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54-407: CTSI-Global is a Memphis-based firm that provides freight-invoice processing and related supply chain management technology and consulting services. CEO J. Kenneth Hazen acquired the company in 1982. Since that time, the firm has evolved from a manual freight bill audit and payment operation into a producer of logistics-focused business intelligence services. Founded over 60 years ago, the company

108-574: A 12 percent increase over 2013. While premises-based software was still more widely used than SaaS solutions for SCMS in 2014, Gartner projects that about two-thirds of the growth in SCMS adoption between 2015 and 2018 will be based on the SaaS subscription model: driven by a growing realization of the benefits of cloud-based services, the SaaS-based SCMS market grew by about 24 percent in 2014 and

162-430: A competitive advantage. In the late 1990s, "supply chain management" (SCM) rose to prominence, and operations managers began to use it in their titles with increasing regularity. A supply chain, as opposed to supply chain management, is a set of firms who move materials "forward", or a set of organizations, directly linked by one or more upstream and downstream flows of products, services, finances, or information from

216-706: A continuous information flow. However, in many companies, management has concluded that optimizing product flows cannot be accomplished without implementing a process approach. The key supply chain processes as stated by Lambert (2004) are: Much has been written about demand management . Best-in-class companies have similar characteristics, which include the following: One could suggest other critical supply business processes that combine these processes stated by Lambert, such as: Effective business process integration in supply chain management requires not only continuous communication, but also strategic coordination across departments and partner companies. The main reason for this

270-455: A few key strategic activities. This inter-organizational supply network can be acknowledged as a new form of organization. However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories. It is not clear what kind of performance impacts different supply-network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among

324-410: A fundamentally new system. This leads to a panarchical interpretation of a supply chain, embedding it into a system of systems , allowing to analyze the interactions of the supply chain with systems that operate at other levels (e.g. society, political economy, planet Earth). For example, these three components of resilience can be discussed for the 2021 Suez Canal obstruction , when a ship blocked

378-772: A product. This set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands. Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management (storage and inventory), and non-asset-based carriers, and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution, and performance management. Market forces sometimes demand rapid changes from suppliers, logistics providers, locations, or customers in their role as components of supply chain networks. This variability has significant effects on supply chain infrastructure, from

432-537: A second near Riverside, California . The centroid near Dayton is particularly important because it is closest to the population center of the US and Canada. Dayton is within 500 miles of 60% of the US population and manufacturing capacity, as well as 60% of Canada's population. The region includes the interchange between I-70 and I-75 , one of the busiest in the nation, with 154,000 vehicles passing through per day, of which 30–35% are trucks hauling goods. In addition,

486-447: A source to a customer. Supply chain management is the management of such a chain. Other commonly accepted definitions of supply chain management include: Mentzer et al. make a further distinction between "supply chain management" and a "supply chain orientation". The latter term involves a recognition that a business strategy cannot be fulfilled without managing the activities of suppliers and customers upstream and downstream, whereas

540-463: A stage 2 supply chain, these are integrated under one plan, and enterprise resource planning (ERP) is enabled. A stage 3 supply chain is one that achieves vertical integration with upstream suppliers and downstream customers. An example of this kind of supply chain is Tesco . It is the third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and

594-399: A structure can be defined as "a group of semi-independent organizations, each with their capabilities, which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration". The importance of supply chain management proved crucial in the 2019-2020 fight against the coronavirus (COVID-19) pandemic that swept across

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648-432: A useful economic consideration. In mathematics and physics , a centroid is the arithmetic mean position of all the points in a plane figure . For supply chain management, a centroid is a location with a high proportion of a country's population and a high proportion of its manufacturing, generally within 500 mi (805 km). In the US, two major supply chain centroids have been defined, one near Dayton, Ohio , and

702-401: Is supply chain resilience , defined as "the capacity of a supply chain to persist, adapt, or transform in the face of change". For a long time, the interpretation of resilience in the sense of engineering resilience (= robustness ) prevailed in supply chain management, leading to the notion of persistence . A popular implementation of this idea is given by measuring the time-to-survive and

756-487: Is a global supply chain services provider with offices in Singapore, Ireland, and India. Its client base includes multinational corporations such as Facebook , Intel , IBM , Horizon Lines and BMW . Supply chain management SCM is the broad range of activities required to plan, control and execute a product's flow from materials to production to distribution in the most economical way possible. SCM encompasses

810-762: Is also important for organizational learning. Firms with geographically more extensive supply chains connecting diverse trading cliques tend to become more innovative and productive. The security-management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001 and related standards published jointly by the ISO and the IEC . Supply Chain Management draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach. An important element of SCM

864-559: Is concerned with topics related to resilience , sustainability , and risk management , among others. Some suggest that the "people dimension" of SCM, ethical issues, internal integration, transparency/visibility, and human capital/talent management are topics that have, so far, been underrepresented on the research agenda. Supply chain management, techniques with the aim of coordinating all parts of SC, from supplying raw materials to delivering and/or resumption of products, tries to minimize total costs with respect to existing conflicts among

918-528: Is meant to increase creativity, information sharing, and collaboration among users. At its core, the common attribute of Web 2.0 is to help navigate the vast information available on the Web in order to find what is being bought. It is the notion of a usable pathway. SCM 2.0 replicates this notion in supply chain operations. It is the pathway to SCM results, a combination of processes, methodologies, tools, and delivery options to guide companies to their results quickly as

972-542: Is that it can effectively improve agility. At the same time, this integration can help businesses respond quickly to changes in demand and improve customer satisfaction. Integration of suppliers into the new product development process was shown to have a major impact on product target cost, quality, delivery, and market share. Tapping into suppliers as a source of innovation requires an extensive process characterized by development of technology sharing, but also involves managing intellectual property issues. There are gaps in

1026-535: The Financial Times . In 1983 WirtschaftsWoche in Germany published for the first time the results of an implemented and so called "Supply Chain Management project", led by Wolfgang Partsch . In the mid-1990s, the term "supply chain management" gained popularity when a flurry of articles and books came out on the subject. Supply chains were originally defined as encompassing all activities associated with

1080-467: The time-to-recover of the supply chain, allowing to identify weak points in the system. The APICS Certified Supply Chain Professional (CSCP) program emphasizes the importance of managing risks and enhancing resilience. According to APICS, in order to manage global interruptions and preserve operational continuity, a robust supply chain is vital. More recently, the interpretations of resilience in

1134-496: The velocity of inventory movement. Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy. In Peter Drucker 's (1998) new management paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. According to Drucker, "the greatest change in corporate culture—and

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1188-571: The 1960s and developed through the 1990s by the introduction of enterprise resource planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of Internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value-added and reducing costs through integration. A supply chain can be classified as a stage 1, 2, or 3 network. In stage 1–type supply chain, systems such as production, storage, distribution, and material control are not linked and are independent of each other. In

1242-465: The 21st century, changes in the business environment have contributed to the development of supply chain networks. First, as an outcome of globalization and the proliferation of multinational companies, joint ventures, strategic alliances , and business partnerships, significant success factors were identified, complementing the earlier " just-in-time ", lean manufacturing , and agile manufacturing practices. Second, technological changes, particularly

1296-576: The I-75 corridor is home to the busiest north–south rail route east of the Mississippi River . Supply chain management software Supply-chain-management software (SCMS) is the software tools or modules used in executing supply chain transactions, managing supplier relationships and controlling associated business processes . Supply chain management maximizes the efficiency of business activities that include planning and management of

1350-460: The activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations. Less control and more supply chain partners lead to the creation of the concept of supply chain management. Supply chain management is concerned with improving trust and collaboration among supply chain partners, thus improving inventory visibility and

1404-443: The assumptions of globalization, outsourcing and linear supply chains and to envision alternatives; in this example this could lead to local and circular supply chains that do not need global transportation routes any longer. Six major movements can be observed in the evolution of supply chain management studies: creation, integration, globalization , specialization phases one and two, and SCM 2.0. The term "supply chain management"

1458-472: The canal for several days. Persistence means to "bounce back"; in our example it is about removing the ship as quickly as possible to allow "normal" operations. Adaptation means to accept that the system has reached a "new normal" state and to act accordingly; here, this can be implemented by redirecting ships around the African cape or use alternative modes of transport. Finally, transformation means to question

