Supply chain management

Managing the flow of supplies through the input, transformation processes and outputs in order to best meet the needs of customers.

Sourcing

Purchasing of inputs for the operations process.

Four trends in sourcing:

·         Supplier rationalisation

·         Vertical integration

·         Cost minimisation

·         Flexible supply chain processes

Supplier rationalisation

Reducing the number of suppliers.

Backwards vertical integration

Buying or merging with suppliers to guarantee quality, delivery and price of supplies.

Flexible or responsive supply chain processes

Organising supply as the business needs it (eg not holding inventory).

Global sourcing

Sourcing supplies internationally in order to best meet the sourcing of requirements. This may help a business achieve competitive advantage through accessing the most cost-efficient supplier.

 E-commerce

The buying and selling of goods and services via the internet (that is, business conducted on the internet). Ecommerce gives businesses the ability to source inputs quickly, efficiently and at low costs.

E-procurement

The use of online systems to manage supply.

Logistics

·         The physical distribution and transportation of products.

·         The use of warehouses and distribution centres is crucial to the successful management of stock.

·         Involves business managing flow of materials, information and other resources between the point of supply and point of consumption in order to meet customer’s requirements.

·         Requires integration of information, transportation, inventory, warehousing, materials handling and packaging.

·         Correct and timely information is crucial for successful logistics management.