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Kurt Y. Liu
SUPPLY CHAIN
ANALYTICS
Concepts, Techniques and Applications

Supply Chain Analytics
Kurt Y. Liu
Supply Chain Analytics

Concepts, Techniques and Applications
Kurt Y. Liu
Adam Smith Business School
University of Glasgow
Glasgow, UK
ISBN 978-3-030-92223-8 ISBN 978-3-030-92224-5 (eBook)

https://doi.org/10.1007/978-3-030-92224-5
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
Switzerland AG 2022
All rights reserved. No reproduction, copy or transmission of this publication may be made without
written permission. No portion of this publication may be reproduced, copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6-10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in
relation to this publication may be liable to criminal prosecution and civil claims for damages
-
This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
To my family, who have always encircled me
with love, patience, and support—my
parents, my wife, and my sons.
—K.Y.L
Preface
Supply chain analytics is an emerging topic in both academia and industries as

using data to get useful insights into effective decision making in supply chain and
logistics management field is gaining strong momentum in recent years. However,
there is a lack of textbooks that specifically focus on applying data analytics in sup-
ply chain management, while majority of available texts on the market are written
for subjects such as business analytics and marketing analytics.
The main objective of this book is to introduce how data analytics and machines
learning can be applied in the supply chain management field to provide meaningful
insights for supply chain and logistics managers in their daily decision making. To
achieve this objective, the book is structured in such a way that the readers can learn
not only the fundamental concepts of supply chain management, but also the rele-
vant data analytics techniques and the applicable machine learning algorithms for
solving practical problems.
A particular focus of this book is on application rather than developing the various
data analytics and machine learning algorithms in that the intended audience of this
book is within the business management domain. Though having a computer science or
mathematics background may have an advantage in understanding the content covered
in this book, it is not essentially required for readers to follow through the book.
When writing this book, I have also tried to draw a clear line between supply
chain analytics and operations research (OR) although these two subjects have
many overlaps. However, OR is a well-established research domain which primarily
involves the construction of mathematical models for optimization problems;
whereas supply chain analytics focuses on the use of massive data and learning from
them to improve decision making for effective supply chain management. We have
only slightly touched upon linear programming for solving optimization problems
in warehousing, logistics network design, and route optimization; other than that, no
further topics from OR are included in the book.
This book is aimed at introductory level of supply chain analytics for those who
have limited background in supply chain management, data analytics, and machine
learning. It does not contain advanced machine learning algorithms and deep learn-
ing techniques and should be appropriate for postgraduate students in business and
management subjects, MBA students, and senior undergraduate students, who have
vii
viii Preface
interests in both supply chain management and data analytics. The book could also
be useful as a reference book for practitioners in relevant industries looking for
learning analytics and digital transformation in their supply chain and logistics
operations.
Each chapter in this book generally contains key learning outcomes, concepts,
techniques, and algorithms as well as practical examples, followed by discussion
questions and keyboard exercise in the end. All the practical examples and analytics
models introduced in this book are developed with Python; however, it does not
prevent interested learners from applying alternative programming languages to
solve these problems. A detailed structure of the data analytics introduced in this
book is revealed in the diagram given below:
For Instructors
All the instructor resources can be found at Palgrave Macmillan’s resource
centre. The additional Python Jupyter notebooks, exercises, and solutions for each
related chapter can be found at our online GitHub repository: https://github.com/
pysca/SCA.
For Students
This book can be used by students who have no programming background; how-
ever, it does not intend to cover all Python basics in programming. Students are
highly recommended to use complementary textbooks while studying this book to
Preface ix
gain a better understanding of Python and its various libraries and packages. In
addition to the online GitHub repository provided above, where students can find all
the Jupyter notebooks, exercises, and solutions for each chapter, there are numerous
free online resources available (e.g., GitHub and Kaggle) for students to practise
their coding and programming skills.
Glasgow, UK Kurt Y. Liu

Acknowledgements
I would like to thank the reviewers whose suggestions significantly helped shape the
structure and contents of the book. I would also like to thank the editors and the
publisher for their efforts and support throughout the process. I am forever grateful
to my former professor and friend at ASU, Prof. Sue P. Siferd, who has always
believed in me and encouraged me to reach higher in my career. She will be
deeply missed.
xi
“The textbook Supply Chain Analytics by Kurt Liu provides an excellent hands-on introduction
to supply chain management and logistics and associated quantitative methods from a data-
science perspective using Python. The book first covers supply chain management basics and
how to get started in data science using Python including data handling, pre-processing and
visualization. Fundamental supply chain activities, data analysis, forecasting and decision
making on the customer and supplier side, in inventory management, and for location and
routing in logistics are introduced. The didactical concept to integrate topical basics and to
present fundamental data analysis and decision support methods with examples coded in Python
gives students a unique introduction to both important areas and the required knowledge and
skills in supply chain analytics. I highly recommend this book for class adoption.”
—Professor Dr Stefan Minner Chair of Logistics and Supply Chain Management,
TUM School of Management, Technical University of Munich, Germany
“Supply Chain Analytics by Kurt Liu combines the essence of supply chain strategy with
decisions taken at strategic, tactical, and operational levels and how data can support these
decisions. Dr Liu makes this title appealing to supply chain students and researchers by
integrating analytics themes with their execution in Python, which is among the top preferred
data science languages. The treatment of data manipulation before any modelling exercise is
commendable since the data from the real world are hardly ever ready to use. It is exciting to
find the state-of-the-art prediction algorithms applied to supply chain problems. This book will
join the reading lists of many supply chain programmes.”
—Prof Dr Emel Aktas Chair of Supply Chain Analytics, Cranfield School
of Management, Cranfield University, United Kingdom
“Data analytics is transforming the practice of supply chain management. This excellent primer
provides an essential introduction of supply chain analytics that can benefit all interested
learners, from novices to experienced ones. It offers an insightful synthesis of supply chain
management and data analytics.
A truly impressive book on the topic that is well developed, very readable, and full of real-life
examples that illuminate the underlying principles and emerging trends. Worth reading and
highly recommended.”
—Benjamin B. M. Shao Professor of Information Systems, Director of the
Digital Society Initiative, W. P. Carey School of Business,
Arizona State University, United States of America
xiii
Contents
1 Introduction�� 1
1.1 What Is a Supply Chain?�� 1
1.1.1 Why Do We Need a Supply Chain?�� 2
1.1.2 Structure of a Supply Chain�� 2
1.1.3 Supply Chain Processes�� 4
1.1.4 Supply Chain Flows�� 6
1.2 Supply Chain Management�� 7
1.3 Business Analytics�� 9
1.4 Supply Chain Analytics�� 12
1.4.1 SMART Goals of SCA�� 13
1.4.2 SCA�� 15
References�� 19
2 Data-Driven Supply Chains and Intro to Python �� 21
2.1 Data and Its Value in SCM�� 21
2.2 Data Source in Supply Chains�� 24
2.3 Big Data�� 30
2.4 Introduction to Python�� 31
2.4.1 Python Downloads and Installation�� 33
2.4.2 Python IDE and Jupyter Notebook �� 33
2.4.3 Essential Python Libraries�� 34
2.4.4 Jupyter Notebook Optimization�� 38
References�� 43
3 Data Manipulation �� 45
3.1 What Is Data Manipulation? �� 45
3.2 Data Loading and Writing�� 47
3.3 Data Indexing and Selection �� 50
3.4 Data Merging and Combination�� 55
3.5 Data Cleaning and Preparation �� 62
3.6 Data Computation and Aggregation�� 67
3.7 Working with Text and Datetime Data�� 75
xv
xvi Contents
4 Data Visualization�� 83
4.1 Data Visualization in Python�� 83
4.2 Creating a Figure in Python�� 85
4.3 Formatting a Figure�� 91
4.4 Plotting Simple Charts�� 93
4.5 Plotting with Seaborn�� 100
4.6 Geographic Mapping with Basemap�� 103
4.7 Visualizing Starbucks Locations�� 106
5 Customer Management �� 113
5.1 Customers in Supply Chains�� 114
5.2 Understanding Customers�� 115
5.2.1 Benefits of a Customer-Centric Supply Chain�� 116
5.3 How to Build a Customer-Centric SC�� 117
5.3.1 Step One: Define Customers�� 118
5.3.2 Step Two: Understand Customers’ Real Needs�� 118
5.3.3 Step Three: Translate Needs into Product Features�� 119
5.3.4 Step Four: Design Supply Chain Processes�� 119
5.3.5 Step Five: Build Efficient Logistics Systems�� 120
5.4 Cohort Analysis�� 121
5.4.1 What Is a Cohort? �� 121
5.4.2 What Is Cohort Analysis? �� 121
5.4.3 Steps for Cohort Analysis �� 122
5.4.4 Cohort Analysis Example in Python�� 123
5.5 RFM Analysis �� 129
5.5.1 What Is RFM?�� 129
5.5.2 What Is RFM Analysis?�� 130
5.5.3 Steps for RFM Analysis�� 131
5.5.4 RFM Analysis Example in Python�� 133
5.6 Clustering Algorithms�� 139
5.6.1 K-Means Algorithm�� 140
5.6.2 Customer Segmentation with K-Means�� 145
5.6.3 DBSCAN�� 151
5.6.4 Gaussian Mixture Model�� 155
References�� 162
6 Supply Management�� 163
6.1 Procurement in Supply Chains�� 164
6.1.1 Vertical Integration�� 164
6.1.2 Outsourcing�� 165
6.2 Supplier Selection �� 168
6.3 Supplier Evaluation�� 171
6.3.1 Supplier Capability Assessment�� 173
Contents xvii
6.4 Supplier Relationship Management�� 174

6.4.1 Managing Tiered Supply Network�� 175
6.5 Supply Risk Management �� 178
6.5.1 Step One: Risk Identification�� 179
6.5.2 Step Two: Risk Assessment�� 179
6.5.3 Step Three: Develop Risk Response Strategies�� 180
6.5.4 Step Four: Continuous Monitoring and Regular Review�� 180
6.6 Supplier Selection Examples�� 182
6.6.1 Coffee Quality Example �� 182
6.7 Regression Algorithms�� 192
6.7.1 Linear Regression �� 192
6.7.2 Support Vector Machines�� 196
6.7.3 Decision Trees�� 202
6.7.4 Cross-Validation�� 206
6.7.5 Random Forests�� 208
6.7.6 Model Fine-Tuning �� 210
6.7.7 Extra-Trees�� 214
7 Warehouse and Inventory Management�� 219
7.1 Warehouse Management �� 220
7.1.1 What Is Warehouse Management?�� 220
7.1.2 Warehouse Management System�� 222
7.1.3 Benefits of WMS�� 223
7.1.4 Warehouse Management Performance Measurement�� 224
7.2 Inventory Management �� 225
7.2.1 What Is Inventory?�� 225
7.2.2 The Purpose of Holding Inventory�� 226
7.2.3 What Is Inventory Management?�� 228
7.2.4 Inventory Management Methods�� 229
7.3 Warehouse Optimization�� 236
7.3.1 Introduction to PuLP�� 236
7.3.2 Warehouse Optimization with PuLP�� 240
7.4 Classification Algorithms�� 243
7.4.1 Logistic Regression�� 243
7.4.2 Classification Performance Measurement�� 248
7.4.3 Dealing with Imbalanced Dataset �� 253
7.4.4 Linear Support Vector Classifier �� 258
7.4.5 Random Forest Classifier�� 260
7.4.6 Boosting Methods for Classification�� 262
xviii Contents
8 Demand Management�� 271

8.1 Demand Management �� 272
8.2 Demand Forecasting �� 273
8.3 Time Series Forecasting�� 275
8.3.1 Time Series Components�� 275
8.3.2 Traditional Time Series Forecasting Methods�� 277
8.4 Machine Learning Methods�� 302
8.4.1 Univariate vs Multivariate Time Series�� 302
8.4.2 Random Forest Regression �� 303
8.4.3 XGBoost �� 308
8.4.4 Learning Rate�� 311
9 Logistics Management �� 319
9.1 Logistics Management�� 320
9.1.1 What Is Logistics Management?�� 320
9.1.2 Main Logistics Management Activities�� 322
9.2 Modes of Transport in Logistics �� 323
9.2.1 Chargeable Weight�� 323
9.2.2 Product Value Density�� 325
9.3 Logistics Service Providers�� 327
9.3.1 Freight Companies�� 327
9.3.2 Freight Carriers �� 328
9.3.3 Freight Forwarders�� 328
9.3.4 Third Party Logistics (3PL) providers�� 328
9.3.5 Fourth Party Logistics (4PL) Companies�� 329
9.4 Global Logistics Management�� 329
9.4.1 Incoterms�� 331
9.5 Logistics Network Design�� 332
9.5.1 Location Decisions�� 333
9.5.2 Centralization vs De-centralization�� 335
9.5.3 Logistics Network Design Example with PuLP �� 337
9.6 Route Optimization�� 342
9.6.1 Travelling Salesman Problem �� 342
9.6.2 Vehicle Routing Problem�� 348
9.6.3 Route Optimization Example: The Cambridge
Pizza Store�� 350
Index�� 371
About the Author
Kurt Y. Liu is an Associate Professor of Supply Chain Analytics at the Adam

