Supply chain management is a cross-functional approach
Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization
and the movement of finished goods out of the organization toward the end-consumer. As corporations strive to focus on
core competencies and become more flexible, they have reduced their ownership of raw materials sources and distribution
These functions are increasingly being outsourced to other corporations
that can perform the activities better or more cost effectively.
The effect has been to increase the number of companies involved
in satisfying consumer demand, while reducing management control
of daily logistics operations. Less control and more supply chain
partners led to the creation of supply chain management concepts.
The purpose of supply chain management is to improve trust and collaboration
among supply chain partners, thus improving inventory visibility
and improving inventory velocity.
Several models have been proposed for understanding the activities
required to manage material movements across organizational and
functional boundaries. SCOR is a supply chain management model promoted
by the Supply Chain Management Council. Another model is the SCM
Model proposed by the Global Supply Chain Forum (GSCF). Supply chain
activities can be grouped into strategic, tactical, and operational
levels of activities.Organizations increasingly find that they must
rely on effective supply chains, or networks, to successfully compete
in the global market and networked economy.In Peter Drucker's (1998)
management's new paradigms, this concept of business relationships
extends beyond traditional enterprise boundaries and seeks to organize
entire business processes throughout a value chain of multiple companies.