Misplaced Pages

This is an old revision of this page, as edited by 198.185.66.249 (talk) at 20:22, 5 June 2014 (→Theories). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages) This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Supply chain management" – news · newspapers · books · scholar · JSTOR (August 2009) (Learn how and when to remove this message) This article appears to contain a large number of buzzwords. There might be a discussion about this on the talk page. Please help improve this article if you can. (July 2011) (Learn how and when to remove this message)

Supply chain management (SCM) is the management of the flow of goods. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain. Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."

SCM draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach.

Origin of the term and definitions

The term "supply chain management" entered the public domain when Keith Oliver, a consultant at Booz Allen Hamilton (now Booz & Company), used it in an interview for the Financial Times in 1982. The term was slow to take hold. It gained currency in the mid-1990s, when a flurry of articles and books came out on the subject. In the late 1990s it rose to prominence as a management buzzword, and operations managers began to use it in their titles with increasing regularity.

Commonly accepted definitions of supply chain management include:

• The management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, company, resellers, and final consumers

• The systematic, strategic coordination of traditional business functions and tactics across all business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole

• A customer-focused definition is given by Hines (2004:p76): "Supply chain strategies require a total systems view of the links in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the consumer. As a consequence, costs must be lowered throughout the chain by driving out unnecessary expenses, movements, and handling. The main focus is turned to efficiency and added value, or the end-user's perception of value. Efficiency must be increased, and bottlenecks removed. The measurement of performance focuses on total system efficiency and the equitable monetary reward distribution to those within the supply chain. The supply chain system must be responsive to customer requirements."

• The integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders (Lambert, 2008)

• According to the Council of Supply Chain Management Professionals (CSCMP), supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes coordination and collaboration with channel partners, which may be suppliers, intermediaries, third-party service providers, or customers. Supply chain management integrates supply and demand management within and across companies. More recently, the loosely coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise.

A supply chain, as opposed to supply chain management, is a set of organizations directly linked by one or more upstream and downstream flows of products, services, finances, or information from a source to a customer. Supply chain management is the management of such a chain.

Supply chain management software includes tools or modules used to execute supply chain transactions, manage supplier relationships, and control associated business processes.

Supply chain event management (SCEM) considers all possible events and factors that can disrupt a supply chain. With SCEM, possible scenarios can be created and solutions devised.

In many cases the supply chain includes the collection of goods after consumer use for recycling. Including third-party logistics or other gathering agencies as part of the RM re-patriation process is a way of illustrating the new endgame strategy...

Functions

Supply chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other firms that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations. Less control and more supply chain partners led to the creation of the concept of supply chain management. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.

Main function of supply chain management are as follows: 1)inventory management 2)distribution management 3)channel management 4)payment management 5)financial management 6)supplier management

Importance

Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy. In Peter Drucker's (1998) new management paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies.

In recent decades, globalization, outsourcing, and information technology have enabled many organizations, such as Dell and Hewlett Packard, to successfully operate collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities (Scott, 1993). This inter-organisational supply network can be acknowledged as a new form of organisation. However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories (Powell, 1990). It is not clear what kind of performance impacts different supply network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players. From a systems perspective, a complex network structure can be decomposed into individual component firms (Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of an internal management control structure is known to impact local firm performance (Mintzberg, 1979).

In the 21st century, changes in the business environment have contributed to the development of supply chain networks. First, as an outcome of globalization and the proliferation of multinational companies, joint ventures, strategic alliances, and business partnerships, significant success factors were identified, complementing the earlier "just-in-time", lean manufacturing, and agile manufacturing practices. Second, technological changes, particularly the dramatic fall in communication costs (a significant component of transaction costs), have led to changes in coordination among the members of the supply chain network (Coase, 1998).

Many researchers have recognized supply network structures as a new organisational form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global Production Network", and "Next Generation Manufacturing System". In general, such a structure can be defined as "a group of semi-independent organisations, each with their capabilities, which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration" (Akkermans, 2001).

The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001 and related standards published jointly by the ISO and the IEC.Supply Chain Management draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach.

Historical developments

Six major movements can be observed in the evolution of supply chain management studies: creation, integration, and globalization (Movahedi et al., 2009), specialization phases one and two, and SCM 2.0.

Creation era

The term "supply chain management" was first coined by Keith Oliver in 1982. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to Japanese management practices.

