To serve the customer, Supply Chain Management (SCM) need to design, plan, execute, control and monitor Supply Chain activities. Their objective is to create and increase the value of the Supply Chain, build necessary infrastructure, leverage logistical needs, supply, and demand, and measure performance even at the global level. It’s more accurate to use the term “Supply network” or “Supply web”. Supply chain profitability is the total profit to be shared across all stages of the supply chain. Supply chain success should be measured by total supply chain profitability, not profits at an individual stage. Sources of supply chain cost are flows of information, products, or funds between stages of the supply chain. Supply chain management is the management of flows between and among supply chain stages to maximize total supply chain profitability.
Keywords: Supply Chain Management (SCM), supply chain profitability, Customers etc.
Introduction:
As Customers are at the end of the network, who need certain product or services, Supply Chain Management is the management of networks and channels involved that serve the customer. SCM covers the movement and storage of raw materials, WIP and finished goods from point of start to point using the finished goods or services. There are different parties involved in a Supply Chain such as manufacturer, marketer, suppliers, transporters, warehouses, retailers, customers etc. They are directly or indirectly involved in fulfillment of the customer requirement. The main objective is to maximize overall value generated. They continually look for sources of revenue and cost.
A supply chain depicted
An integrated approach:
To serve the customer, Supply Chain Management need to
design, plan, execute, control and monitor Supply Chain activities. And
their objective is to create and increase the value of the Supply Chain,
build necessary infrastructure,leverage logistical needs, supply, and
demand,
and measure performance even at the global level. SCM tends to be an
integrated approach along with logistics, procurement, operations management and information technology.
SCM Components:
SCM comprises of all Stages involved, directly or
indirectly, in fulfilling a customer request including
manufacturers,suppliers, transporters, warehouses, retailers, and
customers.Within each company, the supply chain includes all functions involved
in fulfilling a customer request (product development,
marketing,operations, distribution,finance, customer service).
The Customer is an integral part of the Supply Chain.
A Network:
SCM includes movement of products from suppliers to manufacturers to distributors. It also includes movement of information, funds, and products in both directions.It’s more accurate to use the term “supply network” or “supply web”. The network involves all firms and relationships that get a product to market, including the original acquisition of raw materials; production of the item at a manufacturing facility; distribution to a retailer; sale of the finished item to the customer, and any installation, repair, or service activities that follow the sale.
Typical Supply Chain stages :
It includes Customers, retailers, distributors, manufacturers and suppliers. All stages may not be included in all the supply chains. supply chain management discusses about inputs, conversion and outputs, while purchasing, deals with purchased goods, materials and services supply chain management discusses about inputs, conversion and outputs.
Supply Chain profit:
The
objective of every Supply Chain is to
maximize the overall value generated. Value is the difference
between what the final product is worth to the customer and
the costs the supply chain incurs in filling the
customer’s request. Value is strongly correlated with supply
chain profitability (also known as supply chain surplus). Supply
chain profitability is the total profit to be shared across all
stages of the supply chain.
Supply Chain Cost:
Supply
chain success should be measured by total supply chain profitability,
not profits at an individual stage. Sources of supply chain
revenue is the customer. Sources of supply chain cost are flows of
information, products, or funds between stages of the supply
chain. Supply chain management is the management
of flows between and among supply chain stages to maximize
total supply chain profitability.
Example of a supply chain:
For easy understanding,we may site an example of US Textile
& Apparel Supply Chain about 25,000 companies are working, where about
50,000 people are involved excluding retailing channels, which has five
segments. At the top of the Supply Chain, there are fiber producers. At
the second segment, fibers are spun, woven or knitted, which are usually
called textile mills. The Third segment of the supply chain is
apparel manufacturer or other textile products manufacturers. The fourth
segment is the retailers who make the products available to customers.
Then, the customer which is the final part of the supply chain. All the
earlier four segments are working to satisfy the customer needs.
Conclusion:
As Customers are at the cessation of the network, who need certain product or accommodations, Supply Chain Management is the management of networks and channels involved that accommodate the customer. SCM covers the kineticism and storage of raw materials, WIP and finished goods from point of start to point of utilizing the finished goods or services.To accommodate the customer, Supply Chain Management need to design, plan, execute, control and monitor Supply Chain activities. SCM comprises of all Stages involved, directly or indirectly, in consummating a customer request including manufacturers,suppliers, conveyors, warehouses, retailers, and customers.Within each company, the supply chain includes all functions involved in consummating a customer request.Balancing between effectiveness and responsiveness ,building greener supply chain, are among the long term and short term goals of a Supply Chain.
Further
readings:
1.Walker.Helen,Sisto.Lucio
D.,Mc Bain,Danan(2008). “Drivers and barriers to environmental supply
chain management practices: Lessons from the public and private sectors”.
Journal of purchasing and Supply Management. Volume 14, Issue 1, March 2008, Pages 69-85
2.Diabat.Ali,Govindan.Kannan(2011).
“An analysis of the drivers affecting the implementation of green supply
chain management.Resources, Conservation and Recycling”, Volume 55, Issue
6, April 2011, Pages 659-667
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