Supply Chain Management - Essay Example

Supply chain management (SCM) system is an integrated system in which different business processes are integrated for different business operations. Different firms like airlines, hospitality, oil and gas, medical, defense and many other logistics firms are deeply interested in the implementation of a robust and automated supply chain management system. SCM involves acquisition of raw materials, the transformation of raw materials into final products. SCM adds value in the business and involves distribution and promotion of final products in the markets.

SCM plays a vital role in the exchange of information among business partners like vendors, suppliers, retailers, distributors etc. The main purpose of supply chain management system is to enhance the efficiency and profitability. SCM is also vital in order to gain market leverage or competitive leverage. Supply Chain Management can be defined as “the integration of key business processes from end-users through original suppliers that provide products, services, and information and add value for customers and other stakeholders” (Lambert et al., 1998). In supply chain the two important business processes are 1.

Inbound logistics 2. Outbound logistics Inbound logistic is also called as material management. The inbound logistics involves the acquisition of raw materials or supplies. . The different activities of outbound logistics consist of order the product, inventory management and deployment, the storage and handling of the purchased products, transportation, pricing, support in order to promote a product, handling of the returned products and complete life cycle support. The combination of activities of inbound and outbound logistics represents a web or network of the business networks and the relationships among these business networks.

During a supply chain management different stakeholders are involved like vendors, distributors, retailers, customers and other third parties associated with SCM. It is very difficult to conceptualize the whole process of Supply Chain Process in a single model because it is very difficult to capture all the real world dimensions or scenarios of SCM in a single model but the process is not so much complicated and surely it has certain solutions. There is not a thorough way to find out the scope of the supply chain problem in a firm except the guidelines which are comprised of competitive strategy, tactical plans and operational routines.

There are certain problems issues which are faced during supply chain management process like choosing location, analysis of product demand, distribution process of the finished product, the business partners or strategic alliances, the ways to develop an innovative product, adoption of innovative technologies like IT/IS/E-Commerce, supplier or vendor selection, price planning and restructuring of the business network. The problems or issues encountered in a supply chain management system are generally of two types i.e. strategic and tactical in nature and the problems associated