| A supply chain, logistics network, or supply network | | | | partners and consumers is established ensuring mutual |
| is a coordinated system of organizations, people, | | | | success. |
| activities, information and resources involved in | | | | Supply chain management must address the |
| moving a product or service in physical or virtual | | | | problems regarding distribution network |
| manner from supplier to customer. Its management | | | | configuration-number and location of suppliers, |
| deals with the process of planning, implementing, and | | | | production facilities, distribution centers, warehouses |
| controlling its operations with the purpose of | | | | and customers; distribution strategy-centralized |
| satisfying customer requirements as efficiently as | | | | versus decentralized, direct shipment, cross docking, |
| possible. | | | | pull or push strategies, third party logistics; |
| Supply chain management spans all movement and | | | | information-integration of systems and processes |
| storage of raw materials, work-in-process inventory, | | | | through the supply chain to share valuable |
| and finished goods from point-of-origin to | | | | information, including demand signals, forecasts, |
| point-of-consumption. It integrates supply and | | | | inventory and transportation; and inventory |
| demand management within and across companies If | | | | management-quantity and location of inventory |
| a supply chain management system is properly | | | | including raw materials, work-in-process and finished |
| implemented, strategic and competitive areas can be | | | | goods. |
| used to their full advantage. Fulfillment is enabled | | | | Supply chain management is a cross-functional |
| through efficient communication, ensuring that orders | | | | approach to managing the movement of raw |
| are placed with the appropriate amount of time | | | | materials into an organization and the movement of |
| available to be filled. The supply chain management | | | | finished goods out of the organization toward the |
| system also allows a company to constantly see | | | | end-consumer. Its success relies on the corporations' |
| what is on stock and making sure that the right | | | | focus on core competencies and being flexible. In |
| quantities are ordered to replace stock. | | | | some circumstances, operations should be outsourced |
| Logistics is enhanced, keeping the cost of | | | | to other corporations that can perform the activities |
| transporting materials as low as possible consistent | | | | better or more cost effectively. |
| with safe and reliable delivery. Production can run | | | | In effect, the number of companies involved in |
| smoothly as a result of fulfillment and logistics being | | | | satisfying consumer demand would increase, while |
| implemented correctly without delays due to ordering | | | | reducing management control of daily logistics |
| and transportation. The company's flexibility to | | | | operations. Less control and more supply chain |
| respond to unforeseen changes in demand and | | | | partners would lead to the creation of supply chain |
| supply is improved. | | | | management concepts. The purpose of supply chain |
| Because of this, a company has the ability to | | | | management is to improve trust and collaboration |
| produce goods at lower prices and distribute them to | | | | among supply chain partners, thus improving |
| consumers quicker than companies without supply | | | | inventory visibility and improving inventory velocity. |
| chain management thus increasing the overall profit. | | | | Copyright 2007 Ismael D. |
| And most especially, cooperation among supply chain | | | | |