Introduction to Supply Chain Management

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Supply Chain Management

Supply chain management deals with managing the flow of resources between different organisations and departments within a business. Essentially, it is the management of activities surrounding the flow of raw materials to the finished product or service used by the end customer[1].

There are five main activities in the supply chain that require effective management; buy, make, move, store and sell.

  • Buy: the process of purchasing materials and resources and the related flow of money.
  • Make: this includes all activities that are part of producing a product or service.
  • Move: the distribution and logistics required to acquire materials and sell products.
  • Store: the requirements for holding and storing raw materials, information and finished products.
  • Supply Chain ManagementSell: the activities involved in selling a product to consumers, such as marketing and retail outlets.

These activities aren't limited to physical materials; they can include the storage of important information or the flow of cash and finance.

Although they share some similarities, supply chain management differs from operations management. Operations management is primarily concerned with the actual production and delivery of a specific product or service. In contrast, supply chain management deals with the broader concept of managing how organisations and departments interact and rely on the resources supplied by each other.

Supply chain management involves planning and creating systems and processes that make the supply or resources more efficient, accurate and effective. It requires coordination and collaboration between the different partners, suppliers and organisations that are involved in producing and providing a product or service to consumers.

[1] Principles and Tools for Supply Chain Management, S. Webster, 2008