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Understanding Supply Chain Management

A supply chain is a network of facilities and distribution options that procures materials, transforms materials into products, and distributes finished products to customers. The objectives of supply chain management are to maximize value created across the supply chain, increase overall profitability, and balance supply and demand. Benefits include inventory reduction, productivity improvement, cost reduction, and increased profit and customer satisfaction. Key participants in a supply chain are producers, distributors, wholesalers, retailers, and customers.

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Bhavneet Gupta
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82 views3 pages

Understanding Supply Chain Management

A supply chain is a network of facilities and distribution options that procures materials, transforms materials into products, and distributes finished products to customers. The objectives of supply chain management are to maximize value created across the supply chain, increase overall profitability, and balance supply and demand. Benefits include inventory reduction, productivity improvement, cost reduction, and increased profit and customer satisfaction. Key participants in a supply chain are producers, distributors, wholesalers, retailers, and customers.

Uploaded by

Bhavneet Gupta
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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SUPPLY CHAIN MANAGEMENT According to Ganeshan and Harrison at Penn State University in their article An Introduction to Supply Chain

Management A supply chain 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.

Managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer.

OBJECTIVES OF SUPPLY CHAIN MANAGEMENT

Maximise overall value created Supply chain value: difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customers request

Value is correlated to supply chain profitability (difference between revenue generated from the customer and the overall cost across the supply chain

Supply

chain

incurs

costs

(information,

storage,

transportation,

components,assembly, etc.)

Increase Supply chain profitability (total profit to be shared across all stages of the supply chain)

Balance Supply and Demand

BENEFITS OF SCM

Inventory reduction Productivity Improvement Personnel reduction Cost reduction High customer satisfaction Increased profit On-time delivery fulfillment Revenue/profit increase Better cash management Better order management

PARTICIPANTS IN SUPPLY CHAIN

Producer Distributor Wholesaler Retailer Customer

DRIVERS OF SUPPLY CHAIN

Production Inventory Location Transportation information

KEY SUPPLY CHAIN PROCESSES CRM Customer service management Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Return management Initiative to reduce lead time Tighter feedback from customer Customer level forecasting Warehousing management Outsourcing Performance measurement

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