Supply chain management

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For the journal, see Supply Chain Management (journal).

Supply chain management managing complex and dynamic supply and demand networks. [1] (cf. Wieland/Wallenburg, 2011)

Supply chain management (SCM) is the management of an interconnected or interlinked between network,
channel and node businesses involved in the provision of product and service packages required by the end
customers in asupply chain.[2] Supply chain management spans the movement and storage of raw materials,
work-in-process inventory, and finished goods from point of origin to point of consumption. It is also defined as
the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating
net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with
demand and measuring performance globally."[3]
SCM draws heavily from the areas of operations management, logistics, procurement, and information
technology, and strives for an integrated approach.[4]
Contents
[hide]

1 Origin of the term and definitions

2 Problems addressed

3 Functions

4 Importance

5 Historical developments

5.1 Creation era

5.2 Integration era

5.3 Globalization era

5.4 Specialization era (phase I): outsourced manufacturing and distribution

5.5 Specialization era (phase II): supply chain management as a service

5.6 Supply chain management 2.0 (SCM 2.0)

6 Business process integration

7 Theories

8 Supply chain centroids

9 Tax efficient supply chain management

10 Sustainability and social responsibility in supply chains

11 Components

11.1 Management components

11.2 Reverse supply chain

12 Systems and value

13 Global applications

14 Certification

15 Supply chain management college level education

16 See also

17 References

18 Further reading

19 External links

Origin of the term and definitions[edit]

The term "supply chain management" entered the public domain when Keith Oliver, a consultant at Booz Allen
Hamilton (now Booz & Company), used it in an interview for the Financial Times in 1982. The term was slow to
take hold. It gained currency in the mid-1990s, when a flurry of articles and books came out on the subject. In
the late 1990s it rose to prominence as a management buzzword, and operations managers began to use it in
their titles with increasing regularity.[5][6][7]

Commonly accepted definitions of supply chain management include:

The management of upstream and downstream value-added flows of

materials, final goods, and related information among suppliers, company,
resellers, and final consumers

The systematic, strategic coordination of traditional business functions and

tactics across all business functions within a particular company and
across businesses within the supply chain, for the purposes of improving
the long-term performance of the individual companies and the supply
chain as a whole[8]

A customer-focused definition is given by Hines (2004:p76): "Supply chain

strategies require a total systems view of the links in the chain that work
together efficiently to create customer satisfaction at the end point of
delivery to the consumer. As a consequence, costs must be lowered
throughout the chain by driving out unnecessary expenses, movements,
and handling. The main focus is turned to efficiency and added value, or
the end-user's perception of value. Efficiency must be increased, and
bottlenecks removed. The measurement of performance focuses on total
system efficiency and the equitable monetary reward distribution to those
within the supply chain. The supply chain system must be responsive to
customer requirements."[9]

The integration of key business processes across the supply chain for the
purpose of creating value for customers and stakeholders (Lambert,
2008)[10]

According to the Council of Supply Chain Management

Professionals (CSCMP), supply chain management encompasses the
planning and management of all activities involved
in sourcing,procurement, conversion, and logistics management. It also
includes coordination and collaboration with channel partners, which may
be suppliers, intermediaries, third-party service providers, or customers.
Supply chain management integrates supply and demand management
within and across companies. More recently, the loosely coupled, self-

organizing network of businesses that cooperate to provide product and

service offerings has been called the Extended Enterprise.
A supply chain, as opposed to supply chain management, is a set of organizations directly linked by one or
more upstream and downstream flows of products, services, finances, or information from a source to a
customer. Supply chain management is the management of such a chain.[8]
Supply chain management software includes tools or modules used to execute supply chain transactions,
manage supplier relationships, and control associated business processes.
Supply chain event management (SCEM) considers all possible events and factors that can disrupt a supply
chain. With SCEM, possible scenarios can be created and solutions devised.
In many cases the supply chain includes the collection of goods after consumer use for recycling. Including
third-party logistics or other gathering agencies as part of the RM re-patriation process is a way of illustrating
the new endgame strategy.

Problems addressed[edit]
Supply chain management addresses the following problems:

Distribution network configuration: the number, location, and network

missions of suppliers, production facilities, distribution centers,
warehouses, cross-docks, and customers.

Distribution strategy: questions of operating control (e.g., centralized,

decentralized, or shared); delivery scheme (e.g., direct shipment, pool
point shipping, cross docking, direct store delivery, or closed loop
shipping); mode of transportation (e.g., motor carrier, including
truckload, less than truckload (LTL), parcel, railroad, intermodal transport,
including trailer on flatcar (TOFC) and container on flatcar (COFC), ocean
freight, airfreight); replenishment strategy (e.g., pull, push, or hybrid); and
transportation control (e.g., owner operated, private carrier, common
carrier, contract carrier, or third-party logistics (3PL)).

