are embodied in
the law of the land or are practised with or without the connivance of
the law in holes and corners. The examples I have
Examples of public just cited belong to the former of these two
superstitions.
classes. Witches were publicly burned and traitors
were publicly disembowelled in England not so long ago, and slavery
survived as a legal institution still later. The true nature of such public
superstitions is apt, through their very publicity, to escape detection,
because until they are finally swept away by the rising tide of
progress, there are always plenty of people to defend them as
institutions essential to the public welfare and sanctioned by the laws
of God and man.
It is otherwise with those private superstitions to
The wide which the name of folklore is usually confined. In
prevalence of
private superstitions civilized society most educated people are not
constitutes a even aware of the extent to which these relics of
standing menace to savage ignorance survive at their doors. The
civilization.
discovery of their wide prevalence was indeed
only made last century, chiefly through the researches of the
brothers Grimm in Germany. Since their day systematic enquiries
carried on among the less educated classes, and especially among
the peasantry, of Europe have revealed the astonishing, nay,
alarming truth that a mass, if not the majority, of people in every
civilized country is still living in a state of intellectual savagery, that,
in fact, the smooth surface of cultured society is sapped and mined
by superstition. Only those whose studies have led them to
investigate the subject are aware of the depth to which the ground
beneath our feet is thus, as it were, honeycombed by unseen forces.
We appear to be standing on a volcano which may at any moment
break out in smoke and fire to spread ruin and devastation among
the gardens and palaces of ancient culture wrought so laboriously by
the hands of many generations. After looking on the ruined Greek
temples of Paestum and contrasting them with the squalor and
savagery of the Italian peasantry, Renan said, “I trembled for
civilization, seeing it so limited, built on so weak a foundation, resting
on so few individuals even in the country where it is dominant.”170.1
If we examine the superstitious beliefs which are
It is the earliest and tacitly but firmly held by many of our fellow-
crudest
superstitions that countrymen, we shall find, perhaps to our surprise,
survive longest, that it is precisely the oldest and crudest
because they superstitions which are most tenacious of life,
answer to the
calibre of the lowest while views which, though also erroneous, are
minds. Hence while more modern and refined, soon fade from the
the surface of
society is constantly
popular memory. For example, the high gods of
changing, its Egypt and Babylon, of Greece and Rome, have for
depths, like those of ages been totally forgotten by the people and
the ocean, remain
almost motionless.
survive only in the books of the learned; yet the
peasants, who never even heard of Isis and Osiris,
of Apollo and Artemis, of Jupiter and Juno, retain to this day a firm
belief in witches and fairies, in ghosts and hobgoblins, those lesser
creatures of the mythical fancy in which their fathers believed long
before the great deities of the ancient world were ever thought of,
and in which, to all appearance, their descendants will continue to
believe long after the great deities of the present day shall have
gone the way of all their predecessors. The reason why the higher
forms of superstition or religion (for the religion of one generation is
apt to become the superstition of the next) are less permanent than