The principle of ‘Survival of the fittest’ remains valid in the present global economy characterized by the presence of ever changing business environment. Every modern company needs to struggle for the existence & growth under such a competitive environment. One surest way to achieve this is to offer best quality of product at reasonable rate, which suits well to the requirements of target customer. To impart a feeling of delight in the minds of consumers and provide quality product at reasonable price manufacturer has to bring shift in his emphasis from mere cost ascertainment to cost reduction to reduce cost of production. Thus, cost reduction is the main managerial mantra as once quoted by well-known strategist Michael.E.Porter in his landmark book “Competitive Strategy”. There are number of strategic cost management techniques available like Supply Chain Management (SCM) , Business Process Re-engineering (Value Re-engineering), Total Productive Maintenance to reduce cost. Of these Supply Chain Management is prominent tool to reduce cost. In this backdrop the present paper aims to highlight the conceptual framework of SCM, Modus Operandi and its relevance for corporate world in the new millennium.
Supply Chain Management has become a very powerful technique as it increases the responsiveness to the changing business conditions and enhances the competitiveness of the organization. In today’s intense competition, and increasingly global economy, to survive and grow, organization must enhance their market responsiveness and become cost competitive. The supply Chain framework is a method of breaking down the linked set of value creating activities from basic raw material/component supplier to the supply of the end product to customer/consumer.
A supply chain is a business process that links manufacturers, retailers, customers and suppliers in the form of a chain to, develop and deliver products as a single virtual organization of pooled skills and resources. Supply chain management is process of synchronizing the flow of physical goods and associated information from the production line of low level component suppliers to the end consumer, resulting in the provision of early notice of demand fluctuations and synchronization of business processes among all the co-operating organizations in this School IT Supplier supply chain.
Definitions from well-respected references have varied during the past decade. For example, Supply Chain Yearbook 2000 described SCM as, “A chain of processes that facilitates business activities between trading partners, from the purchase of raw goods and materials for manufacturing to delivery of a finished product to an end user.” APICS-The Performance Advantage, offered this definition in January 1999: “The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution and cash.”
This is a little change from the 1997 definition, Logistics Management offered, describing SCM as, “The delivery of enhanced customer and economic value through synchronized management of the flow of physical goods and associated information from sourcing to consumption.” The definition evolution continues as European Logistics Association, in 1995 suggested SCM was, “The organization, planning, control and execution of the goods flow from development and purchasing through production and distribution to the final customer in order to satisfy the requirements of the market at minimum cost and minimum capital use.”