Supply Chain Management defined

Supply Chain Management defined

It is the ability to manage all of the functional moving parts of your supply chain to provide your customers with the best response at the right cost to your organisation. Let’s breakdown this statement and focus on three key areas.
 
The management of the moving parts.
Looking at the moving parts, it starts from procurement where product purchase decisions are made that drive the supply chain volume. This volume will move between multiple vendors to your distribution network for storage and processing. Your distribution centre will focus on picking, packing and despatching orders to fill customer requirements. Transportation function will manage the last leg to the customer.
 
To provide the best response for our customers.
The best response is the ability to manage information flow, data flow and physical material flow to the end customer. This is achieved through the linkages across the supply chain, from vendors to customers as each strives for ways to reduce the cycle time. Collaboration therefore is the key as multiple organisations and stakeholders are at play, each with a different set of boundaries. Working through these boundaries with customers and vendors can be the difference between progress or stagnation.
 
To deliver goods at the right cost, not lowest cost.
The right cost is not the lowest cost, rather it is the right cost for a given delivery. The cumulative outcome may be a lowering of previous years’ expenditure, although the cost of doing business to support customers when they are in need due to unforeseen circumstances such as strikes, supply delays etc. is a cost needed to be incurred. Process improvement can certainly revisit these events and work towards a minimisation strategy in future.
 
At the end of the day, your organisations long term plans are achieved by having a dynamic supply chain strategy which is supported tactically and operationally by all parts of the business, internal and external.
 
What is Supply Chain Management?