Trade-offs in logistical activities: The above activities must be

coordinated in order to achieve the lowest total logistics cost. Trade-offs
may increase the total cost if only one of the activities is optimized. For
example, full truckload (FTL) rates are more economical on a cost-perpallet basis than are LTL shipments. If, however, a full truckload of a
product is ordered to reduce transportation costs, there will be an increase

in inventory holding costs, which may increase total logistics costs. The
planning of logistical activities therefore takes a systems approach. These
trade-offs are key to developing the most efficient and effective logistics
and SCM strategy.

Information: The integration of processes through the supply chain in

order to share valuable information, including demand signals, forecasts,
inventory, transportation, and potential collaboration.

Inventory management: Management of the quantity and location of

inventory, including raw materials, work in process (WIP), and finished
goods.

Cash flow: Arranging the payment terms and methodologies for

exchanging funds across entities within the supply chain.

Supply chain execution means managing and coordinating the movement of materials, information and funds
across the supply chain. The flow is bi-directional. SCM applications provide real-time analytical systems that
manage the flow of products and information throughout the supply chain network.

Functions[edit]
Supply chain management is a cross-functional approach that includes managing the movement of raw
materials into an organization, certain aspects of the internal processing of materials into finished goods, and
the movement of finished goods out of the organization and toward the end consumer. As organizations strive
to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials
sources and distribution channels. These functions are increasingly being outsourced to other firms that can
perform the activities better or more cost effectively. The effect is to increase the number of organizations
involved in satisfying customer demand, while reducing managerial control of daily logistics operations. Less
control and more supply chain partners led to the creation of the concept of supply chain management. The
purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus
improving inventory visibility and the velocity of inventory movement.

Importance[edit]
Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the
global market and networked economy.[11] In Peter Drucker's (1998) new management paradigms, this concept
of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire
business processes throughout a value chain of multiple companies.
In recent decades, globalization, outsourcing, and information technology have enabled many organizations,
such as Dell and Hewlett Packard, to successfully operate collaborative supply networks in which each

specialized business partner focuses on only a few key strategic activities (Scott, 1993). This interorganisational supply network can be acknowledged as a new form of organisation. However, with the
complicated interactions among the players, the network structure fits neither "market" nor "hierarchy"
categories (Powell, 1990). It is not clear what kind of performance impacts different supply network structures
could have on firms, and little is known about the coordination conditions and trade-offs that may exist among
the players. From a systems perspective, a complex network structure can be decomposed into individual
component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the
inputs and outputs of the processes, with little concern for the internal management working of other individual
players. Therefore, the choice of an internal management control structure is known to impact local firm
performance (Mintzberg, 1979).
In the 21st century, changes in the business environment have contributed to the development of supply chain
networks. First, as an outcome of globalization and the proliferation of multinational companies, joint ventures,
strategic alliances, and business partnerships, significant success factors were identified, complementing the
earlier "just-in-time", lean manufacturing, and agile manufacturing practices.[12] Second, technological changes,
particularly the dramatic fall in communication costs (a significant component of transaction costs), have led to
changes in coordination among the members of the supply chain network (Coase, 1998).
Many researchers have recognized supply network structures as a new organisational form, using terms such
as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global Production Network", and "Next Generation
Manufacturing System".[13] In general, such a structure can be defined as "a group of semi-independent
organisations, each with their capabilities, which collaborate in ever-changing constellations to serve one or
more markets in order to achieve some business goal specific to that collaboration" (Akkermans, 2001).
The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001 and
related standards published jointly by the ISO and the IEC.Supply Chain Management draws heavily from the
areas of operations management, logistics, procurement, and information technology, and strives for an
integrated approach.

Historical developments[edit]
Six major movements can be observed in the evolution of supply chain management studies: creation,
integration, and globalization (Movahedi et al., 2009), specialization phases one and two, and SCM 2.0.

Creation era[edit]
The term "supply chain management" was first coined by Keith Oliver in 1982. However, the concept of a
supply chain in management was of great importance long before, in the early 20th century, especially with the
creation of the assembly line. The characteristics of this era of supply chain management include the need for

large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention
to Japanese management practices.

Integration era[edit]
This era of supply chain management studies was highlighted with the development of electronic data
interchange (EDI) systems in the 1960s, and developed through the 1990s by the introduction of enterprise
resource planning (ERP) systems. This era has continued to develop into the 21st century with the expansion
of Internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing
value added and cost reductions through integration.
A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1type supply chain, systems such as
production, storage, distribution, and material control are not linked and are independent of each other. In a
stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one
that achieves vertical integration with upstream suppliers and downstream customers. An example of this kind
of supply chain is Tesco.

Globalization era[edit]
The third movement of supply chain management development, the globalization era, can be characterized by
the attention given to global systems of supplier relationships and the expansion of supply chains over national
boundaries and into other continents. Although the use of global sources in organizations' supply chains can be
traced back several decades (e.g., in the oil industry), it was not until the late 1980s that a considerable number
of organizations started to integrate global sources into their core business. This era is characterized by the
globalization of supply chain management in organizations with the goal of increasing their competitive
advantage, adding value, and reducing costs through global sourcing.

