SUPPLY CHAIN MANAGEMENT: CONCEPTS, TECHNIQUES AND PRACTICES - Enhancing Value Through Collaboration© World Scientific Publishing Co. Pte. Ltd.http://www.worldscibooks.com/business/6273.html
Introduction to Supply Chain Management
Supply Chain Management
is a set of synchronized decisions andactivities utilized to efficiently integrate suppliers, manufacturers,warehouses, transporters, retailers, and customers so that the rightproduct or service is distributed at the right quantities, to the rightlocations, and at the right time, in order to minimize system-wide costswhile satisfying customer service level requirements. The objective of Supply Chain Management (SCM) is to achieve sustainable competitiveadvantage.A company’s supply chain in an e-Biz environment can be verycomplicated. Figure 1.1 illustrates a simplified supply chain becausemany companies have hundreds and thousands of supplies and customers.The supply chain in Figure 1.1 includes internal supply chain functions,an upstream supplier network, and a downstream distribution network.Logistic function facilitates the physical flow of material from the rawmaterial producer to the manufacturer, to the distributor, and finally, tothe end user.The
internal supply chain
of the focal manufacturing company in themiddle of Figure 1.1 includes sourcing, production, and distribution.
or purchasing of the company is responsible for selectingsuppliers, negotiating contracts, formulating purchasing process, andprocessing order.
is responsible for transforming rawmaterials, parts or components to a product.
is responsiblefor managing the flow of material and finished goods inventory from themanufacturer to customer. Enterprise Resource Planning systems (ERP)integrate the entire company’s information system, process and store data,cut across functional areas, business units, and product lines to assistmanagers make business decisions. As an IT infrastructure, ERPinfluences the way companies manage their daily operations andfacilitates the flow of information among all supply chain processes of afirm.The
on the left-hand side of Figure 1.1 consists of all organizations that provide materials or services, either directly orindirectly. For example, a computer manufacturer’s supplier network includes all the firms that provide items ranging from such raw materialsas plastics, computer chips, to subassemblies like hard drives andmotherboards. A supplier of motherboard, for example, may have its