Supply chain refers to a sequence of firms that perform activities required to create and deliver a goods or service to consumers or industrial users while supply chain management is the integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to customers. So, supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores so that merchandise/product is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirements.
👉Supply chain management is concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed:
- In the right quantities
- To the right locations
- At the right time
👉In order to
- Minimize total system cost
- Satisfy customer service requirements
- Purchasing / Procurement
- Inventory Control
- Warehousing
- Materials Handling
- Order Processing
- Transportation
- Customer Service
- Facility Location / Network Design
Three Main Aspects of SCM?
👉SCM as a cross-functional entity
👉SCM as a strategic user of inventory and other production resources (balancing demand & capacity)
👉SCM as the integrator and coordinator of production and logistics activities. This approach is the essence of the SCM and it helps to achieve operational efficiency with regard to cost, lead times, and customer service.