January 10, 2011

Major changes underway in supply chain thinking can improve company profitability. To participate in this fundamental transformation, MIT Senior Lecturer Jonathan L.S. Byrnes says supply chain managers need to take three important steps.

Supply chain management is a relatively young discipline, yet it is already undergoing significant changes. These changes stem from two important developments that are connected with the shift from logistics to the more comprehensive discipline of supply chain management:

(1) the broadening of focus from optimizing internal company processes to optimizing intercompany processes involving links with customers and suppliers; and

(2) the broadening of focus from simple cost control to maximizing supply chain productivity. The first is operational and has been acknowledged and discussed for several years. The second is very strategic and only recently is beginning to gain wider recognition.

Supply chain productivity—the focus of this article—falls under the domain of supply chain finance because it involves maximizing the earning power of a company's supply chain assets. That is one reason why supply chain management is becoming a premier area of strategic importance and, potentially, of huge financial gain in virtually every company. I call this The Coming Revolution in Supply Chain Finance. View the full article here.

Supply Chain Quarterly