Specialization era (phase I): outsourced manufacturing and distribution[edit]

In the 1990s, companies began to focus on "core competencies" and specialization. They abandoned vertical
integration, sold off non-core operations, and outsourced those functions to other companies. This changed
management requirements, by extending the supply chain beyond the company walls and distributing
management across specialized supply chain partnerships.
This transition also refocused the fundamental perspectives of each organization. Original equipment
manufacturers (OEMs) became brand owners that required visibility deep into their supply base. They had to
control the entire supply chain from above, instead of from within. Contract manufacturers had to manage bills
of material with different part-numbering schemes from multiple OEMs and support customer requests for workin-process visibility and vendor-managed inventory (VMI).
The specialization model creates manufacturing and distribution networks composed of several individual
supply chains specific to producers, suppliers, and customers that work together to design, manufacture,

distribute, market, sell, and service a product. This set of partners may change according to a given market,
region, or channel, resulting in a proliferation of trading partner environments, each with its own unique
characteristics and demands.

Specialization era (phase II): supply chain management as a service[edit]

Specialization within the supply chain began in the 1980s with the inception of transportation brokerages,
warehouse management, and non-asset-based carriers, and has matured beyond transportation and logistics
into aspects of supply planning, collaboration, execution, and performance management.
Market forces sometimes demand rapid changes from suppliers, logistics providers, locations, or customers in
their role as components of supply chain networks. This variability has significant effects on supply chain
infrastructure, from the foundation layers of establishing and managing electronic communication between
trading partners, to more complex requirements such as the configuration of processes and work flows that are
essential to the management of the network itself.
Supply chain specialization enables companies to improve their overall competencies in the same way that
outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and
assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby
increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific
supply chain expertise without developing and maintaining an entirely unique and complex competency in
house is a leading reason why supply chain specialization is gaining popularity.
Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken root
primarily in transportation and collaboration categories. This has progressed from the application service
provider (ASP) model from roughly 1998 through 2003, to the on-demand model from approximately 2003
through 2006, to the software as a service (SaaS) model currently in focus today.

Supply chain management 2.0 (SCM 2.0)[edit]

Building on globalization and specialization, the term "SCM 2.0" has been coined to describe both changes
within supply chains themselves as well as the evolution of processes, methods, and tools to manage them in
this new "era". The growing popularity of collaborative platforms is highlighted by the rise of TradeCards supply
chain collaboration platform, which connects multiple buyers and suppliers with financial institutions, enabling
them to conduct automated supply-chain finance transactions.[14]
Web 2.0 is a trend in the use of the World Wide Web that is meant to increase creativity, information sharing,
and collaboration among users. At its core, the common attribute of Web 2.0 is to help navigate the vast
information available on the Web in order to find what is being bought. It is the notion of a usable pathway.
SCM 2.0 replicates this notion in supply chain operations. It is the pathway to SCM results, a combination of
processes, methodologies, tools, and delivery options to guide companies to their results quickly as the

complexity and speed of the supply chain increase due to global competition; rapid price fluctuations; surging
oil prices; short product life cycles; expanded specialization; near-, far-, and off-shoring; and talent scarcity.
SCM 2.0 leverages solutions designed to rapidly deliver results with the agility to quickly manage future change
for continuous flexibility, value, and success. This is delivered through competency networks composed of
best-of-breed supply chain expertise to understand which elements, both operationally and organizationally,
deliver results, as well as through intimate understanding of how to manage these elements to achieve the
desired results. The solutions are delivered in a variety of options, such as no-touch via business process
outsourcing, mid-touch via managed services and software as a service (SaaS), or high-touch in the traditional
software deployment model.

Business process integration[edit]

This section needs additional citations for verification. Please help improve this
article by adding citations to reliable sources. Unsourced material may
be challenged and removed. (June 2013)
Successful SCM requires a change from managing individual functions to integrating activities into key supply
chain processes. In an example scenario, a purchasing department places orders as its requirements become
known. The marketing department, responding to customer demand, communicates with several distributors
and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain
partners can only be fully leveraged through process integration.
Supply chain business process integration involves collaborative work between buyers and suppliers, joint
product development, common systems, and shared information. According to Lambert and Cooper (2000),
operating an integrated supply chain requires a continuous information flow. However, in many companies,
management has concluded that optimizing product flows cannot be accomplished without implementing a
process approach. The key supply chain processes stated by Lambert (2004)[15] are:

Customer relationship management

Customer service management

Demand management style

Order fulfillment

Manufacturing flow management

Supplier relationship management

Product development and commercialization

Returns management

Much has been written about demand management. Best-in-class companies have similar characteristics,
which include the following:

Internal and external collaboration

Initiatives to reduce lead time

Tighter feedback from customer and market demand

Customer-level forecasting

One could suggest other critical supply business processes that combine these processes stated by Lambert,
such as:
a.

