SUPPLY CHAIN ​

MANAGEMENT
David HS
SUPPLY CHAIN ​
MANAGEMENT
Supply chain system is a system that includes
coordination with all parties involved, be it the
suppliers, intermediaries, service providers, or
customers. Basically, supply chain management
is tasked with integrating supply and demand
management in the entire company.
The goal of supply chain management is to
align demand and supply effectively and
efficiently.
Supply chain management or supply chain
management plays an important role in
helping companies to ensure customer
satisfaction. Through this mechanism,
companies can find out what items they want
and when the right time to send the goods.
 I. The Use of Technology in
Supply Chain Management
The information process is a major function
of supply chain management. The latest
developments and IT innovations have
provided an opportunity to increase the
capability of the information process.
IT can contribute to supply chain
management:
1. Improvements and various information
between companies
2. Proper problem identification &
optimization
II. A simple model of
supply chain management
The supply chain operations reference
model (SCOR) is a management tool used
to address, improve, and communicate
supply chain management decisions
within a company and with suppliers and
customers of a company (1). The model
describes the business processes required
to satisfy a customer’s demands. It also
helps to explain the processes along the
entire supply chain and provides a basis
for how to improve those processes.
 Value Chain

A value chain is a step-by-step business model

for transforming a product or service from idea
to reality. Value chains help increase a business's
efficiency so the business can deliver the
most value for the least possible cost. A value
chain is a business model that describes the full
range of activities needed to create a product or
service. For companies that produce goods, a
value chain comprises the steps that involve
bringing a product from conception to
distribution, and everything in between—such as
procuring raw materials, manufacturing
functions, and marketing activities.
 The Advantages of Supply Chain
Management
• Cost Efficiency
The first and foremost advantage of supply chain
management is that it helps the company in achieving
cost efficiency because it can lower various costs like
transportation costs, warehousing, packaging costs,
reduces wastage by timely delivery of goods and so on
which ultimately helps the company in achieving cost
efficiency which in turn increases the profitability of the
company.
• Helpful in Identifying Problem Areas
In the absence of proper supply management company
will find it hard to find problem areas as every
department will blame other departments for failure
but due to this management company can identify the
problem areas in the company due to which company’s
profitability and reputation are taking a hit.
 The Advantages of Supply Chain
Management

• Customer Delight
Since the primary task of this management is to
make sure that goods reach customer on time it
results in customer delight because nowadays
people do not care about paying more money
provided they get quality service from the
company and supply chain management does
exactly that resulting in costumer of the
company getting satisfied and we all know that
a satisfied customer will bring not only his or her
business but acts as a marketing spokesperson
of the company by bringing other customers to
the company
 The Disadvantages of
Supply Chain Management
• Lack of Coordination between Various Departments
The biggest disadvantage of supply chain management
is that it can work only if there is proper coordination
between all the departments of the company and if
departments are at loggerheads than this system will be
a failure. Hence for example, if the marketing
department does not inform the production department
about the possible order than the production department
will not be able to produce the desired order on time.
• Complicated
Since it involves multiple departments sometimes it can
be complicated and may hamper the normal working of
the company besides workers as well as employees
may feel insecure and demotivated because human
beings by nature resist new things and to them the
concept of supply chain management may appear very
complicated resulting in them accepting this management
half-heartedly.
 The Disadvantages of
Supply Chain
Management

• Trained and Professional Staff

It requires professional and trained staff in order to properly
execute supply chain management and in order to hire
professional staff company will need to pay money which is
an expensive proposition which is the reason why small
companies seldom go for supply chain management as
expenses of implementing this system outweighs its benefits.
 The evolution of supply chain
management has been
characterized by an increasing
degree of integration of separate
tasks, a trend that was underlined
in the 1960s as a key area for future
productivity improvements since the
system was highly fragmented.
Although the tasks composing
logistics have remained relatively
similar, they initially consolidated
into two distinct functions related
to materials
management and physical
distribution during the 1970s and
1980s. This process moved further in
the 1990s as globalization incited a
functional integration and the
Development of emergence of logistics in a true
sense; all the elements of the supply
Supply Chain Management chain became part of a single
management perspective.
SCM Implementation
Supply Chain Management (SCM) is a
system that can coordinate the process
of moving material, information and
finance within a company. One factor
that requires costs in marketing
products is logistics management which
consists of product design, material
procurement, production, inventory
control and storage of goods. This
coordination occurs not only within the
company, but also for all activities
outside the company. The goal is that
management of raw material inventory
needs to be more effective and efficient.