Introduction of SCM (0)

INTRODUCTION OF
SUPPLY CHAIN MANAGEMENT (SCM)
A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products , and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations , although the complexity of the chain may vary greatly from industry to industry and firm to firm.
Supply chain management is typically viewed to lie between fully vertically integrated firms , where the entire material flow is owned by a single firm and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and well-practiced relay team . Such a team is more competitive when each player knows how to be positioned for the hand -off. The relationships are the strongest between players who directly pass the baton ( stick ), but the entire team needs to make a coordinated effort to win the race .
Below is an example of a very simple supply chain for a single product, where raw material is procured from vendors, transformed into finished goods in a single step , and then transported to distribution centers, and ultimately, customers. Realistic supply chains have multiple end products with shared components , facilities and capacities. The flow of materials is not always along an arborescent network, various modes of transportation may be considered , and the bill of materials for the end items may be both deep and large.
To simplify the concept , supply chain management can be defined as a loop : it starts with the customer and ends with the customer. All materials, finished products, information, and even all transactions flow through the loop. However , supply chain management can be a very difficult task because in the reality , the supply chain is a complex and dynamic network of facilities and organizations with different , conflicting objectives.
Supply chains exist in both