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2001

From raw materials to customers: Supply chainmanagement in the service industryJack Cook

Kathy DeBree

Amie Feroleto

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Recommended CitationCook, Jack; DeBree, Kathy; and Feroleto, Amie, "From raw materials to customers: Supply chain management in the service industry"(2001). SAM Advanced Management Journal,Accessed fromhttp://scholarworks.rit.edu/article/508

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From raw materials to CU tomer: upply chain management in the erviceindustryS.A.M. Advanced Management Journal; Cincinnati; Autumn 2001: "JacK S CooJ,;.KalhY DeBree;AmieFeroleto:

Volume:1 ue:Sta-rt Page:ISSN:

ubject Terms:

las ificatiou

66414-2107497075

tudiesSupply chainsHealth carc mdustT)'

odes: 9130: ExperImental/theoretical8320: Health care industry5330: Inventory management

Abstract:No company can operate without a supply cham. Recent years have seen change m the way manycompanies manage their supply chams - holistically rather than as a series of separate pieces.Manufacturers have taken the lead In Improving supply cham management, but now thefast-growing service Industry is adopting these pnndples. A study in the health care area {/fustrateshow service businesses can benefit from the decreased lead times, faster product development,hIgher quality, and reduced costs that can accompany successful supply chain management.

for Advancement of Management Autumn 2001

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Supply chain management (SCM) is a familiar concept in manufacturing, but service industries are justnow recogniz.ing the value of successfully implementing iL Although cenain concepts should bc appliedwhile successfully managing a supply chain, companies coordinate their individual supply chains inmany different ways. "Thus, in application, supply chain management practices exist along a continuum,from more traditional approaches. where the organization focuses only on the direct affects upon itsel r,to the more expansive. supply chain, channel-wide perspective" (Cooper et a!., 1997, p. 68). Table Icompares the traditional approach to channel management to the supply chain approach (Cooper et aI.,1997. p. 69).

An effective supply chain is crucial to the success ofa business. "Onc recent study of the US FoodIndustry estimated that poor coordination among supply chain partners was wasting 530 billionannually" (Fisher, 1997, p_ 106). This can be illustrated ifwe consider the traditional view ofa supplychain as similar to a pipe that carries the service or product being provided. When the pipe becomesclogged, the entire system must be flushed to solve the problem. Similarly, when a supply chain does not

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wor\.: properly. a busmC'ss must flush the channel hccause 11 cannot pmpomt where the problem is. Thiscauses companies to lose profits and salts.

I'<ow, howe"er. companies are lmplemennng a new type of supply cham managemC'nt, where the fim]views the supply channel as 3 Whole system instead of concC'TItratmg of each p3J1 of the process. Thecompany focuses on all elTorts. from the procurcmC'nt of raw materi31s to the dlstribullon of the finishedproduct. and how each elTon relates to the othC'f'S (Andraskl. 1998), This allows more communlC:l1lOn toc:<ist wtthm the pIpe and problems to be morC' easily identified

We \\111 show that Implememmg C'lTecll"e SCM IS an advantagc for companlcs that proqde scrqces.FIvc tools of SC1\1 that WIll bc descnl>C'd are makmg and keepmg rebllonshlps, Impicmel\lll\g newtechnology m the supply channel. the use of forecastmg to Increase supply cham effectlvencss.outsoureing to mcrease emclcncy. and cost management as a strategIc weapon A case study from the'health care mdustry wlll bc used to remfo«:e the Importancc and "alue of SC;"l m the servIce s~"Ctor \\' cwill evaluate Implementation steps and the h<:nefits and hmLla110ns of supply cllam managementFinally, a diSCUSSIOn of our conclusions on the subject of SCM m the serVice mdustl')' IS prOVided,

Ser.'lce Onented SO\1

The ser.'lce mdustr;' IS becommg Illcreasmgly dommanl III tile Umted States, and employment IHllnbl'n;arc shlfimg from monuf3ClUnng loward sel'\'tees. The problem IS that the separation betw~'en the ser.·lceIl1dustry 'll1d manufactunng IS not alw3}'s as black and wlltle:lS man~· expens thought S0l11cttl11eS thercIS a gray area, a 111Ixed Il1dustry thaI blends both the manufaclUnng and SCl'\'lec seclOrs. :\n cllcCltveSUllply cham IS needed to link tllese sectors