Smith Business School, University of Glasgow. He teaches Executive, MBA, gradu-
ate, and undergraduate students on supply chain, logistics, and operations manage-
ment. His research focuses on supply chain analytics, supply network configuration,
and sustainable supply chain management. He studied at Waikato Management
School, University of Waikato, New Zealand, and W.P. Carey School of Business,
Arizona State University, USA, for his bachelor’s degree in Supply Chain
Management. He has Master’s in Logistics Management and Master’s in Transport
Management from the Institute of Transport and Logistics Studies (ITLS), University
of Sydney, Australia, and a PhD in Engineering from the University of Cambridge,
UK. He is a Fellow of the Higher Education Academy (FHEA) and a Chartered
Member of The Chartered Institute of Logistics and Transport (CILT), UK.
xix
Introduction
1
Contents
1.1 hat Is a Supply Chain?
W 1
1.1.1 Why Do We Need a Supply Chain? 2
1.1.2 Structure of a Supply Chain 2
1.1.3 Supply Chain Processes 4
1.1.4 Supply Chain Flows 6
1.2 Supply Chain Management 7
1.3 Business Analytics 9
1.4 Supply Chain Analytics 12
1.4.1 SMART Goals of SCA 13
1.4.2 SCA 15
References 19
Learning Objectives
• Understand the supply chain structures and its major components.
• Describe the three supply chain flows and explain their importance.
• Explain why there is a supply chain and why we should manage it.
• Understand the concepts of business analytics and explain its four
major types.
• Explain what supply chain analytics is, its main benefits, and SMART goals.
1.1 What Is a Supply Chain?
The term supply chain has been widely used today to represent the complex net-
works and links of businesses entities to make and deliver products and/or services
to customers. Similar terms exist, for example, demand chain (from the customer
© The Author(s), under exclusive license to Springer Nature 1

Switzerland AG 2022
K. Y. Liu, Supply Chain Analytics, https://doi.org/10.1007/978-3-030-92224-5_1
2 1 Introduction
perspective), supply network, value chain or value network, whilst the latter focuses
more on value-adding/creating activities. Despite having different emphases, they
basically mean the same thing, i.e., supply chain. In reality, a supply chain is a
very complex system consisting of multiple suppliers, distribution centres, ware-
houses, and retailers, etc. Thus, a supply chain is not a simple chain but rather a
supply network. In this book, we use the terms supply chain and supply network
interchangeably.
Within a supply chain, there must be a focal firm, who is the key product and/
or service provider, albeit it may not actually make any physical goods or delivery
service itself. For instance, iPhone is designed by Apple Inc., however the company
itself does not actually manufacture the product. As a focal firm, Apple Inc. outsources
the manufacturing activity to its suppliers such as Foxconn, which makes iPhones in
China and then ships the finished products to the US market or other places around the
world where there is customer demand. In other words, the focal firm is the initializer
of a supply chain, with the aim of making and delivering products and/or services to
customers. Without the focal firm, the supply chain would not exist.
1.1.1 Why Do We Need a Supply Chain?
Let us consider the case of making a car. A typical car consists about 30,000 parts
made from different raw materials and various manufacturing processes. Imagine
that if a car maker could produce everything in-house itself, from raw material
extraction, refinery, parts and components making, to painting, assembly, and final
products delivery to customers, then it may not need any suppliers, distributors,
and dealers, etc. In reality, this is not possible! The car maker would have to focus
on its core competences (e.g., car design and final assembly), and outsource non-
competent and/or non-value activities (e.g., making car stereos, delivery, etc.) to
other manufacturers who are specialized in certain processes and activities. By out-
sourcing, car makers can substantially reduce costs and maximize profits.
In short, if we can produce everything by ourselves, supply chain would not
exist. However, there is no such magic in the world. Every business, no matter big
or small, would need a supply chain to delivery products and/or services (directly
or indirectly) to customers. A sole service provider may have a very simple and
short supply chain, but once there exists a buyer–supplier relationship, there is a
supply chain.
1.1.2 Structure of a Supply Chain
A typical supply chain may include all the parties who are, directly or indirectly,
involved in the making and delivering of products and/or services to the end custom-
ers. For example, an automotive supply chain may consist of hundreds of suppliers
and service providers, who supply the automakers, and once cars are produced, they
will be shipped to downstream wholesalers and car dealers, and finally sold to cus-
tomers. Figure 1.1 represents a simplified supply chain structure.
Tier 3 Suppliers ... Tier 2 Suppliers Tier 1 Suppliers Tier 1 Customers Tier 2 Customers ... End Customers
Raw Material
Supplier
Parts
Supplier Retailers Customers
Component Di
re
Supplier ct
su
ly
1.1 What Is a Supply Chain?
pp
pp
ly DCs
su
Parts
ct
Supplier
re
Di
Retailers Customers
Raw Material Paint
OEM
Supplier Supplier
Manufacturer
Parts
Supplier
DCs
Service
Supplier
Retailers Customers
Parts
Supplier
Raw Material
Supplier
UPSTREAM FOCAL FIRM DOWNSTREAM
Fig. 1.1 Structure of a supply chain

3
4 1 Introduction
There are several terms that are commonly used in a supply chain. From a focal
firm’s point of view, a supply chain has the upstream, which are mainly comprised
of all the suppliers. In the upstream, there are first-tier suppliers, who directly sup-
ply products and/or services to the focal firm. The first-tier suppliers also have their
own suppliers (i.e., suppliers’ suppliers), who are often referred to second-tier sup-
pliers of the focal firm. A supply chain can have multi-tier suppliers in the upstream,
depending on the business types or sectors, i.e., from first tier, second tier, third tier,
etc., all the way up to the original raw material suppliers.
The downstream of a supply chain is often regarded as the customers of the focal
firm. Likewise, it can have first-tier customers, second-tier customers, and all the
way down to the end customers. Customers can be both internal and external ones.
For instance, when a finished car comes off its production line, it can be shipped to a
regional distribution centre (DC) before being sent off to a specific car dealer. In this
case, the DC can be called a first-tier customer, though it may be owned and operated
by the car maker itself. The car dealer can be named second-tier customers, and an
individual car buyer from the car dealer is the third-tier customer or the end customer.
1.1.3 Supply Chain Processes
Another useful perspective to look at supply chain is through the process angle. A
supply chain can be viewed as inter-connected processes wherein various involved
members work together to acquire resources (e.g., raw materials, information, parts
and components), convert them into finished products and/or services through spe-
cific transformation processes, and delivery the products and/or services to fulfil
customer expectations (see Fig. 1.2).
Material flow Raw materials, parts, semi-finished/finished products, etc.
Information flow Capacity, production plans, delivery schedules, etc.
Finance flow Credits, payments terms, invoice, etc.
Suppliers Strategic Planning Customers
Procurement Inbound Production Outbound Order After-sale

logistics logistics fulfillment service
Strategic Alignment
Cash, payments, ect. Finance flow

Sales, demands, orders, production schedules, inventory, etc. Information flow
Returns, repairs, recycling, refurbishing, etc. Material flow
Fig. 1.2 Supply chain as processes to fulfil customer demand

1.1 What Is a Supply Chain? 5
These key supply chain processes include procurement (e.g., contract negotia-
tion, supplier selection and evaluation), logistics (inbound and outbound), internal
production (i.e., transformation process), order fulfilment (e.g., demand manage-
ment, order processing, and order delivery), and after-sale service (e.g., warranty,
repairs, returns, and recalls).
A supply chain can be viewed as inter-connected processes wherein various

involved members work together to fulfil customer expectations.
Each supply chain process contains a variety of activities, which are summarized
in Table 1.1. Note that there are different views on the definitions of logistics and
supply chain. In this book we treat logistics as a part of supply chain processes,
which mainly deals with the physical movement and distribution of goods and
services.
Supply chain processes are not isolated but are rather boundary-spanning
activities across various business functions within an organization, for instance,
research and development (R&D), product design, accounting and finance, sales
and marketing, etc. Supply chain excellence cannot be achieved without strong
collaboration and coordination among internal departments. The active involve-
ment of supply chain department in strategic decision making can bring enormous
Table 1.1 Examples of supply chain activities

Inbound Outbound Order After-sale
Procurement logistics Production logistics fulfilment service
• Make • Materials • Internal • Deliver • Order • Warranty
purchasing receiving operations finished receiving and
decisions from manage- goods to and repairs
• Select and suppliers to a ment customers recording • Installa-
evaluate focal firm’s • Production • Packaging • Order tion
suppliers factory/plants planning • Route and processing • Product
• Negotiate • Route and transport • Order returns
contracts selection scheduling mode picking and
and form • Transport • Quality selection • Order recalls
partnerships mode improve- • Warehous- checking • Spare
with selection ment and ing and and parts
suppliers • Fleet control storage packing • On-site
• Develop management • Business • Inventory • Ship orders support
strategic • Warehousing process manage- to end • Mainte-
alliance with and storage engineering ment, etc. customers nance
suppliers • Inventory • Cost • Customer • User
• Monitor and management, control, etc. account training
evaluate etc. manage- • Recycle
suppliers’ ment and reuse
perfor- • Demand
mances, etc. manage-
ment
6 1 Introduction
benefits to the focal firm. For example, effective production planning and schedul-
ing requires accurate demand forecasting, which can only be realized if there is
strong collaboration between internal operations and the sales and marketing team
to share timely demand information. When launching new products to the market,
actively involving the procurement team in the product design process can assist
in searching for competent and reliable suppliers who are capable of delivering
required components for making the new products.
When a focal firm initially designs and configures its supply chain, it needs to
decide carefully on the types of supply chains that align well with its competitive
strategies and core competences. For instance, a cost leadership focused business
may choose to adopt an efficient supply chain design in order to drive cost down
in its supply chain processes. Strategic planning and alignment of supply chain
processes with a firm’s competitive strategies can ensure effective supply chain con-
figurations for realizing business objectives and sustained competitive advantages.
For example, when there are stable, high volume, low variety, and less uncer-
tainties in demand, a lean supply chain configuration that focuses on efficiency
and waste reduction might work best, whereas an agile supply chain may excel in
a less predictable environment where there are high variety, less stable, and high
uncertainties in demand (Christopher and Towill 2000). In some sectors, a ‘leagile’
supply chain configuration (see Fig. 1.3), combining the lean process and agile pro-
cess with a decoupling point in the supply chain is often used to improve efficiency,
responsiveness, and flexibility to satisfy various customer demands, such as in the
automotive industry.
1.1.4 Supply Chain Flows
Within a supply chain, there are three critical flows that underpinning the success
of a supply chain management, namely materials flow—the physical movement of
raw materials, parts and components, semi-finished and finished products; informa-
tion flow—all the relevant data and information communicated and shared among
supply chain members including, for example, sales and demand data, production
plans and schedules, delivery date, inventory levels, and available production capac-
ities; financial flow—the related transactions about money payment, credit, cash,
and invoice among supply chain members.
As illustrated in Fig. 1.2, all three flows can go bi-directional in the supply chain.
The vital task of achieving supply chain excellence is to ensure the smooth, accurate,
Decoupling
Point
Material Lean Agile Satisfied

Supply Process Process Customer
Fig. 1.3 A leagile supply chain configuration

1.2 Supply Chain Management 7
and timely movement of the three supply chain flows. In addition, although which
might not be so visible and formally recognized, the inter-firm power can be another
important supply chain element. Careful exertion and manipulation of supply chain
power can play a critical role in establishing effective and integrated buyer–sup-
plier relationships for achieving high performance in a supply chain (Benton and
Maloni 2005).
1.2 Supply Chain Management
In previous section, we have introduced the basics of a supply chain, including its
concepts, key components, processes, and flows. However, what is supply chain
management (SCM) and why do we need to manage the supply chain? These are
important questions to address.
Supply Chain Process at Starbucks
Consider yourself walking into a Starbucks and ordering a cup of coffee. The
supply chain process starts with a staff taking your order and payment. Starbucks
then prepares your order, using stored coffee beans, fresh milk, and other ingre-
dients, through its unique coffee making process at the shop, and finally hands
over the gourmet coffee to you in a timely manner.
The whole process may seem to be a very simple and straightforward process.
However, to delivery your order, Starbucks needs to make sure they have enough
coffee beans and other ingredients in stock to meet daily customer demands. At
the background of its operations, each store sends point-of-sales data and replen-
ishment orders to regional warehouses or distributors, who deliver the replenish-
ment orders to the store. Starbucks supply chain team must accurately forecast
the demands, source the right amount and premium quality of coffee beans, make
timely production in its roasting centres, and then rapidly deliver the beans to
each of its branch stores.
Starbucks also needs to establish a good relationship with coffee farmers and
key suppliers, which can not only help the firm to secure high-quality supplies of
coffee beans and other ingredients, but also drive the cost down. Considering its
over 25,000 stores in six continents, supply chain management at Starbucks is
not an easy task at all. It has a massive supply network, riddled with complexities
and uncertainties. For the operator of a small commercial enterprise, Starbucks
may have a lot of more urgent business priorities than its supply chain manage-
ment. However, it must ensure an affordable movement of ingredients, materials,
products, and services to make Starbucks offerings spectacularly unforgettable to
its customers (Leblanc 2018). ◄
ccSupply chain management is defined as the systematic and strategic integration

and coordination of various business functions and processes across the supply
chain to create value for the ultimate customers in an effective and efficient manner.
8 1 Introduction
It encompasses the management of internal and external supply chain processes,

the involved supply chain flows, the buyer–supplier relationships, and the structures
of the networks of inter-connected businesses as well as making strategic planning
and alignment of supply chain strategies with the overall business objectives.
Supply chain management (SCM) aims to deliver enhanced customer service
and experience through synchronized management of the flow of physical goods,
associated information and finance, from point of origin to point of consumption.
A simpler way to put it, SCM aims to make the right products and services to the
right customers, at the right cost, right quantity, right quality, right time, and
right place (i.e., 7Rs of SCM). Effective SCM should align closely with a firm’s
overall business strategy (e.g., cost leadership vs. differentiation) and improve a
firm’s competitive advantage and profitability by enhancing overall customer satis-
faction (Fig. 1.4).
The management philosophy of SCM extends traditional internal business func-
tions and processes by bringing supply chain partners together with the common
goal of optimization and efficiency (Tan et al. 1998). In today’s highly competi-
tive environment, the increasing reliance on supply network relationships, shift-
ing channel power, and globalization necessitate the use of SCM for enhanced
competitiveness.
Supply chain offers a rich venue for businesses to seek strategic access to com-
plementary resources, knowledge, and technologies from supply chain partners and
7 Rs of SCM
Supply Chain Management
Right Customer
Right Place
Right Quality
Right Cost Right Time
Right Quantity
Right Product
Fig. 1.4 7Rs of SCM