Integration era

This era of supply chain management studies was highlighted with the development of electronic data interchange (EDI) systems in the 1960s, and developed through the 1990s by the introduction of enterprise resource planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of Internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value added and cost reductions through integration.

A supply chain can be classified as a stage 1, 2 or 3 network. In a stage 1–type supply chain, systems such as production, storage, distribution, and material control are not linked and are independent of each other. In a stage 2 supply chain, these are integrated under one plan and is ERP enabled. A stage 3 supply chain is one that achieves vertical integration with upstream suppliers and downstream customers. An example of this kind of supply chain is Tesco.

Globalization era

The third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in organisations' supply chains can be traced back several decades (e.g., in the oil industry), it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of supply chain management in organizations with the goal of increasing their competitive advantage, adding value, and reducing costs through global sourcing.

Specialization era (phase I): outsourced manufacturing and distribution

In the 1990s, companies began to focus on "core competencies" and specialization. They abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed management requirements, by extending the supply chain beyond the company walls and distributing management across specialized supply chain partnerships.

This transition also refocused the fundamental perspectives of each organization. Original equipment manufacturers (OEMs) became brand owners that required visibility deep into their supply base. They had to control the entire supply chain from above, instead of from within. Contract manufacturers had to manage bills of material with different part-numbering schemes from multiple OEMs and support customer requests for work-in-process visibility and vendor-managed inventory (VMI).

The specialization model creates manufacturing and distribution networks composed of several individual supply chains specific to producers, suppliers, and customers that work together to design, manufacture, distribute, market, sell, and service a product. This set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands.

Specialization era (phase II): supply chain management as a service

Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers, and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution, and performance management.

Market forces sometimes demand rapid changes from suppliers, logistics providers, locations, or customers in their role as components of supply chain networks. This variability has significant effects on supply chain infrastructure, from the foundation layers of establishing and managing electronic communication between trading partners, to more complex requirements such as the configuration of processes and work flows that are essential to the management of the network itself.

Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is a leading reason why supply chain specialization is gaining popularity.

Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken root primarily in transportation and collaboration categories. This has progressed from the application service provider (ASP) model from roughly 1998 through 2003, to the on-demand model from approximately 2003 through 2006, to the software as a service (SaaS) model currently in focus today.

Supply chain management 2.0 (SCM 2.0)

Building on globalization and specialization, the term "SCM 2.0" has been coined to describe both changes within supply chains themselves as well as the evolution of processes, methods, and tools to manage them in this new "era". The growing popularity of collaborative platforms is highlighted by the rise of TradeCard’s supply chain collaboration platform, which connects multiple buyers and suppliers with financial institutions, enabling them to conduct automated supply-chain finance transactions.

Web 2.0 is a trend in the use of the World Wide Web that is meant to increase creativity, information sharing, and collaboration among users. At its core, the common attribute of Web 2.0 is to help navigate the vast information available on the Web in order to find what is being bought. It is the notion of a usable pathway. SCM 2.0 replicates this notion in supply chain operations. It is the pathway to SCM results, a combination of processes, methodologies, tools, and delivery options to guide companies to their results quickly as the complexity and speed of the supply chain increase due to global competition; rapid price fluctuations; surging oil prices; short product life cycles; expanded specialization; near-, far-, and off-shoring; and talent scarcity.

SCM 2.0 leverages solutions designed to rapidly deliver results with the agility to quickly manage future change for continuous flexibility, value, and success. This is delivered through competency networks composed of best-of-breed supply chain expertise to understand which elements, both operationally and organizationally, deliver results, as well as through intimate understanding of how to manage these elements to achieve the desired results. The solutions are delivered in a variety of options, such as no-touch via business process outsourcing, mid-touch via managed services and software as a service (SaaS), or high-touch in the traditional software deployment model.

