86.The Supply Chain buildupReform actually began before the president of Intel made his statements. Over the past several decades, a number of philosophies that center on decreasing cost and lead-time have been developed and practiced with great success. Most, if not all of these practices play a part in supply chain management. Once the effort in everything else has been exhausted, supply chain management is the only logical step.Before the 1960s, industry looked inward for improvements. Logistics literature offered generally two divergent main approaches to business management: the total cost concept and the customer service concept. "The total cost concept considers logistics as a cost incurring function, which has to be managed by minimizing total logistics costs. According to the total cost concept, the cost of individual factions need not be at their optimum, but attention must be paid to minimizing the delivery cost of the entire firm." It seems to be an easy task to forget the customer when consumed with the task of controlling cost. To avoid excessive attention to cost control, and focus more on the need of the customer, the customer service approach could be adopted. "In the customer service approach, logistics customer service is split into components or service elements. It is possible for a company to differentiate itself from the competitors by offering better logistics services appreciated by the customers. This value-adding logistics strategy is known as differentiation by logistics." After World War II, Japan had to rebuild totally its industrial base. They were then infamous for poor quality and second rate products. In the 1970s, the Japanese began making quality a priority. This priority was not just invoked at the management level, it descended into the very depths of the manufacturing industry. They had received help from a few American consultants during their rebuilding phase after the war. In j...
