'Supply Chain Management' is defined as the integration-oriented skills required for providing competitive advantage to the organization that are basis for successful supply chains. A typical supply chain may involve a variety to stage. These supply chain stages include:
• Customers
• Retailers
• Wholesaler/ Distributors
• Manufacturers
• Component/Raw material suppliers
'Supply Chain Management' is the integration-oriented skills required for providing competitive advantage to the organization that are basis for successful supply chains.
'Supply Chain Management' can be defined as the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective and efficient ways possible.
Within each organization, such as a manufacturer, the supply chain includes all functions involved in receiving in receiving and filling a customer request. The functions that are chain includes all functions involved in receiving and filling a customer request, operations, distribution, finance, and customer service. The decision is trade off between price, inventory, and responsiveness.
Its activities begin with a customer order and ends when a satisfied customer has paid for his or her purchase. Generally, more than one player is involved at each stage. A manufacturer may receive materials from several suppliers and then supply several distributors. Thus, most supply chains are actually networks.
Supply chain is an integral part of the value chain. According to Michael Porter, who first articulated the value chain concept in the 1980s, the value chain is comprised of both the primary and support activities. The supply chain, consists only of the primary activities or the operational part of the value chain. The supply chain, therefore, can be thought of as a subset of the value chain. In other words, while everyone in the same organization works in the value chain, not everyone within the organization works in the supply chain.
The value a supply chain generates is the difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customer's request. The supply chain profitability is based on the effort involved in the appropriate management of the flows between and among stages in a supply chain. Unlike the traditional measure of organizational success in terms of the profits at an individual stage, supply chain success is measured in terms of supply chain profitability.
