What is Supply Chain Management?

What is Supply Chain Management? 

The supply chain :

(Ballou 2009) The supply chain comprises all activities related to the flow and transformation of products and information, starting from raw materials to the end user, both downstream and upstream in the supply chain.

Ugochukwu et al. (2012) and Christopher and Towill (2001), an appropriate Supply Chain Management (SCM) is key for companies, impacting their operational performance in terms of lower inventory level, higher customer satisfaction and processes efficiency, higher quality, reduced costs and improvements in delivery service level.

Jasti and Kodali (2015) emphasize that to assure an organization’s competitiveness it is necessary to produce the right products, with the expected quality and quantity, at the right price and time, for the right customer.

The term “Supply Chain Management” was first proposed in the literature in the 1980s, but it was only in the 1990s that the first organizational reports were actually evidenced. 

SCM implies a management change from exclusive improvement efforts oriented to internal problems, to focus on the relations with the other companies that are part of the organization’s supply chain (Alves Filho et al. 2004).

For the Council of Supply Chain Management Professionals (2013), “SCM encompasses the planning and management of all activities involved in supply and acquisition, conversion and all logistics management activities.

It also includes coordination and collaboration with channel partners, who can be suppliers, intermediaries, service providers and customers.” Further, SCM can be seen as a way to efficiently connect each agent of the manufacturing and supply processes, from the raw material to the final consumer.

Sridharan et al. (2005) comment that SCM aims to integrate the Lean Supply Chain Management: A Systematic Literature … 41 various structures and processes, facilitating and coordinating the flow of goods, services, and information necessary to provide the value that customers want. Complementarily, SCM focuses on how companies manage their technology, information, and skills to improve their competitive advantage (Ariffin et al. 2015).

(Lambert and Cooper 2000) Thus, to accomplish an efficient SCM, it is important to know and understand how organizations are structured. In this sense, two fundamental aspects of the supply chain structure are suggested (Lambert et al. 1998; Lambert and Cooper 2000): supply chain agents and their structural dimensions. The agents of a supply chain include all organizations with which the focal company interacts directly or indirectly through its suppliers or customers, from the raw material acquisition to the final consumer .

Regarding the structural dimensions, Lambert et al. (1998) emphasize three dimensions as essential: (i) horizontal structure, which refers to the number of tiers in the entire supply chain; (ii) vertical structure, denoting the number of suppliers and customers belonging to the same tier; and (iii) horizontal position, which is the position of the focal company within the supply chain.