Supply Chain

Supply Chain

Length: 1222 words (3.5 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
In business terminology, supply chain is the name given to a network of facilities and distribution options that performs the functions of procurement of materials, their transformation into intermediate and finished products, and then later the distribution of these finished products to customers. Although it may seem that supply chains are only important to manufacturing industries, they exist in service industries also. The actual level of its complexity may, however, vary greatly from industry to industry and firm to firm.
Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. The objectives of these organizational divisions are always different and conflict with each other’s objectives. . Marketing puts a higher emphasis on high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization---there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such an integration can be achieved.
Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm, and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. For a supply chain to work efficiently, all the different divisions of it must perform in harmony. The most important relation in this chain is among the adjacent departments. They work must smoothly so that the task can be carried from one to the other. But for the whole chain to work effectively, it has to make a coordinated effort to achieve that goal.
There are two types of decisions that are relevant to supply chain management - strategic and operational. The strategic decisions are always made over a longer period of time, usually in years. These decisions are parallel to the corporate strategy and guide supply chain policies from a design perspective. The operational decisions on the other hand are short term, and focus on activities over a day-to-day basis. The operational decisions are there to manage the product flow so that it is in conformance with the strategically planned supply chain.

How to Cite this Page

MLA Citation:
"Supply Chain." 123HelpMe.com. 28 Feb 2020
    <https://www.123helpme.com/view.asp?id=159531>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Supply Chain Management Success ! Essay

- Supply Chain Management Success. Organizations today all consist of three main functions. These functions include marketing, operations, and financial accountability. Marketing generates the demand through the promotion or sale of a product or service. The operations is the backbone of any organization, which involves the creation of the product, the movement of the product, and final delivery of the product. The financial accountability is ultimately, how the organization is doing financially concerning accounts receivable and accounts payable....   [tags: Supply chain management, Supply chain]

Research Papers
889 words (2.5 pages)

Supply Of Supply Chain Management Essay

- Supply change management refers to managing materials and processes as they move from the suppliers of raw materials to manufacturers to wholesalers to retailers and finally to the customers. It involves managing the supply-side activities to gain competitive advantage and to increase customer value. It also involves coordination among different firms at different levels within the supply chain. A good supply chain management should be both economical and efficient. Supply chain management manages and controls the production, shipment or movement of products and their distribution processes....   [tags: Supply chain management, Supply chain, Inventory]

Research Papers
994 words (2.8 pages)

Supply Chain Management And Supply Chains Essay

- Supply Chain Management is a concept that is based on two main essential ideas. The first one is that every product, that reaches an end user, denotes the collective effort of different organizations. These multiple organizations are collectively called a “Supply Chain”. The other concept is that since supply chains have existed for quite a long time, most of the companies have only focused on what was happening within their own organization. There are very few businesses that understood the activities of the complete chain which eventually carried the products to the final client....   [tags: Supply chain management, Supply chain, Inventory]

Research Papers
1170 words (3.3 pages)

The Concept Of The Supply Chain Management Essay

- In this essay, I will discuss the notion of Supply Chain Management through analysing the different types of supply chains. Next I will look at the concept of sustainability and how it applies to SCM. This will lead into the discussion that SCM also involves the process of New Product and Service Design as well as Strategic Capacity and Project Management. A supply chain entails various entities that are involved in the beginning to end business process of delivering a product (good or service) to its end consumer (Cooper, Lambert & Pagh 1997)....   [tags: Supply chain management, Supply chain, Logistics]

Research Papers
1236 words (3.5 pages)

Essay about Supply Chain Management ( Scm )

- Introduction Supply chain management Supply chain management (SCM) is the management of the flow of goods and services. It includes the movement and storage of raw materials work-in-process inventory and finished goods from the point of origin to point of consumption. Meaning and definition of supply chain management “Supply Chain Management is the process of planning, implementing and controlling the operations of the supply chain with the purpose of satisfying the customer 's requirement as efficiently as possible....   [tags: Supply chain management, Supply chain, Management]

Research Papers
1183 words (3.4 pages)

Global Supply Chain For A Business Essay

- In today’s markets, the drive for a business to continue to lower costs, improve quality, provide world class customer service and to continue to grow, drives many companies to consider moving some production to low cost countries as well as develop sales channels in countries other than their home country. A manufacturer, based in the United States that has decided to move some production to another country to continue to grow and compete must consider a variety of risks and opportunities to ensure that the venture is a positive one for the company, its employees, customers and shareholders....   [tags: Supply chain management, Supply chain, Management]

Research Papers
1120 words (3.2 pages)

Aspects Of Supply Chain Management Essay

- Aspects of Supply Chain Management The times are changing the world that we live in now has become so advanced. No one wants to wait for anything these days. Companies are going out of business just because they can not compete with their competitions ability to supply products so quickly to the consumer. The consumer of products has grown accustom to being able to get everything quickly and basically over night if not sooner. This has placed and amazing amount of pressure on the providers of products to be able to meet the consumers needs to have everything in a day or less....   [tags: Supply chain management, Management, Supply chain]

