Operations Management 2012
SUPPLY CHAIN MANAGEMENT
What is the difference between Supply Chain Management and Logistics?
A supply chain is “the connected series of activities which is concerned with planning,
coordinating and controlling material, parts and finished goods from suppliers to the
customer” (Stevens, 1989).
Supply chain management includes all value-adding activities from the extraction of materials through the transformation processes and through delivery to the end user. Supplychain management spans and crosses organizational boundaries and treats the organisationswithin the supply chain as a unified virtual business entity (Scott and Westbrook, 1991; Newand Payne, 1995).Figure 1: Supply chain management
management, as stated by Russell and Taylor (2009), focuses on “integrating
and managing flow of goods and services and information trough the supply chain in order tomake it re
sponsive to customer needs while lowering total costs”;
Supply chain management requires managing the flow of information throughthe supply chain in order to attain the level of synchronisation that will makeit more responsive to customer needs, while lowering costs. The keys toeffective supply chain management are information, communication,cooperation, and trust (Russell and Taylor, 2009).
Essentially, the existence of supply chain management is
to manage the flow of information,products and services across networks of customers, organisations and supply chain partners
(Russell and Taylor, 2009).