Is supply chain management for real or is it just another fad? Does the answer to this question depend on how a company pursues SCM?
Supply chain management is for real. This is because it is used frequently in today’s materials management environment. SCM is generally associated with advanced information technologies, rapid and responsive logistics service, effective supplier management, and increasingly with customer relationship management. Most materials managers are familiar with the SCM concept and view it as the same with collaboration. Indeed, few companies have adopted SCM. Even fewer have thoroughly mapped out their supply chains so that they know who their suppliers’ suppliers or customers’ customers really are.
In theory, SCM allows a company to focus on doing well a few things for which it has unique skills and advantages. Non-core activities are outsourced to channel members that possess superior capabilities in those areas. Appropriate relationships are formed to assure outstanding performance levels. “Teams” of suppliers, finished goods producers, service providers, and retailers are formed to create and deliver the very best product or service offerings possible. These allied teams of companies form an integrated supply chain, which competes against other supply chains in today’s global economy.
SCM is an absolutely right tool in meet heightened customer demands, while also cutting costs. The markets are changing and customer really do expect more and more every day without an increase if not reduction in their current prices. SCM is a key in making this happen, as in this case study all levels of the organization must be involved. When faced with change, managers and employees are easily resisted by the idea of shaping new practices because they already have much familiarity with current positions. Consequently, if company pursues SCM half hearted, they likely to not fully hold the tool and not...