SCM has passed through three phases
Phase 1: Physical distribution Management – Where manufacturing was handled in isolation & output was pushed to finished goods warehouse
Phase 2: Integrated Logistics Management – Operations of sales, procurement, manufacturing, Warehousing, transportation are integrated to achieve efficient & effective distribution system
Phase 3: Logistics management graduated to SCM – To include scope to link external partners like suppliers, distributors, service providers and customers with a view to deliver enhanced value to customer by synchronized management of flow of physical goods, information and cash between source to customer
Need to focus on SCM
- Customer expectations are moving in the direction of
- Increased value addition & cost consciousness
- Response time & information sensitivity
- Need for reliability
- Increased competition forcing industries towards
- Reduced lead times
- Reduce cost
- Change of attitude forcing industry managers
- Need for integration and partnerships
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