Customer service management

b.

Procurement

c.

Product development and commercialization

d.

Manufacturing flow management/support

e.

Physical distribution

f.

Outsourcing/partnerships

g.

Performance measurement

h.

Warehousing management

a) Customer service management process

Customer relationship management concerns the relationship between an organization and its customers.
Customer service is the source of customer information. It also provides the customer with real-time information
on scheduling and product availability through interfaces with the company's production and distribution
operations. Successful organizations use the following steps to build customer relationships:

determine mutually satisfying goals for organization and customers

establish and maintain customer rapport

induce positive feelings in the organization and the customers

b) Procurement process
Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the
development of new products. In firms whose operations extend globally, sourcing may be managed on a
global basis. The desired outcome is a relationship where both parties benefit and a reduction in the time
required for the product's design and development. The purchasing function may also develop rapid
communication systems, such as electronic data interchange (EDI) and Internet linkage, to convey possible
requirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve
resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling,
and quality assurance, many of which include the responsibility to coordinate with suppliers on matters of
scheduling, supply continuity, hedging, and research into new sources or programs.

c) Product development and commercialization

Here, customers and suppliers must be integrated into the product development process in order to reduce the
time to market. As product life cycles shorten, the appropriate products must be developed and successfully
launched with ever-shorter time schedules in order for firms to remain competitive. According to Lambert and
Cooper (2000), managers of the product development and commercialization process must:
1.

coordinate with customer relationship management to identify

customer-articulated needs;

2.

select materials and suppliers in conjunction with procurement; and

3.

develop production technology in manufacturing flow to manufacture

and integrate into the best supply chain flow for the given combination
of product and markets.

d) Manufacturing flow management process

The manufacturing process produces and supplies products to the distribution channels based on past
forecasts. Manufacturing processes must be flexible in order to respond to market changes and must
accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in minimum lot
sizes. Changes in the manufacturing flow process lead to shorter cycle times, meaning improved
responsiveness and efficiency in meeting customer demand. This process manages activities related to
planning, scheduling, and supporting manufacturing operations, such as work-in-process storage, handling,
transportation, and time phasing of components, inventory at manufacturing sites, and maximum flexibility in
the coordination of geographical and final assemblies postponement of physical distribution operations.
e) Physical distribution
This concerns the movement of a finished product or service to customers. In physical distribution, the
customer is the final destination of a marketing channel, and the availability of the product or service is a vital
part of each channel participant's marketing effort. It is also through the physical distribution process that the
time and space of customer service become an integral part of marketing. Thus it links a marketing channel
with its customers (i.e., it links manufacturers, wholesalers, and retailers).
f) Outsourcing/partnerships
This includes not just the outsourcing of the procurement of materials and components, but also the
outsourcing of services that traditionally have been provided in house. The logic of this trend is that the
company will increasingly focus on those activities in the value chain in which it has a distinctive advantage and
outsource everything else. This movement has been particularly evident inlogistics, where the provision of
transport, warehousing, and inventory control is increasingly subcontracted to specialists or logistics partners.
Also, managing and controlling this network of partners and suppliers requires a blend of central and local

involvement: strategic decisions are taken centrally, while the monitoring and control of supplier performance
and day-to-day liaison with logistics partners are best managed locally.
g) Performance measurement
Experts found a strong relationship from the largest arcs of supplier and customer integration to market share
and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply chain
perspective in customer relationships can both be correlated with a firm's performance. As logistics
competency becomes a critical factor in creating and maintaining competitive advantage, measuring logistics
performance becomes increasingly important, because the difference between profitable and unprofitable
operations becomes narrower. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive
performance measurement realized improvements in overall productivity. According to experts, internal
measures are generally collected and analyzed by the firm, including cost, customer service, productivity, asset
measurement, and quality. External performance is measured through customer perception measures and
"best practice" benchmarking.
h) Warehousing management
To reduce a company's cost and expenses, warehousing management is carrying the valuable role against
operations. In the case of perfect storage and office with all convenient facilities in company level, reducing
manpower cost, dispatching authority with on time delivery, loading & unloading facilities with proper area, area
for service station, stock management system etc.

