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ILSCM > Logistics and Supply Chain Management > The Concept > The Underlying Concept Of Supply Chain Management The Underlying Concept of Supply Chain ManagementA company’s ability to supply customers with what they want, when they want it, at the price and quality they want is not only determined by the company’s skill or expertise in managing their own operation No degree of improvement within the company can make up for suppliers and external service providers not delivering, delivering incorrectly or late and the added complexity plus time for distributing goods in international markets adds significantly to the cost of most components and finished products. High inventory levels are often the result of an effort to buffer against such uncertainties. The concept that describes the interlinking of organisations and their relationships is commonly referred to as a supply chain. It is executed within and between companies through a range of Logistics operations concerned with inbound, internal and outbound material activities. These activities have both a physical and planning context that can be performed either internally by the organisation or through external service suppliers. Supply Chains also contain various ‘subset’ processes of private and government infrastructure including warehouses and distribution centres, Intermodal centres, Electronic Procurement processes and seaports, airports, rail networks and road Infrastructure; all of which can have a significant impact a company’s ability to compete in the market. Familiarity with the Supply Chain concept has become fundamental to understanding business structures, global competitiveness and the role of strategic alliances; however many companies have yet to realise the importance of Supply Chains to their future wellbeing. This applies to companies of all sizes and in all industries, whether in manufacturing, importing, or services. Improving ones own business is no longer a guarantee of success in today's competitive markets; without managed alliances and service providers up and down the Supply Chain, a company is unlikely to achieve a lasting competitive advantage. In essence, enterprises can use their Logistics and Supply Chain Operations, Systems and Financials to achieve three things:
To achieve this in an increasingly globalised marketplace, companies require managers with strategic concepts, cross-functional understanding and sound technical skills.
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