A supply chain is the sequence of organizations-their facilities, functions, and activities that are involved in producing and delivering a product or service. The sequence begins with basic suppliers of raw materials and extends all the way to final customers. Facilities include warehouses, factories, processing centers, distribution centers, retail outlets, and offices. Value Chains, Supply Chains, and Demand Chains
Supply chains are sometimes referred to us value chains, a term that reflects the concept that value is added as goods and services progress through the chain. Supply or value chains are typically comprised of separate business organizations, rather than just a single organization. Moreover, the supply or value chain has two components for each organization: a supply component and demand component. Supply component-starts at the beginning of the chain and ends with the internal operations of organization. Demand component- starts at the point where the organization’s output is delivered to its immediate customer and ends with the final customer in the chain. It is the sales and distribution portion of value chain. The Need for Supply Chain Management
1.The need to improve operations.
2.Increasing levels of outsourcing.
3.Increasing transportation cost.
6.Increasing importance of e-commerce.
7.The complexity of supply chains.
8.The need to manage inventories.
Benefits of Effective Supply Chain Management
Generally, benefits of effective supply chain management include lower inventories, lower cost, and higher productivity, improved ability to fluctuations in demand, shorter lead times, higher profits and greater customer loyalty.
Managing the Supply Chain
Supply chain management involves coordinating activities across the supply chain. Central to this is taking customer demand and translating it into corresponding activities at each level...