Supply chain management is the management of material and information flow in a supply chain to provide the highest degree of customer satisfaction at the lowest possible cost. Supply chain management requires companies to work together with manufactures, suppliers, warehouse workers to fulfill all product orders to all there operation to run smoother and with proper planning it will have the ability to expand the firms operations beyond their location.
Furthermore this process involves all parties directly or indirectly to fulfill a customer’s request. This includes the manufacture, transporters, warehouses, retailers to have the ability to deliver products right to the customer. The object of supply chain is to maximize the overall value generated. For example,’ the supply chain surplus equals customer value minus the supply chain cost. These decisions impact the overall success of the company. The goal is to maximize the overall supply chain surplus. This is the difference between the value generated for the customer and the total cost incurred across all the stages of the supply chain process. As the surplus grows the overall profit there will be for all parties involved.
Many decisions are planned out ahead of time to fulfill orders and to acquire the right amount of supplies to fill these demands by the customer. First a supplier will market there product and then orders will be placed by the customers and the manufacture will receive the order so they will know exactly what their targets will be to fulfill the orders. This will then lead to the supplier and when to receive the supply and how many each unit will be shipped. This will ensure the store or retailer will have the quantity that is needed to supply the demand needs of customers.
Supply chain management has changed over the years due to the advances in technology and how...