Theories[edit]
Currently there is a gap in the literature on supply chain management studies: there is no theoretical support for
explaining the existence or the boundaries of supply chain management. A few authors, such as Halldorsson et
al. (2003), Ketchen and Hult (2006), and Lavassani et al. (2009), have tried to provide theoretical foundations
for different areas related to supply chain by employing organizational theories. These theories include:

Resource-based view (RBV)

Transaction cost analysis (TCA)

Knowledge-based view (KBV)

Strategic choice theory (SCT)

Agency theory (AT)

Channel coordination

Institutional theory (InT)

Systems theory (ST)

Network perspective (NP)

Materials logistics management (MLM)

Just-in-time (JIT)

Material requirements planning (MRP)

Theory of constraints (TOC)

Total quality management (TQM)

Agile manufacturing

Time-based competition (TBC)

Quick response manufacturing (QRM)

Customer relationship management (CRM)

Requirements chain management (RCM)

Available-to-promise (ATP)

However, the unit of analysis of most of these theories is not the supply chain but rather another system, such
as the firm or the supplier-buyer relationship. Among the few exceptions is therelational view, which outlines a
theory for considering dyads and networks of firms as a key unit of analysis for explaining superior individual
firm performance (Dyer and Singh, 1998).[16]

Supply chain centroids[edit]

In the study of supply chain management, the concept of centroids has become an important economic
consideration. A centroid is a location that has a high proportion of a country's population and a high proportion
of its manufacturing, generally within 500 mi (805 km). In the US, two major supply chain centroids have been
defined, one near Dayton, Ohio, and a second near Riverside, California.
The centroid near Dayton is particularly important because it is closest to the population center of the US and
Canada. Dayton is within 500 miles of 60% of the US population and manufacturing capacity, as well as 60% of
Canada's population.[17] The region includes the interchange between I-70 and I-75, one of the busiest in the
nation, with 154,000 vehicles passing through per day, 3035% of which are trucks hauling goods. In addition,
the I-75 corridor is home to the busiest north-south rail route east of the Mississippi River.[17]

Tax efficient supply chain management[edit]

Tax efficient supply chain management is a business model that considers the effect of tax in the design and
implementation of supply chain management. As the consequence ofglobalization, cross-national businesses
pay different tax rates in different countries. Due to these differences, they may legally optimize their supply
chain and increase profits based on tax efficiency.[18]

Sustainability and social responsibility in supply chains[edit]

Supply chain sustainability is a business issue affecting an organization's supply chain or logistics network, and
is frequently quantified by comparison with SECH ratings, which uses a triple bottom line incorporating
economic, social, and environmental aspects.[19] SECH ratings are defined as social, ethical, cultural, and
health' footprints. Consumers have become more aware of the environmental impact of their purchases and
companies' SECH ratings and, along with non-governmental organizations (NGOs), are setting the agenda for
transitions to organically grown foods,anti-sweatshop labor codes, and locally produced goods that support
independent and small businesses. Because supply chains may account for over 75% of a company's carbon
footprint, many organizations are exploring ways to reduce this and thus improve their SECH rating.
For example, in July 2009, Wal-Mart announced its intentions to create a global sustainability index that would
rate products according to the environmental and social impacts of their manufacturing and distribution. The
index is intended to create environmental accountability in Wal-Mart's supply chain and to provide motivation
and infrastructure for other retail companies to do the same.[20]
More recently, the US DoddFrank Wall Street Reform and Consumer Protection Act, signed into law by
President Obama in July 2010, contained a supply chain sustainability provision in the form of the Conflict
Minerals law. This law requires SEC-regulated companies to conduct third party audits of their supply chains in
order to determine whether any tin, tantalum, tungsten, or gold (together referred to as conflict minerals) is
mined or sourced from the Democratic Republic of the Congo, and create a report (available to the general
public and SEC) detailing the due diligence efforts taken and the results of the audit. The chain of suppliers and
vendors to these reporting companies will be expected to provide appropriate supporting information.
Incidents like the 2013 Savar building collapse with more than 1,100 victims have led to widespread
discussions about corporate social responsibility across global supply chains. Wieland and Handfield (2013)
suggest that companies need to audit products and suppliers and that supplier auditing needs to go beyond
direct relationships with first-tier suppliers. They also demonstrate that visibility needs to be improved if supply
cannot be directly controlled and that smart and electronic technologies play a key role to improve visibility.
Finally, they highlight that collaboration with local partners, across the industry and with universities is crucial to
successfully managing social responsibility in supply chains.[21]

Components[edit]
Management components[edit]
SCM components are the third element of the four-square circulation framework. The level of integration and
management of a business process link is a function of the number and level of components added to the link
(Ellram and Cooper, 1990; Houlihan, 1985). Consequently, adding more management components or
increasing the level of each component can increase the level of integration of the business process link.

