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    Four Elements of Supply Chain Management

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    Saikumar Sela
    The four elements of supply chain management are purchasing, operations, distribution, and integration. Purchasing manages supplier relationships and procurement. Operations includes demand planning, forecasting, production, and sometimes inventory management. Distribution involves planning and logistics to deliver products to customers. Integration uses technology to closely coordinate the supply chain functions and share information for analysis and planning.

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    Four Elements of Supply Chain Management

    Uploaded by

    Saikumar Sela
    4K views3 pages
    The four elements of supply chain management are purchasing, operations, distribution, and integration. Purchasing manages supplier relationships and procurement. Operations includes demand planning, forecasting, production, and sometimes inventory management. Distribution involves planning and logistics to deliver products to customers. Integration uses technology to closely coordinate the supply chain functions and share information for analysis and planning.

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    Basic elements of Supply Chain

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    The four elements of supply chain management are purchasing, operations, distribution, and integration. Purchasing manages supplier relationships and procurement. Operations includes demand planning, forecasting, production, and sometimes inventory management. Distribution involves planning and logistics to deliver products to customers. Integration uses technology to closely coordinate the supply chain functions and share information for analysis and planning.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    4K views3 pages

    Four Elements of Supply Chain Management

    Uploaded by

    Saikumar Sela
    The four elements of supply chain management are purchasing, operations, distribution, and integration. Purchasing manages supplier relationships and procurement. Operations includes demand planning, forecasting, production, and sometimes inventory management. Distribution involves planning and logistics to deliver products to customers. Integration uses technology to closely coordinate the supply chain functions and share information for analysis and planning.

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    What Are the Four

    Elements of Supply Chain


    Management?
    Introduction
    According to the Council of Supply Chain Management
    Professionals, Supply Chain Management (SCM)
    encompasses the planning and management of all
    activities involved in sourcing and procurement,
    conversion and logistics. In other words, SCM includes
    the purchasing, operations, distribution and integration
    processes that ensure the efficient production and
    delivery of goods and services to end-customers.

    Purchasing
    The purchasing function, which typically only sources and
    buys the materials required for the production or
    manufacturing of products, manages the activities and
    operations related to the supply of inputs (goods,
    materials and services) under SCM.
    A supply chain has three primary participants: the
    producer, the producers suppliers, and the customers. In
    SCM, the purchasing function identifies, qualifies and
    manages a companys suppliers.

    Operations

    The operations function in a supply chain includes


    demand planning, forecasting, production, and, in some
    types of businesses, inventory management.

    Demand Planning
    Demand planning improves the effectiveness and
    efficiencies of production and inventory management and
    provides a forecast of the materials, components and
    services needed in future time frames for the purchasing
    function. Demand planning is typically an iterative
    process that combines sales and production forecasts
    that provide informed guidance on future sales, revenues,
    inventory levels and perhaps even profitability of the
    company.

    Forecasting
    Within the operations functions of SCM, forecasting is an
    integral part of demand planning. Forecasting product
    demand is the driver for nearly all activities in most
    businesses, especially operations. A sound and realistic
    forecast can provide the foundation for accurate demand
    planning.

    Production
    Of course, demand planning produces a plan for what the
    manufacturing or operations activities of a company is to
    produce or perform. This plan drives the labor, materials,
    processing, and shipping requirements of the company.
    Often, the production planning based on demand
    planning is developed through resource planning
    software, such asmaterials requirements
    planning (MRP), capacity requirements planning (CRP), or
    SCM.

    Distribution

    This portion of SCM involves the planning, logistics and


    delivery of products from a warehouse or production
    facility to wholesalers, retailers or end-customers directly.
    The distribution function within the SCM model is often
    expanded to include packaging, inventory and
    warehousing, as well as in-bound shipments of goods and
    supplies in some cases.

    Integration
    Supply Chain Integration (SCI) is the application of
    technology to facilitate the close coordination of the SCM
    functions, which allows all parties in the supply chain to
    see the details of their actions and interactions. SCI also
    provides for the analysis historical transactions as a part
    of demand, inventory and logistics planning. The key
    component of SCI is information and how it is collected,
    stored and used.

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