ns a hexagon shape (p. 6), with the nucleus firm in the center core, outside of which there are six functions: Making, buying, selling, technology, inventory, and delivery. The formation of this firm, using both internal and external applications is, of course, the simplest form of the supply-chain. Again, in the simplest terms, he explains the functions of these sectors. For example, in the buying sector, he states that "This does ot mean just getting lower prices. It means determining how to cut order entry and payment costs." (p. 5) He offers the same sort of explanation for the other five functions. While the shape and definitions of functions are obviously the pattern for most business today, it should be regarded as merely the very foundation from which more complex and sophisticated business and supply-chain management functions need to spring. What the curious reader will want tio know, even though it surely appears in later chapters is- how do I use these functions to overcome competitive and global pressures.
Simchi-Levi in particular discusses logistics network configuration in some detail, focusing on the nuts and bolts of warehouse location, sizing and interior space allotment, as well as deciding how many warehouses there should be and which customers should receive merchandize from which ones. Simchi-Levi then points out that increasing the number of warehouses has both good effects, such as better customer service and lower transportation costs from warehouse to customer (outbound); and bad effects, such as higher costs for overhead, setup, inventory and transportation from manufacturer/supplier to warehouse (inbound). Based on accumulated data, algorithms are then provided for exact solutions to the questions raised by the above.
Poirier is primarily concerned with taking the fundamentals of Simchi-Levi's modernized supply chain and melding it with the Internet. Poirier insists that e commerce is already...