Today's dynamic times provide opportunities for new and better strategies, tools and practices which in turn, cultivate more complex supply professionals and companies.
Supply chains were originally defined as encompassing all activities associated with the flow and transformation of goods from raw materials through to the end user, as well as the associated information flows. Supply chain management was then further defined as the integration of supply chain activities through improved supply chain relationships to achieve a competitive advantage.
The management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, company, resellersand final consumers. As a consequence, costs must be lowered throughout the chain by driving out unnecessary expenses, movements, and handling.
Efficiency must be increased, and bottlenecks removed. The measurement of performance focuses on total system efficiency and the equitable monetary reward distribution to those within the supply chain. The supply chain system must be responsive to customer requirements.
It also includes coordination and collaboration with channel partnerswhich may be suppliersintermediariesthird-party service providers, or customers. More recently, the loosely coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise.
Supply chain management is the management of such a chain. With SCEM, possible scenarios can be created and solutions devised. Including third-party logistics or other gathering agencies as part of the RM re-patriation process is a way of illustrating the new endgame strategy.
As organizations strive to focus on core competencies and become more flexible, they reduce their ownership of raw materials sources and distribution channels.
These functions are increasingly being outsourced to other firms that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations.
Less control and more supply chain partners lead to the creation of the concept of supply chain management. The purpose of supply chain management is to improve trust and collaboration among supply chain partners thus improving inventory visibility and the velocity of inventory movement, Importance[ edit ] Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy.
In recent decades, globalization, outsourcing, and information technology have enabled many organizations, such as Dell and Hewlett Packardto successfully operate collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities Scott, This inter-organisational supply network can be acknowledged as a new form of organisation.
However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories Powell, It is not clear what kind of performance impacts different supply network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players.
From a systems perspective, a complex network structure can be decomposed into individual component firms Zhang and Dilts, Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players.
Therefore, the choice of an internal management control structure is known to impact local firm performance Mintzberg, In the 21st century, changes in the business environment have contributed to the development of supply chain networks.
First, as an outcome of globalization and the proliferation of multinational companies, joint ventures, strategic alliances, and business partnerships, significant success factors were identified, complementing the earlier " just-in-time ", lean manufacturingand agile manufacturing practices.
Many researchers have recognized supply network structures as a new organisational form, using terms such as " Keiretsu ", "Extended Enterprise", "Virtual Corporation", " Global Production Network ", and "Next Generation Manufacturing System".
Supply chain management is also important for organizational learning. Firms with geographically more extensive supply chains connecting diverse trading cliques tend to become more innovative and productive. Supply Chain Management draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach.
Historical developments[ edit ] Six major movements can be observed in the evolution of supply chain management studies: Creation era[ edit ] The term "supply chain management" was first coined by Keith Oliver in Complex Business Challenges Facing Supply Chain Management; Complex Business Challenges Facing Supply Chain Management.
you need to think about them and design your business so that it can function well under a range of scenarios. In other words, you need to think about the many different possibilities that the future holds, try .
Supply chain management field of operations: complex and dynamic supply- and demand-networks. (cf. Wieland/Wallenburg, ) Functions. Supply chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, certain aspects of the internal processing of materials .
Supply management is a complex function that’s critical to business success, responsible for delivering efficient costs, high quality, fast delivery and continuous innovation throughout companies’ entire supply chains. The strategic contribution of supply management is measured not only in.
Materials Management Materials management is a managerial and organizational approach used to integrate the supply management functions in an organization.
It involves the planning, acquisition, flow and distribution of production materials from the raw material state to the finished product state. The concept of "supply chain management" is fairly simple, but the practice can be enormously complex depending upon the size and nature of the company.
“Simply stated, supply chain is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole,” James Spann, Practice Leader of Supply Chain & Logistics at Simpler Healthcare, said in .