Supply Chain Management

Topics: Supply chain management, Management, Supply chain Pages: 30 (7735 words) Published: May 10, 2013

Programme:Extended Diploma in Strategic Management and Leadership Unit Number and Title:Strategic Supply Chain Management
Unit Level: QCF Level 7
Assignment Ref. Number:2.1.1
Module Tutor:AKM Asaduzzaman Patwary
Email: [email protected]

Learner’s name and statement of authenticity

Learner’s ID: 20112767

I certify that the work submitted for this assignment is my own. Where the work of others has been used to support my work then credit has been acknowledged. 1.1 Explain the importance of effective supply chain management in achieving organisational objectives. Supply Chain Management

There are numerous definitions of the supply chain and supply chain management: “The supply chain conceptually covers the entire physical process from obtaining the raw materials through all process steps until the finished product reaches the end consumer. Most supply chains consist of many separate companies, each linked by virtue of their part in satisfying the specific need of the end consumer.”

Supply chain management may be thought of as the management of all activities aimed at satisfying the end consumer; as such it covers almost all activity within the organisation. It has been suggested that it incorporates a number of key success factors which include a clear procurement strategy, effective control systems, and development of expertise. Supply chain management therefore represents and reflects a holistic approach to the operation of the organisation. In other words, supply chain management relates to the entire procurement cycle not just at the end (which is the commonly-held view). In particular it has a pivotal role to play in the development of an initial sourcing strategy.

A distinction may be drawn between strategic and tactical supply chain management, the respective definitions being:

“The selection and linking of suppliers and customers through negotiation and agreement to achieve customer satisfaction by providing value added products and services within beneficial and profitable relationships of all parties within the supply chain.” And “Supply chain management is the continuous planning, developing, controlling, informing and monitoring of actions within and between supply chain links so that an integrated supply process results which meets overall strategic goals.”

Supply chains are not linear; rather, any organisation has several supply chains coming into (upstream), going through and going out of (downstream) the organisation. Supply chain management is the management of the whole demand process, starting with the end customers' requirements – be that external customers (e.g. consumers) or internal customers (e.g. end users) - and managing the meeting of their requirements right up to, and in some cases, beyond the supplier of the required goods or services.

Few organisations have fully integrated their supply chains; one example of where supply chain management has been successfully implemented is in the automotive sector where Nissan, the car manufacturer, has integrated its upstream supply chains - certainly for its car production if not for its entire business. The supermarket sector is an excellent example of where the supply chains close to the final customer have been managed to the extent that all goods and services required by the organisation are demand-driven, with technology enabling end-customers' requirements to be communicated direct to suppliers. CIPS encourages organisations to manage their supply chains for both direct spend i.e. those goods and services required for the business (components for a manufacturing process for example), as well as indirect spend i.e. those goods and services required to support the business - professional services for instance.

Supply chain management involves identifying where the value lies within the whole supply...
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