What is Supply Chain Management ?

Supply Chain Management ,as defined by the world famous, Institute of Supply Man agement Inc., USA, is the design and management of seamless , value added proces s across organizational boundaries to meet the real needs of the end customer. Supply Chain Management encompasses the planning and management of all a ctivities involved in sourcing and procurement, conversion, and all logistics ma nagement activities. Importantly, it also includes coordination and collaboration with channel partne rs, which can be suppliers, intermediaries, third-party service providers, and c ustomers. In essence, supply chain management integrates supply and demand management with in and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business proces ses 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 m anufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information techno logy.

The development and integration of people and technological resources are critic al to successful supply chain integration. As the corporations strive to focus o n core competencies and become more flexible, they have reduced their ownership of raw materials sources. These functions are increasingly being outsourced to o ther corporations that can perform the activities better or more cost effectivel y. The effect has been to increase the number of companies involved in satisfyin g consumer demand while reducing the management control on daily logistics opera tions. Less control and more supply chain partners led to the creation of Suppl y Chain management concepts. The purpose of Supply chain management is to impr ove trust and collaboration among supply chain partners, thus improving invento ry visibility and improving inventory velocity. Thus the answer to the question " What is Supply Chain Management ? " can be as Supply Chain Management is the process of planning , implementing and controllin g the operations of the supply chain with the purpose of satisfying the custome r's requirement as efficiently as possible. Supply Chain spans all movement and storage of raw materials , Work-in-process , inventory and finished goods from the point of origin to the point of consumption.

According to the CSCMP , a professional association, that developed the definiti on, Supply Chain Management encompasses the planning and management of all acti vities involved in sourcing and procurement, conversion and all logistics manage ment activities. It also includes coordination and collaboration with channel pa rtners which can be suppliers , intermediaries , third party etc. Supply Chain management must address the following problems: Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers , warehouses and customers

Distribution strategy: Centralized Vs decentralized , cross docking, direct ship ment, pull or push strategies, third party logistics Information: Integrate systems and processes through the supply chain to share v aluable information, including demand signals , forecasts, inventory and transpo rtation Inventory management: Quantity and location of inventory including raw material, work-in-process and finished goods service providers and customers. Thus Supply chain management (SCM) can also be described as the oversight of mat erials, information, and finances as they move in a process from supplier to man ufacturer to wholesaler to retailer to consumer. Supply chain management involve s coordinating and integrating these flows both within and among companies. It i s said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when neede d). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service pr oviders (ASP) who promise to provide part or all of the SCM service for companie s who rent their service.

Is Supply Chain Management an Extended Enterprise? Click and Read here.... Supply chain management flows can be divided into three main flows: The product flow The information flow The finances flow

What is a Supply Chain ?

The product flow includes the movement of goods from a supplier to a customer, a s well as any customer returns or service needs. The information flow involves t ransmitting orders and updating the status of delivery. The financial flow consi sts of credit terms, payment schedules, and consignment and title ownership arra ngements. In essence, Supply chain management integrates supply and demand management with in and across companies. Some experts distinguish Supply Chain Management with L ogistics while others consider the term to be interchangeable. From the point of view of an enterprise, the scope of supply chain management is usually bounded on the supply side to the supplier's supplier and on the custom er side by your customer's customer.