Page 77 - DMGT525_MATERIALS_MANAGEMENT

Materials Management Neha Tikoo, Lovely Professional University

Notes Unit 6: Supply Chain Management

CONTENTS
Objectives
Introduction

6.1 Evolution of Supply Chain Management
6.2 Understanding the Supply Chain Management
6.2.1 Need for Supply Chain

6.2.2 Develop Needed Supply Chain Capabilities
6.2.3 Typology of Supply Chains
6.3 Implementation of Supply Chain Principles in a Company
6.4 Summary
6.5 Keywords

6.6 Review Questions
6.7 Further Readings

Objectives

After studying this unit, you will be able to:

 Explain the Concept of Supply Chain Management
 Discuss the Implementation of Supply Chain Management in a Company

Introduction

Previous unit dealt with the concept of negotiation in materials management. It also covered the
various techniques and strategies used in negotiating. In this unit, you will study about supply
chain and its effective implementation in a company.
A supply chain is a system of organizations, people, technologies, activities, information and
resources involved in moving a product or service from supplier to customer. Maintaining a
flawless supply chain across all its operations thus becomes absolutely necessary for any business.
Importance of supply chain management need not be over emphasized as it has become the
cutting edge of business, after product quality and manufacturing capabilities of any business
firm. Supply chain activities transform natural resources, raw materials and components into a
finished product that is delivered to the end user. In sophisticated supply chain systems, used
products may reenter the supply chain at any point where residual value is recyclable.
Supply chains encompass the companies and the business activities needed to design, make,
deliver, and use a product or service. Businesses depend on their supply chains to provide them
with what they need to survive and thrive. Every business fits into one or more supply chains
and has a role to play in each of them. The pace of change and the uncertainty about how markets
will evolve has made it increasingly important for companies to be aware of the supply chains
they participate in and to understand the roles that they play. Those companies that learn how
to build and participate in strong supply chains will have a substantial competitive advantage in
their markets.

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