The basic definition of supply chain management is the flow of goods as raw materials that is procured from the supplier to finished goods as delivered to the customer. Supply chain integration is a close alignment and coordination within a supply chain, often with the use of shared management information systems. A definition of supply chain management supply chain management scm has become a highly sophisticated, technologydependent, and collaborative discipline that combines the business functions of purchasing, operations, inventory management and warehousing, customer service, and logistics source. The supply chain includes, among others, the customer reliance website that accepts the customers order, the reliance store, and all of reliances suppliers and their suppliers. For example, when a final consumer purchases a bottle of coca cola, heshe. Supply chain management is also pervasive and ubiquitous. Numerous supply chain management definitions have been. Fundamentals of supply chain management kenyatta university. A supply chain management scm system is a set of software solutions that manages and oversees the flow of goods, data, and finances as a product or service moves. Supply chain risk management why does risk management matter.
The most accepted definition for sustainable supply chain management sscm would be one where all consumer products are created, used, and recycled or disposed of in the closed loop method. Supply chain management resume, job description, sample. An example of these conflicts is the interrelation between the sale department desiring to have higher. The healthcare supply chain involves the flow of many different product types and the participation of several stakeholders. Supply chain management spans all movement and storage of raw material, workinprocess inventory, and finished goods from point of origin to point of consumption. Supply chain management scm is the active streamlining of a business supply side activities to maximize customer value and gain a competitive advantage in the. Supply chain management scm is the active streamlining of a business supplyside activities to maximize customer value and gain a competitive advantage in the. A more detailed definition of esupply chain management can be. It is said that the ultimate goal of any effective. A supply chain is a network between a company and its suppliers to produce and distribute a specific product, and the supply chain represents the steps it takes to get the product or.
Risk and risk aversion in supply chain management 2. The fraud epidemic enabled by the increasing complexity of supplier networks, technology, and the global reach of manufacturing operations, supply chain fraud is on the rise. Supply chain management affects product and service quality, delivery, costs, the customer experience and ultimately, profitability. In addition, scm monitors the operational procedures from start to finish in order to identify costly and unnecessary procedural steps. Entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer. Supply chain strategies 111 supply chain planning encompasses a comprehensive perspective of business operations. For example, supply chain operations must align with. Practitioners and educators need a common definition of supply chain management, and a shared understanding of the processes. We recommend the definition of supply chain management developed and used by the global supply chain forum. The supply chain management scm profession has continued to change and evolve to fit the needs of the growing global supply chain. Supply chain management may be said to be broadly about the efficient and effective management of all activities. In another example, a customer purchases a wrist watch and traveling bag online from reliance retail. It comprises of vendors that supply raw material, producers who convert the material into products, warehouses that store, distribution centers that deliver to the retailers, and retailers who bring the.
Closed loop supply chain management clscm refers to all forward logistics in. Supply chain management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. Sc1x supply chain and logistics fundamentals lesson. With the supply chain covering a broad range of disciplines, the definition of what is a supply chain can be unclear. Supply chain management is a total systems approach to. Responsiveness versus efficiency sourcing role in the supply chain role in the competitive strategy components of sourcing decisions sourcing. Supply chain fraud 2 3 global profiles of the fraudster kpmg international, ma, y 2016. Risk management in the supply chain supply chain 247. Microsoft andor its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics. This can be combined with tools such as the supply chain management councils scor model based on the five management processes of plan, source, make, deliver and return, in helping to analyse and articulate an. Risk management alignment effective supply chain risk solutions depend on compatibility with an organizations business strategy and mission statement, product families, markets and supply chain partners. Some definitions of a supply chain are offered below. In the late 1990s, supplychain management scm rose to prominence, and operations managers began to use it in their titles with increasing regularity.
Cscmp supply chain management definitions and glossary. Supply chain management software supply chain planning system. Their sample addressed manufacturing and consumer products. With different emphases most definitions of supply chain management, efficient consumer response and vertical marketing systems agree on the vertical cooperation aspect within the value chain e. The health of a global supply chain isnt just measured by revenue and profit. And while frauds within the supply chain can generate significant. Common and accepted definitions of supply chain management are. Supplychain management was then further defined as the integration of supply chain activities through improved supplychain relationships to achieve a competitive advantage. Supply chain management in public sector procurement. For example, when a final consumer purchases a bottle of coca cola.