As the service sector grows IIllmportallce. II is evidcnt that the faceoftomorrol"s bUSiness is ser\'lce Infact, "ser.'lces account for mne of ten of the small buslnC$s-dominated mdustnes that v. III log the fastestgrow th through 2005. aceordll1g to analySIS by the U.S Sm311 BUSll1e5S AI!lnllllstmt IOn (S BA)"(McCune, 1995. p. SO). There arc a number of reasons why sel'\lces arc grO\\ Il1g The number onereason 15 thaI bab}' OOomers arc gellmg to retirement age (McCune. 1995j, For example. residenllal careC3me oul 3t the top of the f3StCSt growmg ,ndustnes betwccn 1992 aud 2005. showlIll1 T3ble 2(McCune, 1995, p. 51).

Othcr ser.'lce mdustnes cxpenenemg rapid growth mclude, child care, medlc31 3nd dental Iaboralory.and mdJVldual and f:uml>, SCI"> Ices. juslto name a fcv. (;"1cCUIIC, 1995). This rcl1ects the increase ll1tllcdual Income famIly. which IS a pan of many Amencans' hves, As the number ofworkl11g womell grows,the need for chIld care and counselll1g increases The extreme growth of baby boomer consumers ha.smandated an increase m the service se<:tor, Handhng the expandmg volume while proVidIng optimalCUSlOIl1cr SCl'\'lce rcqul res busll1esscs to rethink their strategies for success. Supply cllall1 management IShecomll1g a necessity for comll1ued competitiveness and success

RelatIOnships: The most Imponant contributor to success mthe sel'\'ice industry IS building strongrelanonshlps wnlt customef'S. Compa11les can benefit III numerous ways from loyal customcrs. ll1c1udl11gtI1creased revenues, predictable sales and profits. low customer turnover, generallon of new businessfrom word of mouth. and costs that can be amonized ol'n a longer penod (Gwinner ct aL. 1998)Howe'·er. for the relationship to be successful and long term. the customer mUSl also bencfit. Table Jmdic3tes some of these benefits (Gwinner el a1.. 1998).

There are traditional and modem view's of supply cham management. Similarly. sel'\'ice companics canchoose bctween the bow tie (traditional) and diamond (modem) approaches when bUlldmg relatlonshtpswith each othcr (Cooper ct a1.. 1995). The bow'tle idea provides for interaction only between the buyerofone business and the seller of another, while the diamond approach allows all functions toeommUll1cate (Coopcr 0:1 a1.. 1997). These processes are represented III Figure 1 (Cooper et aI., 1997, p.77).

The tr3dnlOnal process requires a kmd of filter. m the fonn of an account manager (Cooper et aL. 1997).However. thiS does not ma:<lmlze eommumcallon h<:lween the flnns. WhlCIl may decrease relationships

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and lower efficiency (Cooper el al.. 1997). In Ihe diamond approach. adl'antageous rel:lliollShlPS aremore apt 10 occur and greater communication resuhs. Reasons for formmg relallonships wilhin a serviceinduSlT)' include necessity, asymmelI)'. reciprocity. efficiency. Slability. and legilimacy (Cooper el aL.1997).

Technology: Changes in lechnology have eXlreme effecls on how a firm manages us supply chain.Specifically. elecl10mc commert'e (EC) is eXlendmg value w11hln lhe SCM process. Businesses use ECto illlcgrale their mtcmal functions with Ihe apphcations of shippers, supphc~. and customers(Scarborough & Spalarella. 1998). ElectroniC commerce allows shlpmenl Slatus messages 10 be rccewcdInstanlaneously and provides vendor·managed and conllnuous replemshment Invenlory programs(DcCovny. 1998). This new technology decreases mvenlory nsks and maximizes Ihe sale orproduclswnh shon hfe cycles by redUCing Ihe hme lllakes 10 reach the broadesl poSSible markel (Scarborough &Spalarella. 1998), EC also promoles compelill\'e advanlages by haVing a more accessible order,cnll)'process. decreased paper handlmg. and less re,keymg of informallon (DeCovny. 1<)98)