1512-399: The chain partners. An example of these conflicts is the interrelation between the sale department desiring to have higher inventory levels to fulfill demands and the warehouse for which lower inventories are desired to reduce holding costs . In 1982, Keith Oliver , a consultant at Booz Allen Hamilton , introduced the term "supply chain management" to the public domain in an interview for

1566-423: The complexity and speed of the supply chain increase due to global competition; rapid price fluctuations; changing oil prices; short product life cycles; expanded specialization; near-, far-, and off-shoring; and talent scarcity. Increasing volatility has characterized supply chains since about 2000. Douglass in 2010 referred to an SCM management style known as "extreme supply chain management", which: recognizes

1620-451: The disparity between supply and demand by improving business processes and using algorithms and consumption analysis to better plan future needs. SCMS also often includes integration technology that allows organizations to trade electronically with supply chain partners. SCMS adoption is growing faster than the broader enterprise application software market. The annual revenue from SCMS (on-premises and SaaS ) reached $ 10 billion in 2014,

1674-440: The dramatic fall in communication costs (a significant component of transaction costs), have led to changes in coordination among the members of the supply chain network. Many researchers have recognized supply network structures as a new organizational form, using terms such as " Keiretsu ", "Extended Enterprise", "virtual supply chain", " Global Production Network ", and "Next Generation Manufacturing System". In general, such

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1728-509: The entire supply chain. It helps businesses in product development, sourcing, production , and logistics by automating operations. In this way, it increases the physical flow of business as well as informative flow. The entire business benefits with higher performance, greater cost-efficiency, and thus increased supply chain efficiency. While functionality in such systems is broad, it commonly includes: A requirement of many SCMS often includes forecasting . Such tools often attempt to balance

1782-467: The evolution of processes, methods, and tools to manage them in a new era of globalization and specialization. One element of this is the growing popularity of supply chain collaboration platforms that connect multiple buyers and suppliers with financial institutions, enabling them to conduct automated supply chain finance transactions. Web 2.0 is a trend in the use of the World Wide Web that

1836-450: The expansion of supply chains beyond national boundaries and into other continents. Although the use of global sources in organizations' supply chains can be traced back several decades (e.g., in the oil industry), it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of supply chain management in organizations with

1890-419: The firm or the supplier-buyer relationship. Among the few exceptions is the relational view , which outlines a theory for considering dyads and networks of firms as a key unit of analysis for explaining superior individual firm performance (Dyer and Singh, 1998). The management of supply chains involve a number of specific challenges regarding the organization of relationships among the different partners along

1944-412: The flow and transformation of goods from raw materials through to the end user or final consumer , as well as the associated information flows. Mentzer et al. consider it worthy of note that the final consumer was included within these early definitions. Supply chain management was then further defined as the integration of supply chain activities through improved supply chain relationships to achieve

1998-669: The former term is used for "the actual implementation of this orientation". Supply chain visibility, in its origins, was concerned with knowledge of the location/production stage and expected delivery date of incoming products and materials, so that production could be planned, but the development of the term has enabled it to be used to plan orders using knowledge of potential supplies, and to track post-production processes as far as delivery to customers. Supply chain management software includes tools or modules used to execute supply chain transactions, manage supplier relationships, and control associated business processes. The overall goal of

2052-527: The foundation layers of establishing and managing electronic communication between trading partners to more complex requirements such as the configuration of processes and workflows that are essential to the management of the network itself. Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to

2106-419: The goal of increasing their competitive advantage, adding value, and reducing costs through global sourcing. In the 1990s, companies began to focus on "core competencies" and specialization. They abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed management requirements, as the supply chain extended beyond the company walls and management

2160-399: The integrated planning and execution of processes required to optimize the flow of materials, information and capital in functions that broadly include demand planning, sourcing, production, inventory management and logistics—or storage and transportation. Supply chain management strives for an integrated, multidisciplinary, multimethod approach. Current research in supply chain management

