What is Supply Chain Management?

Supply chain management is the identification, acquisition, access, positioning and management of resources an organization requires, or anticipates it will need, in order to meet strategic goals. 

The management of supplies is as important of a function as finance, marketing, or human resources in terms of overall business success. The supply chain management department may be responsible for spending 50-60 percent of the gross revenue in an organization, and thereby can exert significant leverage on profitability and operational success.

Various Opportunities in Supply Chain Management

Supply chain management offers a world of employment possibilities, because it is the backbone of so many different kinds of companies. It's important at all levels--from small businesses to Fortune 500 companies--to have reliable supply chain management professionals to ensure the most efficient, profitable, and competitive operations possible.

As a supply chain manager, you may have the opportunity to expand your duties into such areas as planning and policy making, motivation, evaluation, product development, and inventory control. Depending on the size of the organization, you may have a variety of responsibilities or you may focus on just one area of the supply chain. There are countless opportunities for a bright, ambitious individual to fit into the supply management field.

According to McGraw-Hill's Purchasing and Supply Management textbook, the nine major objectives of supply management* are:

  • Improve the organization’s competitive position
  • Provide an uninterrupted flow of materials, supplies and services required to operate the organization
  • Keep inventory investment and loss at a minimum
  • Maintain and improve quality
  • Find or develop best-in-class suppliers
  • Standardize, where possible, the items and services bought and the processes used to procure them
  • Purchase required items and services at lowest total cost of ownership
  • Achieve harmonious, productive internal relationships
  • Accomplish supply objectives at the lowest possible operating costs

*Source: Leenders, Michiel R., Fearon, Harold E., Flynn, Anna E., and Johnson, P. Fraser, Purchasing and Supply Management, 14th edition, McGraw-Hill, Boston, 2011


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What is Supply Chain Management?

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