Examples:
Overall Cost Leadership Supply chain related Sustained supply chain

(e.g., distribution cost competitive Dynamic view
related competitive
reduction, efficient and advantage
reliable supply) advantage
Through strategy (VRIN)

implementation, learning-
by-doing, practicing Distinctive
Operational Excellence SCM e.g., Lean supply
(e.g., lean supply chains) Supply chain chain capability
Strategies
capabilities
(Superior/higher-level capabilities)
Through constant
deploying, learning-by-
e.g., supply chain e.g., enhanced supply chain
integration, SCM Supply chain doing, practicing
Renewed/strengthened integration and SCM
skills/knowledge, SCM IT/IS capabilities supply chain capabilities skills/knowledge
support, flexibility & resources Dynamic view & resources
(Widely-held functional capabilities) (Functional/lower-level capabilities)
Fig. 1.5 Developing supply chain capabilities for competitive advantage
thus developing unique capabilities that are extremely valuable, rare, inimitable,
and non-substitutable (VRIN), i.e., the resource-based view of the firm (Barney
1991). Organizations should focus on continuously developing their specific sup-
ply chain capabilities that can support their SCM strategies for achieving sustained
competitive advantages in the fast-changing and dynamic business environment
(Fig. 1.5).
1.3 Business Analytics
When surfing on the internet for some products that you want to buy, you probably
have seen the ‘recommended for you’ advertisements, popping up somewhere at the
bottom of an article or on either side of a social media page. When searching for
your favourite videos on YouTube, you are more likely to get similar recommended
contents for you. Likewise, when shopping on eBay, you might get ‘items for you’
ads directly sent to your email address, which are most likely to interest you based
on your previous search or purchase history.
Sometimes, these marketing efforts can get it right and you are tempted to buy
the recommended items; while sometimes you are not bothered at all, because the
recommendations are not relevant. This is one of the most widespread forms of
advertising on the internet, and you probably experience it every day. You might
wonder how these companies know what you want and are able to identify relevant
content for each individual customer? The answer lies in the algorithms that are
developed by content recommendation platforms for marketing analytics.
As the advancement of computing power, businesses today have the opportunity
to gain better understandings of their customers by applying advanced analytical
methods into their daily operations. The surging adoption of smart technologies
in many areas around our daily lives and in the manufacturing sectors has boosted
the availability of massive data source. For instance, consumer data generated from
point-of-sales, online orders, payments through smart devices, search engines,
10 1 Introduction
and social media, can be used to better understand customers’ shopping behaviour
and make future predictions. Well-developed analytics on the consumer data can
therefore lead to improved product design, better advertising and pricing strate-
gies as well as more accurate demand forecasting, which can subsequently result
in enhanced operation efficiency, increased customer satisfaction and profitability.
Example
The story of Amazon against Walmart in e-commerce wars (Dastin 2017) can be
an excellent example of how giant retailers use advanced analytics in determin-
ing pricing strategies. Amazon.com itself gathers enormous amount of data on
purchases made by its customers every day. The company analyses customers’
purchases, shopping patterns, browsing history and demographics information,
etc., and uses some advanced algorithm to come up better product recommenda-
tions to its customers.
In early 2017, the programme developed by Walmart engineers to track prices
on Amazon.com several million times a day suddenly stopped working. This was
because Amazon had developed a new tactic to block these programmes, com-
monly known as ‘bots’. Losing access to Amazon’s data was not a small issue, as
Walmart relies on the data to determine its listings accordingly. A tiny difference
in pricing can mean losing a sale. Whether or not Walmart eventually got back on
track to retrieve Amazon’s data is out of our interest, but what we can learn from
the case is that big retailers can use smart and advanced analytics to track what
their rivals are doing and determine better pricing strategies in the competition. ◄
ccBusiness analytics is the application of statistical techniques and programming

in the process of capturing, storing, sorting and transforming data into insightful
knowledge and information for effective business decision making.
Business data analysts can use advanced computing methods and tools to build
analytics models to understand current business situations, predict future states, and
offer best possible business solutions and recommendations. Business analytics can
be categorized into four basic types as described in Fig. 1.6 below.
1. Descriptive analytics. Typically use a real-time dashboard to visualize, present,

and report what is going on based on collected data. Examples include sales
performance for various product categories, financial performance for past
months, and customer categories based on their shopping patterns and styles.
2. Diagnostic analytics. The use of data to explore, determine, and explain what
has happened and why something happened. Examples include quality monitor-
ing with statistical process control and maintenance engineers using diagnostics
data to identify the cause for a jet engine failure.
3. Predictive analytics. The use of data to discover and identify patterns and trends
to predict what will happen in the future. Examples include aggregate demand
forecasting based on historical sales data and specific products purchase predic-
tion based on customers’ previous shopping history and patterns.
Four Types of Business Analytics

DESCRIPTIVE ANALYTICS
The common use of data to catagorize,
report and visualize what has happened,
current business performance, status, etc.
ts Vis
por ery
ual
iiza
DIAGNOSTIC ANALYTICS Re Qu tion
The use of data to understand and explain
what happened and why it happened etc. Ca
usa
l re
y lati
o ver ons
PREDICTIVE ANALYTICS c hip
Categ
dis Co s
Data rre
lati
The use of data to analyze patterns in the on
orizati
past and predict the future, i.e. what will
ing
Regre
happen?
ast
on
rec
Patte
Fo
PRESCRIPTIVE ANALYTICS
ssion
Sim
rn ma
The use of data to make best possible ula
tion
analy
recommendatios. Op
tim
tching
iza
tion
sis
Fig. 1.6 Four basic types of business analytics
4. Prescriptive analytics. The use of data to reveal what actions should be taken
and make best possible recommendations for next steps. Examples include the
use of social media data, types of communications, reviews, comments to deter-
mine the best marketing campaign strategies, pricing optimization, and best
product design features; delivery route optimization based on customer loca-
tions, traffic information, road works, etc.; safety stock and inventory level rec-
ommendations for different stock keeping units (SKUs).
In practice, different business analytics types are not mutually exclusive, but can
be used simultaneously or in sequence to provide best insights for effective decision
making. For example, recent data from an express courier reveal that the company’s
on-time delivery rate has significantly dropped (descriptive analytics). Data analysts
at the company have explored that the main cause of the delays is because of the
dramatic surge in demand during holiday seasons (diagnostic analytics). It is also
predicted that the delays could get even worse if no immediate actions are taken
(predictive analytics). To ensure the delivery of all parcels within the promised time
window, the analysts suggest that the company hire 30 extra part-time truck drivers
in the festive season to cope with the increasing demand (prescriptive analytics).
More advanced business analytics applies human-like intelligence, combining
machine learning and artificial intelligence (AI) techniques to learn from data and
progressively improve performance on a specific task and then drive insights over
time based on hypothesis engines, i.e., cognitive learning or cognitive analytics.
Cognitive analytics is capable of providing real-time answers and personalized
12 1 Introduction
services by searching and learning through massive amounts of data and making
sense of context. Though cognitive analytics has its many applications, its ultimate
objective is to improve business decision making with more reliable and accurate
prediction and recommendations.
In short, business analytics has been widely adopted in various industries and
businesses. Companies like Nike, Coca-Cola, Haier, Alibaba.com, and PayPal have
all applied businesses analytics in different areas within their business to deliver
superior performances and achieve competitive advantages.
1.4 Supply Chain Analytics
One of the most important and fast-growing areas for the application of business
analytics is the supply chain. Supply chain analytics is simply defined as the appli-
cation of machine learning and data analytics techniques in different stages of a
supply chain to improve the overall performance of SCM to meet/exceed custom-
ers’ expectations. The effective use of supply chain analytics (SCA) is considered a
core supply chain capability, with which a firm can achieve superior performance
and sustained supply chain related competitive advantages.
• “To improve the efficiency of the entire supply chain, we want to take the
emotion out of strategic decision-making and let data do the talking.”
—Homarjun Agrahari, Chief Data Officer, MODE Transportation
Example
For example, Hanesbrands Inc. is an apparel manufacturer and marketer based in

the USA, which includes iconic brands such as Champion and Bali. The company
has adopted supply chain analytics to determine the likelihood of stockout at a
particular time, using supply chain data from external and internal sources. If an
inventory stockout is predicted, prescribed actions will be triggered, for example,
resequencing manufacturing and purchase orders and changing transport mode to
make quicker deliveries. With the effective support from its SCA capability,
Hanesbrands Inc. is able to react quickly to supply chain signals and balance miti-
gation cost with the benefits to the company (Bowers et al. 2017). ◄
cc A survey of more than 1000 supply chain leaders was recently administered
by Logility, a supply chain solution company and APICS1 to uncover the
priorities and challenges firms face as they embrace analytics, big data, and
1
APICS is the Association for Supply Chain Management, www.apics.org.
machine learning (Logility 2018). The results identify that faster, more
accurate, and unique fulfilment is a top supply chain priority moving forward;
however, to achieve that, companies must have the ability to access the right
supply chain information when and where they want it, and the ability to
derive quick insights from the data. Also, among the highlights:
• 36% believe that a top driver for their analytics initiatives is the opportu-
nity to optimize inventory to balance supply and demand.
• 30% identify a top business priority moving forward is the need to respond
to customer mandates for faster, more accurate, and unique fulfilment.
• 28% see a key benefit of adopting advanced analytics initiatives is the
ability to blend data from multi-systems for complete supply chain
visibility.
• 19% say they want to leverage machine learning to improve forecast
accuracy.
There are increasing amounts of available data sources in today’s supply chains.
If organizations can capture the value hidden in those data with effective SCA and
provide real-time insights for daily operations, certainly they can expect to reduce
uncertainties and complexities in their SCM with enhanced supply chain traceabil-
ity and visibility. As a result, those organizations that have strong SCA capabilities
can realize superior supply chain performance and a sustained competitive advan-
tage can be expected.
The areas of where SCA can be applied are many along the supply chain. For
example, we can use SCA to understand how customers interact through various
channels and offer more personalized product designs. We can use SCA to optimize
inventory and deliver products based on real-time actual demand. Also, SCA can be
applied to determine the locations of warehouses and optimize delivery routes to
satisfy customers at the best place possible, in the shortest time possible and at the
lowest cost possible.
With the aid of SCA, better insights, visibility, and transparency can be attained
in all the key supply chain processes. The associated benefits of applying SCA
include:
• Enhance understanding of customer requirements

• Improve efficiency and reduce operational costs
• Minimize lead time
• Improve product/service quality
• Optimize distribution networks
1.4.1 SMART Goals of SCA
To achieve a highly effective and efficient level of SCA capability, supply chain
managers should always keep in mind that SCA should be SMART (see Fig. 1.7).
14 1 Introduction
Simple • SCA models need to be as simple as possible, and can provide

specific and easy to understand solutions
• The SCA solutions need to be meaningful, which can offer useful

Meaningful
insights into effective decision making
Actionable • The SCA solutions need to be actionable, which can be

practically adopted to fix supply chain problems
• SCA also needs to be reliable, providing consistent and trustworthy

