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Principles of
Supply Chain Management

by Scott Webster

Dynamic Ideas, Belmont, Massachusetts, 2009.

ISBN: 978-0-9759146-7-0

Principles of Supply Chain Management provides a succinct, focused treatment of supply chain management. The three-part structure provides a cohesive framework for the study of the subject. An up-front emphasis on both the connection of the supply chain to the organization and the significance of information technology facilitates quick engagement of students. Students gain the wherewithal to become problem solvers by learning to employ a combination of analysis and intuition in business decision-making. 

Example pages for your review:

View the Table of Contents for the book here

Educational Philosophy Of the Book

The goal of this book is to provide students with a foundation for devising creative and effective solutions to supply chain problems and opportunities. The focus is on developing problem solving skills and insight through:

  • understanding principles of nature that govern human and system behavior
  • developing, analyzing, and interpreting simple supply chain models
  • synthesizing principles and models in the form of key lessons for managers

Principles of nature describe fundamental phenomena in the world around us and, consequently, can be applied in lots of creative ways. A well known principle from physics, for example, is work = force × distance, and many devices take advantage of this principle (e.g., tweezers, pulley, crane, screw, plow, inclined plane, and on and on). This book describes and illustrates 18 principles of nature that are relevant for supply chain management.

Distinguishing Characteristics Of This Book

Organizing framework

This book is organized around a framework that is simple and easy for students to understand—the five basic supply chain activities of buy, make, move, store, and sell.

Principles of nature

Principles of nature appear throughout the text. Many supply chain tactics draw on one or more of these principles. As students develop an understanding of these principles, they begin to see the principles in action in everyday life and how this knowledge underlies new ideas for improving performance.

Simple models

Simple models of supply chain behavior are developed and analyzed from scratch through example business settings. Students improve their analytical skills and learn how these skills are used to develop insights for managing a system, even without the benefit of years of experience.

Managerial insights

Key lessons for managers are presented at the ends of chapters. These lessons draw on principles of nature, models and analyses, and industry practice.


There are 10 cases in total. Nine cases are designed to help students develop their modeling and analysis skills via Excel. A final case is designed to help students synthesize and apply lessons from the book.

Writing style

Written in an informal style, including a bit of humor, and sprinkled with many examples from industry.


Chapter Descriptions / Outline

Part I – Foundation


Chapter 1 – Introduction: Operations and Supply Chain Management

Covers the what, why, and how of the book – what supply chain management is, why the topic is important, and how the book is structured.


Chapter 2 – Information Technology: ERP Systems, SCA Systems, and E-Commerce

Introduces information technologies that are relevant for supply chain management.


Chapter 3 – Supply Chain Foundations: System Slack and Related Concepts

Introduces six drivers of supply chain performance, elements and origins of two management philosophies that are relevant for SCM (TQM and JIT/lean), and two fundamental approaches for managing material flows (pull and push).

Part II – Principles and Tools


Chapter 4 – Demand Management: Processing, Influencing, and Anticipating Demand

Discusses issues surrounding processing, influencing, and forecasting demand. Long term and short term forecasting methods are covered. Operational changes that improve forecasting accuracy are discussed and illustrated. An explanation of the Winters forecasting model is available in a chapter supplement.


Chapter 5 – Supply Management: Trends, Technologies, and Tactics

Describes sourcing technologies and tactics, including contracts and negotiating tips.


Chapter 6 – Inventory Management I: Deterministic Analysis

Covers economic order quantity models and how much to purchase before a price increase. A story involving a CFO of a distribution firm is used to illustrate issues throughout the chapter.


Chapter 7 – Inventory Management II: Stochastic Analysis

Presents approaches for managing inventory in recognition of uncertainty. Continues the story of the distribution firm as a means to illustrate issues. Stresses insights that follow from the analysis of inventory models. Supporting technical details are available in a chapter supplement.


Chapter 8 – Capacity Management: Analysis and Psychology

Begins with the question of what influences the appropriate level of capacity in different settings. The last part of the chapter focuses on managing capacity in a service setting. Psychological considerations play an important role.


Chapter 9 – Production Management: Flow Control and Scheduling

Picks up on Chapter 8 by examining methods for managing capacity in a production setting. Different approaches for managing the flow of production are described (pull, push, and a hybrid known as POLCA). Discusses a number of scheduling rules.


Chapter 10 – Transportation Management: Elements and Insights

Transportation elements: there is coverage of transportation modes, pricing, services, and service providers. Transportation insights: illustrates analysis of tactical and strategic issues. The distributor story is continued to illustrate the ideas. Followed by three chapter supplements: (1) technical details of models in the chapter, (2) illustration of how market area models are applied in practice, (3) coverage of services and legal requirements associated with international transportation.


Chapter 11 – Quality Management: Tools for Process Improvement

Covers a range of process improvement tools and concepts (process mapping, Pareto analysis, fishbone diagrams, SPC, process capability). Followed by two chapter supplements: (1) technical details associated with control charts, (2) a primer for improving creative problem solving skills.

Part III – Synthesis


Chapter 12 – Supply Chain Strategy: Frameworks and Synthesis

Covers two strategic frameworks and the SCOR model. Summarizes points from earlier chapters and illustrates how these points are interrelated and used to improve performance.



Appendix 1 – Principles of Nature: Insights into Human and System Behavior

The 18 principles of nature are defined and applications of the principles are illustrated.


Appendix 2 – Linchpin of E-Commerce: Basics of Encryption and Digital Signatures

Covers the basics of a key technology underlying e-commerce.


Appendix 3 – Summary of Notation and Formulas

Contains all notation and formulas that appear in the text.


Appendix 4 – Standard Normal Probability and Unit Normal Loss Table


Additional Resources Available:

Student Resources

  • Chapter PowerPoint files
  • Excel files for case studies
  • Practice quizzes

Instructor Resources

  • Quiz/exam questions and solutions
  • Solutions to end-of-chapter exercises
  • Case teaching and grading materials
  • Excel spreadsheet to support an in-class activity on the difference between service level and fill rate
  • Sample syllabi

About The Author

Scott Webster is the Bob Herberger Arizona Heritage Chair in Supply Chain Management at the W.P. Carey School of Business of Arizona State University. He has a B.S. in Mathematics and Statistics and a Ph.D. in Operations Management and Decision Sciences. He has worked in industry in the areas of consulting and corporate finance. He teaches undergraduate, MBA, and doctoral classes in supply chain management and he has been the recipient of numerous Whitman research and teaching awards, including the Oberwager Award for dedication to students. His research focuses on improving competitiveness through logistics, and his work has appeared in such journals as Management Science, Manufacturing & Service Operations Management, and Operations Research, among others. He has served on the editorial boards of Decision Sciences, Journal of Operations Management, Manufacturing & Services Operations Management, and Production and Operations Management, and was named outstanding associate editor of Decision Sciences in 2006.