According to Thomas Friedman in The World is Flat, supply chain management has become a source of competitive advantage and profit in a flat world. He has quoted Wal-Mart’s ability of moving 2.3 billion general merchandise cartons a year down its supply chain into its stores as an example of creating value. Global supply chains that draw parts and producers from every corner of the world, from the best producers at the lowest price, are the way how to beat competitors and stay in the business.
Yossi Sheffi, an expert on supply chain management and a professor of engineering system at MIT, was quoted in Friedman (2006) as saying, “Making stuff – that’s easy. Supply chain, now that is really hard” (pp.152). Sheffi also stressed that, making these chains work is much harder than it looks and requires constant innovation and constant adjustment.
What is Supply Chain Management (SCM)?
There are many definitions of what a supply chain is. Knolmayer, Mertens and Zeier (2002) refer to the integration of all key business process across the supply chain as SCM. Dr. Roger D. Blackwell, professor of marketing at Ohio State University and author of the best-selling book, "From Mind to Market," defines SCM succinctly as "Supply chain management is all about having the right product in the right place, at the right price, at the right time and in the right condition."
Other definitions of SCM are summarised in the table below:
Monczka, Trent, and Handfield (1998) SCM requires traditionally separate materials functions to report to an executive responsible for coordinating the entire materials process, and also requires joint relationships with suppliers across multiple tiers. SCM is a concept, “whose primary objective is to integrate and manage the sourcing, flow, and control of materials using a total systems perspective across multiple functions and multiple tiers of suppliers.”
La Londe and Masters (1994) Supply chain