Question list

What is supply chain management?

Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

Boundaries and Relationships: Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.

What is a supply chain?

The supply chain — a term now commonly used internationally — encompasses every effort involved in producing and delivering a final product or service, from the supplier's supplier to the customer's customer . Supply chain management includes 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.

Due to its wide scope, supply chain management must address complex interdependencies; in effect creating an "extended enterprise" that reaches far beyond the factory door. Today, material and service suppliers, channel supply partners (wholesalers / distributors, retailers), and customers themselves, as well as supply chain management consultants, software product suppliers and system developers, are all key players in supply-chain management.

Why is supply chain management important?

Two main reasons – money and opportunity. Advances in information technology (IT) and the expanding IT infrastructure are introducing new possibilities to improve service and efficiencies, and given the amount of money at stake, the opportunities are high. Some people view the IT tools that underlie supply chain management as the backbone of e-commerce.

In years past, manufacturers were the drivers of the supply chain — managing the pace at which products were manufactured and distributed. Today, customers are calling the shots, and manufacturers are scrambling to meet customer demands for options / styles / features, quick order fulfillment, and fast delivery.

Manufacturing quality — a long-time competitive differentiator — is approaching parity across the board, so meeting customers' specific demands for product delivery has emerged as the next critical opportunity for competitive advantage.

Companies that learn how to improve management of their supply chain will become the new success stories in the global marketplace. Benchmarking studies show significant cost differences between organizations that exhibit best-in-class performance and those with average performance.

What challenges do companies face as they try to improve SCM?

Improving a process as complex as the supply chain can be daunting, as companies are challenged with finding ways to meet ever-rising customer expectations at a manageable cost. To do so, businesses must identify which parts of their supply chain process are not competitive, understand which customer needs are not being met, establish improvement goals, and rapidly implement necessary improvements.

Industry has long lacked a standard way to measure supply chain performance. Because of this, manufacturers and service providers were unable to use a common assessment tool — benchmarking — in the effort to improve their performance. Moreover, the lack of a common means to describe supply chain processes rendered software selection difficult and usually expensive.

Instead of finding the right tools for improving specific competitive gaps, businesses often made huge investments in software that failed to address their particular problem. All too often, available software products forced companies (often unwittingly) to revamp their supply chain processes to suit some default criteria.

Who is a freight forwarder? / What is freight forwarding?

A Freight Forwarder is a person or a company that handles the logistics of a shipment for a corporation or an individual to send goods from one place to another. They take the burden off the clients shoulder and handle all the requirements needed in processing the shipment from the point of origin to the destination. They arrange for pickup, transport, warehousing, packing, labeling etc. Some of the advantages that a customer will have while working with a freight forwarder are that they also handle the Insurance, Customs, Documentation and Clearance.

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