A supply chain is actually a complex supply chain logistics pdf dynamic supply and demand network. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model.
It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology. Many of the exchanges encountered in the supply chain are therefore between different companies that seek to maximize their revenue within their sphere of interest, but may have little or no knowledge or interest in the remaining players in the supply chain. A lack of transparency in the supply chain is known as mystification, which bars consumers from the knowledge of where their purchases originated and can enable socially irresponsible practices. Supply Chain Managers are under constant scrutiny to secure the best pricing for their resources, which becomes a difficult task when faced with the inherent lack of transparency.
A diagram of a supply chain. The black arrow represents the flow of materials and information, and the gray arrow represents the flow of information and backhauls. SCOR measures total supply chain performance. It is a process reference model for supply-chain management, spanning from the supplier’s supplier to the customer’s customer. It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain. The Global Supply Chain Forum has introduced another supply chain model.
This framework is built on eight key business processes that are both cross-functional and cross-firm in nature. Each process is managed by a cross-functional team including representatives from logistics, production, purchasing, finance, marketing, and research and development. While each process interfaces with key customers and suppliers, the processes of customer relationship management and supplier relationship management form the critical linkages in the supply chain. SM is a high-level, industry-neutral enterprise process model that allows organizations to see their business processes from a cross-industry viewpoint. The PCF was developed by APQC and its member organizations as an open standard to facilitate improvement through process management and benchmarking, regardless of industry, size, or geography. The PCF organizes operating and management processes into 12 enterprise-level categories, including process groups, and over 1,000 processes and associated activities. In the developing country public health setting, John Snow, Inc.
JSI Framework for Integrated Supply Chain Management in Public Health, which draws from commercial sector best practices to solve problems in public health supply chains. It is a method where an organization’s supply chain strategy can be reviewed in an organized and systematic approach in order to assure alignment of the supply chain with the business strategy. The method is supported in the most important and recognised theories and practices about supply chain strategy and business strategy. The method was developed by Hernan David Perez, an experienced supply chain manager in several industrial sectors, and, professor and international speaker in supply chain strategy. Original suppliers are those that provide products, services, and information that add value for customers and other stakeholders. The term was used earlier by Alizamir et al. If all relevant information is accessible to any relevant company, every company in the supply chain has the ability to help optimize the entire supply chain rather than to 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. 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. In theory, a supply chain seeks to match demand with supply and do so with the minimal inventory. Companies also outsource production to contract manufacturers. Technology companies have risen to meet the demand to help manage these complex systems. There are four common supply chain models. Besides the three mentioned above, there is the Supply Chain Best Practices Framework.
Resilient supply networks should align its strategy and operations to adapt to risk that affects its capacities. There are 4 levels of supply chain resilience. First is reactive supply chain management. Second is internal supply chain integration with planned buffers.
Then comes collaboration across extended supply chain networks. Finally is a dynamic supply chain adaptation and flexibility. It is not about responding to a one-time crisis, or just having a flexible supply chain. It is about continuously anticipating and adjusting to discontinuities that can permanently impair the value proposition of a core business with special focus on delivering ultimate customer centricity. Strategic resilience, therefore, requires continuous innovation with respect to product structures, processes, but also corporate behaviour. Recent research suggests that supply chains can also contribute to firm resilience. With the emergence of Internet, customers can directly contact the buyers.
This, in effect, has reduced the channel up to a great extent. Initially the supply chain was longer and it used to cost more. Internet has cut down the middlemen like retailers and distributors. Now the supply chain has reduced to manufacturer, distributor, online platform to the ultimate consumers. Some of the benefits are cost reduction, value creation and better collaboration. They also demonstrate that visibility needs to be improved if supply cannot be directly controlled and that smart and electronic technologies play a key role to improve visibility.
Finally, they highlight that collaboration with local partners, across the industry and with universities is crucial to successfully managing social responsibility in supply chains. Over the past 20 years, there has been a shift towards more traceable supply chains. Rather than purchasing crops that have passed through several layers of collectors, firms are now sourcing directly from farmers or trusted aggregators. Supply chain security has become particularly important in recent years. As a result, supply chains are often subject to global and local regulations. In the United States, several major regulations emerged in 2010 that have had a lasting impact on how global supply chains operate.
With increasing globalization and easier access to alternative products in today’s markets, the importance of product design to generating demand is more significant than ever. In addition, as supply, and therefore competition, among companies for the limited market demand increases and as pricing and other marketing elements become less distinguishing factors, product design likewise plays a different role by providing attractive features to generate demand. In this context, demand generation is used to define how attractive a product design is in terms of creating demand. In other words, it is the ability of a product’s design to generate demand by satisfying customer expectations. But product design affects not only demand generation but also manufacturing processes, cost, quality, and lead time. The product design affects the associated supply chain and its requirements directly, including manufacturing, transportation, quality, quantity, production schedule, material selection, production technologies, production policies, regulations, and laws. Broadly, the success of the supply chain depends on the product design and the capabilities of the supply chain, but the reverse is also true: the success of the product depends on the supply chain that produces it.