Post on 07-Apr-2018
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SUPPLY CHAIN MANAGEMENT
INTRODUCTION
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DEFINITION
Harland, 1996
Supply chain management (SCM)is themanagement of a networkofinterconnectedbusinesses involved in the ultimate provision ofproduct and service packages required byend
customers. Supply chain management spans allmovement and storage ofraw materials,work-in-process inventory, and finished goods frompoint oforigin to point ofconsumption.
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DEFINITION
APICS The association for Operations Management
design, planning, execution, control, andmonitoring of supply chain activities with theobjective of creating net value, building acompetitive infrastructure, leveragingworldwide
logistics, synchronizing supplywith demand andmeasuring performance globally
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CONCEPT
The core concept of SupplyChain Management
is that practically every product that reaches anend user represents the cumulative effort ofmultiple organizations. These organizations arereferred to collectively as the supply chain.
Although Supply chains have existed for a long time, mostorganizations have only paid attention to what was happeningwithin their four walls. The result was disjointed and often
ineffective supply chains.
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CONCEPT - ORGANISATIONS
SUPPLIER
MANUFACTURER
WAREHOUSE DISTRIBUTOR/RETAILERS
CUSTOMER
SUPPLYCHAINPARTNERS
UPSTREAM DOWNSTREAMINTERNAL
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CONCEPT
Supply chain management, then, is the activemanagement of supply chain activities to maximize
customer value and achieve a sustainable competitiveadvantage.
It represents a conscious effort by the supply chain firmsto 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 wellas the information systems needed to coordinate theseactivities.
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CONCEPT - FLOW
The organizations that make up the supply chain arelinked together through physical flows, information
flows and fund flows Physical flows involve the transformation, movement, and
storage of goods and materials. They are the most visiblepiece of the supply chain.
Information flows allow the various supply chain partnersto coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supplychain.
Fund flows is the transfer of funds between the
organizations.
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CONCEPT - FLOW
Everyone is Involved
Systems approach atreducing Costs
Integration is the
Key
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OBJECTIVE
Maximise the overall value generated is the
differencebetween what the final product isworth to the customer and the effort the supplychains expends in filling the request of thecustomer
Worth can be defined as the Utility Value forthe Customer
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CONCEPT ICEBERG
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SUCCESS
Supply chain profitability is the difference
between the revenue generated from thecustomer and the overall cost across the supplychain.
Supply chain success is measured in terms ofsupply chain profitability and not in terms of theprofits at an individual stage.
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