Supply chain management is an integration activities to meet customer need through two main processes internal supply chain management and external supply chain management.
Supply chain definition is conversion of the raw material to ِfinished product that customer needs.
The main objective from supply chain management is achieving a fruitful balance between market demand through demand management and supply through supply management, hence achieve business objectives for all business functions in the organization.
Traditional Supply chain was define supply chain as the physical activities to produce the product or the service and transport it to the customer but nowadays there is a new definition of supply chain which called “ cross function supply chain”. This trend focus on all business functions to improve the level of quality of the finished from all business functions points of view and achieve the business objectives in each function inside the organization as:
- Marketing Management: The main objective is development of customer satisfaction level through provide the most appropriate solution to the customer. Supply chain need customer need as an input from marketing department starting from the stage of design the product to design the solution based on customer need to improve customer satisfaction level.
- Sales management: Sales is one from main important inputs to supply chain management to define two main points, first is how many product sales will be able to sale to produce the appropriate quantities .Second, how the customer expect to receive the product to plan the sales and distribution channels. Supply chain manage the production process & distribution channels to achieve sales objective increase sales revenue.
- Warehouse management: Warehousing is one from supply chain constraints in the company. It answers the question of “how the customer expect to receive the product? Which distribution channel will be appropriate for the customer? What is the best model to store this product? Supply chain manage the warehouse process & distribution channels to achieve warehouse objectives.
- Finance department: Supply chain management supports the finance to control the cost of goods sold (COGS) and plan how manage your inventory to minimize company cash to cash cycle.
- Procurement management: Supply chain management able to control the cost of raw material, supplies and any required items from outside the company with building a strategic relationship with the suppliers and improve sourcing processes to minimize items cost with the same quality level, then increase the profitability of the organization.
- Production department: To plan the production processes and production layout to utilize usage of production resources as equipment and raw material which it is the core objective from production department.
- Logistic Management: All supply chain activities are logistic activities. Logistic management includes flow of information, flow of material, staff rotation and cash cycle. So, many companies define supply chain management as logistic management. Supply chain supports logistic department to achieve its objective which it is transport right product through right way in right time with full truck load.
There is a permanent relation between supply chain management and logistics management. There are two opinions in this point. The first point of view assumes that supply chain management is a part of logistics management – They consider that any activity in supply chain called logistic activity – and other point of views assumes logistics is a part of supply chain management – They consider that the logistics management is related to transport the finished goods to the customer.
Both points of view are right based on type of industry because of the main concept of supply chain management which states that “NO ABSOLUTE SOLUTION”
hpa | Supply Chain Sector