Supply chain management

Integrated approach in any company for producing products as per customer demand  can
be defined as supply chain management  which includes all functions right from customer ,
retailers to the vendors.Complexity of supply chain depends upon the numbers of products
and locations of the manufacturing unit .

Elements of supply chain managements are

  • Customer

  • Planning

  • Purchasing

  • Inventory

  • Production

  • Transportation


Few of the definitions  for supply chain management


What is supply chain management?

Supply chain management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management activities.
Importantly, it also includes coordination and collaboration with channel partners, which can
be suppliers, intermediaries, third party service providers, and customers. In essence, supply
chain management integrates supply and demand management within and across companies.

Boundaries and Relationships: Supply chain management is an integrating function with
primary responsibility for linking major business functions and business processes within and
across companies into a cohesive and high-performing business model. It includes all of the
logistics management activities noted above, as well as manufacturing operations, and it
drives coordination of processes and activities with and across marketing, sales, product
design, finance, and information technology.

http://guide.scmr.com/faq?pubid=5

Why is supply chain management important?

Two main reasons – money and opportunity. In the US about 10 percent of gross domestic
product, or almost $1 trillion, is spent on supply chain activities. Advances in information
technology (IT) and the expanding IT infrastructure are introducing new possibilities to
improve service and efficiencies, and given the amount of money at stake, the opportunities
are high. Some people view the IT tools that underlie supply chain management as the
backbone of e-commerce.

In years past, manufacturers were the drivers of the supply chain — managing the pace at
which products were manufactured and distributed. Today, customers are calling the shots,
and manufacturers are scrambling to meet customer demands for options / styles / features,
quick order fulfillment, and fast delivery.

http://guide.scmr.com/faq?pubid=5

What are the current trends in Supply Chain Management?

Supply Chain Management (SCM) is the management of goods and services as they flow
from raw materials to the ultimate consumer. Supply chain management includes the
development and maintenance of business- to-business (B2B) relationships, purchasing, out
sourcing decisions, logistics and transportation management, inventory management,
demand forecasting and management, warehousing, and strategic business alliances.

Supply Chain Management has increased in popularity in the past decade for several
reasons. First, technological innovation has made it possible for businesses to communicate
securely with each other. This enables businesses to consider the impact their own decisions
will have on customers and suppliers. Second, as businesses continuously tried to increase
productivity and reduce costs, they first improved productivity within their own organization.
The next logical step was to improved productivity as it was affected by their interactions with
trading partners. Third, as global competition has increased, supply chains have lengthened,
in many cases, to circle the globe. The need for effective management of the movement of
these goods and services increases as those supply chains grow in size.

http://web.mit.edu/supplychain/faq/sc-mit.html



What is supply chain management (SCM) and its benefits?

A supply chain is a network of facilities that procure raw materials, transform them into final
goods, and deliver the products to customers through a distribution system. SCM’s core
focus is enterprise integration – the integration of purchasing, manufacturing, transportation
and warehousing activities across vendors, facilities, and markets. SCM is the strategic,
tactical and operational planning of the food service supply chain network focusing on
gaining efficiencies, improving communication, and reducing operating, inventory and carrier
costs.

Without redistribution, manufacturers would produce certain products in their plants and then
move them to forward warehouses or company distribution mixing centers, and then on to
food distributors (large and small). These distributors then deliver the products in smaller
quantities to the restaurants. Many distributors cannot cost-effectively utilize inbound
truckload (TL) velocities, and therefore the system uses a more costly less- than-truckload
(LTL) transportation on certain slower moving items. In contrast, with redistribution in place,
manufacturers can efficiently ship truckload quantities to the re distributor, CDC, who then
can ship full (mixed) truckloads of products to the distributors. Most or all higher cost LTLs
are removed or reduced. This increases the distributors’ inventory turns and dramatically
increases the efficiency of the entire food service supply chain, there by reducing costs.

http://www.vxtconsulting.com/FAQ.htm

Glossary  for  Supply  chain  management

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