Supply Chain Management

Supply Chain Management

Supply Chain Management

Introduction

With the trend towards concentration on core competencies (outsourcing, reduction of intra- organizational division of labor/production depth in the company) are rapidly becoming more sophisticated supply chains. Intense competition in global markets, short product lead times (time-to-market), short product life cycles and high customer expectations, supply chains have become the focus of business decisions.

As a result, competing in their respective target markets are not vertically integrated single manufacturer, but rather complex structured alternative supply chains, which are composed of systemically related, but independently operating business units. Competitive advantages such decentralized systems gain in particular by a market-appropriate configuration of their structure and by superior coordination and integration of autonomously controlled activities in the supply chain. This consideration has to supply chain management out. Supply chain management is concerned thus - contrary to the Business Administration - not with the system, company, but with the system supply chain.

A supply chain, considered as a system, can also be described as a distributed network or channel through which information, materials, labor, equipment and currency flow. Though supply chains themselves are not new, four major developments forced thinking about them differently than in the past. The first motivating force came from the communications technology advances that forever changed the span of the marketplace for both the producer and the consumer. The second was the trend toward outsourcing in general, and global outsourcing in particular, which the information age enabled. The third was the increasing importance of timeliness in the marketplace. The fourth was the increasing emphasis placed on quality in all aspects of production and delivery.

Discussion

Supply chain management affects all factors of the shareholder value of a company which includes cost, customer service, productivity and revenues. In addition to the Strategic Planning, Supply Chain Management is the most popular methods for several operations of firms.

Nowadays, companies share the various tasks in the value chain, and around the globe. Despite huge tracks that cover the partial products, the companies jointly produce more and cheaper than a company that does the job alone. This happens because the dependence of firms rises with each other and due to the need for ever closer cooperation and more intensive exchange of information.

The extreme strategic importance of supply chain management for the competitiveness of businesses is evident in all sectors. At the same time, the gap between the average companies and leading companies such as Wal-Mart, Toyota, and Tesco becomes greater with the passage of time. The best are getting better and faster in almost all industries.

The five SCM components

Plan

This is the strategic segment of supply chain management. Strategies and business plans are made in order to carry out the remaining stages efficiently. Strategies are devised by the supply chain managers of the company devising best policies and strategies for the business.

Source

The next component is the selection of suppliers who will supply the goods and services, required to produce a good or service. Build up a set of pricing, delivery and payment procedures with ...