Robert Handfield Director of SCRC, Bank of America and University
Distinguished Professor of Supply Chain Management believes that the
concept of Supply Chain Management is based on two ideas:"The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains.
Supply Chain management, then, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
The organizations that make up the supply chain are “linked” together through physical flows and information flows. Physical flows involve the transformation, movement, and storage of goods and materials. They are the most visible piece of the supply chain. But just as important are information flows. Information flows allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supply chain."
If we simplify this further, Supply Chain Management could be deemed to include all the activities that must take place to get the right product into the right consumer’s hands in the right quantity and at the right time – from raw materials extraction to consumer purchase.
Supply Chain Management focuses on planning and forecasting, purchasing, product assembly, moving, storage, distribution, sales and customer service. Throughout this chain of events, a company may control and effect all the elements of a supply chain once the finished good has been manufactured or purchased, or they may wish to outsource bespoke activities to specialist organisations. Third party logistics providers specialise in the storage, picking and transportation of goods either to a B2B client (e.g. from a textile manufacturer to a retailer) or direct to consumer (e.g. from a warehouse to a customer's home or office).
Some companies choose to outsource their entire logistics operations to a third party whilst others prefer to run certain key operations themselves and only outsource a specific component to a specialist organisation.
What is the role of a Supply Chain Manager?
Having already considered what the key elements of Supply Chain Management are, it follows that an appointed Supply Chain Manager within a given business effectively leads a broad variety of areas within the Supply Chain function.
Indeed, the Supply Chain Manager can have a tremendous impact on the overall success of an organisation. Every company that specialises in the manufacture and/or delivery of a physical product to an end client would like to do this in the most cost effective way possible whilst meeting the customer's requirements. Running a "Lean" Supply Chain successfully requires the Supply Chain Manager to be "the glue" and successfully navigate stakeholder relationships around a business to determine what products are required and when to meet the customer's demand.
By effectively engaging with the sales force and the end customers (and through technological enabled visibility), the Supply Chain Manager is able to monitor product flows and collaboratively respond to potential delivery problems.
Of course this is a straight forward way of looking at Supply Chain Management and the larger the organisation, the greater the scope of the Supply Chain and hence more complexity may arise, especially when Supply Chain Management takes on a regional or global dynamic.
Supply Chain Management can be a really rewarding career path offering the opportunity to work with most departments within an organisation to drive efficiencies and ensure the business operates profitably whilst limiting it's exposure to working capital. Tangible results are highly satisfying and a Supply Chain Manager enjoys having a major impact over the ability of the business to meet the customer's expectations, thus increasing sales and reduce operating costs.
