Supply Chain Management Essay

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The Concept of Supply Chain Management

Nowadays, as the world economic growth and changed, competitive of provider of goods and services become extreme. To coop with global competition and inter-organizational cooperation, good and service provider have to practise supply chain management strategy. This application comes with awareness of the important of integrated relationship upon suppliers and consumers.

Supply chain seen as a whole end to end process. It is began level of effectiveness of material flow until it become a customer product. Competition did occur during all level of production process until it becomes more priority compared to efficiency of production process.

Vast of definition of supply chain management, however the most practised theory is by Handfield and Nichols (1999). Referring to their idea, the supply chain comes with 3 different stages which is
- The administration of activities and processes,
- Coordination of business functions in an enterprise (interfunctional),
- Business coordination inter-organizational level.

Practically, supply chain management can be seen as group of performance towards goal or aims. Network of relationship should be coordinated throughout the process.

The main idea of supply chain management is the integrated approach on managing relationship, information and material flow in the inter-organizational dimension so that may provide positive cost and flow utilization. Those activities may contribute towards positive competition and customer satisfaction index in term of quality and time delivery of the goods and services.

By referring to traditional ways of management, the main focus on cost control and performance improvement. That style of management cannot be applie...

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... four different perspectives which is;
• Internal processes,
• Customer satisfaction,
• Financial performance,
• Improvement, innovation and growth of companies.

Another technique to improve supply chain management is Total Cost of Ownership. By analyzing the cost during purchasing and using the goods or services can manage also build effectiveness and to discover new opportunity and improvement plan among the supply chain participant. Total Cost of Ownership commonly been used as a tools of investigation an effective way of tracking the hidden indirect costs.

The fluctuation of economic trend will become one of the main factor supply chain management to work. The practitioners have to follow the changes of environment. A new and different method or modification of existing technique should be develop and apply as long as supply chain still needed.
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