Research Papers
2028 words (5.8 pages)

Essay about The International Supply Chain Management

- 4.782 International Supply Chain Management Group Assignment Zhou, Chi 20141533 Wang, Anqi 20142345 Word Count: 1. The theories of the game include supply chain management (Simchi-Levi, D. and Y. Zhao, 2003), supply network (Nigel Slack, Stuart Chambers, Robert Johnston, 2010), inventory management, reorder points (Wright, 2015), and Bullwhip effect (Wright, 2015). The game has 4 levels of supply chain: factory, distribution, wholesaler and retailer. The products could not be supplied over level....   [tags: Supply chain management, Inventory, Supply chain]

Research Papers
923 words (2.6 pages)

Essay on Le Supply Chain Management

- Continuous Improvement In present world, supply chain management plays an important role in businesses. In order to create efficient supply chain, the right approach is essential. This essay will explain Lean synchronization, one of the most popular supply chain philosophy, as the role of talent and technology, and four principles to success in continuous improvement. There are various ways to improve supply chain in the competitive environment. Lean synchronization is considered one of the best techniques....   [tags: Supply chain management, Supply chain, Management]

Research Papers
997 words (2.8 pages)

Protecting The Supply Chain Essay

- The larger a company’s supply chain, the more vulnerable the company becomes. When the company’s suppliers spread further and further away from the company, the company becomes even more vulnerable to political and currency risk, cyber attacks, missed inventory goals, and failed communication with the supply chain. For a company to overcome those potential vulnerabilities, a company must build safeguards into their operations. Those safeguards include a strong corporate backing in supply chain management, solid relationships with suppliers, more attention to forecasting, and a holistic approach to sustainability....   [tags: Supply Chain Management]

Research Papers
995 words (2.8 pages)


There are four major decision areas in supply chain management: 1) location, 2) production, 3) inventory, and 4) transportation (distribution), and there are both strategic and operational elements in each of these decision areas.
The first type of decision is the location decision. The location is dependent on determination of customer satisfaction and the prevalent and predicted market demands for the product of service. Having the right projections is critical so that the strategic decisions may correctly focus on the placement of production plants, distribution and stocking facilities, and placing them in prime locations to the market served. Once customer markets are determined, long-term commitment must be made to locate production and stocking facilities as close to the consumer as is practical. In industries where components are lightweight and market driven, facilities should be located close to the end-user. In heavier industries, careful consideration must be made to determine where plants should be located so as to be close to the raw material source. Decisions concerning location should also take into consideration tax and tariff issues, especially in when the distribution is to be outside the city.
Strategic decisions regarding production focus on what customers want and the market demands. This first stage in developing supply chain flexibility takes into consideration what and how many products to produce, and what parts or components should be produced at which plants or outsourced to capable suppliers. These strategic decisions regarding production must also focus on capacity, quality and volume of goods, keeping in mind that customer demand and satisfaction must be met. Operational decisions, on the other hand, focus on scheduling workloads, maintenance of equipment and meeting immediate client/market demands. Quality control and workload balancing are issues, which need to be considered when making these decisions.
Third strategic decisions focus on inventory and how much product should be in-house. A delicate balance exists between too much inventory, which can cost anywhere between 20 and 40 percent of their value, and not enough inventory to meet market demands. This is a critical issue in effective supply chain management. Operational inventory decisions revolved around optimal levels of stock at each location to ensure customer satisfaction as the market demands fluctuate. Control policies must be looked at to determine correct levels of supplies at order and reorder points. These levels are critical to the day-to-day operation of organizations and to keep customer satisfaction levels high.
Strategic transportation decisions are closely related to inventory decisions as well as meeting customer demands. Using air transport obviously gets the product out quicker and to the customer expediently, but the costs are high as opposed to shipping by boat or rail. Yet using sea or rail often times means having higher levels of inventory in-house to meet quick demands by the customer. It is wise to keep in mind that since 30% of the cost of a product is encompassed by transportation, using the correct transport mode is a critical strategic decision. Above all, customer service levels must be met, and this often times determines the mode of transport used. Often times this may be an operational decision, but strategically, an organization must have transport modes in place to ensure a smooth distribution of goods.
Although not part of Supply Chain Management directly, Logistics are closely related to it. It is the part that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements.
These are the boundaries and relationships of Logistics Management adopted by the Council of Logistics Management: "Logistics Management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management of third party logistics services providers. To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution -- strategic, operational and tactical. Logistics Management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance and information technology."
Supply chain management also has its pitfalls that must be avoided for its smooth working. One of such pitfalls is the bullwhip effect. The unmanaged supply chain is not inherently stable. Demand variability increases as one moves up the supply chain away from the retail customer, and small changes in consumer demand can result in large variations in orders placed upstream. Eventually, the network can oscillate in very large swings as each organization in the supply chain seeks to solve the problem from its own perspective. This phenomenon is known as the bullwhip effect and has been observed across most industries, resulting in increased cost and poorer service.
Return to 123HelpMe.com