What is Supply Chain? Introduction To Supply Chain.

 

INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

In this lesson, you will learn:

• What a supply chain is and its components, including how products and information flow in both directions.
• The evolution and key milestones in the history of supply chain management.
• The six main parts of supply chain management and how they work together.
• The strategic value of supply chain management in boosting performance.

What is a Supply Chain?

A supply chain is a network of three or more companies linked together through the flow of products, services, finances and information from suppliers to customers. A basic example involves a company, its supplier and its customer, connected by these flows.

What is Supply Chain Management?

Supply Chain Management(SCM) involves coordinating business activities across companies to improve long-term performance. It’s about creating trust and strong relationships with suppliers and customers, sharing data and sometimes even shifting control over logistics.

History and Evolution of Supply Chain Management

Supply Chains have existed since people began trading goods and services. Over time, technology has played a major role in making supply chains more competitive and efficient.

Here are some milestones in the evolution of Supply Chain Management(SCM):

• 1919: Syracuse University offers one of the first supply chain programs
• 1927: Henry Ford applies “Mass Production” Principles to car manufacturing
• 1952: Barcoding is invented, revolutionizing logistics
• 1988: "Lean Manufacturing" becomes a recognized term, emphasizing efficiency
• 2001: Green Supply Chain Management is introduced, focusing on environmental impact

Key Components of Supply Chain Management(SCM)

Supply Chain Management involves the flow of goods and information from concept to customer.

The six main components are:

• Planning: Coordinating all activities within the supply chain
• Sourcing: Finding and purchasing materials
• Making: Producing the final products
• Delivering: Getting products to customers
• Returning: Managing returns and reverse logistics
• Enabling: Using technology and skilled personnel to support the entire process

Each of these components is connected, ensuring a smooth and cost-effective process from supplier to customer.

All supply chain activities should be planned so everything is connected smoothly. A logical flow is followed: first, materials are sourced, then products are made and finally, they are delivered to customers. If needed, products are returned through the return process. The SCOR model is designed to ensure that processes are connected between companies, customers and suppliers. The sourcing process is connected to the supplier’s delivery and the delivery is linked to the customer’s sourcing. All of this is supported by the right people and technology.