The Supply Chain Management and Its Importance in an Organization
Strategy I have heard the term supply chain management many times before and thought it was a technical jargon only for people woring in certain industries that now or understand it! "owever# after doing some research and reading some boos about it# I have come to understand that it is something that actually a$ects almost everyone in the world! %ccording to &illiam '! (tevenson# author of )perations *anagement# supply chain management is the strategic coordination of business functions within a business organi+ation and throughout its supply chain for the purpose of integrating supply and demand management! It plays a crucial part in organi+ation activities and an important element to enhance the e,ciency of business- operations! (upply chains are typically comprised of separate business organi+ations and it has two components. a supply component and a demand component! /hrough supply chain management# these components are lined together so that maret demand is met as e,ciently as possible across the entire chain! It is therefore safe to assume that (0* represents the conscious e$ort of all the 1rms or business organi+ations in the supply chain in order to run it in the most e$ective and e,cient way possible! (o what will happen if 1rms won-t pay much attention to their supply chain and instead just concentrate on their own operations2 If this would happen# certain critical problems may arise such as inventory stocouts# late deliveries# and 3uality problems! /hese problems and other issues such as increasing transportation costs# increasing globali+ation# increasing importance of e-business# and the need to manage inventories mae it clear that management of supply chains is essential to business success! )ther signi1cant bene1ts that an e,cient and e$ective supply chain management would result to are the following. reduced inventory costs# better medium for information sharing between partners# improved customer satisfaction as well as service# better trust between partners# e,cient manufacturing strategy# improved process integration# increase in cash 4ow# improved 3uality and higher pro1t margin! /he times when businesses could be successful just by operating independently were already a part of the past and are now considered an obsolete strategy! /he present is much more di$erent# and companies must collaborate with each organi+ation involved and lined in the supply chain! 5usiness organi+ations must ensure that supply chain activities are actively managed to ma6imi+e customer value and achieve a sustainable competitive advantage! Implementing the comprehensive management of a supply chain is no easy tas# but once it has been successfully done# everyone and every organi+ation within the chain would bene1t greatly!