Supply Chain Management Definition
SCMA defines supply chain management (SCM) as:
The process of strategically managing flows of goods, services, finance and knowledge, along with relationships within and among organizations, to realize greater economic value through:
- Supporting enterprise strategic objectives
- Contributing to the achievement of strategic competitiveness of the enterprise
- Contributing to the enhancement of the competitive advantage of the enterprise
- Enhancing customer satisfaction
Supply chain management involves the integration of core areas of knowledge (procurement, operations, logistics) and supporting knowledge areas (marketing, finance and accounting, human resources, knowledge management).
- Growing in importance in the new global economy...and critical to the success of any organization today
- Delivering more value to organizations than any traditional business function
- A strategic source of competitive advantage commanding the attention of executives in the C-Suite
- Requiring the professional leadership of those with specialized training and accreditation
- At the dynamic edge of new developments in production and information technology, international security and trade, and environmental responsibility.
Supply Chain: From Supplier to Customer
Today, organizations cannot compete solely as individual firms. Increasingly, they must rely on effective supply chains to win in the networked global economy. With relationships extending beyond traditional enterprise boundaries, organizations are managing business processes throughout an integrated value chain of multiple companies – from the supplier’s supplier to the customer’s customer.
Beyond Cost Reduction…to Value Creation
Supply chains are evolving from entities that were primarily tactical to strategic sources of competitive advantage. They are no longer vehicles for simply reducing cost; they are now helping firms deliver significant and real value to customers and enhance shareholder value. They are no longer primarily talked of between buyers and suppliers; supply chains are now discussed in boardrooms.