To serve the customer, Supply Chain Management (SCM) needs to design, plan, execute, control, and monitor Supply Chain activities. Their objective is to create and increase the value of the Supply Chain, build the 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.
As Customers are at the end of the network and need certain products 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 manufacturers, marketers, suppliers, transporters, warehouses, retailers, customers, etc. They are directly or indirectly involved in the fulfillment of customer requirements. The main objective is to maximize the overall value generated. They continually look for sources of revenue and cost.
An integrated approach
To serve the customer, Supply Chain Management needs 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 the 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 comprises 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, and customer service). The Customer is an integral part of the Supply Chain.
SCM includes the movement of products from suppliers to manufacturers to distributors. It also includes the 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 inputs, conversion, and outputs, while purchasing, deals with purchased goods, materials, and services supply chain management discusses 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. The sources of supply chain revenue are 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 cite 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. In the second segment, fibers are spun, woven, or knitted, which are usually called textile mills. The Third segment of the supply chain is apparel manufacturers or other textile products manufacturers. The fourth segment is the retailers who make the products available to customers. Then, the customer is the final part of the supply chain. All the earlier four segments are working to satisfy the customer’s needs.
As Customers are at the cessation of the network and need certain products 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 needs 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, and building a greener supply chain, are among the long-term and short-term goals of a Supply Chain.
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
Spread the love Abstract: Revenue Management is the use of pricing to increase profit, although supply is limited in a supply chain asset. To increase the profit margin Supply Chain Managers must use all the levers available, including price. Ideas from revenue management suggest that firstly managers should use pricing as a lever, then they can proceed with the increase […]
Strengthening and revitalizing the highest traffic area in the store to become a leading destination for women’s shoes, handbags, fashion jewelry, intimate apparel and accessories, which are anchored by two very strong businesses: Sephora inside JCPenney and the Fine Jewelry store. This week, one of the oldest and largest stores to crack under the pressure of the pandemic, JCPenney, announced that it will be closing a total of 165 stores by Mar. J.C. Penney partners with organizations such as the Sustainable Apparel Coalition (SAC), apparel, footwear, and textile industry alliance to decrease the environmental and social impacts of production. These include actively participating in the Environmental Protection Agency (EPA) SmartWay program, which helps companies advance supply chain sustainability by measuring, benchmarking, and refining freight transportation efficiency.
Spread the love Abstract The popular definition of Lean Manufacturing and the Toyota Production System conventionally consists of the following: To solve the quandary of waste, Lean Manufacturing has The TPS is often used interchangeably with the terms Lean Manufacturing and Lean. Even more importantly, a Lean process is characterized by Lean and the Toyota Production System. The main reason of Lean Manufacturing or TPS is every step of manufacturing should be improved. Lean manufacturing involves never ending efforts to eliminate or reduce “Muda“, a Japanese term used to reduce waste, which does not add value to Supply Chain while make design, manufacturing, distribution and customer service processes in the respective Supply Chain. Things are visually displayed: For communicating with all sorts of people in the factory /supply chain unit visual displays are used as a great tool in the lean manufacturing process.Some techniques used in Lean Manufacturing to eliminate errors of the equipment operator. Keywords: TPS,Muda,Lean, 5s,Six Sigma etc. Introduction: Lean manufacturing is a synchronized method with which a supply chain can eradicate waste from its production process. According to customer needs, production process is required to develop, so that produced goods become more valuable product in quality. In contemporary […]
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