1.1 Explain the Importance of Effective Supply Chain Management in Achieving Your Organizational Objectives. Essay

Words: 1514
Pages: 7

1.1 Explain the importance of effective supply chain management in achieving your organizational objectives.

Supply Chain Management as defined as "Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market”.

Competitive Edge through Core Competencies
Today's business climate has rapidly changed and has become more competitive as ever in nature. Businesses now not only need to operate at a lower cost to compete, it must also develop its own core competencies to distinguish itself from competitors and stand out in the market. In creating the competitive edge, companies need to divert its resources to focus on what they do best and outsource the
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In other words supply chain management relates to the entire procurement cycle not just at the end (which is the commonly-held view). In particular it has a pivotal role to play in the development of an initial sourcing strategy.
Since the term “supply chain” contains the word “supply”, many people naturally assume that supply chain must have something to do with suppliers (i.e. purchasing or procurement). While it is true that supply chain management does encompass the purchasing and procurement functions, supply chain management actually extends well beyond those areas. Supply chain management is the practice of manufacturing and distributing physical goods as efficiently as possible.
Supply chain management encompasses the entire process of manufacturing and distributing physical goods, from supplier’s supplier to customer’s customer. Business functions that are within the realm of supply chain management include: forecasting and planning, procurement and purchasing, manufacturing and assembly, warehousing and distribution, shipping and transportation, returns and refurbishment, inventory management and order management. Or, stated more simply, supply chain management includes the functions: plan, buy, make, store, move, sell and return.
For example, let’s look at [a very simplified version of] the processes that created the computer monitor upon which you are probably reading this text. The monitor was most likely assembled using