Reliable solutions for effective SCM.
Timely • SCA needs to perform timely analysis and results to solve fast-
changing problems/issues faced by supply chain managers.
Fig. 1.7 SMART goals of SCA
• SCA needs to be as simple as possible and can provide specific and easy-to-
understand solutions. As Richard Daigle, group director for Automation and
Analytics at Coca-Cola, stated that ‘analytics supply chain models must be sim-
ple and transparent, yet effective’ (Bowers et al. 2017). If the SCA models get
too complicated and solutions are difficult to understand, it is more likely that
supply chain managers will not use it. In other words, the simpler the model and
the more understandable the specific solutions it provides, the greater the likeli-
hood that it will be adopted.
• SCA needs to create meaningful solutions, which can offer useful insights into
effective decision making in SCM. SCA analysts should have a deep and thor-
ough understanding of supply chain processes in order to build the right models
to tackle the specific problems in SCM. Otherwise, one ‘can end up with nothing
more than fun and interesting facts’, observed Ben Martin, chief officer, advanced
analytics and global planning at Hanesbrands (Bowers et al. 2017).
• The SCA solutions need to be actionable, which can be practically adopted to
fix specific supply chain problems. To achieve this, again SCA professionals
should develop a complete and comprehensive knowledge of supply chain pro-
cesses. Otherwise, the SCA solutions may become irrelevant, more problems
than actionable solutions will result.
• SCA needs to be reliable, which can provide consistent and trustworthy solu-
tions for effective SCM. SCA should not only create simple, easy-to-understand,
meaningful, and actionable solutions, but also produce something that is reliable,
accurate, and consistent over time. No matter how the business environment
changes, the analytics models developed by SCA professional should be resil-
ient, robust, and adaptable to the uncertainties, and provide insights that can be
trusted by the managers.
• SCA needs to generate timely results and solutions. To cope with the fast-
changing environment, problems, and issues faced by modern supply chain man-
agers, SCA must be able to generate effective solutions and insights in a timely
fashion. Moreover, effective SCA should take a more proactive stance to prevent
problems, rather than being reactive to fix problems.
The SMART goals set the foundation for effect SCA in supporting superior
supply chain performance. In addition, achieving effect SCA requires top man-
agement team commitment and support. Without the support from senior exec-
utives, it would be very difficult for organizations to achieve a higher level of
SCA capabilities. There also should be a supportive culture created both within
an organization and with its supply chain partners, in which users fully trust and
embrace supply chain analytics in their daily operations and planning, as well as
strategic decision making.
1.4.2 SCA
The subject of supply chain analytics has overlapped with other domains such as
Management Science, Operations Research, and Decision Science. In particular,
management science (MS) focuses on the application of scientific methods, data
and math to the study of management, with strong intersections with business, eco-
nomics, engineering, and other fields. When management science is used to solve
specific problems in the context of production and manufacturing (i.e., operations
management), or provide solutions for supply chain management, it becomes the
subject of operations research (OR). OR involves the construction of mathematical
models, and through the application of optimization, simulation, queueing theory,
and other stochastic models, to make better decisions. OR also has strong links to
computer science and analytics. Decision science (DS) draws upon the methods and
techniques from both management science and analytics as well as design thinking
and behavioural science to help organizations make better decisions.
Often it is hard to draw clear lines between supply chain analytics (SCA) and the
other two subjects (i.e., OR and DS), depending on the business context and the spe-
cific problems to be solved. However, one may note that OR places strong emphases
on mathematical modelling and optimization, whilst SCA explores and learns from
data to find answers to specific supply chain related problems. The Venn diagram
below displays the relations of these subject domains (Fig. 1.8).
In this book, we focus on the application of SCA on some of the key supply
chain processes and activities, including customer management (in Chap. 5), sup-
ply management (in Chap. 6), warehouse and inventory management (in Chap. 7),
demand management (in Chap. 8), and logistics management (in Chap. 9). We will
also touch upon some OR optimization techniques such as linear programming in
16 1 Introduction
Fig. 1.8 Intersections

between SCA and other
domains
Supply Chain Management
/Operations Management
Operations Supply Chain

Research Analytics
Decision
Management Science Science Business Analytics
later chapters, however they are not the primary focus of this book and will only be
introduced briefly. Other areas such as sales and marketing, product development,
and internal factory operations (i.e., operations management) are not considered key
supply chain processes, and thus are excluded in this book.
Summary of Learning Objectives

1. Understand the supply chain structures and its major components.
Supply chain is the term that we use to describe the inter-connected busi-
ness networks and links in the making and delivering products and/or ser-
vices to customers. A supply chain or supply network typically involves a
focal firm which is the key products and/or services provider. We use the
term ‘upstream’ to describe the suppliers who directly or indirectly supply to
the focal firm. It may have multiple tiers/echelons in the upstream. Similarly,
we use the term ‘downstream’ to describe the customers of the focal firm,
which may also involve multi-tier structures (i.e., tier-1, tier-2…) The key
components of a supply chain involve the various processes from procure-
ment to after-sale service as well as the supply chain flows.
2. Describe the four supply chain flows and explain their importance.
The commonly known three flows within a supply chain (i.e., materials
flow, information flow, and financial flow) are regarded as supply chain flows.
We described the meaning of each as well as their flow directions. ‘Power’
can be another important supply chain element, which can constantly change,
influence and govern the buyer–supplier relationship. To achieve effective
and efficient SCM, organizations must ensure the smooth, accurate, and
timely movement of supply chain flows as well as a careful exertion of
‘power’ in fostering a good and effective buyer–supplier relationship.
3. Explain why there is a supply chain and why we should manage it.
We used the automotive supply chain as an example to illustrate why
we need a supply chain. This is because in reality we cannot make every-
thing in house. Even if it is possible, it might not be the best option, con-
sidering the time, cost, technological constraints, etc. Therefore, we should
look for business partners who can make and supply parts/services to us
more efficiently and effectively. A supply chain can be very short and sim-
ple, but also can be very long and complex, depending on business types.
The reason why we need to manage a supply chain is because we need to
maintain a smooth supply of goods and/or services to satisfy our custom-
ers, with the 7Rs of SCM objectives, i.e., make and deliver the right prod-
uct and service to the right customers, at the right cost, right quantity, right
quality, right time, and right place. In addition, different organizations may
have different business objectives and strategies (e.g., cost leadership and
differentiation), therefore they will need to manage and design the best
supply chains that can align closely with their business objectives.
4. Understand the concepts of business analytics and explain its four
major types.
The use of data analytics is getting strong momentum in today’s busi-
nesses. Business analytics is defined as the application of statistical tech-
niques and programming in the process of capturing, sorting, sorting and
transforming data into insightful knowledge and information for effective
business decision making. With the support of business analytics, organiza-
tions can expect to better understand their customers, design and make prod-
ucts or services that attract the customers most and improve operation
efficiency, customer satisfaction, and profitability. There are four major
types of business analytics, including descriptive analytics, diagnostic ana-
lytics, predictive analytics, and prescriptive analytics. They can be used
either separately or simultaneously, but the ultimate aim of their application
is to provide solutions and meaningful insights for effective decision making.
5. Explain what supply chain analytics is, its main benefits, and
SMART goals.
An important and fast-growing area for the application of business ana-
lytics is the supply chain. Supply chain analytics is defined as the applica-
tion of data analytics techniques in different stages of a supply chain to
improve the overall performance of SCM. To manage the supply and
demand more effectively, with enhanced traceability, transparency, and
visibility in a supply chain, SCA plays a critical enabling role. Companies
that have strong SCA capabilities can expect to achieve superior supply
chain performance and a sustained competitive advantage. Nevertheless, a
strong SCA capability does not necessarily mean a complex model or
algorithm to be developed but SMART. The SMART objectives suggest
that SCA be simple, meaningful, actionable, reliable, and timely.
18 1 Introduction
Discussion Questions
1. What is a supply chain? Why is there a supply chain? Can you think of a busi-
ness which does not have a supply chain?
2. Can you give examples of supply chain flows and explain why they are impor-
tant to achieving supply chain excellence?
3. Explain what supply chain management should involve and discuss why are
the 7Rs objectives important to successful supply chain management?
4. Can you give any examples of business analytics in practice? How can differ-
ent types of business analytics be used to support effective decision making
in business?
5. Discuss the possible applications of SCA in different stages of a supply chain
and why are the SMART objectives are important?
Case Study: Amazon’s Anticipatory Shipping

From 2-day shipping, to next day, the same day, and even within next hour,
Amazon fulfilment has been at an uncatchable pace to win customers, bestow-
ing the company a massive advantage over its rivals in the online retail busi-
ness. Speed is everything in today’s e-commerce as customers will not tolerate
on your delays anymore. On the Christmas eve of 2013, Amazon made one
step ahead further by successfully obtaining the patent, officially known as
‘method and system for anticipatory package shipping’.
Amazon describes it as a way of shipping products to the destination geo-

graphical area without completely specifying the delivery address at time of
shipment. The packages could wait at depots or on trucks until a customer
order arrives. If implemented well, the system could help the company to
boost sales and potentially reduce shipping, inventory, and logistics costs.
However, this is all reliant on the accurate and timely prediction of custom-
ers’ orders.
But how? According to Amazon, a well-defined forecasting model is bound
to provide decision support for speculative shipping of items, using data from
References 19
Amazon customers’ previous shopping histories, links clicked, searched

items, wish lists, etc. Amazon collects troves of data about its customers,
which can be sued to predict what its customers want, when and where they
want the products, and then ship the items automatically.
Convenience and speed are the best attractions of Amazon’s anticipatory
shipping, but they are not all of it. Imagine you are too busy to notice your
laundry powder or toilet tissues almost run out. Unexpectedly, you open your
door and receive an Amazon package which contains exactly what you need
for household replenishment. Wouldn’t it feel delightful and exciting? Even
if Amazon got it wrong, you might still feel quite excited to open a box when
you don’t know what’s inside. You might be tempted to keep it, especially
if Amazon offers certain discounts or even as outright gifts. In its patent,
‘Delivering the package to the given customer as a promotional gift may be
used to build goodwill’, said Amazon (Kopalle 2014).
Further reading:
Mitchell, C. (2015), “Amazon patents “anticipatory shipping” of items their
data says you’ll buy”, Harvard Business School Digital Initiative.
Questions:
1. Why does Amazon come up the idea of anticipatory shipping and what are
the benefits?
2. How could Amazon achieve it? What sort of data can be used in predicting
customer orders?
3. What options does Amazon have if its anticipation of customer orders
was wrong?
4. Do you think Amazon’s anticipatory shipping will succeed? How can its
rivals compete with Amazon.
References
Barney, J. 1991. “Firm resources and sustained competitive advantage”, Journal of Management,
Vol. 17 No. 1, pp. 99–120.
Benton, W.C. & Maloni, M. 2005. “The influence of power-driven buyer/seller relationships on
supply chain satisfaction”, Journal of Operations Management, Vol. 23 No. 1, pp. 1–22.
Bowers, M.R., Petrie, A.G. & Holcomb, M.C. 2017. “Unleashing the Potential of Supply Chain
Analytics”, MIT Sloan Management Review, Vol. 59 No. 1, pp. 14–16.
Christopher, M. & Towill, D.R. 2000. “Supply chain migration from lean and functional to agile and
customised”, Supply Chain Management: An International Journal, Vol. 5 No. 4, pp. 206–213.
Dastin, J. 2017. “Amazon trounces rivals in battle of the shopping ‘bots’”, Reuters, Retrieved 15 Oct,
2018, from https://www.reuters.com/article/us-amazon-com-bots-insight-idUSKBN1860FK.
Kopalle, P. 2014. “Why Amazon’s Anticipator Pure Genius”, Forbes, Retrieved 1 Nov, 2018,
from https://www.forbes.com/sites/onmarketing/2014/01/28/why-amazons-anticipatory-
shipping-is-pure-genius/?sh=588e61564605
20 1 Introduction
Leblanc, R. 2018. “How Starbucks changed supply chain management from coffee bean to cup”.
The Balance Small Business.
Logility, 2018. “Logility Survey Reveals the Top Supply Chain Priorities for Advanced
Analytics”, Retrieved 20 Oct, 2018, from https://www.logility.com/press-release/logility-
survey-reveals-the-top-supply-chain-priorities-for-advanced-analytics/
Tan, K.C., Kannan, V.R. & Handfield, R.B. 1998. “Supply chain management: supplier perfor-
mance and firm performance”, International Journal of Purchasing and Materials Management,
Vol. 34, pp. 2–9.
Data-Driven Supply Chains and Intro
to Python 2
Contents
2.1 Data and Its Value in SCM 21
2.2 Data Source in Supply Chains 24
2.3 Big Data 30
2.4 Introduction to Python 31
2.4.1 Python Downloads and Installation 33
2.4.2 Python IDE and Jupyter Notebook 33
2.4.3 Essential Python Libraries 34
2.4.4 Jupyter Notebook Optimization 38
References 43
Learning Objectives
• Explain why data is important for effective supply chain management.
• Discuss the various data sources and related IT adoption in supply chains.
• Describe what big data is, its characteristics and the 5Vs of big data.
• Understand how to download and install Python and the essential Python
libraries.
2.1 Data and Its Value in SCM
ccData is defined as ‘information, especially facts or numbers, collected to be

examined and considered and used to help decision making, or information in an
electronic form that can be stored and used by a computer’ in Cambridge Dictionary.
© The Author(s), under exclusive license to Springer Nature 21

