What is Supply Chain Management?
Published on: Jan, 11, 2011
Director of SCRC, Bank of America University Distinguished Professor of Supply Chain Management
What is Supply Chain Management?
The concept of Supply Chain Management is based on two core ideas. The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains.
Supply chain management, then, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
The organizations that make up the supply chain are “linked” together through physical flows and information flows. Physical flows involve the transformation, movement, and storage of goods and materials. They are the most visible piece of the supply chain. But just as important are information flows. Information flows allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supply chain.
Read the Supply Chain Management Professional Newsletter
Read the latest supply chain research, articles, and news as soon as we post them.
Learn More about Supply Chain Management
- Supply Chain Management Definitions & Terms
- Supply Chain Management Articles
- Supply Chain Management Procurement Tutorials
Related Articles
- Why Do You Need To Know About Supply Chain Management (SCM)?
- What Do You Need to Know about Supply Chain Management (SCM)?
- How Do You Do Supply Chain Management (SCM)?
- Managing Relationships in the Supply Chain
- The New Supply Chain Model
- How Mature Is Your Supply Chain?
- A TaylorMade Supply Chain
- Leading Change in Supply Chain Management