Wednesday, October 9, 2013

The meaning of supply chain management

Supply chain management is one of the major strategic building blocks to develop an effective and efficient verticalised supply chain.

What is supply chain management? Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers.

Thus supply chain management covers all the necessary movement and storage of raw materials, work in process inventory and finished goods from the point-of consumption.

Harrison and Van Hoek define supply chain management as: The alignment of upstream and downstream capabilities of supply chain partners to delivers superior value to the end customer at less cost to the supply chain as a whole.

Supply chain is about relationship management. A supply chain is managed link-by-link, relationship-by-relationship, and the organizations that manage these relationship best will win.

It is important to recognize that one of the most important prerequisites for successful supply chain management is the integration of information flows, material flows and all the business processes within a supply chain network.

Supply chain risk appears as an event which effects the movement of material in a supply chain and disrupts the planned flow of material and money startling from initial suppliers to the end consumer.
The meaning of supply chain management
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