Supply Chain Management Is The Network Of All The Business Entities

717 Words Sep 24th, 2015 3 Pages
Supply chain management is the network of all the business entities and processes which links suppliers and customers and the various operations which involve them. the business entities consist of the manufacturer, suppliers, distributors, retailers, customers. SCM involves multiple firms and their business activities and how they link and coordinate together both up the stream and down the stream with exchange of products, services, finances, information, etc.
This definition creates 3 degrees of complexity in a supply chain. A direct supply chain consists of a company, customer and supplier involved in up/downstream of flows. An extended supply chain includes suppliers of the supplier and customers of the customer, in addition to the above. An ultimate supply chain encapsulates all the organizations involved in the exchange of information, products,etc. from the ultimate supplier to the ultimate customer.(Mentzer, et al., 2001) . The ultimate supply chain will depend on not just the management decisions but the planning and operational decisions as well.(Drucker, 1988) This is because of the fact that all the entities are entwined in an intricate network(Lambert and Cooper, 2000) and any small change which is unsynchronized can have a large impact at the other end of a supply chain due to the bullwhip effect(Hau Lee, 1997).
To track the efficiency and responsiveness of a supply chain and achieve a strategic fit, the performance of a supply chain can be tracked by…

Related Documents