The Supply Chain Concept Essay

1554 words - 6 pages

Supply Chain Concept

Introduction
In today's competitive business environment many firms face the arduous mission of managing their supply chain. In an effort to gain competitive advantage, firms must make key decision involving logistics and operations management to move products and service across the supply chain. The materialization and attractiveness of the Internet has made supply chain management more attainable for business enterprises. Research shows that Internet-derived technology has enabled companies to build and deploy supply chain management systems to perform key business decisions involving product flow and scheduling, process design and selection, product sourcing, layout, job design, and technology management. Implementation of supply chain management system gives firms the ability to publish information on a platform that can be accessed by the entire enterprise, suppliers, distributors, and customers all around the world. According to Gary Schneider (2004, p. 228, para. 1), author of E-Commerce the Second Wave, the ultimate goal of supply chain management is to achieve a higher-quality or lower-cost product at the end of the chain. This document gives a description of the supply chain concept and how it applies in eBusiness. Additionally, the benefits of the supply chain concept and the differences in the supply chain between a Business-to-Consumer (B2C) site compare to a Business-to-Business (B2B) site are explored.

The concept of the Supply Chain
The interaction between suppliers, manufacturers, distributors and consumers is important to understanding the supply chain concept. Schneider (2004, p. 544) defines the supply chain as ?the part of an industry value chain that precedes a particular strategic business unit. It includes the network of suppliers, transportation firms, and brokers that combine to provide a material or service to the strategic business unit?. A simple example of the supply chain concept explained by Wu and O?Grady (2001) states,
     ?Material flow is from the suppliers, who provide materials and subassemblies, to      the manufacturers, who build, assemble, convert, or furnish a product or service.      The finished products then pass to distributors, who transport and deliver the      finished product to the customers. While material flows from left to right, which      is from suppliers to manufacturers, distributors and customers, information flow in      a conventional supply chain can be considered to flow in the opposite direction.      The customers order from the distributors, who then order from the manufacturers      and so on down through the supply chain, from right to left, as shown in Figure      1.?
An understanding of the flow of the supply chain aids in exploring the activities of the manufacturing, planning, distribution, marketing, and purchasing operations within an organization to manage the supply chain in an eBusiness environment.

How the supply chain applies...

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