Don Kagey sat exhausted in his car in the YMCA parking lot. He had just won the city-league 40-and-over racquetball tournament. Don had scarcely had time to savor his victory before workplace worries...

Don Kagey sat exhausted in his car in the YMCA parking lot. He had just won the city-league 40-and-over racquetball tournament. Don had scarcely had time to savor his victory before workplace worries encroached on his thoughts. It was Friday evening, which meant that Don had only the weekend to decide whether or not to recommend that Med-Tec pursue SCM as a response to increasing customer demands for customized products delivered just in time. Customers were not willing to pay more for the increased service; indeed, they were relentless in their desire to “squeeze” costs out of their supply base. As Don began the drive home, he reviewed his company’s situation and the month-long investigation he and his team had been through. Don Kagey was vice president of purchasing and operations at Med-Tec, a supplier of disposable medical equipment to the hospital industry. At Don’s urging, Med-Tec had spent the past 2 years implementing sixsigma quality and lean manufacturing. Med-Tech had also increased its use of global sourcing. The results were impressive: Defects were down to 250 parts per million, productivity was up 5 percent, and order fulfillment times had been reduced from 7 to 4 days. Don’s management team was frazzled from the hectic pace they had maintained during the implementations. Despite these improvements, Med-Tec’s best customer, Allegiance Corp., had just approached Don with a request for an entirely new level of delivery performance and customer service. Katie McDonald, senior purchasing manager at Allegiance, had suggested that Med-Tec look at SCM as a possible approach to improving service. Don wasted little time in investigating SCM. He called a couple of friends whose companies faced the same challenges as Med-Tec. The first conversation was with Mark, a friend who worked for a major supplier in the auto industry. Mark was adamant that SCM was just the latest fad and that it would soon disappear from the headlines. Mark compared SCM to TQM, noting that they both had come to “mean everything and nothing at the same time.” Don’s second call was to Cheryl, a friend who worked as a logistics manager for a major electronics company. Cheryl’s first words were, “Without doubt, SCM is one of our most important areas of emphasis. On a scale of 1 to 10, SCM is an 11. It’s clearly the key to our future success or failure.” It seamed clear that SCM was not for every company. Don jotted down a summary note: “SCM can’t succeed without top management commitment.” Two days after his meeting with Katie McDonald, Don had met with his management team to communicate to them Allegiance’s customer service expectations. The team had spent the next 3 weeks evaluating both SCM and Med-Tec’s readiness to implement it successfully. The most important findings were summarized on a white board, as follows: