Supply Chain Management Concentration

About this concentration
Career Opportunities & Professional Organizations
Curricululm & Courses
Associated Faculty
Related center or initiative: Supply Chain Resource Consortium

What is Supply Chain Management?

“Supply Chain Management: the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage." Cecil Bozarth, introduction to his book, Operations and Supply Chain Management

The concept of Supply Chain Management is based on two core ideas.

• 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.
• 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.

A few points of note about SCM:

• It doesn’t replace what we’ve learned about management over the last 50 years; it builds upon it.
• It often requires significant changes in the firm’s organizational structure, because SCM issues cut across functional areas and even business entities.
• It requires firms to put in place information systems and metrics that focus on performance across the entire supply chain.
• It adds another layer of complexity to a firm’s strategy development efforts.