INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

A Supply Chain is defined as a set of three or more companies directly linked by one or
more of the upstream and downstream flows of products, services, finances, and
information from a source to a customer.

A basic Supply Chain consists of a company, an immediate supplier, and an immediate

customer directly linked by one or more of the upstream and downstream flows of products,
services, finances, and information.

Supply chain management is the implementation of a supply chain orientation across suppliers and
customers.

Supply Chain management is the systemic, strategic coordination of the traditional

business functions within a particular company and across businesses within the supply chain, to
improve the long-term performance of the individual companies and the supply chain as a
whole.

Supply chain strategy is two or more firms in a supply chain entering into a long-term agreement; the
development of trust and commitment to the relationship, the integration of logistics activities
involving the sharing of the demand and sales data, and the potential for a shift in the locus of control
of the logistics process.

Evolution and History of Supply Chain Management

The supply chain and its management have existed from the day individuals began trading goods and
services. Supply chain management and logistics have evolved together with technology making it
easier for an organization to improve its competitiveness.

The history and evolution of supply chain management will be presented in the form of a timeline:

1919: Syracuse University is known to have the first version of a supply chain program
where a business degree with a specialization in traffic and transportation was provided.

1927: Henry Ford manufactured cars by following the concept of “mass production” to achieve a
consistent evolution of operations in supply chain management.

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1952: The barcoding system was invented by Norman Woodland and Bernard Silver and
patented in the year 1952.

1963: The council of logistics management was established under the name of the National Council
of Physical Distribution Management.

1969: Few individuals such as J.F. St G. Shaw, Partner, Price, Cardew and Rider researched
and understood the relationship between a customer and a supplier.

1971: The concept of Reverse Logistics is discussed by William Stanton and William Zikmund.

1985: A research paper was presented about Third-Party Logistics at the council of logistics
management annual conference by Ken Ackerman and Dean Wise.

1988: The term “Lean Manufacturing” has been introduced.

1997: A technique has been devised to reduce the overall impact of the bullwhip effect by Lau
Lee, V. Padmanabhan, and Seungjin Whang.

2001: The concept of Green Supply Chain Management has been introduced. This is the first
version of the greenhouse gas protocol, a carbon accounting tool for the supply chain that has been
released.

2010: The profession of the supply chain has been classified as a job by 0* NET is known as Supply
Chain Managers.

2011: The supply chain leader, Tim Cook, an Apply Inc. has been named as the CEO of Apple.

Key Components of SCM

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Supply Chain management (SCM) takes the concept of the “chain” a few steps further. It
describes the flow of goods, services, and related activities executed from inception to consumption
required to plan, control, and achieve a product's overall success. Six key components structure
the process: planning, sourcing, making, delivering, returning, and enabling. In most cases,
these components are streamlined to achieve the most scalable and cost-effective distribution
possible.

All supply chain activities should be planned, so the planning process connects with all of the others.
Then, there is a logical sequence from source, where you buy materials, to make, where
you manufacture products, to deliver, where you get those products to your customers. At
any point in the source, make, or deliver processes you may need to send some of your products back
up the chain, so the return process sits underneath all of them.

And because the SCOR model is designed to describe a supply chain, not just an individual company,
those processes also have to link to your customers and suppliers. So the sourcing process for your
company connects to the delivery process for your suppliers. And the delivery process for your
company connects to the sourcing process for your customer. To make all of that work, you need to
have the right talent and information technology in place to enable these processes.

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