Strategic Supply Chain Management : Scm & Lean Management Concepts

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Strategic Supply Chain Management: SCM and Lean Management Concepts LAW CHONG SENG University Technology of Malaysia (UTM) cslaw5@live.utm.my, mylawcs@gmail.com

ABSTRACT One of the most significant paradigm shifts of modern business management is that individual businesses no longer compete as solely autonomous entities, but rather within supply chains. In this emerging competitive environment, the ultimate success of the business will depend on management’s ability to integrate the company’s intricate network of business relationships. Successful supply chain management requires cross-functional integration within the firm and across the network of firms that comprise the supply chain. It is focused on relationship management and the improvements in performance that result from better management of key relationships. By understanding the supply chain management processes and how they should be implemented, firms will be able to create more integrated supply chains which will lead to higher revenues and increased profitability for all member firms. Keywords: Strategic Supply Chain Management, Lean Management, Logistics, Inventory Control

INTRODUCTION Supply chain management encompasses the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every business fits into one or more supply chains and has a role to play in each of them. The pace of change and the uncertainty about how markets will evolve has made it increasingly important for companies to be aware of the supply chains they participate in and to understand the roles that they play. Those companies that learn how to build and participate in strong supply

chains will have a substantial competitive advantage in their markets. A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. It is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.

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Supply chain is network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer. Managing these linkages and delivering the product/service to the customer in a cost effective way is SCM. Supply chain management encompasses materials and supply management from the supply of basic raw materials to final product. Supply chain management focuses on how firms utilize their suppliers’ processes, technology and capability to enhance competitive advantage. It is a management philosophy that extends traditional intraenterprise activities by bringing trading partners together with the common goal of optimization and efficiency. Supply Chain Management is a set of approaches utilized to efficiently integrate supplier, manufacturer, warehouse and stores so that merchandise is produced and distributed at the right quantities, to the right location and at the right time, in order to minimize system under costs while satisfying service level requirements (Tilak Raj, 2004). Supply chain management, then, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities. The...
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