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Although there are obVIOUS benefils for companies using EC in their supply chain. bamc~ to Ihistechnology also e:'l:iSl. The problem thaI most often anses IS a security breach wilhin the syslem(DeCovny, 1998). Another difficulty IS Ihat many orgamzationslack the resources 10 mlegrate EC wilhtheir supply chain. including skilled emplo)'ccs (DeCo\'ny, 1998). Some firms choose to seck help fromconsul1ams and advisors before makIng mlslakes wnh lheir lechnology procuremenl endeavor(Scarborough & Spatarella, 1998). This makes the SWllch to electronic commerce qUlle a bil easier.

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Forecasllng: A company can effecll"e1y u~ customer dala to synehronil;e lIS supply cham OperaliOnSwith consumer needs. This can be done through CUSlomer supplied forecasts, "'hich many people decl1l anecessary pan of managing a supply cham Roben Altabet. who IS "Ice president of businessmanagement in Ihe Duraeell North Allamic Group. states that, "the IateSI emphasis of forecasting hasbeen in the areas of schedulmg and logistics, renamed 'Supply Cham ~lanagcmenl'''(Allabel. 1998, I'3), Another anicle S1lyS. "forecast honzons can Impact a host of functional areas m the supply cham"(Saran. 1998, p. 23)

An accurate sales forecasl can han' numerous advantageous results m Ihe process of SCi\l. Effe<;:t,,'cforecaSlS provide vendors WIth more accurate data. Improl'e effictencles m product dlstnbullon, reduccsupply chain Illvcmoncs. and cnhance customer sen'lce (Kiely. 199899) In generot forecasllng helpsbusmesses servc thclr customers more emclently. Without the conslant fear of e,~cess lflvcntOryHowe"cr, if SCM uses an crroneous forccast. the results Will be feltthloughout the cnllre system

Outsourcmg Manufactunng and Sell'1Ce mdustnes are grappling wllh the decIsion ofwhelher to make orbuy the parts used 10 manufacture their products. To ans" er thlli qUeSllon. a company must weigh Ihecost factors, Expcns bellcve Ihat compames are headmg toward I:l'eater spec13li;t:tllon am! outsourcingfor the mmerials Heeded to make their product {Lalos & i\loschuns. 19(9), ProducI compk\lIy and<:ommcrclal uncenalmy IS Imked to how much lechnology IS m"olved and the deglee of nsk for Ihehtlsilless {Lalos &. Mosclwn5, 1999), In lhe sernee mdllslry SlltlSfYlng the customer IS th~ 1111;hcSlImonty !3usmcsses mllst ltnk Ihe deciSion to make or buy based on which option pro' Ides optimal<:tlSlomcr sUtlSfaCllon and the most cost·effecllvc methodology. nlls IS why procurement IS l>elngrecog11l~ed as an 1t1lponallltool for lmprovmg a service corpornllon'S bottom hne (Amlcrson & K.Il/.1(98), Gencr.lll>'. the end product and uillmately Ihe customer wilt bene fit from olltsouremg In Iheservice mduslry, nlis lmponance IS bemg pushed on the outsourtcr 10 cnslIre that malenals Will am,'Con t,me and III good condition. Scrvice fimls must consider quality, reliability. trallSponmlon costs, thccOSts of acqulnng and managmg, and the value oflhe fmal product to the customer (Andcrson & Kilt/,1(98).

