supply-chain management

The management of the links between an organization and its suppliers and customers to achieve strategic advantage. Many specialist companies now offer to manage the whole of the supply chain, on behalf of manufacturers. Supply-chain management covers:

• Materials management - the management of the flow of materials through an organization's supply chain, including first-tier suppliers, inventory management, operations planning and control, and distribution to first-tier customers.

• Logistics - the management of materials and information flows from an organization to its customers. (Sometimes 'logistics' is also used as a synonym for 'supply-chain management'. )

• Physical distribution management - the management of the process that connects the producer and the first-tier customers, including storage and transport.

• Purchasing and supply management - the management of an organization's interface with suppliers, ensuring that the right quantity is bought at the right time, at the right price, to the right quality specification, and from the right sources.

• Information flow management - the management of the flow of information between an organization and both its suppliers and its customers. For every unit of material flow in one direction through the supply chain, there should be at least one corresponding information flow in the opposite direction. Many of the more recent improvements in materials management have come from the use of computers and information technology in the flow of information.

Supply-chain management