SMU MBA ASSIGNMENTS

A supply chain is a network of retailers, distributors, transporters, storage facilities, andsuppliers that participate in the production, delivery, and sale of a product to the consumer. The supply chain is typically made up of multiple companies who coordinate activities to set themselves apart from the competition.

A supply chain has three key parts:

• Supply focuses on the raw materials supplied to manufacturing, including how, when, and from what location.
• Manufacturing focuses on converting these raw materials into finished products.
• Distribution focuses on ensuring these products reach the consumers through an organized network of distributors, warehouses, and retailers.

While often applied to manufacturing and consumer products, a supply chain can also be used to show how several processes supply to one another. The supply chain definition in this sense can apply to Internet technology, finance, and many other industries. A supply chain strategy defines how the supply chain should operate in order to compete in the market. The strategy evaluates the benefits and costs relating to the operation. While a business strategy focuses on the overall direction a company wishes to pursue, supply chain strategy focuses on the actual operations of the organization and the supply chain that will be used to meet a specific goal.

Another term associated with a supply chain is supply chain management (SCM), which is the oversight of materials, information, and finances as they are distributed from supplier to consumer. The supply chain also includes all the necessary stops between the supplier and the consumer. Supply chain management involves coordinating this flow of materials within a company and to the end consumer.

Supply chain management can be divided into three main flows:

• The Product flow includes moving goods from supplier to consumer, as well as dealing with customer service needs.
• The Information flow includes order information and delivery status.
• The Financial flow includes payment schedules, credit terms, and additional arrangements.

The careers of many of my colleagues in the profession of supply chain management were forged in manufacturing. Indeed, it was the factory that inspired so many of the principles of Quality, Planning, and Inventory Management that we have come to apply in many disciplines. My career, however, followed a somewhat different path: I “grew up”  in retail, and gained a completely different perspective on SCM as a result.

The host of this video ends the presentation with the statement: “they [retailers] could all use the help of Supply Chain Managers.” That is true enough. But the statement does not go far enough.

The relationship between retail operations and supply chain management ought to be reciprocal and integrated. Successful retailers understand the value of best practices in SCM. Wal-Mart has built an empire on this approach. The retail mind-set challenges traditional supply chain perspectives, forcing them to employ flexibility, responsiveness, and efficiency in the processes.

Supply chain management took a long time to come to an appreciation of the importance of the consumer in the Great Equation of Commerce. This is a concept that comes intuitively to retailers.  We have morphed from a post-war supply-driven economy to one that is consumer-driven. Many manufacturers have yet to come to grips with this simple yet profound change, and struggle as a result. Such was the largess of the post-war boom.

I would argue that retail has a lot to offer to the profession of supply chain management as well. Through an appreciation of the wants and needs of consumers, SCM practitioners will gain a much deeper understanding of what works, and what does not.

This video lasts only a little under 4 minutes, and gives an excellent overview of the subject matter.