Supply chain management - Wikipedia, the free encyclopedia. Supply chain management field of operations: complex and dynamic supply- and demand- networks. Wieland/Wallenburg, 2. In commerce, supply chain management (SCM), the management of the flow of goods and services. Interconnected or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain. The term was slow to take hold. It gained currency in the mid- 1. In the late 1. 99. As a consequence, costs must be lowered throughout the chain by driving out unnecessary expenses, movements, and handling. The main focus is turned to efficiency and added value, or the end- user's perception of value. 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 partners, which may be suppliers, intermediaries, third- party service providers, or customers. Supply chain management integrates supply and demand management within and across companies. More recently, the loosely coupled, self- organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise. A supply chain, as opposed to supply chain management, is a set of organizations directly linked by one or more upstream and downstream flows of products, services, finances, or information from a source to a customer. 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. Sourcing & Procurement; Supply Chain Software; Third Party Logistics. 7 Magazine Issues per year of Supply Chain Management Review magazine. 2014 Occupational Standard: PROCUREMENT OFFICER. Strategic Sourcing: A Step -By-Step Practical Model. 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. 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 . 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, 2. 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, 1. In the 2. 1st 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 .
Firms with geographically more extensive supply chains connecting diverse trading cliques tend to become more innovative and productive. However, the concept of a supply chain in management was of great importance long before, in the early 2. The characteristics of this era of supply chain management include the need for large- scale changes, re- engineering, downsizing driven by cost reduction programs, and widespread attention to Japanese management practices. However, the term became widely adopted after the publication of the seminal book Introduction to Supply Chain Management in 1. Robert B. Handfield and Ernest L. This era has continued to develop into the 2. Internet- based collaborative systems. This era of supply chain evolution is characterized by both increasing value added and cost reductions through integration. A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one that achieves vertical integration with upstream suppliers and downstream customers. An example of this kind of supply chain is Tesco. Globalization era. Although the use of global sources in organisations' supply chains can be traced back several decades (e. This era is characterized by the globalization of supply chain management in organizations with the goal of increasing their competitive advantage, adding value, and reducing costs through global sourcing. Specialization era (phase I): outsourced manufacturing and distribution. They abandoned vertical integration, sold off non- core operations, and outsourced those functions to other companies. This changed management requirements, by extending the supply chain beyond the company walls and distributing management across specialized supply chain partnerships. This transition also refocused the fundamental perspectives of each organization. Original equipment manufacturers (OEMs) became brand owners that required visibility deep into their supply base. They had to control the entire supply chain from above, instead of from within. Contract manufacturers had to manage bills of material with different part- numbering schemes from multiple OEMs and support customer requests for work- in- process visibility and vendor- managed inventory (VMI). The specialization model creates manufacturing and distribution networks composed of several individual supply chains specific to producers, suppliers, and customers that work together to design, manufacture, distribute, market, sell, and service a product. This set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands. Specialization era (phase II): supply chain management as a service. Learn procurement and supply chain management process. Supply Chain Empire Supply, Chain, Sourcing and Procurement. This variability has significant effects on supply chain infrastructure, from the foundation layers of establishing and managing electronic communication between trading partners, to more complex requirements such as the configuration of processes and work flows that are essential to the management of the network itself. Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best- in- class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain- specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is a leading reason why supply chain specialization is gaining popularity. Outsourced technology hosting for supply chain solutions debuted in the late 1. This has progressed from the application service provider (ASP) model from roughly 1. Saa. S) model currently in focus today. Supply chain management 2. SCM 2. 0). The growing popularity of collaborative platforms is highlighted by the rise of Trade. Card. At its core, the common attribute of Web 2. Web in order to find what is being bought. It is the notion of a usable pathway. SCM 2. 0 replicates this notion in supply chain operations. It is the pathway to SCM results, a combination of processes, methodologies, tools, and delivery options to guide companies to their results quickly as the complexity and speed of the supply chain increase due to global competition; rapid price fluctuations; changing oil prices; short product life cycles; expanded specialization; near- , far- , and off- shoring; and talent scarcity. SCM 2. 0 leverages solutions designed to rapidly deliver results with the agility to quickly manage future change for continuous flexibility, value, and success. This is delivered through competency networks composed of best- of- breed supply chain expertise to understand which elements, both operationally and organizationally, deliver results, as well as through intimate understanding of how to manage these elements to achieve the desired results. The solutions are delivered in a variety of options, such as no- touch via business process outsourcing, mid- touch via managed services and software as a service (Saa. S), or high- touch in the traditional software deployment model. Business process integration. In an example scenario, a purchasing department places orders as its requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged through process integration. Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems, and shared information. According to Lambert and Cooper (2. However, in many companies, management has concluded that optimizing product flows cannot be accomplished without implementing a process approach. The key supply chain processes stated by Lambert (2.
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