Definition of a Supply Chain - Keeping it Simple

A fundamental element of any business strategy isApplication
the Supply Chain process or strategy to deliverResearch from various surveys and opinions polls
goods and services to the consumer. This functionindicate there are common weaknesses within the
represents the core value of any organisation andStrategic Supply Chain process across industry.
ultimately drives bottom line profits to shareholdersGenerally survey respondents suggest that the senior
and business owners. Hence it becomes alevel Management approach could be stronger within
requirement to apply a robust strategy across thetheir organisation or that the Strategy itself is
operation to ensure goods are delivered andcompletely absent. These indicators imply there is a
operations are controlled according to plan.valid argument to impose more regular use of Supply
The natural extension of this process is the SupplyChain definitions in order to underline the senior level
Chain definition where companies attempt to describemanagement policy.
the process and function of Supply ChainGiven the debate and confusion stemming from
Management (SCM). This definition should ideally helpindustry, it is suggested that a pragmatic approach
to capture the charter or spirit in which the processtowards definition is required. This will certainly
is performed. Employees would then naturally refer toprovide freedom and flexibility within any organisation
it during their work thereby embedding the processto improve the Supply Chain Strategy without being
via their actions. Unfortunately these cultural aspectsbound into the elementary level of debate or
of a strategic definition statement are frequentlydiscussion we have witnessed so far. On the surface,
overlooked and attempts to instill a positive culturalthe majority of definition statements can be broken
attitude are hampered through an absence of suchdown into some common elements, thereby
definitions.providing us with the basis for a framework to define
BackgroundSCM.
The SCM terminology was introduced to industry inThe Common Components
the early 1980's through the Financial Times. At the· Concept - Definition and understanding of
time, it was an attempt to define how a particularthe Supply Chain Management concept
company performed various duties and outline the· Objective - The problems, objectives, and
operational management process to handle suppliers,ultimate goal of the Supply Chain function
customers, and partners. Ten years later the· Scope - Interpretation of the processes,
terminology was emphasised by various communitiesactivities, functions and boundaries of the Supply
and organisations that represented the professionalsChain
and working force within this particular businessIt is suggested that any organisation can produce a
function.core strategic statement and policy by referring to
In the late 1990's the Global Supply Chain Forumthese common components.
(GSCF) had managed to establish a greaterThe intrinsic value of producing a strategy is provided
understanding of the process and emphasise on thethrough the culture and following it brings from
SCM definition. This particular rendition appears toemployees. By 'keeping it simple' when defining the
have gained popularity by industry experts andSupply Chain Management function, the company is
organisations with many companies electing to referable to quickly transpose this value into a viable
to it as part of their strategy and operation. It isoutput. This framework is a practical approach to
possible to locate this definition and certain variantsengage the workforce and underline the Senior
throughout the Internet but there has not been anyManagement policy without casting a shadow over it
major changes made to the GSCF definition for thethrough academic debate.
last 20 years.