Supply Chain Management

Definition

Supply chain management is the movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.

Raw materials flow into a manufacturing firm, from a physical supply system they are processed by manufacturing and finally finished goods are distributed to end consumers through a physical distribution system.

Following are addressed by the Supply Chain Management

Suppliers.

Production Facilities.

Distribution Points.

Warehouses.

Customers.

Factors Influencing Supply Chain Management

Process to supply or service from supplier end to customer end.

Supply chain is like Network, where number of companies linked with each other.

A customer can be a supplier to another customer so the total chains have number of supplier/customer relationships.

Distribution system can be direct from supplier to customer, depending on the products and markets.

Product or services usually flow from supplier to customer and design and demand information usually flows from customer to supplier.

Some of the supply chain processes are:

Customer relationship management

Customer service management

Demand management

Order fulfillment

Manufacturing flow management

Supplier relationship management

Product development and commercialization

Returns management

Following provides to run company in profitable

Best customer service.

Lowest production cost

Lowest inventory investment

Lowest distribution costs

To achieve Marketing objectives to maintain best customer service and to increase revenue

Maintain high inventories so goods are always available for the customer.

Interrupt production runs so that a Non inventory item can be manufactured quickly.

Create an extensive and costly distribution system so goods can be manufactured quickly.