Supply Chain Management Overview

Study Notes

Supply Chain & Logistics Management Definition

Supply chain management (SCM) unifies and manages a network of interconnected organisations working together to control, manage, and improve the flow of materials and information from suppliers to end users while increasing value for the end user at a lower cost.

The Evolutions of Supply Chain Management

1950s-1960s: U.S. manufacturers focused on mass production techniques to reduce costs and improve productivity.
1960s-1970s: New computer technologies led to the development of Materials Requirements Planning (MRP) and Manufacturing Resource Planning (MRPII) to coordinate inventory management and improve internal communications.
1980s-1990s: Intense global competition forced U.S. manufacturers to adopt:
- Just-In-Time (JIT) to align raw-material orders with production schedules.
- Total Quality Management (TQM) as a continuous process of detecting and reducing errors in manufacturing, improving supply chains, customer experiences, and employee training.
- Business Process Reengineering (BPR) to fundamentally rethink how work is done to improve customer service, cut costs, and become global competitors.
- Customer Relationship Management (CRM) to manage and analyze interactions with past, current, and potential customers.
2000s and Beyond: Focused on improving supply chain capabilities with initiatives such as:
- Third-party service providers (3PLs).
- Integrating logistics as a business management process that governs the flow of materials, information, and goods from origin to arrival, with interconnected and interdependent management activities.
- Client/server SCM software - Enterprise Resource Planning.
Today: Focus on the environmental and social impacts of supply chains with:
- Sustainability, emphasizing meeting current supply chain needs without hindering future generations.
- The Triple Bottom Line: Taking care of people, the planet, and profits.

Logistics Management: Definition

Logistics management plans, implements, and controls the efficient and effective forward and reverse flow of goods, services, and related information from origin to consumption to meet customer requirements.
Logistics involves managing the flow of items, information, cash, and ideas through coordinating supply chain processes and strategically adding place, period, and pattern values.
Logistics is the function responsible for moving materials through its supply chain.