Business process integration

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources in this section. Unsourced material may be challenged and removed. (June 2013) (Learn how and when to remove this message)

Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. In an example scenario, a purchasing department places orders as its requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems, and shared information. According to Lambert and Cooper (2000), operating an integrated supply chain requires a continuous information flow. However, in many companies, management has concluded that optimizing product flows cannot be accomplished without implementing a process approach. The key supply chain processes stated by Lambert (2004) are:

• Customer relationship management
• Customer service management
• Demand management style
• Order fulfillment
• Manufacturing flow management
• Supplier relationship management
• Product development and commercialization
• Returns management

Much has been written about demand management. Best-in-class companies have similar characteristics, which include the following:

• Internal and external collaboration
• Initiatives to reduce lead time
• Tighter feedback from customer and market demand
• Customer-level forecasting

One could suggest other critical supply business processes that combine these processes stated by Lambert, such as:

1. Customer service management
2. Procurement
3. Product development and commercialization
4. Manufacturing flow management/support
5. Physical distribution
6. Outsourcing/partnerships
7. Performance measurement
8. Warehousing management

a) Customer service management process

Customer relationship management concerns the relationship between an organization and its customers. Customer service is the source of customer information. It also provides the customer with real-time information on scheduling and product availability through interfaces with the company's production and distribution operations. Successful organizations use the following steps to build customer relationships:

• determine mutually satisfying goals for organization and customers
• establish and maintain customer rapport
• induce positive feelings in the organization and the customers

b) Procurement process

Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the development of new products. In firms whose operations extend globally, sourcing may be managed on a global basis. The desired outcome is a relationship where both parties benefit and a reduction in the time required for the product's design and development. The purchasing function may also develop rapid communication systems, such as electronic data interchange (EDI) and Internet linkage, to convey possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling, and quality assurance, many of which include the responsibility to coordinate with suppliers on matters of scheduling, supply continuity, hedging, and research into new sources or programs.

c) Product development and commercialization

Here, customers and suppliers must be integrated into the product development process in order to reduce the time to market. As product life cycles shorten, the appropriate products must be developed and successfully launched with ever-shorter time schedules in order for firms to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must:

1. coordinate with customer relationship management to identify customer-articulated needs;
2. select materials and suppliers in conjunction with procurement; and
3. develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the given combination of product and markets.

d) Manufacturing flow management process

The manufacturing process produces and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible in order to respond to market changes and must accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency in meeting customer demand. This process manages activities related to planning, scheduling, and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites, and maximum flexibility in the coordination of geographical and final assemblies postponement of physical distribution operations.

e) Physical distribution

This concerns the movement of a finished product or service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product or service is a vital part of each channel participant's marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing. Thus it links a marketing channel with its customers (i.e., it links manufacturers, wholesalers, and retailers).

f) Outsourcing/partnerships

This includes not just the outsourcing of the procurement of materials and components, but also the outsourcing of services that traditionally have been provided in house. The logic of this trend is that the company will increasingly focus on those activities in the value chain in which it has a distinctive advantage and outsource everything else. This movement has been particularly evident in logistics, where the provision of transport, warehousing, and inventory control is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling this network of partners and suppliers requires a blend of central and local involvement: strategic decisions are taken centrally, while the monitoring and control of supplier performance and day-to-day liaison with logistics partners are best managed locally.

g) Performance measurement

Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can both be correlated with a firm's performance. As logistics competency becomes a critical factor in creating and maintaining competitive advantage, measuring logistics performance becomes increasingly important, because the difference between profitable and unprofitable operations becomes narrower. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to experts, internal measures are generally collected and analyzed by the firm, including cost, customer service, productivity, asset measurement, and quality. External performance is measured through customer perception measures and "best practice" benchmarking.

h) Warehousing management

To reduce a company's cost and expenses, warehousing management is carrying the valuable role against operations. In the case of perfect storage and office with all convenient facilities in company level, reducing manpower cost, dispatching authority with on time delivery, loading & unloading facilities with proper area, area for service station, stock management system etc.

Theories

Currently there's a gap in the literature on supply chain management studies present: there is no theoretical support for explaining the existence or the boundaries of supply chain management. A few authors, such as Halldorsson et al. (2003), Ketchen and Hult (2006), and Lavassani et al. (2009), have tried to provide theoretical foundations for different areas related to supply chain by employing organizational theories. These theories include:

• Resource-based view (RBV)
• Transaction cost analysis (TCA)
• Knowledge-based view (KBV)
• Strategic choice theory (SCT)
• Agency theory (AT)
• Channel coordination
• Institutional theory (InT)
• Systems theory (ST)
• Network perspective (NP)
• Materials logistics management (MLM)
• Just-in-time (JIT)
• Material requirements planning (MRP)
• Theory of constraints (TOC)
• Total quality management (TQM)
• Agile manufacturing
• Time-based competition (TBC)
• Quick response manufacturing (QRM)
• Customer relationship management (CRM)
• Requirements chain management (RCM)
• Available-to-promise (ATP)

However, the unit of analysis of most of these theories is not the supply chain but rather another system, such as the firm or the supplier-buyer relationship. Among the few exceptions is the relational view, which outlines a theory for considering dyads and networks of firms as a key unit of analysis for explaining superior individual firm performance (Dyer and Singh, 1998).