Literature on business process re-engineering[22] buyer-supplier relationships,[23] and SCM[24] suggests various
possible components that should receive managerial attention when managing supply relationships. Lambert
and Cooper (2000) identified the following components:

Planning and control

Work structure

Organization structure

Product flow facility structure

Information flow facility structure

Management methods

Power and leadership structure

Risk and reward structure

Culture and attitude

However, a more careful examination of the existing literature[25] leads to a more comprehensive understanding
of what should be the key critical supply chain components, or "branches" of the previously identified supply
chain business processesthat is, what kind of relationship the components may have that are related to
suppliers and customers. Bowersox and Closs (1996) state that the emphasis on cooperation represents the
synergism leading to the highest level of joint achievement. A primary-level channel participant is a business
that is willing to participate in responsibility for inventory ownership or assume other financial risks, thus
including primary level components (Bowersox and Closs, 1996). A secondary-level participant (specialized) is
a business that participates in channel relationships by performing essential services for primary participants,
including secondary level components, which support primary participants. Third-level channel participants and
components that support primary-level channel participants and are the fundamental branches of secondarylevel components may also be included.
Consequently, Lambert and Cooper's framework of supply chain components does not lead to any conclusion
about what are the primary- or secondary-level (specialized) supply chain components (see Bowersox and
Closs, 1996, p. 93) that is, which supply chain components should be viewed as primary or secondary, how
these components should be structured in order to achieve a more comprehensive supply chain structure, and
how to examine the supply chain as an integrative one (See above sections 2.1 and 3.1).

Reverse supply chain[edit]

Reverse logistics is the process of managing the return of goods. It is also referred to as "aftermarket customer
services". Any time money is taken from a company's warranty reserve or service logistics budget, one can
speak of a reverse logistics operation.

Systems and value[edit]

Supply chain systems configure value for those that organize the networks. Value is the additional revenue
over and above the costs of building the network. Co-creating value and sharing the benefits appropriately to
encourage effective participation is a key challenge for any supply system. Tony Hines defines value as
follows: "Ultimately it is the customer who pays the price for service delivered that confirms value and not the
producer who simply adds cost until that point".[9]

Global applications[edit]
Global supply chains pose challenges regarding both quantity and value. Supply and value chain trends
include:

Globalization

Increased cross-border sourcing

Collaboration for parts of value chain with low-cost providers

Shared service centers for logistical and administrative functions

Increasingly global operations, which require increasingly global

coordination and planning to achieve global optimums

Complex problems involve also midsized companies to an increasing

degree

These trends have many benefits for manufacturers because they make possible larger lot sizes, lower taxes,
and better environments (e.g., culture, infrastructure, special tax zones, or sophisticated OEM) for their
products. There are many additional challenges when the scope of supply chains is global. This is because
with a supply chain of a larger scope, the lead time is much longer, and because there are more issues
involved, such as multiple currencies, policies, and laws. The consequent problems include different currencies
and valuations in different countries, different tax laws, different trading protocols, and lack of transparency of
cost and profit.

Certification[edit]
There are several certification programs for SCM staff development, including the Association for Operations
Management (APICS), the International Supply Chain Education Alliance (ISCEA), and the Institute of Supply
Chain Management (IOSCM). The APICS certification is called the Certified Supply Chain Professional
(CSCP); the ISCEA certification is called the Certified Supply Chain Manager (CSCM). Additionally, the
Institute for Supply Management is developing a certification called the Certified Professional in Supply
Management (CPSM),[26] focused on procurement and sourcing, also called supply management. The
Purchasing Management Association of Canada is the main Canadian certifying body; its designations have

global recipricocity. The main designation is the Supply Chain Management Professional (SCMP), with several
others progressing toward it.
Topics addressed by selected professional supply chain certification programmes[26][27]

Institute
for Supply
Managem
ent (ISM)
Awarding
Certified
Body
Purchasin
g
Manager
(CPM)

Institute
for Supply
Managem
ent (ISM)
Certified
Profession
al in
Supply
Managem
ent
(CPSM)

The
Associatio
n for
Operation
s
Managem
ent
(APICS)
Certified
Productio
n and
Inventory
Managem
ent
(CPIM)

The
American
Associatio
Internatio
Society of
n for
nal Supply
Transportat
Operation
Chain
ion and
s
Education
Logistics
Managem
Alliance
(AST&L)
ent
(ISCEA)
Certificatio
(APICS)
Certified
n in
Certified
Supply
Transportat
Supply
Chain
ion and
Chain
Manager
Logistics
Profession
(CSCM)
(CTL)
al (CSCP)

Internatio
nal Supply
Chain
Institute
Education
of Supply
Alliance
Chain
(ISCEA)
Managem
Certified
ent
Supply
(IOSCM)
Chain
Analyst
(CSCA)

