Chain Management includes integrated enterprise activities between multiple Supply Chain partners, which are connected by the flow of goods and information from the supplier of raw materials to end users. Partners can be suppliers, logistics service providers, end customers or manufacturers. The terms Supply Chain Management and logistics are often used synonymously. Both subject areas aim to establish a chain of processes (goods, information, value) while increasing efficiency (customer benefits) and effectiveness (cost-benefit ratio). Supply Chain Management is based, unlike logistics, on the entire institution, that is, all areas of the company are involved in the manufacturing process.
Brief description
The origins of Supply Chain Management can be traced back to America in the early 1980s, where Michael E. Porter began working on the manufacturing chain with integrated various activities of a company. Consulting firms through strategies like Just-in-Time, KANBAN and Lean Production achieved cost reductions in manufacturing. New opportunities were sought to maximize profits and Supply Chain Management was discovered as one effective method. In Europe, Supply Chain Management only began to be used in the mid-1990s.
Over time, various SCM concepts have been created, establishing material and information flows that create time- and cost-optimized supply chains. The various SCM concepts differ in their fundamentals and their industry assumptions. The most important process-driven SCM concepts are “Just-In-Time” and “Quick Response.” The goal of the new SCM concepts is Win-win-oriented optimization of the supply chain.
The following should be mentioned as trends of the coming years :
- Globalization versus regionalization
- Increase in customer focus
- Availability of resources
- Co-op
- Service orientation
- Communication and information technologies
Tasks and objectives
- Reducing resources
- Reducing run times
- Cost reduction
- Improving service quality, that is, customer focus
- Faster response to market changes
- Team orientation
- Faster communication
- Tailor product design for logistical requirements
- Creating and targeting a network
- Increase the success of the enterprises involved
Features and requirements
- Supply Chain Enabler build the foundation of Supply Chain Management and enable you to put in place strategies and carry out processes
- Supply Chain processes represent transactions between trading partners through information and material channels. The exchange of information is triggered by customers, and the effective provision of goods is triggered by the corresponding supplier.
- The Supply Chain strategy formulates the commercial objectives, markets and products selected, and establishes the relevant information infrastructures. Supporting the strategy takes place through the processes, form of organization and technologies used.
- The ability to measure the processes, activities and achievements of Supply Chain Management is provided by Supply Chain Management Controlling. Measurability is expressed in the form of Supply Chain indicators.
Application
Supply Chain Management is supported by the following concepts and terms:
- Just-In-Time
- KANBAN
- Efficient Consumer Response (ECR) used in trade and the consumer goods industry to rationalize processes. The tools are:
- technologies, such as barcodes
- logistics processes like Cross-Docking and Vendor Managed Inventory
- marketing-oriented Category Management
- CPFR (= Collaborative Planning, Forecasting and Replenishment) master planning process
- Cross-industry SCOR-Modell (Supply-Chain Operations Reference Model) from large enterprises to facilitate communication between enterprises through a unified concept in Supply-Chain structures and processes.
- ERP II systems, also referred to as Advanced Planning Option (APO), take over the operational planning and control of Supply-Chain activities in large electronic markets.
RELATED TERMS
- CPFR
- ECR - Efficient Consumer Response
- JIT - Just In Time
- KANBAN
- VMI - Vendor Managed Inventory
- Logistics management
- Logistics
- SCOR - Supply Chain Operations Reference
- Cross Docking
- ERP
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