Supply chain management phases

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

  1. Customer expectations are moving in the direction of
  • Increased value addition & cost consciousness
  • Response time & information sensitivity
  • Need for reliability
  1. Increased competition forcing industries towards
  • Reduced lead times
  • Reduce cost
  1. Change of attitude forcing industry managers
  • Need for integration and partnerships

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