Procureme
High
nt

High

Low

High

Low

High

High

High

Strategic
Sourcing

Low

High

Low

Low

Low

High

Low

Low

New
Product
Low
Developme
nt

High

Low

High

Low

Low

Low

Low

Production,
Low
Lot Sizing

Low

High

Low

High

Low

Low

High

Quality

High

High

High

High

Low

Low

Low

High

Lean Six
Sigma

Low

Low

Low

Low

Low

High

High

Low

Inventory High
Manageme

High

High

High

High

High

High

High

nt

Warehouse
Manageme Low
nt

Low

Low

Low

High

Low

High

High

Network
Design

Low

Low

High

Low

High

High

High

Low

Transportat
High
ion

Low

High

Low

High

High

High

High

Demand
Manageme Low
nt, S&OP

High

High

High

High

High

High

High

Integrated
SCM

High

Low

Low

High

High

High

High

High

CRM,
Customer
Service

Low

Low

Low

High

Low

High

Low

High

Pricing

Low

Low

Low

Low

Low

Yes

Yes

Low

Risk
Manageme Low
nt

High

High

Low

Low

Low

Low

High

Project
Manageme Low
nt

High

High

Low

Low

Yes

Low

High

Leadership,
People
High
Manageme
nt

High

High

Low

Low

High

Low

High

Technology High

Low

Low

High

High

High

High

High

Theory of
Low
Constraints

Low

Low

Low

Low

High

High

Low

Operational
High
Accounting

High

Low

Low

Low

High

Low

Low

Supply chain management college level education[edit]

Many of the top universities offer supply chain management programs at the undergraduate and graduate
levels. Some of them are:
United States[28]

Michigan State University

Massachusetts Institute of Technology

Arizona State University

Pennsylvania State University

Ohio State University

Carnegie Mellon University

University of Tennessee

Purdue University

University of Maryland

University of Michigan

Western Michigan University

Texas State University

UW-Stout

Cranfield University

Huddersfield University

Northumbria University

University of Sunderland

University of Liverpool

United Kingdom[29]

University of Lincoln

University of Birmingham

University of Hull

University of Central Lancashire

Brunel University

University of Westminster

See also[edit]

Beer distribution game

Management account

Bullwhip effect

Management informa

Calculating demand forecast accuracy

Master of Science in

Cold chain

Military supply chain

Council of Supply Chain Management Professionals

Netchain analysis

Customer-driven supply chain

Offshoring Research

Customer relationship management

Operations managem

Demand chain management

Order fulfillment

Distribution

Procurement

Document automation

Procurement outsourc

Ecodesk

Radio-frequency iden

Enterprise planning systems

Reverse logistics

Enterprise resource planning

Service management

Industrial engineering

Strategic information

Information technology management

Supply chain manage

Integrated business planning

Supply chain network

Inventory

Supply chain security

Inventory control system

Supply chain

Inventory management software

Supply management

LARGe SCM

Value chain

Liquid logistics

Value grid

Logistic engineering

Vendor-managed inv

Logistics

Warehouse

Logistics management

Warehouse managem

Logistics Officer

References[edit]

1.

Jump up^ cf. Andreas Wieland, Carl Marcus Wallenburg (2011): SupplyChain-Management in strmischen Zeiten. Berlin.

2.

Jump up^ Harland, C.M. (1996) Supply Chain Management, Purchasing

and Supply Management, Logistics, Vertical Integration, Materials
Management and Supply Chain Dynamics. In: Slack, N (ed.) Blackwell
Encyclopedic Dictionary of Operations Management. UK: Blackwell.

3.

Jump up^ "supply chain management (SCM)". APICS Dictionary.

Retrieved 19 June 2013.

4.

Jump up^ Bartsch, Frank. "Supply Chain Management (SCM)". BB

Handel. Retrieved 19 June 2013.

5.

Jump up^ David Jacoby (2009), Guide to Supply Chain Management:

How Getting it Right Boosts Corporate Performance (The Economist
Books), Bloomberg Press; 1st edition, ISBN 978-1576603451

6.

Jump up^ Andrew Feller, Dan Shunk, & Tom Callarman (2006).
BPTrends, March 2006 - Value Chains Vs. Supply Chains

7.

Jump up^ David Blanchard (2010), Supply Chain Management Best

Practices, 2nd. Edition, John Wiley & Sons, ISBN 9780470531884

8.

^ Jump up to:

a b

Mentzer, J.T. et al. (2001): Defining Supply Chain

Management, in: Journal of Business Logistics, Vol. 22, No. 2, 2001, pp.
125
9.

^ Jump up to:

a b

Hines, T. 2004. Supply chain strategies: Customer driven

and customer focused. Oxford: Elsevier.

10. Jump up^ Cooper et al., 1997
11. Jump up^ Baziotopoulos, 2004
12. Jump up^ MacDuffie and Helper, 1997; Monden, 1993; Womack and
Jones, 1996; Gunasekaran, 1999
13. Jump up^ Drucker, 1998; Tapscott, 1996; Dilts, 1999
14. Jump up^ Trade Services and the Supply Chain
15. Jump up^ Lambert, Douglas M.Supply Chain Management: Processes,
Partnerships, Performance, 3rd edition, 2008.
16. Jump up^ http://dx.doi.org/10.2307/259056
17. ^ Jump up to:

a b

Doug Page,"Dayton Region a Crucial Hub for Supply

Chain Management", Dayton Daily News, 2009-12-21.

