Supply Chain Management has been identified by the business community as a key discipline which can generate significant cost savings, improve customer value and be used effectively to gain a sustainable competitive advantage.
To a casual observer, supply chain management would appear to be just another name for logistics management. There is, undeniably, a strong relationship but the concept of supply chain management goes far beyond the content of logistics management. Supply chain management deals with the management of a set of activities designed to enhance value for the firm’s customers by integrating business processes across departmental and inter-organisational boundaries, from the raw material stage to the consumption stage. In fact it is often said that supply chain management is about the management of relationships. During the course of your studies you will find this theme reappearing time and again.
Supply chain management is about managing the firm’s logistics and other functions in order to achieve cross-functional and cross-organisational synergies with an objective of attaining competitive superiority. This clearly represents a great challenge as well as a tremendous opportunity for most firms in the competitive business environment of today.
You will notice that supply chain management focuses on activities which can be classified as logistics activities, such as inventory and distribution management. These are definitely important activities in the firm’s value chain, but in supply chain management these activities are managed in an integrated way, with integration at times taking place across organisational boundaries.
Supply chain management develops value chain knowledge by linking with concepts of strategic management, information technology, marketing, transportation systems management and international trade. You will see that supply chain management is a broad and all-encompassing unit which aims to reorient all business processes with the corporate goal of creating value for the customer. Successful completion of this unit will make you better prepared for the real business world irrespective of the kind of business you are likely to step in.