Abstract
This chapter deals with the question how value-based aspects could be reflected in strategic supply chain (SC) planning, in particular how to determine strategic targets for SC value drivers in a long-term horizon of several years from which a framework for tactical and operational SC planning and control can be obtained. It describes an approach to value-based strategic SC planning, in which long-term targets for company value are disaggregated to annual targets for SC cost and working capital under explicit consideration of planned future sales development. A top down determination of annual targets for SC cost and working capital is combined with a bottom up validation to form a closed planning and control cycle. The planning method, which is derived from a discounted cash flow based model for quantifying value impacts from SC cost and working capital, is discussed thoroughly and illustrated by a numerical example. Aspects of integrating this approach with financial planning and tactical SC planning are outlined.
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This chapter has been previously published as a paper (Brandenburg M, Seuring S (2010) Value-based strategic supply chain planning. In: Kersten W, Blecker T, Lüthje C (eds) Pioneering solutions in supply chain management – a comprehensive insight into current management approaches. Operations and technology management, vol 14. Erich Schmidt, Berlin, pp 185–196) and is reprinted in this dissertation by courtesy of © Erich Schmidt Verlag GmbH & Co. KG, Berlin 2010. The content of this chapter has been presented at the Hamburg International Conference on Logistics HICL 2010 held in Hamburg, Germany, September 2–3, 2010.
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Notes
- 1.
Note: In this chapter, all figures are rounded to integers. Tax rate T and cost of capital WACC are assumed to remain constant in all periods of the planning horizon.
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Brandenburg, M. (2013). Value-Based Strategic Supply Chain Planning. In: Quantitative Models for Value-Based Supply Chain Management. Lecture Notes in Economics and Mathematical Systems, vol 660. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-31304-2_7
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