COSI Management· COSt management IS an Imponant sttategic weapon for a busmess "E.~temal

purchases of products and scn'ices accoum for more Ihan 50 pereenl of lOla I COSts" (DegraC\c 8.:Roodhooft, 1999, P 5) Wltholll sacn fiemg quahty, services must crcate a reliable. cOSt eff,:,cuve supplycham to bc compcutll·e m the marketplace. Teehnology has mCTeased the reliabIlity of COSt managcmentsystems through the usc of<:omputcr packages deSigned for specific compames (Anderson & Katz,1998). A mathcmallcal model has been crealed 10 welgb the ditTerem COSIS ofa supply chaltl Theobject,,'e of this model IS to choose the nghl combmation of suppliers. w'ltll the paniculJr cntenaImponam for the purchasmg deciSIon. The model's benefilS mclude the ability to compare the COSIsavings from one yt.>ar to the next. Results can even be used as a negotialion tool with a fiml'S suppliers(Anderson & Katz, 1998). An effCCI1\'e way to 5a,'e money IS for a busmess to mcrease efficictlcyIhrollgb tcchnology and Improved accouming syslcms.

SCt\l in the Health Care IndllstT) (A Case Study)

Increased revenues and enhanced SCT\'lce are key corporale objectives. With this III mInd. hcalth careagencies arc Irymg to figure OUI ways 10 cuI COSIS bUI sun keep their euslomers saHsfled, and many arenow' lookmg to their supply chains for the answers, A health care supply chain deals with factors such asthe expirotion dates on products. product shipping and deliveT)' location. multiple product mix (to buildcustom packages for customers), mulliple deliveT)' locations, multiple distribution POllltS. and multipleaccounts and customers (Smith. 1997). Howevcr, health can: is differem from other industnes becausehospitals arc unable to pinpoint the reasons for decreases m the dcmand for their services (Sm,th, 1997).This is be<:ause demand is based on each indl\'ldual pallcnl, whosc necds and ltlsurnncc·relatedrestrictions are di fficult to predict effectively' (Smith. 1997). Health care agencies have to ordcr manydifferem lypCS of equipment and supplies based on customers' diverse needs. while slillltll:reJsmgrevenlles and sallsfying the customer (Smith. 1997). This can be nearly Impossible to achle,'e,

The poslllon of a hospl1al malmal manager IS becommg Imponam because oflhe deCISiOnS they make

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that dcal with Im'emory They have Ihe responSlbdlly ofehoosmg what, when, and how mueh \0 order.Examples of what these managers ean sa\'e a hospaal is shown by the folio" Ing: "Cedars-Smal HealthSystem, Los Angeles, beat IlS own eSl1mates and savro 56.73 per pauent day_ or 5 1.56 million, In fiscalyear 1998. by eonsolidal1ng matenals management operations" (Supply Chain Streamlinmg ""ets B)~

SaVings. 1998), Another example IS Eisenhower Memonal haspilal. wllleh converted to Just-m·lImedistributlon and decreased in\'entory from 51.5 million to 5142,000 In Just 18 months (Dejohn, 1998)These two hospllals were able to rrouce their In'entory levels sigl1lficantly. whkh lllcreased thehospital's rC\'ClUles, Cedars-Smal has a wcll run, offslle w'archouse labeled "matenals serVice cClllcr."which IS run mamly b}' new technology. computers. and electronic uckets (Suppl)' Cham StreamhnlllgNets Big Savings. 1998). Messages from the nurses to the warehouses 3lld the warehouses to thedistributor are sent e1cclmlllcally. allowmg for greater eommumcatlon between the hospital and thewarehouse. The hospital convened the unus-cd m\'emory rooms Into palient rooms (Supply ChainStreamhnlng Nets Big Sa"mgs, 1998) The Increasro hcd capacity led to higher tumovcr. grealer 11ro flts.and lIlcreased eustomer sausfactlon

Eisenhower Mcmonal signed a COntract "'nh AllegIance Health Care Corpornhon. McGraw Park. Ill. \0h>mdlc tilelr elltlrc mvcntory. and also tmlployed people as "materials se"icc coordinators" to ImproveIhe effiCiency of their system (Dejohn. 1998) These people wll! work closely v.'llh the phySICians tounprove relulions between departmems and "Ill ultimately Iukc over thclr tn\ emory responslbill1}'(DcJohn. 1998), ThiS frees el inlcal stafT lime for patient care The outcomc IS mlpro\'cd CliStOIll~r

sallSfuclion (Dejohn, \998), "hnng people to deal "Hh the lOgiStiCS of the hospital benefits the doclOrs.nurses, and the customer m the long run. Efliclent tnvemory managemcm leads 10 greater profits bydccreaslllg II\\,cnI00' costs and IIlcrcaslng customcr satIsfaction