Switzerland AG 2022
K. Y. Liu, Supply Chain Analytics, https://doi.org/10.1007/978-3-030-92224-5_2
22 2 Data-Driven Supply Chains and Intro to Python
Some have described data as the ‘new oil’ of the digital economy. In fact, data can be
anything and can come from anywhere; however, getting the true value of data depends
on whether an organization can capture the data, store the data, interpret the data, and
most importantly, derive meaningful insights from the data for effective decision mak-
ing. In other words, the ability to find the data, see the value of the data, and mine the
‘gold’ out of the data varies significantly among different organizations.
Example
Data plays an increasingly important role in today’s business operations. For

example, Coca-Cola is a well-loved brand by people from all walks of life. In
2015, the company initiated a digital-led loyalty programme, with which Coca-
Cola was able to connect with its customers better and collect valuable data
through social authentication. In particular, the super beverage brand collects
customers’ reviews and opinions through apps or social networks and uses the
data to develop their products and create tailored advertisements to different
audiences. In Japan, a similar app called Coke On has been developed. With the
data from the app users, Coca-Cola can optimize where to supply and how their
vending machines are placed to ensure they are meeting customer demand. The
data strategy has proven to work well, not only in terms of sales but also cutting
down costs and satisfying customers at the right place and the right time. ◄
As discussed in the previous chapter, achieving supply chain excelltence, espe-

cially the 7Rs objectives, requires organizations to effectively manage and coordi-
nate supply chain processes. However, the effective management and coordination
of supply chain processes would need smooth, timely and accurate information and
data exchange throughout the supply chain. For instance, without critical data on
customer demand and sales, current inventory level, and available capacities, it can
be very difficult for manufacturers to make effective decisions for their production
planning and scheduling. In addition, inaccurate information and data exchange
such as slight demand forecasting errors in the downstream can cause significant
bullwhip effect in the upstream (see Fig. 2.1), which subsequently affect supply
chain efficiency—disturbing supplies and potentially creating waste and high cost
in inventory (Lee et al. 1997).
Many organizations have realized the importance of data for their supply chain
management, and thus implementing various software packages to capture and
exchange essential data in their supply chains, such as ERP (enterprise resource
planning) and CRM (customer relationship management) systems. Managers, how-
ever, must decide carefully which systems to use, as the selected ones must align
well with their business types, objectives, existing processes, etc. Otherwise, seri-
ous problems can occur in the supply chain, which can cause production interrup-
tion, severe delays in supplies, and loss of customers.
For instance, in 2000, Nike decided to do better demand forecasting to improve
its supply chain management according to customer requirements. The company
spent US$400 million on the new software I2, hoping to remove unwanted products
from its production schedule and inventory as well as maintenance cost. But the new
2.1 Data and Its Value in SCM 23
Tier 2 Supplier Tier 1 Supplier Manufacturer Wholesaler Retailer Customer
Inventory Inventory
Inventory Inventory
Inventory Inventory
Inventory
Inventory
Inventory
Inventory Inventory
Demand Demand Demand Demand Demand Demand
UPSTREAM DOWNSTREAM
Amplifying Bullwhip Effect
Fig. 2.1 Bullwhip effect in the supply chain
software was unable to provide the accurate data on the complete market require-
ments because it had some bugs, did not integrate well, and was too slow. Besides,
Nike’s employees were inadequately trained to use the system. As a result, the
designers and planners at Nike could not interpret the demand of the market to make
timely production plans and unique production process to meet the customer
requirements. Due to this ERP failure, Nike had an estimated US$100 million lost
in sales, a 20% stock price dip and several class action lawsuits (Bosari 2012).
In addition to using incompetent software packages that fail to address business
objectives and problems, what other factors could affect data and information shar-
ing in supply chains? There can be many reasons, but some of major ones are as
follows:
• Lack of trust among supply chain members

• Unwilling to disclose sensitive data and information (e.g., sales data and cus-
tomer account)
• Incompatibility of systems in the supply chain (e.g., different systems are being
used by suppliers).
• Lack of collaboration and coordination both intra- and inter-firms (e.g., depart-
ments work in silos), creating barriers for effective data sharing.
Therefore, to overcome these barriers for effective information and data sharing,
organizations need to build partnerships with supply chain members, and to foster
trust with them so that they are willing to share critical and timely data with the
focal firms as well as with other members in the network. Certainly, establishing
partnership and trust may take very long time but is worth the effort. Internally,
organizations should try to simplify data sharing procedures and improve cross-
functional collaborations. Sometimes this may require a change of organizational
structure, business process re-engineering or even creating a new collaborative
organizational culture. Top management support and commitment also plays a vital
role in ensuring effective and smooth data and information sharing across internal
and external boundaries.
In short, data is extremely valuable for effective supply chain management. From
procurement, inbound and outbound logistics, internal production, order fulfilment
to after-sale services, data is at the central heart of ensuring the smooth running and
synchronization of these processes to increase customer responsiveness and reduce
costs. Without meaningful data and effective data sharing in supply chains, supply
chain management would fail, which could consequently lead to detrimental busi-
ness performance.
2.2 Data Source in Supply Chains
There are many available data sources in supply chains, not only within a focal firm
but also across firm boundaries. Information and data exchange among supply chain
members are essential for effective supply chain coordination and collaboration. If
each tier members within a supply chain share appropriate and important informa-
tion and data with other tier members, then fast and appropriate supply chain
responsiveness can be realized.
For example, a car dealer promptly shares timely sales data with a car manufac-
turer. The car maker then uses the sales data to adjust production plans at its plants.
The critical production plans must be rapidly communicated with suppliers as well,
who then strive to adjust their own production plans and achieve just-in-time (JIT)
deliveries to the car maker’s plants.
The fast adoption of information technology (IT) has enabled organizations to
streamline their supply chain processes, improve visibility in the supply chain, and
facilitate better decision-making. Technology evolvement, especially the advent of
smart technologies, has greatly improved data capture, data storage, and data shar-
ing within the supply chain. Some of the examples include:
Electronic Data Interchange (EDI) EDI replaces traditional paper-based orders,

invoices, postal mail, fax, and email with standard electronic format to exchange
business documents through computer-to-computer network between companies.
EDI eliminates the errors and waiting time caused by human handling. Examples of
documents exchanged via EDI include purchase orders, invoices and shipping sta-
tus documents, inventory documents, and bill of lading.
Barcoding System The system usually consists of barcoding hardware (e.g., hand-
held scanners, mobile computers, and printers) to scan and capture product informa-
tion and a supporting software to read, decode, interpret, and transmit data to a
central database. We can see today that the barcoding system has been widely
adopted in many areas of businesses, from, for example, checking out items when
shopping at a supermarket, to using the QR (Quick Response) code scanner on your
smartphones to check a product price and make purchase.
The benefit of using a barcoding system is that it can automatically collect data,
provide real-time and very accurate information transferring, and essentially reduce
the risk of human error. In a supply chain, barcoding system can be used to handle
incoming and outgoing goods in a warehouse, automatically record inventory lev-
els, track shipment details and status in transportation and distribution of products
and services.
Radio-frequency Identification (RFID) RFID, as revealed by its name, uses

radio-frequency waves to automatically transfer data, allowing users to identify and
locate items and assets quickly and uniquely. The technology adopts RFID tags or
smart labels, whereby digital data and information are encoded. RFID tags are
attached to items in order to track them using an RFID reader and antenna. These
tags typically do not have a battery but receive energy from the radio waves gener-
ated by the reader. Data can be transmitted through radio waves to the reader/
antenna combination, and then transferred to a host computer system and stored in
a database for further analysis.
Unlike the barcoding system, data from the RFID tags can be read without line
of sight, making it more favourable for a range of applications, including, for exam-
ple, inventory tracking, logistics (materials management) and vehicle tracking, toll-
ing and real-time location system.
Enterprise Resource Planning (ERP) ERP system integrates different business

processes and multiple stages of the supply chain with a common database to
enable the smooth, real-time, and accurate data flows between them. ERP system
consists of various ERP modules such as Finance and Accounting, Human
Resource Management (HRM), Sales and Marketing, Inventory management,
Customer Relationship Management (CRM), and Supply Chain Management
(SCM) (Fig. 2.2).
ERP typically uses a common, defined data structure to create, store, and share
data between these core processes, facilitating fast-track reporting, eliminating data
duplication and errors as well as enhancing data integrity. Today, ERP system has
evolved to embrace emerging technologies such as cloud computing (Cloud ERP)
and smartphones (Mobile ERP), offering organizations more affordable, flexible,
and remote access to ERP with enhanced security. Top ERP vendors on the market
include SAP, Oracle, Sage, Microsoft, and Infor.
Geographic Information System (GIS) GIS is a system that capture, store, and
analyse geographical data for problem solving and effective decision making in
relation to spatial analysis. GIS can be used in SCM to tack and manage resources
and make location decisions. For instance, supply chain professionals can use GIS
to determine facility site, trace and track trucks or ships, and visualize where goods
are located.
Today, GIS has gradually evolved into more advanced location intelligence (LI)
applications, which incorporate geo-enriched data sources (e.g., demographics,
weather data, and real-time data streams) and embrace advanced location data
Fig. 2.2 ERP modules
SCM
Human
Resources CRM
ERP
Finance & Inventory
Accounting Management
Sales &
Marketing
analytics methods for optimization and prediction (Moreno 2017). For example, LI
can be used by logistics managers to optimize delivery route based on real-time traf-
fic data and customer locations.
Intelligent Transportation System (ITS) ITS is a combination of sensing, com-

munication, control and analysis technologies to facilitate safer, smarter, more coor-
dinated and more efficient ground transportation management. ITS has four major
communication layers including vehicle-to-infrastructure (V2I), vehicle-to-vehicle
(V2V), infrastructure-to-infrastructure (I2I), and vehicle-to-mobile devices (V2M).
The adoption of ITS in supply chains is expected to enable real-time vehicle track-
ing and improve fleet management via effective monitoring, planning, and control
(Veres et al. 2017) (Fig. 2.3).
Cyber Physical System (CPS) CPS is a system that links the physical world with
the virtual world using embedded computers and networks. In a CPS system, the
physical entities/processes are monitored, controlled, and optimized through com-
puting algorithms, tightly integrated with sensors, actuators, communication net-
works, software and computers. Just as the internet revolutionized how we interact
with each other, CPS radically transforms the interaction between the physical and
the virtual world. The major CPS application areas include energy (e.g., smart grid),
health (e.g., medical monitoring), mobility (e.g., autonomous automobile systems),
and manufacturing (e.g., process control systems, robotics systems). CPS can be
adopted in SCM to facilitate intelligent and efficient production systems, monitor
and tracking deliveries, optimize logistics and inventory control.
Fig. 2.3 Real-time vehicle tracking with ITS system
Internet of Things (IoT) IoT is a network of uniquely identifiable physical objects

(e.g., home appliances, mechanical and digital machines, vehicles, devices, etc.)
embedded with sensors, actuators, software, and computing devices, enabling them
to exchange data over the internet. CPS and IoT have significant overlaps, however
CPS emphasizes more on the link between computation and the physical world,
whereas IoT focuses more on the internet-connected devices and embedded sys-
tems. If we consider CPS moves the first step towards vertical digital integration by
connecting the physical entities to the virtual world, IoT sets the future where any-
thing is connected over the internet, allowing them to collect data about the physical
world from anywhere and share with other systems and devices.
If we extend the concept of IoT to manufacturing, the IoT becomes Industrial
Internet of Things (IIoT) , which is also known as Cyber Physical Production
Systems (CPPS), Industrial Internet, or Smart Factory. Similarly, if we extend the
concept to our homes, it becomes smart homes with connected home appliances
(e.g., television, air conditioning, kitchen, lights, security cameras, etc.). When the
smart devices or machines are connected, they generate a massive amount of IoT
data which can be analysed, leveraged, and acted upon in real-time without human
intervention (Fig. 2.4).
In the environment of IoT and CPS, coupled with AI, machine learning, and the
cloud, machines can interact with other machines as well as human beings, learn
about them and adapt to their wants and needs. It has been said that the advent of
IoT and CPS is driving the biggest shift in business and technology since World War
II, which have set a foundation for a fourth industrial revolution, i.e., Industry 4.0
(Carruthers 2016).
Blockchain Blockchain is a record-keeping technology behind the Bitcoin crypto-

currency, developed by an unknown person (or people) under the name of Satoshi
Nakamoto in 2008. Unlike traditional database, blockchain is a specific type of
database that stores information and data in blocks. Once a fresh block receives new
Fig. 2.4 Smart lock and smart lights IoT system
Blockchain’s Pros and Cons

