Supply Chain Management

To discuss ‘supply chain management’, i.e. the managing of supply chains, it is necessary to understand what a supply chain is. By definition, a supply chain is a network of organisations that are involved in upstream and downstream linkages , in different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer.From this definition we can understand that a supply chain is the linkage of a number of different factors which allow a product or services to develop through each stage of the factor markets and become a finished product supplied to the consumer. Therefore supply chain ‘management’ is the way in which the supply chain is influenced or changed to make the most efficient and economic use of available resources. Historically supply chains have been an element in almost every aspect of history, however a greater influence was placed on increasing efficiency and economic effectiveness during the industrial revolution and the mid-1900s due to the advancements in information technology and globalization. Hence, supply chain management became more prominent. This assignment will examine further the role that supply chain management fulfills in 21st century business and comment on both the primary positives and negatives. Furthermore this assignment discusses the argument that supply chain management is either a passing fad or fundamental to business as proposed by

Charu Chandra and Sameer Kumar in the publication ‘Supply chain management in theory and practice: A passing fad or a fundamental change?’

There are a few things that a supply chain management does for a business for example:

There are six key elements to a simply supply chain , which are 1)customer orders, 2)Planning , 3)Purchasing, 4)Inventory , 5)Production and 6)Transportation.These elements work hand-in-hand to ensure the smooth process between customer orders to customer receipt.

• Ensures efficiency and on time

-Time is a crucial competitive variable as more markets become time competitive.Jus as important from the suppliers perspective , is the time it takes to convert order into cash and the total time that working capital is committed from when materials are first procured through to when the customers payment is received.Time is valuable thing in the supply chain world.

• Supplies demand and plans for future needs e.g increased demand

• Creates and manages production price