One of the most recent developments about supply chain theory has been presented under the name of "Supply Chain Roadmap®", which is a method whereby an organization’s supply chain strategy can be reviewed in an organized and systematic approach in order to assure alignment of the supply chain with the business strategy. Method is supported in the most important and recognised theories and practices about supply chain strategy and business strategy. The method allows the characterisation of the supply chain under analysis by 42 factors in a single page view called "The Map" -a downloable version of the map is available on http://www.supplychainroadmap.com-, and allows the comparison of this supply chain with 6-Supply Chain Archetypes (Fast, Efficient, Continuous Flow, Agile, Custom Configured, Flexible), in order to find gaps between supply chain under analysis and the most proper supply chain archetype. Method is applied in four steps (Scope, Understanding, Evaluation, and, Redesign & Deployment). Method was developed by Hernan David Perez, an experienced supply chain manager in several industrial sectors, and, professor and international speaker in supply chain strategy. An academic version of the method is available on www.supplychainroadmap.com, and a book about the professional version of the method is available. The book "Supply Chain Roadmap: aligning supply chain with business strategy" deepens and extended the concepts presented in his recognized article "Supply Chain Strategies: Which one hits the mark?" published by CSCMP's Supply Chain Quarterly in 2013, which was the third highest read article of the magazine in 2013, and, is a top search-result in Google for Supply Chain Strategy.

Supply chain centroids

In the study of supply chain management, the concept of centroids has become an important economic consideration. A centroid is a location that has a high proportion of a country's population and a high proportion of its manufacturing, generally within 500 mi (805 km). In the US, two major supply chain centroids have been defined, one near Dayton, Ohio, and a second near Riverside, California.

The centroid near Dayton is particularly important because it is closest to the population center of the US and Canada. Dayton is within 500 miles of 60% of the US population and manufacturing capacity, as well as 60% of Canada's population. The region includes the interchange between I-70 and I-75, one of the busiest in the nation, with 154,000 vehicles passing through per day, 30–35% of which are trucks hauling goods. In addition, the I-75 corridor is home to the busiest north-south rail route east of the Mississippi River.

Tax efficient supply chain management

Tax efficient supply chain management is a business model that considers the effect of tax in the design and implementation of supply chain management. As the consequence of globalization, cross-national businesses pay different tax rates in different countries. Due to these differences, they may legally optimize their supply chain and increase profits based on tax efficiency.

Sustainability and social responsibility in supply chains

Supply chain sustainability is a business issue affecting an organization's supply chain or logistics network, and is frequently quantified by comparison with SECH ratings, which uses a triple bottom line incorporating economic, social, and environmental aspects. SECH ratings are defined as social, ethical, cultural, and health' footprints. Consumers have become more aware of the environmental impact of their purchases and companies' SECH ratings and, along with non-governmental organizations (NGOs), are setting the agenda for transitions to organically grown foods, anti-sweatshop labor codes, and locally produced goods that support independent and small businesses. Because supply chains may account for over 75% of a company's carbon footprint, many organizations are exploring ways to reduce this and thus improve their SECH rating.

For example, in July 2009, Wal-Mart announced its intentions to create a global sustainability index that would rate products according to the environmental and social impacts of their manufacturing and distribution. The index is intended to create environmental accountability in Wal-Mart's supply chain and to provide motivation and infrastructure for other retail companies to do the same.

It has been reported that companies are increasingly taking environmental performance into account when selecting suppliers. A 2011 survey by the Carbon Trust found that 50% of multinationals expect to select their suppliers based upon carbon performance in the future and 29% of suppliers could lose their places on 'green supply chains' if they do not have adequate performance records on carbon.

The US Dodd–Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July 2010, contained a supply chain sustainability provision in the form of the Conflict Minerals law. This law requires SEC-regulated companies to conduct third party audits of their supply chains in order to determine whether any tin, tantalum, tungsten, or gold (together referred to as conflict minerals) is mined or sourced from the Democratic Republic of the Congo, and create a report (available to the general public and SEC) detailing the due diligence efforts taken and the results of the audit. The chain of suppliers and vendors to these reporting companies will be expected to provide appropriate supporting information.

