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How Do You Do Supply Chain Management (SCM)?

A firm’s SCM efforts start with the development and execution of a long-term supply chain strategy. Among other things, this strategy should:

  • Identify what supply chains the firm wants to compete in.
  • Help managers understand how the firm will provide value to the supply chain.
  • Guide the selection of supply chain partners, including suppliers, subcontractors, transportation providers, and distributors.

As firms struggle to understand what supply chains they compete in, it is often valuable to map the physical flows and information flows that make up these supply chains. From these maps, firms can begin to understand how they add value, and what information is needed to make the supply chain work in the most effective and efficient way possible.

Of course, the firm’s supply chain strategy does not exist in a vacuum. It must be consistent with both the overall business strategy and efforts within such areas as purchasing, logistics, manufacturing and marketing.