Supply chain management scm is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management professionals focus on managing the flow of goods. The supply chain not only includes the manufacturer or suppliers, but. What is supply chain management scm and why is it important.
In reality, the supplier base is usually a network and not a linear chain, and a tier 3 supplier could be the trigger of enormous supply disruptions, for example, because it supplies two or three tier 1 or tier 2 suppliers. The concept of working together with the aim of improving supply chain performance by aligning the plans and the objectives of individual enterprises. Risk changes over time mechanisms are required to access information from a wide range of information sources and to analyse this to update the risk management process. Supply chain management is the integrated processoriented planning and control of the flow of goods, information and money across the entire value and supply chain from the customer to the raw. Supply chain management is primarily concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed in the right quantities, to the right locations and at the right time, and so as to minimize total system cost subject to satisfying. This is a brief introductory tutorial that explains the methodologies applied in the rapidly growing area of supply chain management in. For this reason, supply chain management scm attempts to bridge this gap effectively by closely monitoring the cost a company pays for materials and from whom the materials are being procured. Ae defining the concept of supply chain management and its. The scm determines the entire process by taking the right quantity to the righ. Introduction to supply chains what is supply chain management. Mastering logistics end to end supply chain management enables enterprises to source the materials necessary to create a product or service and deliver that. The definitions of procurement and supply chain management.
Other commonly accepted definitions of supplychain management include. Pdf on jan 1, 2004, vorst and others published supply chain management. Operations practice excellence in supply chain management. Ae defining the concept of supply chain management and its relevance to romanian academics and practitioners 76 amfiteatru economic business market on the circuit cocacola wholesaler retailer final consumer caescu and dumitru, 2011. Supply chain management in healthcare should ensure complete endtoend visibility of information among suppliers, manufacturers, distributors and customers. About the tutorial supply chain management can be defined as the management of flow of products and services, which begins from the origin of products and ends with the products consumption at the enduser. Supply chain management involves coordinating and integrating these flows both within and among companies. The following are illustrative examples of a supply chain. A new introduction to supply chains and supply chain management. Pdf defining the concept of supply chain management and its. What it is, what its not and how it works the supply chain ecosystem is a complex one especially for multinational companies that work with suppliers all over the world. Concept of supply chain a supply chain consists of all stages involved, directly or indirectly, in fulfilling the customer request.
Supply chain management definition and importance of its. Role in the supply chain set of business processes required to purchase goods and services in. Supply chain management can be defined as the management of flow of products. Supply chain management is concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed. For example, a shipment has landed from a supplier who is based in new. Part two the definition of supply chain management executive summary supply chain management is still evolving and developing and there are, therefore, numerous definitions of it, some of which are presented in this paper. This definition effectively explains why supply chain management can be done in such. For example, at the 1995 annual conference of the council of logistics. The main purpose of the healthcare supply chain is to.
Develop a highlevel roadmap for supply chain sustainability. Take an example of quality management a very important part of todays business. Effective supply chain management requires simultaneous improvements in both customer service levels and the internal operating efficiencies of the companies in the supply chain. Supply chain management is the integration of key business processes from end user through. In commerce, supply chain management scm, the management of the flow of goods and. As recently as 2017 a typical supply chain accessed 50 times more data than just five years earlier. These companies have redefined their customers expecta. A supply chain is the endtoend system that creates products and services and delivers them to the customer. Goods can also flow in a reverse direction in a supply chain from the customer back to producers for purposes such as returns, reuse and recycling. Definition of a supply chain a supply chain is the material, information, and services, typically crossing several different organizations, involved in producing and delivering a product or service to an end user. If you go to a supermarket and pick up a few items off the shelf from electronics and white goods or even clothes and look at the labels, the chances are that you will find them having been manufactured in china or mexico.