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Management Information Systems

Notes Supply Chain Management can also refer to Supply chain management software which are tools
or modules used in executing supply chain transactions, managing supplier relationships and
controlling associated business processes.
Figure 9.13: SCM Connected with various Domains

9.7.1 Supply Chain Management Challenges

Supply chain management must address the following problems:
 Distribution Network Configuration: Number, location and network missions of suppliers,
production facilities, distribution centers, warehouses, cross-docks and customers.

 Distribution Strategy: Including questions of operating control (centralized, decentralized
or shared); delivery scheme (e.g., direct shipment, pool point shipping, Cross docking,
DSD (direct store delivery), closed loop shipping); mode of transportation (e.g., motor
carrier, including truckload, parcel; railroad; intermodal, ocean freight; airfreight);
replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g., owner-
operated, private carrier, common carrier, contract carrier, or 3PL).

 Information: Integration of and other processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory, transportation, and potential
collaboration, etc.
 Inventory Management: Quantity and location of inventory including raw materials,
work-in-process and finished goods.

 Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds
across entities within the supply chain.
Supply chain execution is managing and coordinating the movement of materials, information
and funds across the supply chain. The flow is bi-directional.

9.7.2 Activities/Functions

Supply chain management is a cross-functional approach to managing the movement of raw
materials into an organization, certain aspects of the internal processing of materials into finished
goods, and then the movement of finished goods out of the organization toward the
end-consumer. As organizations strive to focus on core competencies and becoming more flexible,
they have reduced their ownership of raw materials sources and distribution channels. These
functions are increasingly being outsourced to other entities that can perform the activities

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