The topic of supply chain management and the creation of a coherent set of best practices therein can be a source of stress. The practice of supply chain management incorporates myriad concerns — environmental issues, wages as well as health and safety conditions. A varied list, to be sure. By way of definition, below is my favourite take on modern supply chain management, courtesy of the Network for Business Sustainability :. The reason I offer this definition versus the multitude a simple Internet search would yield is because of its holistic nature — specifically the social, the environmental and the economic concerns every business should pay attention to when managing its supply chain.
Indeed, supply chain management involves all aspects of sourcing, procurement, logistics and production. For too long those tasked with designing and overseeing supply chains focused too heavily, in some cases solely, on how to squeeze as much profit from the supply chain as possible.
Today, supply chain management, and the best practices that light the way for practitioners in the field, requires a nuanced understanding of the entire supply chain realm — from the different methodologies available to supplier performance to global regulations to economic concerns. Supply chain management, although it may not feel like it to those toiling in the field, is a relatively new concept. Among the milestones illustrated in the image, for the purposes of this analysis the most important highlights are those that took place within the past three decades.
The tie that binds each of these three examples is the holistic, all-encompassing take they place on supply chain operations.
For example, total cost of ownership is the financial estimate that includes all direct and indirect costs associated with the production of a good.
A valuable initial element in managing a supply chain is developing supply chain information systems. The concept of supply chain management is built on functional integration, which is supported and often catalyzed by information technology.
One of the components of the implementation of supply chain management is information sharing through two-way communication between partners within a supply chain. The activities of information generation, storage, and utilization in individual firms in a supply chain are essential to implement supply chain management. Member of a supply chain need real-time visibility of performance data across the entire supply chain.
In Dell computer's direct relationship with its customer create valuable information that, in turn, allows the company to coordinate its entire supply chain back through manufacturing to product design with other firms. World is shrinking day-by-day with advancement of technology. The expectations of customers are rising and the companies are prone to more and more uncertain environment.
In the 21st century companies will have to start using IT for their strategy development in contrast to the earlier situation when IT was aligned with existing business strategies to gain competitive advantage. The companies must also realize that they must harness the power of technology to collaborate with their business partners as never before.
It can be concluded that a proper IT strategy integrated with a supply chain strategy can turn around a company's fortune. About the Author:. The author holds degree in M. Phil in Commerce from Periyar University, Salem. She has also participated in different National Seminars and presented numerous papers and has also authored a book named "Banking Theory, Law and Practices.
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Make to Order. Wed, November 24th, Featured Fairs. Get your copy. By: Bhuvaneswari. View Article Analytics. Introduction Supply Chain Management SCM is the systemic, strategic coordination of the traditional business functions within a particular company and across businesses within the supply chain for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole.
Objective of Supply Chain The objective of every supply chain is to maximize the overall value generated. Cycle View The processes in a supply chain are divided into a series of cycle, each performed at the interface between two successive stages of a supply chain. Cycle view of Supply chain process includes, Customer order cycle Replenishment cycle Manufacturing cycle Procurement cycle.
Supply Chain Management in Global Environment The globalization of business has received a great deal of press in recent years. Dynamic Role of Sales Function in SCM The role of the contemporary sales person is changing dramatically, and in many situations, the old models of selling are simply outdated, ineffective and counter productive to SCM goals and objectives.
Personal Selling In SCM The sales function plays a critical role in implementing many supply chain management activities and behaviours. New Roles for Sales Management To support the sales force in its new supply chain management roles, sales managers need to train, support and encourage supply chain activities and logistics expertise.
Role of Transportation In A Supply Chain Transportation refers to the movement of product from one location to another as it makes it way form the beginning of a supply chain driver because products are rarely produced and consumed in the same location. Information Technology in Supply Chain Management A key aspect of supply chain management is the ability to make strategic decisions quickly based on accurate data, and this requires an efficient and effective information system.
The Business Environment Information is at the center of virtually every aspect of business especially in today's dynamic, uncertain and highly cooperative environment.
Supply Chain Information Systems Information systems are essential to managing a supply chain. Conclusion World is shrinking day-by-day with advancement of technology. About the Author: The author holds degree in M. Tags : Management Logistics. Disclaimer Responsibility: Fibre2fashion. Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products.
It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Supply chain management SCM represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production to product development to the information systems needed to direct these undertakings.
Typically, SCM attempts to centrally control or link the production, shipment, and distribution of a product. By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution , sales, and the inventories of company vendors. SCM is based on the idea that nearly every product that comes to market results from the efforts of various organizations that make up a supply chain.
Although supply chains have existed for ages, most companies have only recently paid attention to them as a value-add to their operations. In SCM, the supply chain manager coordinates the logistics of all aspects of the supply chain which consists of five parts:.
The supply chain manager tries to minimize shortages and keep costs down. The job is not only about logistics and purchasing inventory. According to Salary. Productivity and efficiency improvements can go straight to the bottom line of a company. Good supply chain management keeps companies out of the headlines and away from expensive recalls and lawsuits. A supply chain is the network of individuals, companies, resources, activities, and technologies used to make and sell a product or service.
A supply chain starts with the delivery of raw materials from a supplier to a manufacturer and ends with the delivery of the finished product or service to the end consumer.
SCM oversees each touchpoint of a company's product or service, from initial creation to the final sale. With so many places along the supply chain that can add value through efficiencies or lose value through increased expenses, proper SCM can increase revenues, decrease costs, and impact a company's bottom line. For several years the company has been investing and revamping its supply chain management process. Walgreens was able to use big data to help improve its forecasting capabilities and better manage the sales and inventory management processes.
His role is to boost customer satisfaction as the company increases its digital presence. Beyond that, in , it announced it would be offering free two-hour same day delivery for 24, products in its stores. Examples of supply chain activities can include designing, farming, manufacturing, packaging, or transporting. Supply chain management is important because it can help achieve several business objectives. For instance, controlling manufacturing processes can improve product quality, reducing the risk of recalls and lawsuits while helping to build a strong consumer brand.
At the same time, controls over shipping procedures can improve customer service by avoiding costly shortages or periods of inventory oversupply. Overall, supply chain management provides several opportunities for companies to improve their profit margins and is especially important for companies with large and international operations.
Supply chain management has five key elements—planning, sourcing raw materials, manufacturing, delivery, and returns.
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