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Part - IV
Different forms of Supply Chain
The comprehensive definition of "Supply Chain Management" is the coordination of material and information flow from raw material in the ground to the end-customers’ recycling of the expired product. This definition encompasses many activities currently not included under the title of Supply Chain Manager for many reasons. These include: lack of resources, the new definition crosses many lines of responsibility and territorial interests, and insufficient support from top management to effect the required changes. Given these conditions, Supply Chain Management (SCM) has evolved into forms that fit existing business models. Some of these forms and some tools that can assist us in realizing the potential of SCM are: -
Form 1: The Least Change. Many organizations have renamed the Material Management function to reflect business’s current interest the term "SCM". This function typically includes planning/scheduling, first tier suppliers, inbound logistics, and Warehousing. This form of SCM is the least upsetting to an organization and its activities can be controlled through budgets and head counts.
Form 2: Logistics. Some publications and common carriers would have us believe that SCM is connecting all suppliers, warehouses, distribution centers, and customers through superior logistics. That may be appropriate if only truckers, and material handlers come in contact with the products, but there are additional opportunities in inventory and improved process times as well as product quality.
Form 3: Supply-Base Focused. These organizations track and influence the flow of material through the supply chain beginning with raw material and ending at the use of the resulting components by the buying organization. The responsibility usually falls on purchasing whose job it is to: -
reduce the accumulated lead times and stored inventories at each stage,
reduce costs by facilitating communications between levels and eliminating waste, and
to improve quality and its associated costs.
Often the supply chain will involve two or three levels of suppliers depending on the complexity of the purchased item. Funding this process is often an issue, especially in those organizations with three or more tiers of suppliers.
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* Contributed by -
Amit Mishra,
PGP 19188,
Indian Institute Of Management, Lucknow.
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