supply chain management

[sə′plī ‚chān ‚man·ij·mənt] (industrial engineering) An inventory process involving planning and processing orders; handling; transporting and storing all materials purchased, processed, or distributed; and managing inventories in a coordinated manner among all the players on the chain to fulfill customer orders as they arise rather than to build up stock level to fulfill anticipated future demand.

supply chain management

The planning, scheduling and control of the supply chain, which is the sequence of organizations and functions that mine, make or assemble materials and products from manufacturer to wholesaler to retailer to consumer. The driving force behind supply chain management (SCM) is to reduce inventory.

Dr. Roger D. Blackwell, professor of marketing at Ohio State University and author of the best-selling book, "From Mind to Market," says it very succinctly. "Supply chain management is all about having the right product in the right place, at the right price, at the right time and in the right condition." See supply chain system and demand chain management.

The Primer

"From Mind to Market" is must reading for supply chain management aficionados. Well written and to the point, Dr. Blackwell has a way with words: "Selling is getting rid of products you have, while marketing means having products you can get rid of." (HarperCollins, 1997, ISBN 0-88730-833-3)

supply chain management

Supply Chain Management

The act or process of ensuring that one's business has the proper supplies in order to continue operations. Supply management involves ensuring that supplies are procured as cheaply as possible. For example, a construction company must procure cement, wood, and nails efficiently and inexpensively; equally, a consulting firm must make sure that research materials are easily available. Large companies often devote whole divisions to supply chain management, giving them budgets of millions of dollars to help the company save money.

There are two basic types of supply chain management: just in time and just in case. A just in time supply chain management strategy involves keeping only enough inventory to meet immediate business needs. This requires constant monitoring but can save a significant amount money. A just in case strategy, on the other hand, keeps a larger inventory to meet unexpected increases in demand. This saves less money (depending on the nature of the business and matters like carrying costs) but can be easier to manage.

supply chain management

a term used to describe the management of inventory (STOCK), not only within a firm but also along the network of suppliers and customers which constitute the SUPPLY CHAIN or VALUE-ADDED CHAIN. Supply chain management employs a variety of methods such as STOCK CONTROL, MATERIALS REQUIREMENT PLANNING and DISTRIBUTED REQUIREMENT PLANNING to both minimize stock-holding costs while maintaining effective distributed levels of servicing customer orders. See SUPPLIER DEVELOPMENT.