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