The context of an integrated supply chain is the firms’ relationship management within a framework as capacity limitations, information, core competencies, capital, and human resource problems.
SCM focus on the channel relationship management Thus the focus of supply chain management is upon the
management of relationships in order to achieve a more profitable outcome for all parties in the chain. This brings with it some difficulties since there may be occasions when the narrow self-interest of one party has to be included for the benefit of the chain as a whole.
Fig2.1 an Integrated Supply Chain
Definition of Supply Chain Management
Supply chain management (SCM) is viewed by some individuals to be narrowly focused and/or focused upon supplies and materials, not demand for finished products.
SCM is the extension of logistics The concept of supply chain management is relatively new. It is in fact the third phase of an evolution that started in the 1960s with the development of the physical distribution concept, which focused on the outbound side of a firm’s logistics system. Logistics management is basically concerned with optimizing flows within the organization, while supply chain management extends such internal integration to the outside of the organization.
Market driven Freshness oriented Logistics optimizer
Operationally agile Customer-guided Trade focused
Outline-2
Part II Supply Chain Strategies ▪ Five supply chain strategy ▪ Many suppliers strategy ▪ Few suppliers strategy ▪ Vertical integration ▪ Keiretsu networks ▪ Virtual companies
SCM is highly customer-oriented
Supply chain management is highly customer-oriented. “supply chain integration really begins with the goal of satisfying consumer demand,” says LaHowchic, the President and CEO of Limited Logistics Services Co., “This fundamental belief impacts everything we do in the supply chБайду номын сангаасin. We seek to raise the level of quality throughout the chain to more effectively respond to consumer demand. And to do this, we need to optimize information and product flows through interdependent linked business processes－ from the sourcing of raw materials all the way to the sale of the finished products.”
The initial focus on physical distribution or outbound logistics was logical since finished goods were usually higher in value, which meant that their inventory, warehousing, materials-handling, and packaging costs were relatively higher than their raw materials inputs. In U.S.A., a national organization, the National Council of Physical Distribution Management (NCPDM), was organized to foster leadership, education, research, and interest in the area of physical distribution management.
Supply chain management came into vogue during the 1990s and continues to be a focal point for making organizations more competitive in the global marketplace. Supply chain management can be viewed as a pipeline for the efficient and effective flow of products/materials, services, information, and financials from the supplier’s suppliers through the various intermediate organizations/companies out to the customer’s customers (see Fig. 2.1) or the system of connected networks between the original suppliers and the ultimate final consumer.
Chapter I I Supply Chain Management
Outline-1
Part I Concept of Supply Chain Management ▪ Development of the Concept of SCM ▪ Definition of SCM ▪ Strategic importance of the supply chain management ▪ Supply chain management is highly customer-oriented ▪ Types of supply chain strategies
Part III Supplementary Reading
▪ Supply chain management of Volkswagen
Part I Supply Chain Management
Development of the concept of supply chain management
The integrated supply chain management shifts traditional channel arrangements from loosely linked groups of independent businesses that buy and sell inventory to each other toward a coordinated initiative to increase market impact, overall efficiency, continuous improvement, and competitiveness.
Broadly and comprehensively, SCM is the art and science of integrating the flows of products and materials, information (as order and schedules), and financials (as credit and cash) through the entire supply pipeline from the supplier’s supplier to the customer’s customer. It could be argued that supply chain, demand chain, value network, value chains, etc., can be used as synonyms.