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An example of these conflicts is the interrelation between the sale department desiring to have higher inventory levels to fulfill demands and the warehouse for which lower inventories are desired to reduce holding costs .
Origin of the term and definitions[ edit ] InKeith Olivera consultant at Booz Allen Hamilton introduced the term "supply chain management" to the public domain in an interview for the Financial Times.
Supply chains were originally defined as encompassing all activities associated with the flow and transformation of goods from raw materials through to the end user, as well as the associated information flows.
Supply chain management was then further defined as the integration of supply chain activities through improved supply-chain relationships to achieve a competitive advantage. The management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, company, resellersand final consumers.
As a consequence, costs must be lowered throughout the chain by driving out unnecessary expenses, movements, and handling. The main focus is turned to efficiency and added value, or the end user's perception of value. Efficiency must be increased, and bottlenecks removed.
The measurement of performance focuses on total system efficiency and the equitable monetary reward distribution to those within the supply chain.
The supply-chain system must be responsive to customer requirements. It also includes coordination and collaboration with channel partnerswhich may be suppliersintermediariesthird-party service providers, or customers.
More recently, the loosely coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise. Supply chain management is the management of such a chain.
With SCEM, possible scenarios can be created and solutions devised. Including third-party logistics or other gathering agencies as part of the RM re-patriation process is a way of illustrating the new endgame strategy.
As organizations strive to focus on core competencies and become more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other firms that can perform the activities better or more cost effectively.
The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations. Less control and more supply-chain partners lead to the creation of the concept of supply-chain management. The purpose of supply-chain management is to improve trust and collaboration among supply-chain partners thus improving inventory visibility and the velocity of inventory movement.
Importance[ edit ] Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy. In recent decades, globalization, outsourcing, and information technology have enabled many organizations, such as Dell and Hewlett Packardto successfully operate collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities Scott, This inter-organisational supply network can be acknowledged as a new form of organisation.
However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories Powell, It is not clear what kind of performance impacts different supply-network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players.
From a systems perspective, a complex network structure can be decomposed into individual component firms Zhang and Dilts, While the cost elements provide good data points for decision making, there is more to be considered.
We will look at the impact of these options on the twin supply chain parameters of . As a supply chain professional, an individual could work in a variety of areas including purchasing, logistics, new product development, global sourcing and procurement, quality management, inventory control or traffic analysis, operations and supplier relationship management.
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Logistics Operations products include: SR Warehouse Management Helps retailers manage warehouse operations from reception, storage, order preparation and picking, and shipment. Module 1:Supply Chain Management The first supply chain was the barter system Traces of outsourcing was seen when Charles S.
Rolls became selling agent for cars made by F.