A SUPPLY CHAIN is a network of supplier, manufacturing, assembly, distribution and logistics facilities that perform the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these products to customers. Supply chains arise in both manufacturing and service organizations.
It 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 Chain Management [SCM] is a systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer. SCM is different from Supply Management which emphasizes only the buyer supplier relationship.
Supply chain Management is utilized to facilitate the coordination with outside business entities, or in the scope of extended enterprise. SCM usually refers to the redesign of supply chain processes in order to achieve streamlining of supply chain collaboration. It is generally performed only by large corporations with large suppliers. A Supply chain is a collection of interdependent steps that, when followed, accomplish certain objective such as meeting customer requirements. It is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service manufacture the product or service and delivers it to customers. Supply chain networks have gained prominence in the last decade. Important reasons for their growing importance include: global dispersion and distribution facilities; demand for customized products for local markets; competitive pressures; and rapid advances in information technologies in the form of EDI, internet technologies, electronic commerce etc.
The term supply chain management was first used in the early 1980s to refer to the notion that manufacturing firms should think of their own internal operations as an integrated whole, rather than as separate departments such as purchasing, stores, production, finished good warehouse, distribution and so on. It was quickly extended to cover relationships with suppliers and with immediate customers the idea being that working more closely and co‐operatively with these e counterparts would enable a kind of integration and co‐ordination that would lead to reduced inventory, better quality and delivery performance and reduced cost for everyone involved.
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