1. Supply Chain Management is what?
Supply Chain (often mistakenly referred to as Logistics) is a system comprising organizations, people, activities, and resources involved in the transportation of a product (or service) from the supplier’s hands (or manufacturer) to the customer (consumer). It is also known as the transportation operation from B to C, from Business to Customer.
2. What is supply chain management?
“Supply Chain Management” includes planning and managing all activities related to sourcing, procurement, production, and all logistics management activities. At a crucial level, supply chain management involves the coordination and collaboration of partners on the same channel such as suppliers, intermediaries, service providers, and customers. Essentially, supply chain management integrates supply and demand management within and between companies.
Supply chain management is an integrated function with the primary role of connecting business functions and key business processes within the company and of companies with each other into a high-efficiency business model and cohesion. Supply chain management encompasses all the logistics management activities mentioned, as well as production activities, and promotes coordination in process and operations of marketing, sales, product design, finance, and information technology departments.”
In summary: The concept of the supply chain is broader and includes both Logistics and the production process. Moreover, the supply chain focuses more on procurement activities while Logistics addresses strategies and coordination between marketing and production.
3. The Role of the Supply Chain
Did you know what a piece of clothing goes through to get to you? It’s a long journey involving many different stages such as Suppliers of raw materials (fabric, thread, accessories…), factories, workshops processing fabric according to designs, transportation systems from the workshop to the main company, agents, wholesale and retail stores, and finally to us.
The example above shows that the supply chain is involved in almost all daily activities happening around the world. The issue here is how you manage this supply chain to bring about the highest efficiency and revenue for your company.
A challenge posed to businesses as well as individuals active in the import and export industry is how to manage the supply chain. This factor is critically related to whether the company’s revenue is increasing or declining. Are operational costs being reduced or are they rising?
This demand is contributing to the rising need for manpower active in the supply chain, as well as creating more jobs for workers.