The Introduction of Supply Chain

Ashwani Kumar on 1/6/2020 9:56:38 AM

Supply chains are complex systems that integrate mainly suppliers,manufacturers, distributors and retailers to fulfill customer requirements

Supply Chain is the management of the flow of goods and services.It includes the movement and storage of raw materials, work in process and finished goods from point of consumption

Supply chain management integrates suppliers, manufacturers, distributors, and consumers efficiently in order to produce and distribute the products at the right amounts to the right locations within the specified time frame. The goal of supply chain management is usually either cost minimization or profit maximization while reaching various service levels set by upper management. 

Historical developments

Creation era

The term supply chain management was first coined by Keith Oliver in 1982. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management.

Integration era

This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration

Globalization era

The third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents.This era is characterized by the globalization of supply chain management in organizations with the goal of increasing their competitive advantage, value-adding, and reducing costs through global sourcing

Supply Chain Drivers

The Four Major Dimensions of Supply Chain Performance

Drivers are based on :

• Time

• Space

• Money

• Inventory

Time : This was largely due to the fact that Information would take a long time to reach the intended destination for possible usage The IT Revolution has largely bridged the gap between the time an event takes place at a place of reference where information is generated to transmission and possible usage to the point of relevance

Space : This Dimension covers two sub-aspects :

• Geographical Dispersion

• Spatial Arrangements

Money : Digital Technologies have made it easy to

‘transmit’ Money almost instantaneously

Space :

Geographical Dispersion and Spatial Arrangements are inversely proportional to proximity to the Customer and Sources of Materials

Money (Price and Flow)

Flow of money has become a function of the efficiency and effectiveness of the IT systems of an Organisation . Price remains a variable

Inventory :

This remains the only Dimension of the Supply Chain that needs to be managed at every state of realisation

                                                        Supply Chain Network

                                E-Commerce supply chain

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