With thesc 111lprOVel1lents 1!1 matenals management. hospitals are seardung for more breakthroughs tohelp cut cOSts and make the supply cham more elTcctl"e An example of this IS McKesson CorporatlOn,rcnamed McKesson General Medical after acqUIring Genernl Medical Corporahon McKesson. adl stflbulOr. IS plannmg to olTer one-stop shopplllg for phamlaceullcals and medleal·surglc:LI products Ashoner supply ch,J1I1 decreascs the costs 3lld distributions that are IIlvol\'ed and often makes the supplych31lllllorc clTeCtl\e and cfliclent This IS the mOl1\'atlon for McKesson Gencrnl t\'ledlcal, although Itsone-stop shopping theory IS hlghl)' risky (Speer. 1997). We behe\'c that the Idca of one·stop shopp1l1gcan he highly profotable If ImplemcnK-d caul1ously, To reduce Ihe nsk. McKesson should :Lilo\\ ilscustomers. tile hospitals, to have a stake In the company. This can be accompllshro by selhng shares ofstock and allowlllg mcmbers of the hospital to Sit on ItS hoard and oversee the managcment of the newsystem.

Health care agencIes \\ ill be e"aluatlng the elTectl\'eness ofone-stop shopplllg. McKesson's goal IS tohire dlstnbutors that \\ III service all of its UllllS and offer \'olume discoums (Speer, 1997)Implementation of this approach will necessitate restructunng the new comp311Y. mcludl ng buildinghighly autom31ed warchouses, offering samc-day scrvice. and reducing Ihe total number of centers(Speer. 1997). McKesson General MedLcal has already Implememed effccuve supply cham changes,which mcreased sales. and IS now waltlng to include the one·stop shoppmg idea (Speer. 1997) ThiSrestructuring has extended Its customer base from 39% to ~9%,. says spokesperson John Lawrence(Speer. 1997), a great success for the company. Howe,·cr. there will al"ays be competition, and thelikelihood of MeKesson General Medical monopoliZing the market IS very unhkely. The prospect ofcombimng pharmaceuticals and medical supplies is appeahng to many matenals managef5 wilo wish toincrease revenue for their companies.

To understand the changes that heal1h car~ compames are making, LI is necessary to comprehend whatthese businesses are trying to achieve. "Pharmaceuticals are small in size but high in dollar amount.MroicaVsurgical supplies ar~ the opposite. The t\\'o businesses are completely dilTerent." states LarryDooley. "Ice president of distribution servIces al VHA (Speer. 1997, p. ~8), Compal1les are trying tomesh the different businesses 1I1 order to serve their custome~ better. With tooay's technology and a wellmanaged system. the opponunity for gro",h with this new merger is extraordmary.

Just-In-Timelnventory Management· \Vllhmthe health care mdustry. there has been a greater relianceon just-in-ume (JIT) l1l\'emory and total quahty management (TQM). The con(ept of liT. 111 particular.

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is laking hold and companies are restructunng to accommodate n. JusHn·lIme inventory managemell! ISthe proCel;S of rlX'el Villi: ll1ventory exa.tly when needed ll1Slead of ha~ing a stocked warehouse ofsupplies. Advanlages indude better dellX'lion of quahly problems. shorter product developmenl cycles,quicker customer response time. and lower holding cost (Coleman &. Jennings. 1998). For lhese reasons.JIT syslems have made It possible to substantially increase revenues for many finns who use It JlT eanbe a direcl link belween whal the customer desires and ho" a company can achieve 1I. Service Industriesarc al\\ ays looking for beller ways 10 serve their customers. and fllSler. more fle'l:ible, belleHjUalil isen'lce is what cuslomers want Ho"ever, compantes thaI choose to Implement JlT face lhc poSSIbilityofbemi: left hIgh and dry If their suppliers are unable 10 del]\er (Coleman & Jennmgs, lQ(8). as shownby the UPS slrike