Pros Cons
Improved transaction Complicated technology
secuurity Regulation
Increased transparency Challenges in
Accurate tracking implementation
Permanent and Initial technology cost can
unalterable ledger be high
Reduced cost by
A new transaction is eliminating 3rd party The transaction is
initiated by someone verification
completed
Validation
The transaction is then The network of nodes Once validated, a new The new block of data is then added
transmitted to a P2P network validated the transaction block of data is created to the existing blockchain creating
of computers (a.k.a. nodes) using known algorithms for the ledger permanent record of transactions
Fig. 2.5 Blockchain technology
data, it is chained together with the previous block in chronological order. One of
the unique features and advantages about blockchain is that it is a decentralized
ledger of all transactions across a peer-to-peer network, with each node in the
decentralized system having a copy of the blockchain, and thus data entered is
incorruptible and irreversible. Figure 2.5 illustrates how blockchain works and its
pros and cons.
Blockchain has great potential applications beyond just bitcoin and cryptocur-
rency. Many companies have already adopted the technology such as Walmart,
Pfizer, AIG, Siemens, Unilever, and a host of others. For instance, IBM has created
its Food Trust blockchain to trace and track the journey that food products take to
get to its locations (Conway 2020).
In operations and SCM, there are a number of opportunities for blockchain appli-
cation to transform practices, including impacting new product development,
enhancing product safety and security, improving quality management and sustain-
ability, advancing inventory management, and reducing cost of supply chain trans-
actions (Cole et al. 2019), to name a few.
The technology’s decentralized network of computers records and timestamps
every transaction in a shared ledger that is constantly and collectively updated in
real-time. Therefore, it can be used to improve trust amongst supply chain members,
ensure the validity of each transaction and reduce risks of fraud (Ganeriwalla et al.
2018). The potential application of blockchain in supply chain both in terms of risk
and trust is summarized in Fig. 2.6 below.
• When there is high level of risks involved in transaction, and trust is critical
among the involved members in the supply chain (either they do not know each
other or it would be too costly to build trust), blockchain has high value of poten-
tial application because it can provide participants with secure transactions,
trusted data, and self-executing contracts.
• When the level of risks is high (e.g., food safety issues), but trust is not essential
in the transaction (e.g., long-term partnership already established), blockchain
can be applied to track assets along the supply chain and throughout their life
cycle to minimize the risk.
• When the level of risks in transaction is low (e.g., commodity products/non-
critical items), but trust is still critical in the transaction (e.g., many parties
involved in transaction), blockchain can be applied to create a permanent and
High
Blockchains can track assets Blockchains can provide

along the supply chain and participants with secure
throughout their life cycle to transactions, trusted data
minimize the risk. and self-executing contracts.
Level of Risks
(in transactions)
A blockchain distributed
Blockchain has limited value. creates a permanent and
tamperproof database.
Low
Value of Trust
Low High
Fig. 2.6 Risk and trust implications for Blockchain adoption

unalterable database that are fully traceable an auditable, which can be accessed
by different parties and facilitates reliable and secure data exchange.
• However, if both the level of risks and value of trust are low, blockchain may
have limited value of adoption.
2.3 Big Data
Due to the wide adoption of IT systems and smart technologies in the supply chain,
along with e-commerce, social media and more, there are a massive amount of data
available for businesses to harness and act upon. The characteristics of vast volume,
variety, velocity give rise to a surging popular term Big Data.
In the past, organizations usually have limited ability to collect large amounts of
data due to storage constraint, and they were unable to process so large, complex,
and fast-changing data and information in a timely manner using traditional meth-
ods. Today, with greater computing power and cheaper storage on platforms such as
data lakes and Hadoop, businesses can access, store, and process much more data
in real-time or near real-time for effective decision making. In addition to large
volume, big data has four other important dimensions which will be explained in the
following paragraphs.
In terms of variety, big data comes in different forms, which can be categorized
into three basic types:
1. Structured data—refers to the data that are in a fixed format or an ordered man-
ner, which can be readily and seamlessly stored, retrieved, and processed. It is
considered the most ‘traditional’ form data which can be stored for example, in
Excel spreadsheet or SQL database. Common examples of structured data
include GPS data, sales records, financial data from stock market, etc.
2. Unstructured data—refers to the data that are not in a standard or fixed format.
It often takes more time to process and analyse this type of data, e.g., audio
recordings, videos, customer comments, or Twitter posts, etc.
3. Semi-structured data—there is no clear definition for this type of data, but gen-
erally it contains data with both forms (structured and unstructured) present, e.g.,
JSON, XML, CSV, etc. It is relatively easier to process and analyse this type of
data than unstructured data as most analytics tools today have the ability to effi-
ciently transform, read, and process the semi-structured data.
Velocity refers to the speed at which data is generated. Big data usually is gener-
ated, captured, and processed in real-time or near real-time. This is important as it
enables organizations to quickly identify problems, adjust their plans, and respond
to fast-changing business environment (Fig. 2.7).
Variation reflects the changes in data flows, patterns, and structures. In today’s
uncertain business environment, big data becomes very unpredictable and vary sig-
nificantly over time. Organizations need to understand this variation and develop
robust analytics tools or algorithms to cope with the uncertainty and unpredictabil-
ity of big data.
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service. Could they have made early use of the wonderful gifts of the
finer breeds of the dog and the horse, what steps of advancement
might they not have taken? How far would the Aztecs, Incas, and
Algonquins have advanced without domestic fowls and cattle? What
would the Japanese islanders have been, without the numerous
domestic animals imported from China in historic times? What would
Europe and America be, bereft of the gifts they have both received
from Asia?
How striking are the narratives of the early colonists in America,
that reveal to us the fact that the aboriginal Indian had only a wolf-
dog of diminutive size and slight powers, while the canine breeds of
Europe not only showed more varied and higher qualities, but were
larger in size. Of these strange creatures, the red men were usually
more afraid than of their white owners. How surprising was the
experience of the Mexicans, who, on beholding the Spanish
cavaliers, cased in steel, thought the horse and the rider were one
animal! What would South America and her early savages have
been, if left without the friends of man imported from the Asian
continent?
As at The Hague and at Delft, one notes with the statue of
William the Silent the little dog that saved his life; so at Edinburgh we
see at the feet of the effigy of Sir Walter, the poet and romancer, his
favorite dog Maida. Few episodes are more touching than that of the
dog Lufra, in Canto V of the “Lady of the Lake.”
After such a picture of mutual devotion between man and brute,
it seems little wonder that in Scotland has been bred what is perhaps
the noblest type of canine life. In the physical characteristics of
speed, alertness, fleetness, the Scotch collie is second to none in
the kingdom of dogs, while in the almost human traits of loyalty to his
master and devotion to his interests, this friend of man crowns an
age-long evolution from the wild. Happily in art, which is the praise of
life, Scotland’s collie and hound have found the immortality of man’s
appreciation. This is shown, not only in the word paintings of her
poets and romancers, but on the canvas of Landseer, the
Shakespeare of dogs. In the Highlands this English painter found
some of his noblest inspirations.
Edinburgh, besides being a brain-stimulant, because it is the
focus of Scottish history, is also a heart-warmer. Holyrood Palace,
Arthur’s Seat, Grey Friar’s Churchyard, St. Giles’s Church, the
University, Calton Hill—what memories do they conjure up, what
thought compel? A Scottish Sabbath—how impressive! One can no
more write the history of Scotland or pen a description of the country
and people, and leave out religion, than tell of Greece or Japan and
make no mention of art.
CHAPTER V
MELROSE ABBEY AND SIR WALTER SCOTT
Always fond of fireside travels, I had, many a time, in

imagination, ridden with William of Deloraine from Branksome Hall,
through the night and into the ruins of Melrose Abbey. His errand
was to visit the grave of Michael Scott, whose fame had penetrated
all Europe and whom even Dante mentions in his deathless lines.
Now, however, I had a purpose other than seeing ruins. If possible, I
was determined to pick a flower, or a fern, from near the wizard’s
grave to serve as ingredient for a philter.
Does not Sir Walter, in his “Rob Roy,” tell us that the cailliachs,
or old Highland hags, administered drugs, which were designed to
have the effect of love potions? Who knows but these concoctions
were made from plants grown near the wonder-worker’s tomb? At
any rate, I imagined that one such bloom, leaf, or root, sent across
the sea, to a halting lover, might reinforce his courage to make the
proposal, which I doubt not was expected on the other side of the
house. At least we dare say this to the grandchildren of the long
wedded pair.
So glorified were the gray ruins of Melrose, in Scott’s enchanting
poetry, that I almost feared to look, in common sunlight, upon the
broken arches and the shafted orioles; for does not Scott, who warns
us to see Melrose “by the pale moonlight,” tell us that
“The gay beams of lightsome day

Gild but to flout the ruin gray.”
Yet the tourist’s time, especially when in company, is not usually
his own, and for me, though often, later, at the abbey, the opportunity
never came of visiting “fair Melrose aright,” by seeing its fascinations
under lunar rays, or in
“the cold light’s uncertain shower.”
On the morning of July 11, we had our first view from the railway.
The ruins loomed dark and grand. Approaching on foot the pile,
closely surrounded as it was by houses and Mammonites and
populated chiefly by rooks, the first view was not as overpowering as
if I had come unexpectedly to it under the silver light of the moon.
Yet, on lingering in the aisles within the ruined nave and walking up
and down amid the broken marbles, imagination easily pictured
again that spectacular worship, so enjoyed in the Middle Ages and
beloved by many still, which makes so powerful and multitudinous an
appeal to the senses and emotions.
The west front and a large portion of the north half of the nave
and aisle of the abbey have perished, but the two transepts, the
chancel and the choir, the two western piers of the tower, and the
sculptured roof of the east end are here yet to enthral. I thought of
the processions aloft, of the monks, up and down through the interior
clerestory passage, which runs all around the church. Again, in the
chambers of fancy, the choir sang, the stone rood screen reflected
torch and candlelight, and the lamp of the churchman shed its rays,
while the “toil drops” of the knight William, “fell from his brows like
rain,” as “he moved the massy stone at length.”
A minute examination of the carving of windows, aisles, cloister,
capitals, bosses, and door-heads well repays one’s sympathetic
scrutiny, for no design is repeated. What loving care was that of
mediæval craftsmen, who took pride in their work, loving it more than
money! Proofs of this are still visible here. Such beauty and artistic
triumphs open a window into the life of the Middle Ages. From the
south of Europe, the travelling guilds of architects and masons, and
of men expert with the chisel, must have come hither to put their
magic touch upon the stone of this edifice, which was so often built,
destroyed, and built again. “A penny a day and a little bag of meal”
was the daily dole of wages to each craftsman. One may still trace
here the monogram of the master workman.
Under the high altar in this Scottish abbey, the heart of Robert
the Bruce was buried. Intensely dramatic is the double incident of its
being carried toward Palestine by its valorous custodian, who, in
battle with the Saracens, hurled the casket containing it at the foe,
with the cry, “Forward, heart of Bruce, and Douglas shall follow
thee.”
In the chancel are famous tombs of men whose glory the poet
has celebrated. Here, traditionally, at least, is the sepulchre of
Michael Scott, visited, according to Sir Walter’s lay, by the monk
accompanying William of Deloraine. With torch in hand and feet
unshod, the holy man led the knight.
It was “in havoc of feudal war,” when the widowed Lady, mistress
of Branksome Hall, was called upon to decide whether her daughter
Margaret should be her “foeman’s bride.” “Amid the armed train” she
called to her side William of Deloraine and bade him visit the
wizard’s tomb on St. Michael’s night and get from his dead hand,
“the bead, scroll, or be it book,” to decide as to the marriage.
Now for Scott’s home! On the bank of Scotland’s most famous
river, the Tweed, two miles above Melrose, was a small farm called
Clarty Hole, which the great novelist bought in 1811. Changing the
name to Abbotsford, he built a small villa, which is now the western
wing of the present edifice. As he prospered, he made additions in
the varied styles of his country’s architecture in different epochs. The
result is a large and irregularly built mansion, which the “Wizard of
the North” occupied twenty-one years. It has been called “a romance
in stone and lime.” Knowing that the Tweed had been for centuries
beaded like a rosary with monasteries and that monks had often
crossed at the ford near by, Sir Walter coined the new name and
gave it to the structure in which so much of his wonderful work was
done for the delight of generations. Curiously enough, in America,
while many places have been named after persons and events
suggested by Scott’s fiction, only one town, and that in Wisconsin,
bears this name of Abbotsford.
With a jolly party of Americans, we entered the house, thinking of
Wolfert’s Roost at Tarrytown, New York, and its occupant
Washington Irving, who had been a warm friend of Sir Walter. It was
he who gave him, among other ideas, the original of Rebecca, a
Jewish maiden of Philadelphia, whose idealization appears, in
Scott’s beautiful story of “Ivanhoe,” as the daughter of Isaac of York.
Memory also recalls that Scott wrote poetry that is yet sung in
Christian worship, for in Rebecca’s mouth he puts the lyric,—
“When Israel of the Lord beloved.”
In the dim aisles of Melrose Abbey, before Michael Scott’s tomb,

“the hymn of intercession rose.” The mediæval Latin of “Dies Iræ”
has many stanzas, but Scott condensed their substance into twelve
lines, beginning;—
“That day of wrath, that dreadful day,

