Supply Chain Management

Supply Chain Management (pronunciation: suh-ply cheyn man-ij-muhnt) is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible.

Etymology

The term "Supply Chain Management" was first coined by Keith Oliver, a consultant at Booz Allen Hamilton, in an interview with the Financial Times in 1982. The term is derived from the concept of a chain of supplies, referring to the sequence of processes involved in the production and distribution of a commodity.

Related Terms

• Inventory Management
• Logistics
• Procurement
• Production Planning
• Demand Forecasting
• Warehouse Management
• Distribution Management
• Customer Service Management

Overview

Supply Chain Management involves the planning and management of all activities involved in sourcing, procurement, conversion, and 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.

Components of Supply Chain Management

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.

See Also

• Enterprise Resource Planning
• Just In Time
• Lean Manufacturing
• Total Quality Management
• Six Sigma

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