Health care compames havc made many lmprovemems because Ihey have used aJusHnlUne syslemInvenlory eoslS arc a St8mficanl liabllily for lhese compames, and. With JlT, a huge portion of IhcIiabllily is em out oflhe equallon (Coleman &. lenlllngs, 1998), Hospitals lhm usc JIT no\\ have moreroom for patients, TIlose who don'l use thl5 lype of Il1vernory system are expenencmg excess lIlventoryand lumover dlfficullies (Colem311 &. Jenmngs. 1998). As an example. hospitals lhal hal'c had espln",ldrugs ean'lsellihem al a discount, because they have no market I'alue. They arc Ivaste and have a Illreetnegative affect on the bollom hne

Wilh all oflhe advantages of lIT. some health care compames are Ignonng Ihe disadvantages andproblems that a lIT system can cause The UPS case IS a greal example of the mablllt) of a busmess 10compensalc when a product Isn'l delivered (Coleman & Jenmngs. 1998). This case IlIuslraled lheadvantage of carrYing st&mfieanl 1I11"Crltones to prolect agall1S1 eonllngeneles (Coleman & Jenrungs.1998) II supports lhe old saymg "e~pect the unexpected." Allhough l\ IS valuable 10 prcpare forune~pected eVCnlS, II IS also not producl"'e to alw3ys second-guess yourself Busmesses mUSI find lheproper amount of ml'entory that is neither e~cessive nor unsafe 111 lhe case ofunnpeeted e>ems

Evaluation of SCM Irt Ihe Servlcc Industry

A service business must be eaUllOUS when lmplemennng SCM. The conCepl ofSC/I'lls hollslle and IllUSlfocus 011 all efforts. "An understandmg of he" cost aceumulales lhrough lhe supply cham m a hollsll<:way, based on the combinallons of products and customers. IS essential to handlmg the huslness Issuesa.~soc'ated With the supply cham" (Bnuthw311e & Samakh. 1998. p. 75). It 15 also mlportanlthat hothIlltcmal and external cuslomers are taken Into :!Ceoum "hen establishIng a supply cham Although IllOSIeompames realize lhat the supply eh:lln IS affected by eXlemal hnks wnh such members:ls suppliers.I,anners. and customers, lhey often forget that success also depends on 1I}lemal dcpanmcnls thai servt'one anolher and conuibule to the value add,ng proee.s (Morash & Clinton. 1997).

Benefils of SCM. There are many benefits to SCM. \\hlch outweigh lhe added energy thaI must bespent. TI,cse include decreased lead limes. faster product development. Increased quallly, aud reducedcosts (Choi & Rungtusanatbam, 1999). Also. SCM greally Improves customer sen'lce and contributes tosynergy within the process. This 's especially crucial in service induslnes. where the emphaSIS IS onmeeting the cuslomer's needs. All oflhe henefilS lead to greater competitiveness. As oue anlcle slaled."the reward - a remarkable compemive advantage thaI generales high groWlh III sales and proflls" (Pagh& Cooper. 1998. p. 28),

Limnations of SCM: There may be seV'ere resIstance within the company when implementmg SCM.blX'ause il requires modification of the altitudes and behavior of lhose inl'olved in the syslem ­employees and the employer. Resistance to change IS common and predlctmg employee behavior ISdifficult. A lack of underslanding by senior management is anolher possible reason for the reslSlance 10supply chain managemenl (Andraski. 1998), gil'en thaI an un"Tltten rule of business is to mimmize riskand cover all angles. Execulivcs may feel that 50"1 is 100 simple and IS merely a passIng whim(AndrnskJ. 1(98). however. the,r commitme11l is "'lal 10 guide olher employees and 10 oblam r~'qulred

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Supply chain management In the sernee Industry has taken off In reeem years. and many conlpantCS areconStdenng It How a manager handlt's hiS company's supply chain will help dctenmnc if ItS prOOtlct willmake a profit In the marketplace. Because Ihere tS a lack of know ledge and understandm!,'. 10 asSistmanagers In the sen 'ICe sector. II is crucial Ihat today-'s mana!;crs oblaln a full appreclJlion for" halsupply chain managemel1t 15 and how 11 can be ,mplemenled successfully