Incidents like the 2013 Savar building collapse with more than 1,100 victims have led to widespread discussions about corporate social responsibility across global supply chains. Wieland and Handfield (2013) suggest that companies need to audit products and suppliers and that supplier auditing needs to go beyond direct relationships with first-tier suppliers. They also demonstrate that visibility needs to be improved if supply cannot be directly controlled and that smart and electronic technologies play a key role to improve visibility. Finally, they highlight that collaboration with local partners, across the industry and with universities is crucial to successfully managing social responsibility in supply chains.

Components

Management components

SCM components are the third element of the four-square circulation framework. The level of integration and management of a business process link is a function of the number and level of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985). Consequently, adding more management components or increasing the level of each component can increase the level of integration of the business process link.

Literature on business process re-engineering buyer-supplier relationships, and SCM suggests various possible components that should receive managerial attention when managing supply relationships. Lambert and Cooper (2000) identified the following components:

• Planning and control
• Work structure
• Organization structure
• Product flow facility structure
• Information flow facility structure
• Management methods
• Power and leadership structure
• Risk and reward structure
• Culture and attitude

However, a more careful examination of the existing literature leads to a more comprehensive understanding of what should be the key critical supply chain components, or "branches" of the previously identified supply chain business processes—that is, what kind of relationship the components may have that are related to suppliers and customers. Bowersox and Closs (1996) state that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement. A primary-level channel participant is a business that is willing to participate in responsibility for inventory ownership or assume other financial risks, thus including primary level components (Bowersox and Closs, 1996). A secondary-level participant (specialized) is a business that participates in channel relationships by performing essential services for primary participants, including secondary level components, which support primary participants. Third-level channel participants and components that support primary-level channel participants and are the fundamental branches of secondary-level components may also be included.

Consequently, Lambert and Cooper's framework of supply chain components does not lead to any conclusion about what are the primary- or secondary-level (specialized) supply chain components (see Bowersox and Closs, 1996, p. 93) —that is, which supply chain components should be viewed as primary or secondary, how these components should be structured in order to achieve a more comprehensive supply chain structure, and how to examine the supply chain as an integrative one (See above sections 2.1 and 3.1).

Reverse supply chain

Reverse logistics is the process of managing the return of goods. It is also referred to as "aftermarket customer services". Any time money is taken from a company's warranty reserve or service logistics budget, one can speak of a reverse logistics operation. Reverse logistics is also the process of managing the return of goods from store, which the returned goods are sent back to warehouse and after that either warehouse scrap the goods or send them back to supplier for replacement depending on the warranty of the merchadise.

Systems and value

Supply chain systems configure value for those that organize the networks. Value is the additional revenue over and above the costs of building the network. Co-creating value and sharing the benefits appropriately to encourage effective participation is a key challenge for any supply system. Tony Hines defines value as follows: "Ultimately it is the customer who pays the price for service delivered that confirms value and not the producer who simply adds cost until that point".

Global applications

Global supply chains pose challenges regarding both quantity and value. Supply and value chain trends include:

• Globalization
• Increased cross-border sourcing
• Collaboration for parts of value chain with low-cost providers
• Shared service centers for logistical and administrative functions
• Increasingly global operations, which require increasingly global coordination and planning to achieve global optimums
• Complex problems involve also midsized companies to an increasing degree

These trends have many benefits for manufacturers because they make possible larger lot sizes, lower taxes, and better environments (e.g., culture, infrastructure, special tax zones, or sophisticated OEM) for their products. There are many additional challenges when the scope of supply chains is global. This is because with a supply chain of a larger scope, the lead time is much longer, and because there are more issues involved, such as multiple currencies, policies, and laws. The consequent problems include different currencies and valuations in different countries, different tax laws, different trading protocols, and lack of transparency of cost and profit.