When Heaven and earth shall pass away.”
We were shown the novelist’s study and his library, the drawing-
room and the entrance hall. The roof of the library is designed chiefly
from models taken from Roslyn Chapel, with its matchless pillar that
suggests a casket of jewels. While many objects interested us both,
it is clear, on the surface of things, that our lady companion,
Quandril, was not so much concerned with what the cicerone told to
the group of listeners as were certain male students present, who,
also, were slaves of the pen: to wit, that when Sir Walter could not
sleep, because of abnormal brain activity, he would come out of his
bedroom, through the door, which was pointed out to us in the upper
corner, and shave himself. This mechanical operation, with industry
applied to brush, lather, steel, and stubble, diverted his attention and
soothed his nerves. More than one brain-worker, imitating Sir Walter,
has found that this remedy for insomnia is usually effectual.
Another fascinating monastic ruin is Dryburgh on the Tweed. It
was once the scene of Druidical rites. The original name was Celtic,
meaning the “bank of the oaks.” St. Modan, an Irish Culdee,
established a sanctuary here in the sixth century, and King David I,
in 1150, built the fine abbey. Here, in St. Mary’s aisle, sleeps the dust
of the romancer who re-created, to the imagination, mediæval
Scotland. Certainly her greatest interpreter in prose and verse is one
of the land’s jewels and a material asset of permanent value.
The fame of Sir Walter yields a revenue, which, though not
recorded in government documents, is worth to the Scottish people
millions of guineas. From all over the world come annually tens of
thousands of pilgrims to Scotland, and they journey hither because
the “Wizard of the North” has magnetized them through his magic
pen. Probably a majority are Americans. Not even Shakespeare can
attract, to Stratford, at least, so many literary or otherwise interested
pilgrims of the spirit, as does Burns or Scott.
DRYBURGH ABBEY
We move next and still southward to Gretna Green—for
centuries mentioned with jest and merriment. Of old, those rigid laws
of State-Church-ridden England concerning marriage, which made
the blood of Free Churchmen boil, while rousing the contempt and
disgust of Americans, compelled many runaway couples from across
the English border to seek legal union under the more easy statutes
of Scotland. Gretna Green was the first convenient halting-place for
those who would evade the oppressive requirements of the English
Marriage Act. For generations, thousands of nuptial ceremonies
were performed by various local persons or officials, though chiefly
by the village blacksmith. Other places, like Lamberton, shared in the
honors and revenue also. One sign, visible for many years, read,
“Ginger Beer Sold Here, and marriages performed on the most
reasonable terms.”
English law, framed by the House of Lords, compelled not only
the consent of parents and guardians, but also the publication of
banns, the presence of a priest of the Established Church, fixed and
inconvenient hours, and other items of delay and expense. All that
Scotland required, however, as in New York State, was a mutual
declaration of marriage, to be exchanged in presence of witnesses.
The blacksmith of Gretna Green was no more important than
other village characters, nor did his anvil and tongs have any ritual
significance, because any witness was eligible to solemnize a
ceremony which could be performed instantly. Gradually, however,
as in so many other instances of original nonentities in Church and
State, the blacksmith gradually assumed an authority which imposed
upon the credulity of the English strangers, who usually came in a
fluttering mood. In that way, the local disciple of St. Dunstan is said
to have profited handsomely by the liberality usually dispensed on
such felicitous occasions. The couple could then return at once to
England, where their marriage was recognized as valid, because the
nuptial union, if contracted according to the law of the place where
the parties took the marital vow, was legal in the United Kingdom.
After the severity of the English law, under the hammering of the
Free Church had been modified, Gretna Green was spoiled as a
more or less romantic place of marriages, and held no charms for
elopers. Scottish law, also, was so changed as to check this evasion
of the English statutes. No irregular marriage of the kind, formerly
and extensively in vogue, is now valid, unless one of the parties has
lived in Scotland for twenty-one days before becoming either bride or
groom. Gretna Green no longer points a joke or slur except in the
preterite sense.
Sir Walter Scott, who sentinels for us the enchanted land we are
entering, was in large measure the interpreter of Scotland, but he
was more. In a sense, he was his native country’s epitome and
incarnation. His literary career, however, illustrated, in miniature,
almost all that Disraeli has written in his “Curiosities of Literature,”
and especially in the chapter concerning “the calamities of authors.”
Happily, however, Scott’s life was free from those quarrels to which
men of letters are so prone, and of which American literary history is
sufficiently full. Millions have been delighted with his poetry, which he
continued to write until Byron, his rival, had occulted his fame. He is
credited with having “invented the historical novel”—an award of
honor with which, unless the claim is localized to Europe, those who
are familiar with the literature of either China or Japan cannot
possibly agree. Yet, in English, he was pioneer in making the facts of
history seem more real through romance.
Scott was born in a happy time and in the right place—on the
borderland, which for ages had been the domain of Mars. Here, in
earlier days, the Roman and the Pict had striven for mastery. Later,
Celtic Scot and invaders of Continental stock fought over and
stained almost every acre with blood. Still later, the Lowlanders, of
Teutonic origin, and the southern English battled with one another for
centuries. On a soil strewn with mossy and ivied ruins, amid a
landscape that had for him a thousand tongues, and in an air that
was full of legend, song, and story, Scott grew up. Though not much
of a routine student, he was a ravenous reader. Through his own
neglect of mental discipline, in which under good teachers he might
have perfected himself, he entered into active life, notably defective
on the philosophic side of his mental equipment, and somewhat ill-
balanced in his perspective of the past, while shallow in his views of
contemporary life.
Despite Scott’s brilliant imagery, and the compelling charm of his
pageants of history, there were never such Middle Ages as he
pictured. For, while the lords and ladies, the heroes and the armed
men, their exploits and adventures in castle, tourney, and field, are
pictured in rapid movement and with fascinating color, yet of the real
Middle Ages, which, for the mass of humanity, meant serfdom and
slavery, with brutality and licentiousness above, weakness and
ignorance below, with frequent visits of plague, pestilence, and
famine, Scott has next to nothing to say. As for his anachronisms,
their name is legion.
Nevertheless Scott had the supreme power of vitalizing
character. He has enriched our experience, through imaginative
contact with beings who are ever afterwards more intimately distinct
and real for us than the people we daily meet. None could surpass
and few equal Scott in clothing a historical fact or fossil with the
pulsing blood and radiant bloom of life, compelling it to stand forth in
resurrection of power. Scott thus surely possesses the final test of
greatness, in his ability to impress our imagination, while haunting
our minds with figures and events that seem to have life even more
abundantly than mortal beings who are our neighbors.
Critics of to-day find fault with Scott, chiefly because he was
deficient in certain of the higher and deeper qualities, for which they
look in vain in his writings, while his poetry lacks those refinements
of finish which we are accustomed to exact from our modern singers.
However, those to whom the old problems of life and truth are yet
unsettled, and who still discuss the questions over which men
centuries ago fought and for which they were glad to spill their blood
in defence and attack, accuse Scott of a partisanship which to them
seems contemptible. Moreover, his many anachronisms and grave
historical blunders, viewed in the light of a larger knowledge of men
and nations, seem ridiculous.
Yet after all censure has been meted out and judgment given, it
is probable that in frank abandon for boldness and breadth of effect,
and in painting with words a succession of clear pictures, his poems
are unexcelled in careless, rapid, easy narrative and in unfailing life,
spirit, vigorous and fiery movement. Had Scott exercised over his
prose writings a more jealous rigor of supervision, and had he
eliminated the occasional infusions of obviously inferior matter, his
entire body of writings would have been even more familiar and
popular than they are to-day. It is safe to say that only a selection of
the most notable of his works is really enjoyed in our age, though
undoubtedly there will always be loyal lovers of the “Magician of the
North,” who still loyally read through Scott’s entire repertoire. Indeed,
we have known some who do this annually and delightedly. Taking
his romances in chronological order, one may travel in the
observation car of imagination through an enchanted land, having a
background of history; while his poems surpass Baedeker, Black, or
Murray as guide books to Melrose Abbey, through the Trossachs, to
Ellen’s Isle, or along Teviot’s “silver tide.”
CHAPTER VI
RAMBLES ALONG THE BORDER
Where does the Scot’s Land begin and where end? To the latter
half of the question, the answer is apparently easy, for the sea
encloses the peninsula. Thus, on three sides, salt water forms the
boundary, though many are the islands beyond. On the southern or
land side, the region was for ages debatable and only in recent times
fixed. Scotland’s scientific frontier is young.
Sixteen times did we cross this border-line, to see homes and
native people as well as places. In some years we went swiftly over
the steel rails by steam, in others tarried in town and country, and
rambled over heath, hill, and moor, to see the face of the land. We
lived again, in our saunterings, by the magic of imagination, in the
past of history. Affluent is the lore to be enjoyed in exploring what
was once the Debatable or No Man’s Land.
What area is richer in ruins than that of the shire counties
bordering the two countries? Yet there is a difference, both in nature
and art. On the English side, not a few relics in stone remain of the
old days, both in picturesque ruins and in inhabited and modernized
castles. On the other or Scotch side, few are the towers yet visible,
while over the sites of what were once thick-walled places of defence
and often the scene of blows and strife, the cattle now roam, the
plough cuts its furrows, or only grassy mounds mark the spot where
passions raged. Let us glance at this border region, its features, its
names, and its chronology. How did “Scotland” “get on the map”?
This familiar name is comparatively modern, but Caledonia is
ancient and poetical. The Roman poet Lucan, in a.d. 64, makes use
of the term, and in Roman writers we find that there existed a district,
a forest, and a tribe, each bearing the name “Caledonia,” and
spoken of by Ptolemy. The first Latin invasion was under Agricola,
about a.d. 83, and a decisive battle was fought, according to his son-
in-law, Tacitus, on the slopes of Mons Graupius, a range of hills
which in modern days is known as the “Grampian Hills.” To our
childish imagination, “Norval” whose father fed his flock on these
heathery heights, was more of a living hero than was the mighty
Roman. Of Agricola’s wall, strengthened with a line of forts, there are
remains still standing, and two of these strongholds, at Camelon and
Barhill, have been identified and excavated.
Perhaps the most northerly of the ascertained Roman
encampments in Scotland is at Inchtuthill. Where the Tay and Isla
Rivers join their waters—
“Rome the Empress of the world,

