SUPPLY CHAIN MANAGEMENT

The Development of Supply Chain Management



The Development of Supply Chain Management

Introduction

Supply chain management refers to the development and management of integrated supply chain (material and information flows) over the entire value chain, starting from the raw materials through the processing stages to the end user. Therefore, Supply chain management describes the design of all active processes to customers or markets economically, to provide products, goods and services. In contrast to the concept of logistics supply chain management includes not only the physical activities but the accompanying order processing like Cash flow and processes (Paul &Halldorsson , 2004, pp. 17-31).

In particular it includes the coordination and cooperation between the participating partners like, suppliers, distributors, logistics service providers, customers. SCM integrates management within the boundaries of an enterprise and across enterprise boundaries (Christopher, 1998, pp. 1-304).

Discussion

Evolution in Supply Chain

Previous to 1950s, logistic was considered as a military term. It was the function concerned with maintenance, procurement, transportation of personnel, material as well as military facilities. Even though, some authors previous to this time started discussing about trading one expense for another like, cost of transportation and inventory and discussed the advantages to the organizations of obtaining the appropriate goods to the appropriate place on the right time. The firm within the usual firm around the actions presently related to the logistic was disjointed. This fragmentation resulted in conflict between personnel who had the responsibility for activities of logistics and the cost and services to the customers were sub-optimize (Hesse & Rodrigue, 2004, pp.171-184).

The causes for this fragmented position were:

Little understanding of core cost tradeoffs.

The inertia of meeting and traditions.

Other areas were considered more important than logistic.

The firms may be under evolutionary state.

Later on it the organization realized the benefits of reducing the fragmentation like

It promotes significant tradeoffs to take place that result in reduction in total cost.

It is focused on significant identified areas by top management and

Logistic establish the structure within which the organization can control things easily.

The technology and organization of advanced distribution are rooted from changes in macro and micro economic environment. This can be categorized by globalization and flexibilization (Ronald, 2007, pp. 332 - 348). Flexible specialization is the representation of felxibilization. It is an extremely differentiated and a strong customer and market driven mode of value addition. Contemporary manufacturing and supply is not subjected to a single organization activity any more. However, increasingly it is practiced in suppliers' network and subcontractors (Kane, 2008, pp. 31-35).The bundles of supply chain do this by cooperation, communication, information and physical distribution. Globalization exhibits that the frame for the whole economy has been grown with the implication of spatial economic growth, more intricate economic integration of globe and a complex networking of global hubs and flows. Therefore, logistic has been developing against the long term structural economic, technological and societal change, affecting all main industrialized states (Ueltschy, 2011, pp.17-22).

The contemporary logistic was firstly dedicated to the process of production automation, so as to organize manufacturing of industry ...