2214-424: The late 1990s and has taken root primarily in transportation and collaboration categories. This has progressed from the application service provider (ASP) model from roughly 1998 through 2003 to the on-demand model from approximately 2003 through 2006, to the software as a service (SaaS) model currently in focus today. The term SCM 2.0 has been coined to describe both changes within supply chains themselves as well as

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2268-441: The literature on supply chain management studies at present. A few authors, such as Halldorsson et al., Ketchen and Hult (2006), and Lavassani et al. (2009), have tried to provide theoretical foundations for different areas related to supply chain by employing organizational theories, which may include the following: However, the unit of analysis of most of these theories is not the supply chain but rather another system, such as

2322-1002: The need for collective, rather than sequential, risk management and facilitates collaboration on a new scale that is necessary for survival. It challenges companies to be "perpetually vigilant". Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. In an example scenario, a purchasing department places orders as its requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged through business process integration , e.g., using electronic data interchange . Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems, and shared information. According to Lambert and Cooper (2000), operating an integrated supply chain requires

2376-402: The overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is a leading reason why supply chain specialization is gaining popularity. Outsourced technology hosting for supply chain solutions debuted in

2430-421: The players. From a systems perspective, a complex network structure can be decomposed into individual component firms. Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of an internal management control structure is known to impact local firm performance. In

2484-434: The sense of ecological resilience and social–ecological resilience have led to the notions of adaptation and transformation , respectively. A supply chain is thus interpreted as a social-ecological system that – similar to an ecosystem (e.g. forest) – is able to constantly adapt to external environmental conditions and – through the presence of social actors and their ability to foresight – also to transform itself into

2538-402: The software is to improve supply chain performance by monitoring a company's supply chain network from end-to-end (suppliers, transporters, returns, warehouses, retailers, manufacturers, and customers). In some cases, a supply chain includes the collection of goods after consumer use for recycling or the reverse logistics processes for returning faulty or unwanted products back to producers up

2592-407: The term became widely adopted after the publication of the seminal book Introduction to Supply Chain Management in 1999 by Robert B. Handfield and Ernest L. Nichols, Jr., which published over 25,000 copies and was translated into Japanese, Korean, Chinese, and Russian. This era of supply chain management studies was highlighted with the development of electronic data interchange (EDI) systems in

2646-550: The value chain. Supply chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer. As organizations strive to focus on core competencies and become more flexible, they reduce ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other firms that can perform

2700-454: The value chain. Formal and informal governance mechanisms are central elements in the management of supply chain. Particular combinations of governance mechanisms may impact the relational dynamics within the supply chain. The need for interdisciplinarity in SCM research has been pointed out by academics in the field. In the study of supply chain management, the concept of centroids has become

2754-581: The way business is being conducted—may be the accelerated growth of relationships based not on ownership, but on partnership." This approach allows companies to leverage the strengths and capabilities of various partners to achieve greater efficiency and innovation, ultimately enhancing overall business performance. In recent decades, globalization, outsourcing, and information technology have enabled many organizations, such as Dell and Hewlett-Packard , to successfully operate collaborative supply networks in which each specialized business partner focuses on only

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2808-564: The world. During the pandemic period, governments in countries which had in place effective domestic supply chain management had enough medical supplies to support their needs and enough to donate their surplus to front-line health workers in other jurisdictions. The devastating COVID-19 crisis in US has turned many sectors of the local economy upside down, including the country's storied logistics industry. Some organizations were able to quickly develop foreign supply chains in order to import much needed medical supplies. Supply chain management

2862-803: Was distributed across specialized supply chain partnerships. This transition also refocused the fundamental perspectives of each organization. Original equipment manufacturers (OEMs) became brand owners that required visibility deep into their supply base. They had to control the entire supply chain from above, instead of from within. Contract manufacturers had to manage bills of material with different part-numbering schemes from multiple OEMs and support customer requests for work-in-process visibility and vendor-managed inventory (VMI). The specialization model creates manufacturing and distribution networks composed of several individual supply chains specific to producers, suppliers, and customers that work together to design, manufacture, distribute, market, sell, and service

2916-446: Was first coined by Keith Oliver in 1982. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line . The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to Japanese management practices. However,

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