Management Supply Chain Management Supply

Management Supply Chain Management Supply chain management (SCM) is the management of a system of interrelated businesses concerned with the final delivery of product and service packages required by end consumers. Supply chain management entails all movement and storage of raw materials, work that is in process, inventory and finished goods.

Supply chain management is a cross task approach including managing the progress of raw materials into an organization, certain facets of the inside processing of materials into finished goods, and the movement of finished goods out of the company and toward the end customer. As companies strive to center on fundamental competencies and becoming more flexible, they decrease their ownership of raw materials sources and distribution channels. These functions are more and more being outsourced to other entities that can carry out the activities better or more cost successfully.

The effect is to augment the amount of organizations involved in satisfying consumer demand, while dropping management control of daily logistics operations (Mentzer, DeWitt, Keebler, Soonhoong, Nix, Smith, & Zacharia, 2001). The organizations that make up the supply chain are connected together through physical flows and information flows. Physical flows entail the alteration, movement, and storage of goods and materials. They are the most noticeable piece of the supply chain. But just as significant are information flows.

Information flows permit the assorted supply chain partners to bring together their long-range plans, and to control the daily flow of goods and material up and down the supply chain (Handfield, 2011). One example of a company that operates in a global environment that utilized supply chain management is that of Wal-Mart. Wal-Mart is committed to enhancing operations, decreasing expenses and improving customer service. But the key to retailer Wal-Mart's achievement is its capability to make costs out of its supply chain and run it efficiently.

A lot of supply chain specialists refer to Wal-Mart as a supply chain-driven company that has retail stores on the side. Wal-Mart's company philosophy is to be at the foremost boundary of logistics, distribution, transportation, and technology. The way that Wal-Mart does business would stop working right away without its advanced technology. "Wal-Mart has the biggest IT systems of any private company in the world and supply chain Wal-Mart has made important investments in supply chain management" (Why Wal-Mart's supply chain is so successful, n.d.).

Wal-Mart's way of doing business is founded on a low price approach and low transportation expenses which permit it sell its products at the lowest achievable prices. "In return for its Everyday Low Price Strategy, Wal-Mart's suppliers, both large and small, either break even or make profit supplying at Wal-Mart's stores. But the real winners are Wal-Mart's customers who save thousands of dollars buying at low prices. Since Wal-Mart stores began selling groceries almost three dozen regional grocery suppliers have struggled to match or simply run out of business.

On average Wal-Mart's annual sales are $350 billion and it has more than 7,000 stores, 120 distribution centers and operations spanning fifteen countries. Nearly two million employees at Wal-Mart focus on cost, customers and continuous improvement on a daily basis. Other major retailers like Target and Home Depot have emulated Wal-Mart's logistics strategies and tactics" (Why Wal-Mart's supply chain is so successful, n.d.). Every Wal-Mart store functions like a small company. Store managers are taught to run one.