Certification

There are several certification programs for SCM staff development, including International Institute for Procurement and Market Research (IIPMR), Association for Operations Management (APICS), International Purchasing and supply chain management institute (IPSCMI),the International Supply Chain Education Alliance (ISCEA), and the Institute of Supply Chain Management (IOSCM). IIPMR offers three Certifications namely Certified Supply Chain Associate (CSCA), Certified Supply Chain Specialist (CSCS) and Certified Procurement Professional (CPP. The APICS certification is called the Certified Supply Chain Professional (CSCP); the ISCEA certification is called the Certified Supply Chain Manager (CSCM). Additionally, the Institute for Supply Management is developing a certification called the Certified Professional in Supply Management (CPSM), focused on procurement and sourcing, also called supply management. The Purchasing Management Association of Canada is the main Canadian certifying body; its designations have global recipricocity. The main designation is the Supply Chain Management Professional (SCMP), with several others progressing toward it.

Topics addressed by selected professional supply chain certification programmes

Supply chain management college level education

In the 2013/2014 Eduniversal Best Masters Ranking in Supply Chain and Logistics, the following schools achieved the highest degrees for logistics and supply chain related master programs worldwide: Erasmus University Rotterdam, Vienna University of Economics and Business, KEDGE Business School, Purdue University and Copenhagen Business School.

The only university with a primary focus on logistics and supply chain management is the Kühne Logistics University in Hamburg, Germany. It is supported by the Kühne-Foundation of the logistics entrepreneur Klaus-Michael Kühne.

In English-speaking countries, many other top universities offer supply chain management programs at the undergraduate and graduate levels. Some of them are:

United States

• University of Houston
• Michigan State University
• Massachusetts Institute of Technology
• Brigham Young University
• Arizona State University
• Pennsylvania State University
• Ohio State University
• Carnegie Mellon University
• University of Tennessee
• Purdue University
• Northeastern University
• Rutgers University
• Virginia Tech
• University of Maryland
• University of Michigan
• University of South Carolina
• University of Texas at Dallas
• Western Michigan University
• Texas State University
• Western Illinois University
• Embry-Riddle Aeronautical University

United Kingdom

• Cranfield University
• Huddersfield University
• Northumbria University
• University of Sunderland
• University of Liverpool
• University of Lincoln
• University of Birmingham
• University of Hull
• University of Central Lancashire
• Brunel University
• University of Westminster

Canada

• John Molson School of Business
• HEC Montreal

See also

References

1. cf. Andreas Wieland, Carl Marcus Wallenburg (2011): Supply-Chain-Management in stürmischen Zeiten. Berlin.
2. Harland, C.M. (1996) Supply Chain Management, Purchasing and Supply Management, Logistics, Vertical Integration, Materials Management and Supply Chain Dynamics. In: Slack, N (ed.) Blackwell Encyclopedic Dictionary of Operations Management. UK: Blackwell.
3. "supply chain management (SCM)". APICS Dictionary. Retrieved 19 June 2013.
4. Bartsch, Frank. "Supply Chain Management (SCM)". BB Handel. Retrieved 19 June 2013.
5. David Jacoby (2009), Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance (The Economist Books), Bloomberg Press; 1st edition, ISBN 978-1576603451
6. Andrew Feller, Dan Shunk, & Tom Callarman (2006). BPTrends, March 2006 - Value Chains Vs. Supply Chains
7. David Blanchard (2010), Supply Chain Management Best Practices, 2nd. Edition, John Wiley & Sons, ISBN 9780470531884
8. ^ Mentzer, J.T. et al. (2001): Defining Supply Chain Management, in: Journal of Business Logistics, Vol. 22, No. 2, 2001, pp. 1–25
9. ^ Hines, T. 2004. Supply chain strategies: Customer driven and customer focused. Oxford: Elsevier.
10. Cooper et al., 1997
11. Baziotopoulos, 2004
12. MacDuffie and Helper, 1997; Monden, 1993; Womack and Jones, 1996; Gunasekaran, 1999
13. Drucker, 1998; Tapscott, 1996; Dilts, 1999
14. Trade Services and the Supply Chain
15. Lambert, Douglas M.Supply Chain Management: Processes, Partnerships, Performance, 3rd edition, 2008.
16. http://dx.doi.org/10.2307/259056
17. ^ Doug Page,"Dayton Region a Crucial Hub for Supply Chain Management", Dayton Daily News, 2009-12-21.
18. Investor Words definition of "tax efficient"
19. Khairul Anuar Rusli, Azmawani Abd Rahman and Ho, J.A. Green Supply Chain Management in Developing Countries: A Study of Factors and Practices in Malaysia. Paper presented at the 11th International Annual Symposium on Sustainability Science and Management (UMTAS) 2012, Kuala Terengganu, 9–11 July 2012. See publication here
20. Wal-Mart's Sustainability Index and Supply Chain Green Standards
21. "Indirect carbon emissions and why they matter". Carbon Trust. 7 Nov 2011. Retrieved 28 Jan 2014.
22. Andreas Wieland and Robert B. Handfield (2013): The Socially Responsible Supply Chain: An Imperative for Global Corporations. Supply Chain Management Review, Vol. 17, No. 5.
23. Macneil ,1975; Williamson, 1974; Hewitt, 1994
24. Stevens, 1989; Ellram and Cooper, 1993; Ellram and Cooper, 1990; Houlihan, 1985
25. Cooper et al., 1997; Lambert et al.,1996; Turnbull, 1990
26. Zhang and Dilts, 2004 ;Vickery et al., 2003; Hemila, 2002; Christopher, 1998; Joyce et al., 1997; Bowersox and Closs, 1996; Williamson, 1991; Courtright et al., 1989; Hofstede, 1978
27. ^ http://www.thehindu.com/features/metroplus/society/young-entrepreneurs-with-a-difference/article5064673.ece
28. ^ http://www.market-research-experts.com/wp/research-analysis/top-5-supply-chain-certifications/
29. ^ David Jacoby, 2009, Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance (The Economist Books), Bloomberg Press; 1st edition, ISBN 978-1576603451. Chapter 10, Organising, training and developing staff
30. Boston Strategies International
31. http://techjumble.com/the-iipmr-certify-yourself-today/
32. http://www.crunchbase.com/organization/international-institute-for-procurement-and-market-research-iipmr
33. http://www.best-masters.com/ranking-master-supply-chain-and-logistics.html
34. U.S. News - College Compass
35. UK Supply Chain Management Education
36. HEC Montréal | Global Supply Chain Management | Options | M. Sc. Hec.ca. Retrieved on 2014-04-19.

