Theoritical aspects of Supply Chain Management 3.1.

The origin of SCM: The earliest

appearance of the term supply chain management as we know it today published in recognized
media and literatures can be traced back to the early 1980s. More precisely, it first appeared in
a financial times article written by Oliver and Webber in1982 describing the range of activities
performed by the organization in processing and managing suppliers. However the earlier
publications of supply chain management in the 1980s were focused on purchasing activities.
The major development and significant increases of publication in the areas of supply chain
integration and supplier buyer relationship came in 1990s when the concept as we know it today
was gradually established 3.2. Definitional Analysis of SCM Supply chain management (SCM) is
the broad range of activities required to plan, control and execute a product's flow from
acquiring raw materials and production through distribution to the final customer, in the most
streamlined and cost-effective way possible. SCM encompasses the integrated planning and
execution of processes required to optimize the flow of materials, information and financial
capital in the areas that broadly include demand planning, sourcing, production, inventory
management and storage, transportation or logistic sand return for excess or defective
products. Both business strategy and specialized software are used in these endeavors to
create a competitive advantage. Chopra and Meindl (2007, p.3) believes that. A supply chain
consists of all parties involved, directly or indirectly, in fulfilling a customer request. Within each
organization, such as a manufacturer, the supply chain includes all functions involved in
receiving and filling a customer request. These functions include but are not limited to new
product development, marketing, operations, distribution, finance, and customer service. Chen
and Paul raj (2004) stated that- a typical supply chain is a network of materials, information, and
services processing links with the characteristics of supply, transformation and demand. There
are three traditional stages in the supply chain: procurement, production and distribution. Each
one of these stages may be composed of several facilities in different locations around the world
(Thomas and Griffin, 1996). For example, in automotive industry assembly plants are located in
others countries than suppliers of different components and distribution is worldwide. Mentzer et
al. (2001, p. 4) describes a supply chain as “a set of three or more entities (organizations or
individuals) directly involved in the upstream and downstream flows of products, services,
finances, and/or information from a source to a customer”. Shapiro (2001)writes that the
traditional objective of SCM is to minimize the total Supply Chain Cost to meet fixed and given
demand. 26| P a g e 3.3 Importance of SCM: Supply Chain Management is the process of
managing the flow of products and services from raw material manufacture to customer
consumption. Supply chain management creates efficiencies, raises profits, lower costs, boost
collaboration and more . SCM enables companies to better manage demand, carry the right
amount of inventory, deal with disruptions, keep costs to a minimum and meet customer
demand in the most effective way possible. These SCM benefits are achieved through the
appropriate strategies and software to help manage the growing complexity of today's supply
chains 3.4 SCM (Supply Chain Management) Processes Supply chain activities aren't the
responsibility of one person or one company. Multiple people need to be actively involved in a
number of different processes to make it work. Planning– the plan process seeks to create
effective long- and short-range supply chain strategies. From the design of the supply chain
network to the prediction of customer demand, supply chain leaders need to develop integrated
supply chain strategies. Key elements of supply chain planning For supply chain planning to be
implemented successfully, there must be seamless coordination between different teams and
processes. Here are the key elements of supply chain planning. Demand planning: As
discussed in the earlier part of the blog, demand planning lays the foundation of subsequent
supply chain processes.This involves an assessment of varied data to accurately forecast
demand, which can 27| P a g e then be used to maintain and store optimum inventory and avoid
costs associated with surpluses. Demand planning is done by looking at historical data,
projected sales, market conditions and other factors.Today, demand planning is done with the
help of advanced technology.Powered by artificial intelligence and machine learning
capabilities, advanced supply chain management software can predict demand with precision. It
can ‘sense’ demand by looking at real-time data, market conditions and events and point-of-sale
data.The use of predictive analytics for demand forecasting has also increased. This helps to
better understand consumer behavior, buying patterns and other factors that influence demand.
Supply planning: The next step is to come up with a supply plan that can synchronize with the
demand plan and meet the overall requirements of the business.The supply plan involves
sourcing of raw materials, components and other goods needed for production. The goal is
planning supply that can meet the demand for the product in the best possible way. Production
planning: This involves resource allocation of employees, material and production capacity. The
broad objectives of a production plan are reducing waste and only producing what is required to
ensure the availability of optimum inventory. The latter of these is realized with a supply chain
plan that increases cross-functional visibility through efficient inventory manageme