MBA First Batch Management Studies, Jagannath University: Supply Chain Management

Supply Chain Management
Sheet #1

Provided By: Mr. Sahidul Islam

Introduction to Supply Chain Management:

Supply chain management area has been described by many names, including physical distribution, materials management, transportation management, logistics, and now supply chain management. The business activities of concern may include all or part of the following: transportation, inventory maintenance, order processing, purchasing, warehousing, materials handling, packaging, customer service standards, and production.

Planning, organizing, and controlling of these activities are the major issues of supply chain management.

The field of business logistics/supply chain management represents a synthesis of many concepts, principles, and methods from the more traditional areas of marketing, production, accounting, purchasing and transpiration, as will as from the disciplines of applied mathematics, organizational behavior, and economics. Target is to unify these into a logical body of thought.

Business logistics: The newness of the field results from the concept of coordinated management of the related activities, rather than the historical practice of managing them separately, and the concept that logistics adds value to products or services that are essential to customer satisfaction and sales.

Logistics is that part of the supply chain process that plans implements, and controls the efficient, effective flow and storage of goods, services.

The supply chain (SC) encompasses all activities associated with the flow and transformation of goods from the raw materials stage (extraction), though to the end user, as well as the associated information flows, Materials and information flow both up and down the supply chain. Supply chain management (SCM) in the integration of these activities through improved supply chain relationships, to achieve a sustainable competitive advantage.

The systematic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-tern performance of the individual companies and the supply chain as a whole.

Product flows across functions and across companies to achieve competitive advantage and profitability for the individual companies in the supply chain and the members collectively.

Logistics/SC is a collection of functional activities (transportation), inventory control, etc.), which are repeated many times throughout the channel through which raw materials are converted into finished products and consumer value is added. Because raw material sources, plants, and selling points are not typically located at the same places and the channe represents a sequence of manufacturing steps, logistics activities recur many times before a product in the marketplace.

Usually, the maximal managerial control that can be expected is over the immediate physical supply and physical distribution channels, as shown in Figure 1-2 The physical supply channel refers to the time and space gap between a firm’s immediate material sources and its processing points. Similarly, the physical distribution channel refers to the time and space gap between the firms’s processing points and its customers. Referred to as materials management and physical distribution comprise those activates that are integrated into business logistics. Business logistics management is now popularly referred to as supply chain management.

The Immediate Supply Chain for an Individual Firm