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The Business Case for Preparedness
Lower Costs
May 24, 2008 12:03 AM
Higher supply chain security can be achieved at lower cost by proper management and operational design.
Source: "Higher Supply Chain Security with Lower Cost: Lessons from Total Quality Management", Hau L. Lee and Seungjin Whang, Graduate School of Business, Stanford University, Stanford, July 6, 2003
Key Points:
* Governments and industry have all responded with proposals to create more confidence in supply chain security, while maintaining smooth flows of goods and services in a global supply chain. One of the most effective strategies may be to apply the lessons of successful quality improvement programs. In this paper, we describe how the principles of total quality management can actually be used to design and operate processes to assure supply chain security. The central theme of the quality movement - that higher quality can be attained at lower cost by proper management and operational design - is also applicable in supply chain security. By using the right management approach, new technology, and re-engineered operational processes, we can also achieve higher supply chain security at lower cost. We will demonstrate how this can be done with a quantitative model of a specific case example."
Link: http://bctim.wustl.edu/calendar/mediafiles/SecurityQuality.pdf