18. Jump up^ Investor Words definition of "tax efficient"

19. Jump up^ Khairul Anuar Rusli, Azmawani Abd Rahman and Ho, J.A.
Green Supply Chain Management in Developing Countries: A Study of
Factors and Practices in Malaysia. Paper presented at the 11th
International Annual Symposium on Sustainability Science and
Management (UMTAS) 2012, Kuala Terengganu, 911 July 2012. See
publication here
20. Jump up^ Wal-Mart's Sustainability Index and Supply Chain Green
Standards
21. Jump up^ Andreas Wieland and Robert B. Handfield (2013): The Socially
Responsible Supply Chain: An Imperative for Global Corporations. Supply
Chain Management Review, Vol. 17, No. 5.
22. Jump up^ Macneil ,1975; Williamson, 1974; Hewitt, 1994
23. Jump up^ Stevens, 1989; Ellram and Cooper, 1993; Ellram and Cooper,
1990; Houlihan, 1985
24. Jump up^ Cooper et al., 1997; Lambert et al.,1996; Turnbull, 1990
25. Jump up^ Zhang and Dilts, 2004 ;Vickery et al., 2003; Hemila, 2002;
Christopher, 1998; Joyce et al., 1997; Bowersox and Closs, 1996;
Williamson, 1991; Courtright et al., 1989; Hofstede, 1978
26. ^ Jump up to:

a b

David Jacoby, 2009, Guide to Supply Chain Management:

How Getting it Right Boosts Corporate Performance (The Economist

Books), Bloomberg Press; 1st edition, ISBN 978-1576603451. Chapter 10,
Organising, training and developing staff
27. Jump up^ Boston Strategies International
28. Jump up^ U.S. News - College Compass
29. Jump up^ UK Supply Chain Management Education

Further reading[edit]

Cooper, M.C., Lambert, D.M., & Pagh, J. (1997) Supply Chain

Management: More Than a New Name for Logistics. The International
Journal of Logistics Management Vol 8, Iss 1, pp 114

FAO, 2007, Agro-industrial supply chain management: Concepts and

applications. AGSF Occasional Paper 17 Rome.

Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R.
(2006), Management Information Systems For the Information Age (3rd
Canadian Ed.), Canada: McGraw Hill Ryerson ISBN 0-07-281947-2

Halldorsson, Arni, Herbert Kotzab & Tage Skjott-Larsen (2003). Interorganizational theories behind Supply Chain Management discussion
and applications, In Seuring, Stefan et al. (eds.), Strategy and Organization
in Supply Chains, Physica Verlag.

Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett-Larsen, T. (2007).

Complementary theories to supply chain management. Supply Chain
Management: An International Journal, Volume 12 Issue 4, 284-296.

Handfield and Bechtel, 2001; Prater et al., 2001; Kern and Willcocks, 2000;
Bowersox and Closs, 1996; Christopher, 1992; Bowersox, 1989

Hines, T. 2004. Supply chain strategies: Customer driven and customer

focused. Oxford: Elsevier.

Kallrath, J., Maindl, T.I. (2006): Real Optimization with SAP APO.
Springer ISBN 3-540-22561-7.

Kaushik K.D., & Cooper, M. (2000). Industrial Marketing Management.

Volume29, Issue 1, January 2000, Pages 6583

Ketchen Jr., G., & Hult, T.M. (2006). Bridging organization theory and
supply chain management: The case of best value supply chains. Journal
of Operations Management, 25(2) 573-580.

Kouvelis, P.; Chambers, C.; Wang, H. (2006): Supply Chain Management

Research and Production and Operations Management: Review, Trends,
and Opportunities. In: Production and Operations Management, Vol. 15,
No. 3, pp. 449469.

Larson, P.D. and Halldorsson, A. (2004). Logistics versus supply chain

management: an international survey. International Journal of Logistics:
Research & Application, Vol. 7, Issue 1, 17-31.

Movahedi B., Lavassani K., Kumar V. (2009) Transition to B2B eMarketplace Enabled Supply Chain: Readiness Assessment and Success
Factors, The International Journal of Technology, Knowledge and Society,
Volume 5, Issue 3, pp. 7588.

Lavassani K., Movahedi B., Kumar V. (2009) Developments in Theories of

Supply Chain Management: The Case of B2B Electronic Marketplace

Adoption, The International Journal of Knowledge, Culture and Change

Management, Volume 9, Issue 6, pp. 8598.

Mentzer, J.T. et al. (2001): Defining Supply Chain Management, in: Journal
of Business Logistics, Vol. 22, No. 2, 2001, pp. 125

Simchi-Levi D.,Kaminsky P., Simchi-levi E. (2007), Designing and

Managing the Supply Chain, third edition, Mcgraw Hill

External links[edit]

Supply Chain Management Definition and Solutions - CIO Magazine

[show]

Management
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Social and environmental accountability

Categories:

Commercial item transport and distribution

Supply chain management

Distribution, retailing, and wholesaling

Supply chain management terms

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