Supply chain management integrates the key business processes, from end user through original suppliers.
Companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations and production capabilities. Technology can be used effectively to enhance the performance of the supply chain to ensure value propositions at all points of the supply chain. Ensuring superior value propositions based on customer service leads to competitive advantage.
If all relevant information is accessible to any relevant company, every company in the supply chain has the possibility to and can seek to help optimizing the entire supply chain rather than sub optimize based on a local interest. This will lead to better planned overall production and distribution which can cut costs and give a more attractive final product leading to better sales and better overall results for the companies involved.
The primary objective of a company’s supply chain management is to fulfil customer demands through the most efficient use of resources, including distribution capacity, inventory and labour. A supply chain seeks to match demand with supply and do so with the minimal inventory. Various aspects of optimizing the supply chain include liaising with suppliers to eliminate bottlenecks; sourcing strategically to strike a balance between lowest material cost and transportation, implementing JIT (Just In Time) techniques to optimize manufacturing flow; maintaining the right mix and location of factories and warehouses to serve customer markets, and using location/allocation, vehicle routing analysis, dynamic programming and traditional logistics optimization to maximize the efficiency of the distribution side.
Incorporating SCM successfully leads to a new kind of competition on the global market where competition is no longer of the company versus company form but rather takes on a supply chain versus supply chain form.
When a firm sustains