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Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the Supply Chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. According to the Council Of Supply Chain Management Professionals (CSCMP), a professional association that developed a definition in 2004, Supply Chain Management "encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies."Council of Supply Chain Management Professionals: ''CSCMP Definition of Supply Chain Management.'' Supply Chain Event Management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned. Some experts distinguish supply chain management and Logistics Management , while others consider the terms to be interchangeable. From the point of view of an enterprise, the scope of supply chain management is usually bounded on the supply side by your supplier's suppliers and on the customer side by your customer's customers. Supply chain management is also a category of software products. SUPPLY CHAIN MANAGEMENT PROBLEMS Supply chain management must address the following problems:
ACTIVITIES/FUNCTIONS Resolution to supply chain problems span Strategic, Tactical, and Operational levels of activities. SCOR is an operations reference model for supply chain promoted by the Supply-Chain Council . Strategic
Tactical
Operational
THE BULLWHIP EFFECT A new theory The Beer Game and the Bullwhip suggests that the problem of supply chain management has focused on the supplier where it needs instead to focus on the consumer. Using the analogy of a Freeway , traffic flow theorist Carlos Daganzo of the Institute of Transportation Studies at Berkeley found that failures in the supply chain tend to be caused by bottlenecks at the consumer end of the supply chain, which caused ripple effects all the way back to the supplier (the bullwhip effect). The Just In Time inventory strategy is an example of a strategy that addresses this problem of supply chain management, but it is, of course, not applicable at all levels of demand. SUPPLY CHAIN MANAGEMENT AND INACCURACY PROBLEMS According to a survey conducted by Andersen (1996), on a typical afternoon in a U.S. supermarket, 8.2% of the items are out of stock and this number is nearly doubled for items that are advertised. The cost of stockouts in U.S. supermarkets alone are estimated a $7 to $12 billion of sales. In the same study, it was estimated that 33% of out-of-stock items are located in the store, just not in the correct location. Before being stored on store shelves, items pass through several processes which are the supply system, order preparation process and the shipment and the receiving process. Once received in the store, all products are initially stored within the backroom. Then, the shelf stock is replenished from time to time during the selling season as retail shelf space is limited. During these processes, execution errors that may occur would compromise the availability of products on shelves. One can distinguish two root causes of poor product avaiblity: i) One part of products ordered is not received by the store, ii) All products ordered are received but one part is not available on shelf due to internal store execution problems. In the second case, The store may be out of stock of a product, when in fact the product is available in the back of the store or is placed on the wrong shelf. Inacuracy problems in SCM SEE ALSO
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