The supply chain can be described as the network, covering the various stages in the provision of products or services to customers. It includes not only manufacturers and suppliers, but also transporters, warehouses, distributors, retailers, etc. The number of stages in the supply chain depends on the customers' needs, and the role each stage plays in fulfilling their needs. Supply Chain Management (SCM) integrates procurement, operations and logistics to provide value added products or services to customers. Effective management of the supply chain helps organizations meet customer requirements on time, with the desired quality specifications, in a cost-effective manner, through the coordination of different activities which transform raw materials into final products or services.
SCM can provide both tangible and intangible benefits to an organization. Tangible benefits include revenue growth, improved facility utilization, optimized inventory management, etc. Intangible benefits include improvement in quality, improvement in customer satisfaction, and enhanced customer and supplier relationships.
In this chapter we discuss the principles of supply chain management, process views of the supply chain, and factors and issues considered when designing the supply chain.
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