Write a note on Supply Chain Management

Supply Chain management (SCM)

A supply chain consists of all stages involved, directly or indirectly in fulfilling a customer request. The supply chain not only includes the manufacturer and the suppliers, but also transporters, warehouses, retailers and customers themselves. A supply chain is dynamic. It essentially involves the constant flow of information, product and funds between the different stages of the supply chain. There is continuous interaction between all stages of a supply chain.

E.g.: a customer walks into a store to purchase detergent. The supply chain for a company begins the moment a customer requires detergent and is looking for it. The next stage in SCM involves the store where the customer is. looking for purchasing the detergent. The shelves of the store will be stacked with various detergents which it may have received from the distributor. The distributor in turn gets the goods from the company say HUL, whom he regularly keeps informing about the demand for their product, the quality, pricing, and so on. Based on all such information received from various distributors spread throughout the country, HUL plans its manufacturing process. Information is then send to the material processing department who establish contact with suppliers of raw materials, packaging materials, etc. hence, in the supply chain process formation regarding pricing, customer requirements, competitors strategies, all flow to the manufacturer of the detergent who will share it with his suppliers. As a result the supplier is incorporated in to supply chain process.

Evolution OF SCM

Until about mid 1950’s, the field of supply chain management was in a state of stagnant. The slow and isolated fragmented set of activities was rampant. Production and manufacturing were given uppermost attention. The inventory was the responsibility of the marketing, accounting and/or production areas and order processing was an accounting or sales responsibility. This fragmented way resulted in a great deal of friction on account of the conflicting objectives between production, marketing, accounting

This led to the assertion in the early 1960’s that logistics was one of the real frontiers of opportunity for enterprises to improve their corporate efficiency. Initial focus and emphasis was on the internal front, limited to productivity within the four walls of the factory or manufacturing till the 1970’s. During the Ethiopian famine relief efforts of the 1980’s, the term logistics was applied to the food-supply activities. The 1980’s stressed the need for quality, whereas the 1990’s have seen the emergence of the supply chain management and the millennium trends on e-business or IT enabled supply chains.