Further reading

• Ferenc Szidarovszky and Sándor Molnár (2002) Introduction to Matrix Theory: With Applications to Business and Economics, World Scientific Publishing. Description and preview.
• Cooper, M.C., Lambert, D.M., & Pagh, J. (1997) Supply Chain Management: More Than a New Name for Logistics. The International Journal of Logistics Management Vol 8, Iss 1, pp 1–14
• FAO, 2007, Agro-industrial supply chain management: Concepts and applications. AGSF Occasional Paper 17 Rome.
• Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R. (2006), Management Information Systems For the Information Age (3rd Canadian Ed.), Canada: McGraw Hill Ryerson ISBN 0-07-281947-2
• Halldorsson, Arni, Herbert Kotzab & Tage Skjott-Larsen (2003). Inter-organizational theories behind Supply Chain Management – discussion and applications, In Seuring, Stefan et al. (eds.), Strategy and Organization in Supply Chains, Physica Verlag.
• Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett-Larsen, T. (2007). Complementary theories to supply chain management. Supply Chain Management: An International Journal, Volume 12 Issue 4, 284-296.
• Handfield and Bechtel, 2001; Prater et al., 2001; Kern and Willcocks, 2000; Bowersox and Closs, 1996; Christopher, 1992; Bowersox, 1989
• Hines, T. 2004. Supply chain strategies: Customer driven and customer focused. Oxford: Elsevier.
• Kallrath, J., Maindl, T.I. (2006): Real Optimization with SAP® APO. Springer ISBN 3-540-22561-7.
• Kaushik K.D., & Cooper, M. (2000). Industrial Marketing Management. Volume29, Issue 1, January 2000, Pages 65–83
• Ketchen Jr., G., & Hult, T.M. (2006). Bridging organization theory and supply chain management: The case of best value supply chains. Journal of Operations Management, 25(2) 573-580.
• Kouvelis, P.; Chambers, C.; Wang, H. (2006): Supply Chain Management Research and Production and Operations Management: Review, Trends, and Opportunities. In: Production and Operations Management, Vol. 15, No. 3, pp. 449–469.
• Larson, P.D. and Halldorsson, A. (2004). Logistics versus supply chain management: an international survey. International Journal of Logistics: Research & Application, Vol. 7, Issue 1, 17-31.
• Movahedi B., Lavassani K., Kumar V. (2009) Transition to B2B e-Marketplace Enabled Supply Chain: Readiness Assessment and Success Factors, The International Journal of Technology, Knowledge and Society, Volume 5, Issue 3, pp. 75–88.
• Lavassani K., Movahedi B., Kumar V. (2009) Developments in Theories of Supply Chain Management: The Case of B2B Electronic Marketplace Adoption, The International Journal of Knowledge, Culture and Change Management, Volume 9, Issue 6, pp. 85–98.
• Mentzer, J.T. et al. (2001): Defining Supply Chain Management, in: Journal of Business Logistics, Vol. 22, No. 2, 2001, pp. 1–25
• Simchi-Levi D.,Kaminsky P., Simchi-levi E. (2007), Designing and Managing the Supply Chain, third edition, Mcgraw Hill