Of yore her eagle wings unfurled.”
The Romans left the country and did not enter it again until a.d.
140, when the wall of Antoninus Pius was built, from sea to sea, and
other forts erected. It was on pillared crags and prow-like headlands,
between the North and South Tynes, along the verge of which the
Romans carried their boundary of stone.
The Caledonians remained unconquered and regained full
possession of their soil, about a.d. 180. Then the Emperor Septimus
Severus invaded the land, but after his death the Roman writ never
ran again north of the Cheviot Hills. Summing up the whole matter,
the Latin occupation was military, without effect on Caledonian
civilization, so that the people of this Celtic northland were left to
work out their own evolution without Roman influence and under the
ægis of Christianity.
If we may trust our old friend Lemprière (1765–1824), of
Classical Dictionary fame,—the second edition of whose useful
manual furnished, to a clerk in Albany, the Greek and Latin names
which he shot, like grape and canister, over the “Military Tract,” in
New York State, surveyed by Simeon DeWitt,—we may get light on
the meaning of “Caledonia” and “Scot.” The former comes from
“Kaled,” meaning “rough”; hence the “Caledonii,” “the rude nation,”—
doubtless an opinion held mutually of one another by the Romans
and their opponents. The term survives in the second syllable of
Dunkeld. “Pict,” or “pecht,” is stated to mean “freebooters.” “Scot”
means “allied,” or in “union,” and the Scots formed a united nation.
Another author traces Caledonia to the term “Gael-doch,” meaning
“the country of the Gael,” or the Highlander.
After the invasions of the Romans, there followed the Teutonic
incursions and settlements, which were by the mediæval kingdoms,
and the struggles between the Northerners and Southrons, but no
regular boundary was recognized until 1532. For a millennium and a
half, or from Roman times, this border land was a region given up to
lawlessness, nor did anything approaching order seem possible until
Christianity had been generally accepted. Faith transformed both
society and the face of nature. By the twelfth century, churches,
abbeys, and monasteries had made the rugged landscape smile in
beauty, while softening somewhat the manners of the rude
inhabitants. Yet even within times of written history, nine great battles
and innumerable raids, of which several are notable in record, song,
or ballad, took place in this region. These, for the most part, were
either race struggles or contests for the supremacy of kings.
In modern days, when “the border,” though no longer a legal
term, holds its place in history and literature, it has been common to
speak of the country “north of the Tweed” as meaning Scotland. Yet
this river forms fewer than twenty miles of the recognized boundary,
which in a straight line would be but seventy miles, but which,
following natural features of river, hill burn, moor, arm of the sea, and
imaginary lines, measures one hundred and eight miles. The ridge of
the Cheviot Hills is the main feature of demarcation for about twenty-
five miles. A tributary of the Esk prolongs the line, and the Sark and
the Solway Firth complete the frontier which divides the two lands.
The English counties of Northumberland and Cumberland are thus
separated from the Scottish shires of Berwick, Roxburghe, and
Dumfries. In former times, “the frontier shifted according to the
surging tides of war and diplomacy.”
Even to the eleventh century, the old Kingdom of Northumbria
included part of what is now Scotland, up to the Firth of Forth and as
far west as Stirling. In 1081, however, the Earl of Northumberland
ceded the district which made the Tweed the southern boundary of
the Kingdom of the Scots. Hence the honor of antiquity belonging to
the Tweed as the eastern border-line! On the west, however, William
the Conqueror wrenched Cumberland from the Scottish sceptre, and
ever since it has remained in England.
For six hundred years, from the eleventh to near the end of the
seventeenth century, war was the normal condition. Peace was only
occasional. In this era were built hundreds of those three-storied
square towers with turrets at the corners, of which so many ruins or
overgrown sites remain. On each floor was one room, the lower one
for cattle, the upper for the laird and his family, and a few ready-
armed retainers. Around this bastel-house, or fortified dwelling, were
ranged the thatched huts of the followers of the chief. These, on the
signal of approaching enemies, or armed force, crowded into the
stronghold. In feudal days, when these strong towers were like links
in a chain, prompt and effective notice of approaching marauders
could be sent many leagues by means of beacon fires kindled in the
tower-tops and on the walls. Human existence in these abodes,
during a prolonged siege, may be imagined.
Perhaps the best picture of castle and tower life in this era,
though somewhat glorified, is that of Branksome Hall, in “The Lay of
the Last Minstrel.” The nine and twenty knights, in full armor night
and day, “drank the red wine through their helmets barred.” The
glamour of Scott, the literary wizard, makes castle life seem almost
enviable—but oh, the reality! Happily to-day lovely homes have
taken the place of these ancient strongholds.
On the Scottish side, besides numerous small streams, are
many stretches of fertile land with rich valleys and intervales, while
much of the scenery is romantic and beautiful. In the southwestern
corner, one does not forget that from the eighth to the twelfth century
flourished the Kingdom of Strathclyde, which bordered on the Clyde
River. In the Rhins of Galloway is the parish of Kirkmaiden, which is
Scotland’s most southern point. The common, local expression,
“from Maidenkirk to John o’ Groat’s House,” is like that of “from Dan
to Beersheba.” Now, however, not a few sites famous in song and
story and once part of the Scots’ land are in England, notably,
Flodden Field, and in the sea, Lindisfarne, or Holy Isle, so famous in
“Marmion.” To-day, on Holy Isle, the summer tourists make merry
and few perhaps think of the story of Constance the nun, betrayed
by Marmion the knight, condemned by her superior, incarcerated in
the dungeons, and sent to her death.
Probably the ages to come will show us that the most enduring
monuments of centuries of strife, in this borderland, must not be
looked for in its memorials of stone, but in language. The “winged
words” may outlast what, because of material solidity, was meant for
permanence and strength. Minstrelsy and ballad, poem and song,
keep alive the acts of courage and the gallantry of the men and the
sacrifice and devotion of the women which light up these dark
centuries. To Scott, Billings, and Percy we owe a debt of gratitude,
for rescuing from oblivion the gems of poet and harpist.
When feudalism gave way to industry, the business of the moss
trooper, the swashbuckler, and the cattle-thief ceased to be either
romantic or useful. The same fate which, in the Japan of my
experience, met the ruffians and professional gentlemen-assassins,
was visited upon the Scottish borderers. These fellows could not
understand just how and why they were now deemed common
ruffians and vile murderers, who had before been powerful chiefs or
loyal retainers. Instead of minstrels singing in praise of their exploits,
the gallows, planted on a hundred hills, awaited them. The Japanese
handled their problem by ordering to the common public execution
grounds the cowardly assassins of foreigners, instead of allowing
them, as gentlemen, to commit the ceremony of hara-kiri, within
decorated areas curtained with white silk, to be followed by
posthumous floral offerings laid on their tombs by admiring friends.
In both Scotland and Japan, the effectual method, in the new
climate of public opinion, was to deprive the thief and murderer of all
glory and honor. In both lands, the police took the place of the
military. The club of justice fell unerringly on the right noddle, instead
of having innocent bystanders killed by the bullets of soldiers. In
place of harmless peasants suffering the loss of their houses, crops,
and cattle, the border malefactors, who later furnished themes for
the cheap stage and the dime novel, paid in person the penalty of
their misdeeds.
Yet until a Scottish king sat on an English throne, the attempts to
create a peaceful border region were more or less fitful and but
partially successful. It is true that the area had long before been
marked off into three districts, or marches,—east, middle, and west,
—with officers called “wardens.” These, aided by commissioners, put
down petty insurrections and punished cattle-thieves. Occasionally a
warden would be slain at a border meeting, as was Sir Robert Kerr,
whose murder was avenged by one of his loyal followers, who
pursued the assassin as far as York, dragged him out of
concealment, and brought his head to their new master. This exploit
almost duplicated the approved episode of the Japanese Forty-
seven Ronins in Yedo, though on a smaller scale. Further to carry
out the fashion, which I used to see often illustrated in Japan, the
head was exposed in Edinburgh, on the king’s cross.
One of the favorite games of the Scottish borderers was to meet,
ostensibly to play football, but in reality to plan and execute a raid
southward, with a view to incendiarism and the theft of butcher’s
meat on the hoof. Was it from this Scotch precedent that in the sport
of American college football—the first game being that between
Rutgers and Princeton in 1870, for which we subscribed in student
days—was borrowed the violence which makes the rough-and-
tumble scuffle so fascinating to the “fans” of to-day? Be this as it
may, the earlier Scottish football games, which made bullhide rather
than pigskin their chief goal, were broken up in Queen Elizabeth’s
time.
After a Scottish king had mounted the English throne, border
lawlessness became henceforth intolerable. It had lasted long
enough, and after 1605 was put down with ruthless energy. Those
shires in both England and Scotland, which had formerly been the
border counties and so often given up to the ravages of the moss
troopers, were named by King James, in 1603, “the Middle Shires of
Great Britain.” By means of a band of mounted police, twenty-five in
number, led by Sir William Cranstoun, murderers and robbers were
speedily brought to justice. In one year thirty-two persons were
hanged, fifteen banished, and over one hundred and forty named as
fugitive outlaws. This list was next year increased and their names
were hung up at the market crosses and on the doors of parish
churches. Over two hundred and sixty were nominated as persons to
be pursued with hue and cry, wherever they were found. The nests
of outlawry were thus broken up and the houses of thieving families
were searched for stolen goods. Cranstoun, the Samson of the new
age, carried off the gates of the Philistines from the Gaza of moss
and heatherland. Their iron portals, which had so long barred the
entrance of civilization, were removed and dragged away to be
turned into plough irons. Thus the work went on.
Is it any wonder that, of all the States of the American Union,
Pennsylvania, so largely settled by the Scots, has handled most
wisely, efficiently, and with least loss of property, life, or limb, the
turbulent foreign elements within her gates? Her superb body of
mounted police, the envy of other States, is but a modern quotation
from this page of Scottish history. The system is the creation of
descendants of Scotsmen who settled the western third of the
Keystone State. Set one expert to foil another!
It is inspiring to note what names of ancestors, of those who are
to-day most godly and respected people, having brave sons and
lovely daughters, are found in these courts of justice in the time of
King James, of Bible translation time. So far is this true that one calls
to mind the rhyme of our own poet, John G. Saxe, concerning those
who are warned not to study genealogy too eagerly, lest
“your boasted line

May end in a loop of stronger twine,
That plagued some worthy relation.”
Yet, let us not be afraid of being descended from the Maxwells,
Johnstons, Jardines, Elliots, Armstrongs, Scotts, Kerrs, Buccleughs,
Nevilles, or whom not or what not of these days, now so transfigured
in romance. History and science both agree that if we go back far
enough, no race was once lower than that to which each of us
belongs, whether Celtic, Teutonic, Slavic, or Aryan of any sort.
It was and is necessary, for poet, novelist, dramatist, and maker
of moving-picture films, to show that these illustrious persons, who
were villains in the eye of the law in one age and heroes of romance
in another, should be like those in the condition that our Prescott the
historian desired his heroes to be—under the ground at least two
hundred years. By that time they are cooled off and their passions
reduced to the ordinary temperature of graveyard dust. Their faults
have been left in the haze of oblivion, while their merits take on a
glamour that comes only from the past. In the “distance that robes
the mountain in its azure hue” both persons and events can be
transfigured in poem, song, and story.
Think of the last of the desert chivalries and enthusiasms—our
cowboys—a century or two hence! Behold how, even in the Hub of
the Universe, the street rioters active in the Boston “Massacre” have
their artistic monument! What is a crime in one generation becomes
something to be gloried in, when success is won! With the multitude,
the end ever justifies the means. The accepted history of almost all
wars is that written by the victors. The beaten foe is always in the
wrong. “Whatever is, is right.” All, save the few starry spirits of
mankind, say this.
Sir Walter evidently appreciated these phenomena. Knowing
human nature well, he did not hesitate to be frank about his own
forebears. He made of the old scenes of slaughter a new enchanted
land, into which one can now travel unarmed and without guards. As
Roderick Dhu justified to Fitz James the profession of cattle-lifting,
which he, like his ancestors, followed, so Lockhart tells that when the
last bullock, which Auld Watts had provided from the English
pastures, was consumed, Mary Scott, the flower of Yarrow, placed
on her table a dish containing a pair of clean spurs. This was a hint
to the company that they must bestir themselves for their next
dinner. In those days when the rule was to “love thy neighbor and
hate thine enemy” (is it yet repealed?) cattle-stealing was a virtuous
occupation just as war is, and will be, unless the United States of the
World is formed.
ABBOTSFORD
By 1610 the mounted police had done their work so well that the
borders were reported, by King James’s commissioners, to be as
peaceable and quiet as any part of any civil kingdom in Christendom.
In a word, the pioneers of civilization, on either side of the frontier,
were like men who blast the rocks, fill up the swamps, and grade the
prairies and canyons, so that we can sleep in the berths and eat in
the dining-cars of the “Flying Scotchman” or the “Overland Limited.”
Much of the waste land, long ago reclaimed, is now covered with the
gardens, fertile fields, and fair homes of ladies, gentlemen, and
Christians. After the enormous mineral wealth of this region had
been exploited, moss troopers and cattle-thieves were as much out
of place as are the cowboys—except on the stage, which is an
indestructible museum of antiquities.

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Supply Chain Analytics: Concepts,

Techniques and Applications 1st

Concepts, Techniques and Applications

Supply Chain Analytics

ISBN 978-3-030-92223-8 ISBN 978-3-030-92224-5 (eBook)

Supply chain analytics is an emerging topic in both academia and industries as

Glasgow, UK Kurt Y. Liu

6.4 Supplier Relationship Management���������������������������������������������������� 174

8 Demand Management�������������������������������������������������������������������������������� 271

Kurt Y. Liu is an Associate Professor of Supply Chain Analytics at the Adam

1.1 What Is a Supply Chain?

© The Author(s), under exclusive license to Springer Nature 1

1.1.1 Why Do We Need a Supply Chain?

1.1.2 Structure of a Supply Chain

UPSTREAM FOCAL FIRM DOWNSTREAM

Fig. 1.1 Structure of a supply chain

1.1.3 Supply Chain Processes

Material flow Raw materials, parts, semi-finished/finished products, etc.

Information flow Capacity, production plans, delivery schedules, etc.

Finance flow Credits, payments terms, invoice, etc.

Suppliers Strategic Planning Customers

Procurement Inbound Production Outbound Order After-sale

Cash, payments, ect. Finance flow

Fig. 1.2 Supply chain as processes to fulfil customer demand

A supply chain can be viewed as inter-connected processes wherein various

Table 1.1 Examples of supply chain activities

1.1.4 Supply Chain Flows

Material Lean Agile Satisfied

Fig. 1.3 A leagile supply chain configuration

1.2 Supply Chain Management

Supply Chain Process at Starbucks

ccSupply chain management is defined as the systematic and strategic integration

It encompasses the management of internal and external supply chain processes,

Right Cost Right Time

Fig. 1.4 7Rs of SCM

Overall Cost Leadership Supply chain related Sustained supply chain

Through strategy (VRIN)

Fig. 1.5 Developing supply chain capabilities for competitive advantage

1.3 Business Analytics

ccBusiness analytics is the application of statistical techniques and programming

1. Descriptive analytics. Typically use a real-time dashboard to visualize, present,

Four Types of Business Analytics

1.4 Supply Chain Analytics

For example, Hanesbrands Inc. is an apparel manufacturer and marketer based in

• Enhance understanding of customer requirements

1.4.1 SMART Goals of SCA

Simple • SCA models need to be as simple as possible, and can provide

• The SCA solutions need to be meaningful, which can offer useful

Actionable • The SCA solutions need to be actionable, which can be

• SCA also needs to be reliable, providing consistent and trustworthy

Fig. 1.7 SMART goals of SCA

Fig. 1.8 Intersections

Operations Supply Chain

Summary of Learning Objectives

Case Study: Amazon’s Anticipatory Shipping

Amazon describes it as a way of shipping products to the destination geo-

Amazon customers’ previous shopping histories, links clicked, searched

2.1 Data and Its Value in SCM

ccData is defined as ‘information, especially facts or numbers, collected to be

Glasgow, UK Kurt Y. Liu

6.4 Supplier Relationship Management�� 174

8 Demand Management�� 271

1.1 What Is a Supply Chain?

1.1.1 Why Do We Need a Supply Chain?

1.1.2 Structure of a Supply Chain

1.1.3 Supply Chain Processes

1.1.4 Supply Chain Flows

1.2 Supply Chain Management

1.3 Business Analytics

1.4 Supply Chain Analytics

1.4.1 SMART Goals of SCA

2.1 Data and Its Value in SCM

2.2 Data Source in Supply Chains

2.3 Big Data