The oft-consulted Wikipedia gives the definition of Supply Chain Management as “Supply chain management (SCM) is the process of planning, implementing and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.”
What do you do when a fresh intern asks you what is supply chain and supply chain management? Well, I go about like this.
Three things make a Supply Chain, namely Customers, Producers and Suppliers. One can extend the Supply Chain to include the customers’ customers and the suppliers’ suppliers. Supply Chain Management is an approach to manage the troika of PPF which stands for Purchasing, Production and Fulfillment, in order.
Purchasing- I/P from supplier
Production- Converting I/P to finished product(O/P)
Fulfillment- Delivering O/P to customer.
Major decisions that are taken before setting up a Supply Chain in place can again be summed up in a triad as where to, how to and from which.
a)Where to locate the DC(Distribution Centre)
b)How to transport goods among the DCs
c)From which places to procure the goods.
