ABSTRACT
Introduction The imperative to focus on the customer, the ultimate point in every supply chain, is driven by three developments. Firstly, radical changes in the nature of the marketplace for most products and services, including more intense competition and the globalisation of markets. Secondly, the increasing power of the customer, given the readily available and inexpensive access to information and direct communications, with almost unlimited suppliers in the market. As a consequence of this, the customer is seeking and is in a greater position to demand, increased value, including reduced prices, in the product and service package ultimately received. A number of supply chain developments and innovations have been driven by these demands from the customer in the marketplace. The concept of the value chain paralleling the supply chain is generally accepted in the literature. Members at every stage in the supply chain have responded to these developments. For example, the impetus to create supply chains, which are lean and agile is a typical response to improve efficiency and reduce costs, as are single sourcing agreements. As a consequence, supply chains face multiple varieties o f structures, rapid changes, new innovations, new partnerships and hence, greater unpredictability and uncertainty about future changes. The increasing incidence of disintermediation within existing supply chains poses further threats, uncertainties and risks for all organizations irrespective of size or position within the supply chain. Describing or prescribing an ‘appropriate’ supply chain has become problematic, given both the contingency dimension (see Chapter 3) and state of flux inherent in most sectors. This leads to increased risk and a need for closer relationships because of the multiple relationships and multiple channels etc. that now operate within markets and hence the need for the formulation of a new model. The characteristics of this Amorphous Supply Chain Model are: 1. Inherent instability in the sense that none of the members may rely on the structures and relationships remaining stable for any length of time. This vulnerability of the supply chain to increasingly frequent and significant shocks is addressed by Christoper et al (2002).2. Unpredictability, given that there are a wider set of factors potentially influencing the organization and its supply chain (e.g. impact of global communications and the consequent competition).
