Supply Chain Management

Supply Chain Management is often defined in Operations Management literature as the integrative planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities (Handfield & Nichols, 1999; Mentzer et al., 2001). Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, third-party service providers, In fact, the coordination is one of the major challenges in effective supply chain management (Thomas & Griffin, 1996). Stakeholders could be intermediaries, and even customers. At its core. Supply Chain Management integrates supply and demand management within and across companies.

Supply-Chain-Structure

Supply Chain Management can also be defined as the integrative planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Securing one of the few respected logistics companies can be a great way to have a more efficient supply chain management.

However, selection of any supply chain partner is a multi-criteria decision making process and is extremely complex. Therefore a lot of advanced decision support systems are used for partner selection for effective supply chain management. There has been lots of studies which has focussed on the challenges and approaches for supply chain partner selection (Kar, 2009; Pani & Kar, 2011, Kar, 2014; Kar & Pani, 2014a; Kar & Pani, 2014b)

 

Supply Chain StructureThe structure and activities of a typical Supply Chain for a large manufacturing firm is displayed above.

So what does integrative supply chain management?

Integrative supply chain management consists of all the activities involved in logistics, supplier identification and management, reverse logistics, cash to cash management, service level distribution, management to demand and responding to fluctuations, manufacturing, management of e-SCM issues, management of technology, auctions, negotiations, reverse auctions, customer relationship management (to an extent), ware house management, inventory management and so on.

However the most crucial activities in proper management of the supply chain focuses on activities involving logistics management, supplier / vendor selection, procurement strategizing (make vs buy decisions), vendor management, value co-creation with partners and collaborators, and daily operational aspects. Essentially, the crux of excellence in Supply Chain Management lies in managing the Supply Chain Network, which extends from the many tiered suppliers (vendors) to the end customer through distributors or retailers.

Supply-Chain-Structure

Research on supply chain management started as early as in the late 1950s, and research issues were centered around few key themes as described by the diagram below.

Supply-Chain-Key-Activities

Thus Effective Supply Chain Management encompasses the planning and management of all the ploys and strategies, including the implementation of the same, for improving the sourcing and procurement of a firm, conversion, demand creation and fulfillment, and all Logistics Management activities. Thus, it also includes coordination and collaboration with channel partners, who can be suppliers for the firm, third-party service providers, intermediaries, and as mentioned earlier, collaborating customers on the network.

Those who feel as though they have a strong understanding of the many relationships involved with supply chain management may be able to own a franchise like Quiznos or other restaurant franchises with their expertise. The act of owning and establishing a franchise or chain restaurant in one’s area is fairly complicated, but certainly not impossible. It is also an excellent way to gain an understanding of what goes into owning and managing a business. Those who are relatively new to some of the aforementioned concepts may also find that they would have an easier time managing a franchise that is already established versus managing a business from the ground up.

By the way, did you hear about Interlink Parcel Delivery? They are a part of the UK based Interlink Express. They offer an excellent courier service, based on effective management of the logistics value chain.

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P.S. Article inspired by the presentation of my friend and colleague, Dr. Priyal Singh

References:

  • Handfield, R. B., & Nichols, E. L. (1999). Introduction to supply chain management (Vol. 183). Upper Saddle River, NJ: prentice Hall.
  • Kar, A. K. (2009). Using Fuzzy Neural Networks and Analytic Hierarchy Process for Supplier Classification in e-Procurement.
  • Kar, A. K. (2014). Revisiting the supplier selection problem: An integrated approach for group decision support. Expert systems with applications, 41(6), 2762-2771.
  • Kar, A. K., & Pani, A. K. (2014a). How can a group of procurement experts select suppliers? An approach for group decision support. Journal of Enterprise Information Management, 27(4), 337-357.
  • Kar, A. K., & Pani, A. K. (2014b). Exploring the importance of different supplier selection criteria. Management Research Review, 37(1), 89-105.
  • Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining supply chain management. Journal of Business logistics, 22(2), 1-25.
  • Pani, A. K., & Kar, A. K. (2011, January). A study to compare relative importance of criteria for supplier evaluation in e-procurement. In System Sciences (HICSS), 2011 44th Hawaii International Conference on (pp. 1-8). IEEE.
  • Thomas, D. J., & Griffin, P. M. (1996). Coordinated supply chain management. European journal of operational research, 94(1), 1-15.
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Arpan Kar

Professor at IIT / IIM
Prof. Kar (PhD) is a faculty member of the Information Systems & Management area in Indian Institute of Technology Delhi, one of the top universities globally. He has extensive experience in teaching, training, consultancy and research. He has over 35 high impact publications. Prior to joining academia, he has rich experience in Cognizant Business Consulting and IBM Research Laboratory. He is the Editor of Business Fundas.
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