Supply Chain Management

Business, Legal & Accounting Glossary

Definition: Supply Chain Management



Full Definition of Supply Chain Management


Supply Chain Management(SCM) deals with the planning and execution issues involved in managing a supply chain.

The components of SCM are:

  • Demand Planning: (forecasting)
  • Demand Collaboration: (collaborative resolution process to determine consensus forecasts)
  • Order Promising: (When can one promise a product to a customer taking account lead times and constraints)
  • Strategic Network Optimization: (what plants and DC’s should serve what markets for what products) (monthly – yearly)
  • Production and Distribution Planning: (Coordinate the actual production and distribution plans for a whole enterprise) (daily)
  • Production Scheduling: (For a single location create a feasible production schedule)(minute by minute)
  • Plan of reduction of costs and management of the performance (diagnosis of the potential and the indicators, the organization and planifiaction strategic, masters dysfunctions in real-time, evaluation and accounting reporting, evaluation and reporting quality

Traditional Model

The traditional model of supply chain management follows a linear sequence of events. The order could be Marketing, design, process planning, purchasing, and vendors.

Integrated product-process design

Inter-functional integration

An inter-functional integration approach to supply chain management can be characterized by the following:

  • Concurrent engineering: This involves a cross-functional team in the NPDP (new product development process]]. Parties from the marketing department, design department, and process planning would work together to design the product.

Inter-organizational integration

This is punctuated by:

  • Early involvement of the purchasing department in the design
  • Pre-sourcing of key vendors
  • Design is driven by cost targets
  • Cross-enterprise teams which would include suppliers, customers, distributors, legal teams, accountants, and others
  • The design would be done with consideration for logistics constraints or needs

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Supply Chain Management. PayrollHeaven.com. Retrieved July 04, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/supply-chain-management/

Definition Sources


Definitions for Supply Chain Management are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 29th March, 2020 | 2 Views.