External links

• Supply Chain Management Definition and Solutions - CIO Magazine
• The Vital Role of Contract Manufacturing in Supply Chain Management and Optimization

v t e Management
Outline of management Index of management articles
By type of organization	Academic Association Business Restaurant Court Healthcare Intelligence Military Public Reputation
By focus, within an organization	On scope Strategic (top-level) Capability Capital Change Communication Financial Innovation Legal Performance Risk Systems On component Facility Product Product lifecycle Brand Project Construction Program On activity or department managed Line Marketing Operations/production Process Quality Sales Staff Accounting Office Records On aspect or relationship Customer relationship Engineering Logistics Perception Supply chain Talent On problem Conflict Crisis Stress On resource Environmental resource Field inventory Human resources Information Information technology Knowledge Land Materials Skills Technology Time
Positions	Interim Middle Senior
Methods, approaches	Adhocracy Collaborative method Distributed Earned value management Evidence-based management Full range leadership model Management by objectives Management style Macromanagement Micromanagement Scientific management Social entrepreneurship Sustainable management Team building Virtual management
Skills, activities	Decision-making Forecasting Leadership
Pioneers, scholars	Peter Drucker Eliyahu M. Goldratt Oliver E. Williamson
Education	Association of Technology, Management, and Applied Engineering Business school Certified Business Manager Chartered Management Institute Critical management studies
Degrees	Bachelor of Business Administration Master of Business Administration PhD in management Doctor of Business Administration
Other	Administration Collaboration Corporate governance Executive compensation Management consulting Management control Management cybernetics Management development Management fad Management system Managerial economics Managerial psychology Managerialism Organization development Organizational behavior management Pointy-haired Boss
Systems science portal

v t e Social and environmental accountability
Ethics and principles	Aarhus Convention Climate justice Corporate accountability / behaviour / environmental responsibility / responsibility / social responsibility Dirty hands Environmental racism / in Russia / in the United States / in Western Europe / inequality in the UK / injustice in Europe Ethical banking Ethical code Extended producer responsibility Externality Harm Little Eichmanns Loss and damage Organizational ethics Organizational justice Pollution Principles for Responsible Investment Racism Social impact assessment Social justice Social responsibility Stakeholder theory Sullivan principles Transparency (behavioral social) UN Global Compact
Social accounting	Corporate crime Double bottom line Ethical positioning index Higg Index Impact assessment (environmental equality social) ISO 26000 ISO 45001 Genuine progress indicator Performance indicator SA 8000 OHSAS 18001 Social return on investment Whole-life cost
Environmental accounting	Carbon accounting Eco-Management and Audit Scheme Emission inventory Environmental full-cost accounting / Environmental conflict / impact assessment / management system / profit-and-loss account ISO 14000 ISO 14031 Life-cycle assessment Pollutant release and transfer register Sustainability accounting / measurement / metrics and indices / standards and certification / supply chain Toxics Release Inventory Triple bottom line
Reporting	Global Reporting Initiative GxP guidelines Sustainability reporting
Auditing	Community-based monitoring Environmental (certification) Fair trade (certification) ISO 19011
Related	Bangladesh Accord Benefit corporation Child labour Community interest company Conflict of interest Disasters Disinvestment Eco-labeling Environmental degradation Environmental pricing reform Environmental, social, and corporate governance Ethical consumerism Euthenics Global justice movement Health impact assessment Market governance mechanism Product certification Public participation SDG Publishers Compact Social enterprise Socially responsible business Socially responsible investing Socially responsible marketing Stakeholder (engagement) Supply chain management
Environment portal Category Commons Organizations

• Commercial item transport and distribution
• Supply chain management
• Distribution, retailing, and wholesaling
• Supply chain management terms