Supply Chain Management – Definition

Cite this article as:"Supply Chain Management – Definition," in The Business Professor, updated April 23, 2019, last accessed October 25, 2020, https://thebusinessprofessor.com/lesson/supply-chain-management-definition/.

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Supply Chain Management (SCM) Definition

Supply chain management (SCM) explains the coordination and execution of activities needed to maximise customer value and achiever desired levels of outputs. It refers to a set of activities that plan and control the flow of goods and services.

SCM describes the management of all the processes involved in the production of good and services. This range from product development to the realisation of final products. SCM also refers to the management of processes that turn raw materials into their final products. Suppliers use SCM to strengthen their supply chain and also add values to their customers amidst competition from other suppliers.

A Little More on What is Supply Chain Management (SCM)

A Supply Chain Management (SCM) lords over every aspect of a product or service, it is the supervision and coordination of a product from initial stage of conception to it final output. Hence, SCM  is found at the center of conception, production and distribution of goods and rendering of services.

The management of supply chain is crucial to the efficiency of SCM because it is through this that a manager can account for losses and gains encountered during the production of goods. SCM enables companies keep track of their inventories, cut production cost, achieve fast distribution of goods and services and also enhance the development of the company.

There are many processes, factors and procedures that sum up to how a raw material is transformed or manufactured into a product. Supply chain refers to the totality of technologies, resources, individuals, organizations, activities, processes, information and procedures that resulted in the production of a good or service.

Hence, a supply chain describes the combination of things involved right from the delivery of raw material and how the material is transformed into a finished product that can be marketed to a set of buyers or consumers. It is the network of processes that a product goes through to before it is eventual delivered to the end user.

Many companies are beginning to embrace SCM due to the understanding of its numerous benefits. Diverse companies across all sectors of the economy employ the use SCM so that they can control the activities involved in the production of goods and services and also enhance product quality.

An example of SCM in business is that of Walgreens Boots Alliance Inc. in 2016. This company operates the second largest pharmacy chain in the United States and as at this time, it needed to transform and effectively manage its supply chain and that brought SCM on board. With the use of SCM, this company was able to minimise cost and excess inventory attributed to its supply chain.

References for Supply Chain Management

Academic Research on Supply chain management

•    Defining supply chain management, Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Journal of Business logistics, 22(2), 1-25.

•    Issues in supply chain management, Lambert, D. M., & Cooper, M. C. (2000). Industrial marketing management, 29(1), 65-83.

•    Supply chain management: implementation issues and research opportunities, Lambert, D. M., Cooper, M. C., & Pagh, J. D. (1998). Supply chain management: implementation issues and research opportunities. The international journal of logistics management, 9(2), 1-20.

•    Coordinated supply chain management, Thomas, D. J., & Griffin, P. M. (1996). European journal of operational research, 94(1), 1-15.

•    Green supplychain management: a state‐of‐the‐art literature review, Srivastava, S. K. (2007). Green supplychain management: a stateoftheart literature review. International journal of management reviews, 9(1), 53-80.

•    Supply chain management: more than a new name for logistics, Cooper, M. C., Lambert, D. M., & Pagh, J. D. (1997). Supply chain management: more than a new name for logistics. The international journal of logistics management, 8(1), 1-14.

•    From a literature review to a conceptual framework for sustainable supply chain management, Seuring, S., & Müller, M. (2008). Journal of cleaner production, 16(15), 1699-1710.

•    Effective supply chain management, Davis, T. (1993). Sloan management review, 34, 35-35.

•    International supply chain management, Houlihan, J. B. (1985). International journal of physical distribution & materials management, 15(1), 22-38.

•    A framework of sustainable supply chain management: moving toward new theory, Carter, C. R., & Rogers, D. S. (2008). International journal of physical distribution & logistics management, 38(5), 360-387.

•    Supply chain management: relationships, chains and networks, Harland, C. M. (1996). British Journal of management, 7, S63-S80.

•    Performance measurement for green supply chain management, Hervani, A. A., Helms, M. M., & Sarkis, J. (2005). Benchmarking: An international journal, 12(4), 330-353.

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