Supply chains have been around for as long as the business of production itself. What is new is their management. To elaborate, activities such as purchasing, warehousing, inventory control, and transport were once considered part of the “cost” of running a business. Now these activities come together as “Supply Chain Management”—a strategic function that has taken center stage on the CEO’s agenda. What explains the success of Walmart in retailing, Dell in the personal computer business, Zara in fashion, Toyota in automobile production, and Li & Fung in the trading business? Efficient and responsive Supply Chain Management.
There are several reasons for the growing influence of the supply chain on a company’s bottom line. First, businesses are doing less within their own organization, and relying more on their supply chain partners. This may be due to increased complexity, scale economy, or to focus on core competencies. Whatever the reason, the success of a firm is increasingly dependent on what happens outside its organizational boundaries. Second, supply chains are becoming longer and more complex. Stretched across several continents, spanned by road, rail, sea, air, and now, by data—the task of ensuring that all these things work together seamlessly is frustratingly difficult and requires constant attention. Third, Supply Chain Management is becoming more enveloping—it includes everything from buying raw materials to managing suppliers, warehousing, operating transport fleets, taking orders, collecting payments, repairing products, and even reverse logistics (the task of recycling unused and end-of-product-life-cycle items for a sustainable supply chain). Finally, supply chain disruption represents a significant danger for many firms and managing this risk is becoming a pressing issue. Ironically, as supply chains have become leaner this risk has only increased. The new “Just-In Time” converts are celebrating their lean international supply chains, unaware that a dock strike in California or an earthquake in Turkey can have a calamitous effect on their business.
In the wake of events such as Covid-19, Supply Chain Management is more important than ever, and this course will focus on rigorous models from which we can understand managerial principles that allow for the various supply chain activities to be integrated into a seamless process.
Charles E. Exley Professor of Management; Chair of Decision, Risk, and Operations Decision, Risk, and Operations;
Awi Federgruen is the Charles E. Exley Professor of Management and Chair of the Decision, Risk, and Operations (DRO) Division of Columbia University's Graduate School of Business, where he served as Senior Vice Dean from 1997-2002. Professor Federgruen also served for many years as the Chair of the DRO Division, most recently from 2004-2010. Professor Federgruen joined the Columbia faculty in 1979 after...