<P>Introduction<BR>WHY THIS BOOK AND WHY NOW?<BR>With any new work, the question that always has to be answered is—why? Why a new book on supply<BR>chain management and procurement? Why another book about lean systems? Why should we care? Is<BR>there anything more important that we can learn from the concept of lean supply chain management?<BR>Why a new book on supply chain management? The answer is simply because the works that exist<BR>tend to treat SCM as product movement and delivery, and SCM is really something greater than that. In<BR>fact, many books state that SCM is the same as logistics management,[1] using the Council of Logistics<BR>Management definition. Practitioners in SCM will undoubtedly tell you there are very unique differences<BR>between logistics and supply chain management. Throughout this book we revisit this difference and<BR>demonstrate how integrating SCM into other business elements delivers the greatest improvements of<BR>performance—with, yes, financial benefits as well!<BR>Why a new book on lean? Most books on lean systems center on manufacturing operations and<BR>material management within that environment. These books describe the tools and methods by which<BR>to implement lean initiatives, the measures by which success is observed, and the support needed to<BR>allow for implementation success. What they don't address is the pre-implementation events that need<BR>to occur in the supply chain to enable the lean efforts within the four walls. This is where the value of<BR>practical experience comes to play in how this question is answered. Linking supply chain efforts with<BR>lean efforts—really making them one and the same—is the way in which both efforts are optimized. So<BR>while this book addresses the use of lean tools and the integration with lean implementation internally,<BR>it really creates a new definition and practice in lean.<BR>Why should we care? Again, the answer is simple, cost … or, more important, profit. In a typical<BR>manufacturing firm, procurement and supply chain costs make up about 50 percent of COGS (cost of<BR>goods sold), and manufacturing contributes 30 percent. Improvement in these two factors can provide<BR>the single biggest opportunity for profit improvement. At a 20 percent gross profit, it takes $5 of<BR>improved sales to equal the profit effect of $1 of supply chain savings. While most readers of this work<BR>will be either SCM practitioners or students, the truth of this story needs to be heard by the executive<BR>management of our organizations so that the appropriate focus and effort is placed here. Typically,<BR>organizations rally around sales strategies or overhead reduction strategies for improving profit, with<BR>this biggest piece of SCM being lost.<BR>Finally, does this or any book provide the roadmap to integrate SCM strategy into the larger business<BR>strategy of a company? Many SCM initiatives have either been only moderately successful, or have<BR>completely failed. Why? They've failed because they haven't been part of a corporate strategy other<BR>than saving money. The tendency is that these plans are stand-alone, not usually an extension of the<BR>company's manufacturing or technology plans, and may in fact be in direct conflict with the company's<BR>goals and approach. This book was written specifically to be used as a strategic planning tool in<BR>developing a world class supply chain and procurement plan.<BR>This book doesn't jump immediately to implementation steps, but builds the overall business and value<BR>systems that must be in place first. It addresses the different commercial and financial environments in<BR>which an organization might find itself, and recommends specific approaches tailored to those<BR>conditions. Finally, the book concludes by focusing on the SCM steps and implementation order that<BR>facilitates the implementation of lean manufacturing within your own organization.</P>
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