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We face today is no longer a simple supply and demand in the market, but a new technology emerging, rapidly changing competitive environment in the market, manufacturer's relationship with its customers, suppliers, are becoming more and more important. A good supply chain management can reduce product delivery time, to reduce the total cost of purchase, and add more value for the company and the customer. It can not only access to brand the interests of, and can be distinguished from other products and the promotion of good relations with customers to reduce the company's costs and improve relationships with suppliers, simplifying business processes, and enables organizations to focus on their core competencies.
Managers or academic researchers agree that the view, supply chain management is the key to competitive advantage. However, if you ask the SCM Agreement defines in more detail, even the most famous managers and scholars will struggle.
Supply chain management is a very broad term, and often misunderstood, in a lot of different opinions, there is no complete explanation.
What is supply chain management, supply chain management is defined as a cooperative strategy, the goal is to integrate upstream and downstream operations, to eliminate non-value added costs, infrastructure, time, and, by competition to provide customers with better service.
In order to show that the SCM is and what is not, will clarify some of the most common misconceptions below:
Myth 1: the supply chain is a scam
Old and which are new packaging concept. Due to the impact of IT, SCM practice developed over the last 10 years of rapid growth. PC rapid calculation speed, communication, data management software, and variability are upgrading new practices, policies, strategies, and applications. In fact, in various industries, such as VMI (vendor managed inventory), the storage sector and collaborative planning, forecasting, replenishment (CPFR) strategy coincided with the potential of collaborative supply chain management function.
Misunderstood 2:SCM is a synonym for logistics management
The essence of supply chain management is the integration of operations, policy and strategic planning. Such planning requires that all activities and processes, such as customer order fulfillment, procurement, integration of manufacturing resource optimal planning and logistics of enterprise-wide, end-to-end integration. Ultimately, SCM to integrate key business operations and supply chain operations.
However, logistics (defined by the Council of Logistics Management), which is part of the supply chain process, planning, implementation, and control of goods, services and information flow from the source to deliver according to customer demand and storage.
Misunderstood 3:SCM is the only company to become competitive request
This is clearly wrong, in order to truly be competitive, companies need strong business vision, a clearly defined mission, product marketing plans, well-planned strategies (such as supply chain strategies and "waterfall" action strategy).
Misunderstanding 4:SCM
Supply management is only about the sourcing and vendor management. SCM is about the entire end-to-end flow of raw materials to the final consumer, as well as integration of supply and demand.
Myth 5: supply chain value chain management (VCM) important
Value chain management from the perspective of value added supply chain. This is obviously a very important point. However, without SCM's focus on integrating collaborative, value-chain analysis might lack the necessary structures, not failed to reach the final goal. In effect, the SCM and VCM complement each other.
This view is only correct at one point. If the "cluster" is a group of companies working together toward common goals, level of supply chain partners are VARs clusters. However, SCM than traditional definitions of cluster, conventional wisdom limits the enterprises in the same industry, or of physical locations. If each supplier in the chain increases the value of the overall network clusters, the further development of cluster supply chain will lead to final customers more profitable.
Misunderstood 7:SCM is equivalent to achieve ERP
Focus on end-to-end integration of the supply chain. However, integration of ERP concerns all application transactions, become an enterprise-wide system. Therefore, channel integration within the ERP concerns, and providing enterprise-wide decision support management information required. Many ERP implementations actually does not support links to process and integrate the supply chain because they lack well defined actions to improve planning from the outset.