A better appreciation for the supply cham management process can bl.' gameti by underslan<1mj: sen'IcelnduSlnl.'S. A crucial example 's the hcalth ll1dustf). "hlCh IS cxpected 10 be oncofthc faslcst gro\\Ingmdustnes in Ihe fUlure, Health care '5 altempung 10 ,mplemem a supply cham that <1eihers quailtyproducis a, tlllnnnal cOSt Some oflhe problems that have :lr1sen have to do "Ith the lack of an etliclell1prog....m to deal pmnari Iy wllh health care faclllt,es and Jusl-tn·t,me managemcnl Bencfils. 1'[111tallons.and the lmplementa'lOn steps of SCM help show where Ihe new hcallh care phenomena arc headed

SCl\1 IS not a passlllg fad but rather aJl C\'OluIIOJl m thc operanons ofscrnces. We prcd,cllhat sen ,eesentenng the SC\I gate \\ ,II Sen'e mllhons of doHars that \\ould olhen\ ISC be spent because of adysf'llletlonal supply cham Smcc ,he SC\1 COJlccpt IS fa,r1y nc\\. U IS \'Uallhat manager~ do nO'I11:llo.e.1"leap of faIth." so 10 SPClllo.. bu' r~scarth Ihe process thoroughly This should ...,.,able Ihem 10 ...b~),c .1supply chain that \\111 be most benefiCIal In obtaining the main obJcctl\ ... for any' company. "h,cl1 LS tomilkc n profit,

[Referen ......1REFERENCES

[RefHeneelAI,all<ll. II (1998. Fall) Th~ for«ast~' as a "e. Il¥m_ cI 'M et,atl'g'~ llIIIM'''Ill~am TM Jou,nal ot Bu"nes. Fore<:a,MgMe<ho<l. & S.s,~m •• 17 (3), 3·6AM~'S/)n. M G. to Kau. P B. (1998) Str&tl!'\l'C _'1:"'9 TM !nter""uonaL JOUmlll cI ~'Sl'" M.n~9~men, 9 11 J 1 'J[RefHcncc!Mora.~" 1. C. (199B) l~M~..n,o ana 'h~ ,~~I"alJ(l(l of 'UOlltv <M,n <Q1 ~""'al<On. )oumll' ot Bu."'e•• lOO,'''CS. 19 (2),9-11B"'\h"'.,le. A.• & s"makh. E. (199B). TM Cool-t<>-WO"'e meUu:>:l. The lnlemol>Oflal 1",-",,,,,1 01 log,.,,,. Monaoemeot, 9 (ll.69-B4

[Reference)cnOI. T.•.. II< IIU"OtU"'''''lnom.''' (1999. Wmlet). Compa"..,., cI Q"".ty managell¥n' !l'KttCK: ""'ross tM! '''00'. eh.'haM InO"st"e., Tn~ JoutrUll or Suoo'~ CN,n ""'''''Qf'''''''''I. 35 (I l. 20·27.CoJ<oman, 5, 1.• II< lenn,ng•. K, M (1998) The UPS stt,~e LKsons I".. juS!·,n'lJme... Prooucllon ana hw~nlO/)' MaMoementJournal. 39 (4). 63·67.Coo~" M, C. Ellram. l. M" C.r<lne<'. 1. r & H.n~,. A M 1l'l'l7) M~,"II m"!t,p~.II..no~. 1Q<Jrn.' 01 8",,"esslo9'SllC',lB (1J. 61-89,DeCovny, S (199B, tlovemll<l,/De<:emberl. Th~ e!<:am'"< CCmrnen::e comes cI .Qf'. JOU,,,,,,I 01 Bu.,~ .. Str.,.... , 19 (6),38-44

