A supply chain or logistics network is the system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. A vendor or a supplier is a Supply chain management term meaning anyone who provides goods or services to a company A customer is someone who makes use of the paid products of an individual or Organization. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. A raw material is something that is acted upon or used by Organisms, or by human labour or Industry, for use as a Building material to create some product In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains^[1]. The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his

A typical supply chain begins with ecological and biological regulation of natural resources, followed by the human extraction of raw material and includes several production links, for instance; component construction, assembly and merging before moving onto several layers of storage facilities of ever decreasing size and ever more remote geographical locations, and finally reaching the consumer.

Many of the exchanges encountered in the supply chain will therefore be between different companies who will seek to maximize their revenue within their sphere of interest, but may have little or no knowledge or interest in the remaining players in the supply chain. More recently, the loosely coupled, self-organizing network of businesses that cooperates to provide product and service offerings has been called the Extended Enterprise. An Extended Enterprise is a loosely coupled self-organizing network of firms that combine their Economic output to provide products and services offerings to the Market ^[2]

Supply chain modelling

A diagram of a supply chain. The black arrow represents the flow of materials and information and the gray arrow represents the flow of information and backhauls. The elements are (a) the initial supplier, (b) a supplier, (c) a manufacturer, (d) a customer, (e) the final customer.

There are a variety of supply chain models, which address both the upstream and downstream sides.

The SCOR (Supply Chain Operations Reference) model, developed by the Supply Chain Council, measures total supply chain performance. Supply-Chain Operations Reference-model ( SCOR(r) is a process Reference model developed by the management consulting firm PRTM and AMR Research It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer. ^[3]. It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain.

The Global Supply Chain Forum (GSCF) introduced another Supply Chain Model. This framework ^[4] is built on eight key business processes that are both cross-functional and cross-firm in nature. Each process is managed by a cross-functional team, including representatives from logistics, production, purchasing, finance, marketing and research and development. While each process will interface with key customers and suppliers, the customer relationship management and supplier relationship management processes form the critical linkages in the supply chain.

Supply chain management

In the 1980s the term Supply Chain Management (SCM) was developed, to express the need to integrate the key business processes, from end user through original suppliers. Supply chain management (SCM is the process of Planning, implementing and Controlling the operations of the Supply chain as efficiently as possible Original suppliers being those that provide products, services and information that add value for customers and other stakeholders. The basic idea behind the SCM is that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations, production capabilities.

If all relevant information is accessible to any relevant company, every company in the supply chain has the possibility to and can seek to help optimizing the entire supply chain rather than sub optimize based on a local interest. This will lead to better planned overall production and distribution which can cut costs and give a more attractive final product leading to better sales and better overall results for the companies involved.

Incorporating SCM successfully leads to a new kind of competition on the global market where competition is no longer of the company versus company form but rather takes on a supply chain versus supply chain form.

The primary objective of supply chain management is to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventory and labor. Supply chain management (SCM is the process of Planning, implementing and Controlling the operations of the Supply chain as efficiently as possible Inventory is a list for goods and Materials, or those goods and materials themselves held available in stock by a Business. Various aspects of optimizing the supply chain include liaising with suppliers to eliminate bottlenecks; implementing JIT (Just In Time) techniques to optimize manufacturing flow; and using location/allocation, vehicle routing analysis, Dynamic programming and, of course, traditional logistics optimization to maximize the efficiency of the distribution side. In Mathematics and Computer science, dynamic programming is a method of solving problems exhibiting the properties of Overlapping subproblems and Logistics is the management of the flow of Goods, Information and other resources including Energy and people between the point of origin and the point

There is often confusion over the terms Supply Chain and Logistics. It is now generally accepted that the term Logistics applies to activities within one company/organization whereas the term Supply Chain also encompasses suppliers and customers and therefore is a much broader focus.

Starting in the 1990s several companies choose to outsource their supply chain management by partnering with a 3PL, Third-party logistics provider. A third-party Logistics provider (abbreviated 3PL) is a firm that provides outsourced or "third party" logistics services to companies for part or sometimes

See also

• APICS
• Cold Chain
• C-VARWIP
• Demand chain
• Demand chain management
• Demand optimization
• Distribution
• Distribution Resource Planning
• Factory Physics
• Industrial Engineering
• Inventory control
• Liquid Logistics
• Logistics
• Marketing
• Manufacturing
• Military Supply Chain Management
• Reverse logistics
• Supply network
• Supply chain management
• Supply chain network
• Supply chain optimization
• Supply Chain Security
• Transport
• Value Chain

External links

• Glossary of supply chain standards

References

1. ^ Anna Nagurney: Supply Chain Network Economics: Dynamics of Prices, Flows, and Profits, Edward Elgar Publishing, 2006, ISBN 1-84542-916-8
2. ^ Definition of Terms. APICS The Association for Operations Management, is a not-for-profit International education organization offering certification programs training tools and A cold chain is a Temperature -controlled Supply chain. An unbroken cold chain is an uninterrupted series of storage and distribution activities which maintain a given Production control Systems can be classified as pull and push systems (Spearman et al A Demand chain is composed of the enterprises that sell the goods or services Demand Chain Management is the management of upstream and downstream relationships between suppliers and Customers to deliver the best value to the customer at the Demand optimization is the application of processes and tools to maximise Return on sales. Distribution (or place) is one of the four elements of Marketing mix. Distribution Resource Planning (DRP is a method used in Business administration for planning orders within a Supply chain. Factory Physics is a book written by Wallace Hopp and Mark Spearman which introduces a framework for manufacturing management Industrial engineering is also not good and shit Operations management, Systems engineering, production engineering manufacturing engineering or manufacturing systems Liquid Logistics is a special category of Logistics that relates to Liquid products and is utilized extensively in the "Supply Chain for Liquids" discipline Logistics is the management of the flow of Goods, Information and other resources including Energy and people between the point of origin and the point In popular usage "marketing" is the promotion of products especially Advertising and Branding However in professional usage the term has a wider meaning of Manufacturing (from Latin manu factura, "making by hand" is the use of tools and labor to make things for use or sale Military supply chain management is a cross-functional approach to procuring, producing and delivering products and services The broad Reverse logistics stands for all operations related to the reuse of products and materials A supply network is a pattern of Temporal and Spatial processes carried out at Facility nodes and over distribution links which adds value for Supply chain management (SCM is the process of Planning, implementing and Controlling the operations of the Supply chain as efficiently as possible Due to the rapid advancement of technology such as pervasive or ubiquitous wireless and internet networks connective product marking technologies like RFID and emerging standards for the Supply Chain Optimization is the application of processes and tools to ensure the optimal operation of a manufacturing and distribution Supply chain. Supply chain security refers to efforts to enhance the security of the Supply chain: the transport and logistics system for the world's Cargo. Transport or transportation is the movement of people and goods from one place to another The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his A Management Consultant @ Large. Retrieved on 2008-02-11. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 660 BC - Traditional founding date of Japan by Emperor Jimmu.
3. ^ SSC Supply Chain Council, SCOR Model
4. ^ the Supply Chain Management Institute - framework