Global Supply Chain Forum Model

Following yesterday's post, I will comment today on the second most popular SCM model, developed in 1998 by Global Supply Chain Forum (LAMBERT et al., 1998). The model proposed by the GSCF identifies eight key processes that form the basis for supply chain management, as shown in Figure 1. The shared definition and understanding of these processes are of crucial importance for the success of integrated supply chain management.

The idea is that each process runs across functional boundaries, eliminating silos of resources and information within the organization. The silos in this model are characterized by the functional areas of Marketing and Sales, Logistics, Purchasing, Production, Research & Development, and Finance. Each process is subsequently divided into a series of sub-processes aimed at implementing the model (LAMBERT et al..

Figure 1 – Global Supply Chain Forum Framework

Source: LAMBERT et al., 1998

Recognizing the increasing complexity of supply chains, LAMBERT and POHLEN (2001) propose seven steps for validating the GSCF model and understanding how activities multiply between the layers of the supply chain and how they influence each other:

• Map the supply chain from the point of origin of inputs to the point of consumption of goods and services, based on the identification of each existing key relationship;
• Use customer and supplier relationship management processes to analyze each relationship and identify opportunities to capture value in the supply chain;
• Develop “Profit and Loss” statements for customers and suppliers to assess the effect of the relationship on the profitability and shareholder value of the two companies;
• Realign supply chain processes and activities to achieve performance objectives;
• Establish non-financial performance measures that align individual behaviors with supply chain process objectives and financial goals;
• Compare shareholder value and market capitalization of companies to supply chain objectives and revise processes and performance measures as necessary;
• Replicate each of these steps for each relationship in the supply chain.

The GSCF model stresses the importance of a process approach, where all functional areas must work together. For this, it is also essential to develop and strengthen relationships with key customers and suppliers. According to the GSCF model, when all coordination mechanisms between the various functions are in place, the result is an efficient and effective supply chain.

References

LAMBERT, DM; COOPER, MC; PAGH, JD Supply Chain Management: Implementation issues and research opportunities. The International Journal of Logistics Management, v. 9, no. 2, 1998.

LAMBERT, DM; GARCÍA-DASTUGUE, S.; CROXTON, K. An evaluation of process-oriented Supply Chain Management frameworks. Journal of Business Logistics, v.26, n.1, p. 25-51, 2005.

LAMBERT, DM; POHLEN, TL Supply Chain metrics. The International Journal of Logistics Management, v. 12, no. 1, p. 1–19, 2001.