IRefcre"u]DeO'o..", Z.• 5. ll000hooll. F (1999. W'''l....). Effect".,v ",:ea,"O .uppr.... u.,nO lotol co.l 01 owne""',p. The Jpurn.' ofSupply Choln Monog""",nl, 35 (I), 5'10DelOM. P. (1998.1"""), Ne.. mal ......'. 'QKOOI'''.oaa PO'fSCVUlI tQIJ'h to .uOPI. <no.n. HOSO,,,.' Molena" MoMgem..nl. 23(6). I. 13.FI<Me" 1'1. L (1991. Mor<hl"'pnl). wn., " the "Vnl 'UPlltv eno,n to' you' orn<luet' HO"'or<l 8".'n.... Rev''''''. 7S (2), 105· 116,

IReferencelGwmn..... K. P. &. Gr..ml",. D. 0 .. &. 811""'. 1'1 1. (1996. Spnng). R.."'tIOMI l>er>eH. ,n ......" ... mau'ttles' rn.. cu'lom..~.perspea"... Joumo' of lhe Aooa..my or "'001<..1"'9 sa..""... 26 (2). lOI'1I4K,el •• D. (1996/'999. W,nt"'). Synen,,,,,,,.,no .upply eN'" pperatlOtl. w"h COMu""', aeman<l ""'''9 <u5lomer Oot. Tn..)o"rno' ot 8".'n.... Fo'"oo,ton~ "'et't>oo. &. SySlem•• 17(4).3,9,

IReferel"lce]....,0•• t .• II< ,,,,,.,,\,,,,., 5, (1999. w,nt..,), An ~Po"<" ,nvesh9"tIOn of outsourn"ll ""dSlOr1< Journo' 01 Supply C""'"MonOQf'ment, 35 (I). ))·41M<Cun~. J. (1995. Ma.llune), The flH;e 01 ,''''''''''OW. The lOutrUll of Bu"""" St,.,"'Oy. 16 (3). 50·S5MOfa.n, EA.• &. (:J,nlPfl. 5. R. (1997. Spn"9l. The role of I,an<o<>rto""" ""POO'I,t.... ,n InU,mat'Pflal '''PPI. cMam,""".oe"",n,. T",n'oortotfOh Jour""l. 36 (3). 5'17Pagn, J. D.• & Cooper. 1'1 C. (1998). S"OPly cnU\ POSt:P<>nM>fOnt .nd 'P<'CU'Ohon "'oteg,... : How to cMoo,," 1M right

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80f8

<trllt~y. Joumlll 01 lIu.,""" lD<;i<tI«. 19 (2). 13·33Soran. V. (1998, Sr>nI\9}, The role 01 hIe cydfl and lena.t hc>nZo<I5 ,n a lo~.t,ng sy.tem Reebok'. perspeC\,ve. TheJournal of 8u<jnM< ForeI:.'Jst,ng Memoc. &. System•• 17 (I}. 23. 28.

[ReferencelSc.rt!OrOlJgh, M. C" &. SPlIt.",lla. J, J, (1998. July/Augu.t), GeWn9 beh'nd the bu...,.... 01 .'Klron" COm_reo TMA )""mel,18 (4). 42·44sm,,", J. (1999, Jan""ry). let ,uPlllle.. IleIP PIIIn tlUrelUl.. """"•. HOSPItal M.~""t. Management, 24 (I). 12·13 Speer, Tc. (1997, August 5), ~r-om dod« 10 doC<. HOSpitalS &. Healltl NetwO<1<$. 71 (IS). 48-50Su~y Cha,n S,",a",I,nlng Net. 8", saVing. (1998. t1..-nber). HOSPItal M.'''''<IIls Man.gement. 23 (II). 2. 10

IAulltor notellack S Cook. Rodl...ter ]n.t ,ute ol Tedlroology

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IAulhor notclOr. Cook .peclallze. In e~r-on", commerce. 'nlorm<l""" syStems. Md P"Od\lCllOll.nd _.UO<1. management ~.thy De\l,ee'. a....t.n, employee "'P'O'Sent.,lve.t W~m.n. I'oocl M."'et. A""" ~_etl .. !lumen Resourees Deportment sUpC,,-"soc.t5 .. flag. Da...n La.e

Rq",xlu"od ""n penn""011 of lho Cop)Tlghl o"n., Furth.. 'ep<od"""on Of d..u,bullOn .. p'oh'b".d ""hOUl pcm\l>!,nn