Supply Chain Management

For years, researchers and practitioners have primarily investigated the various processes within manufacturing supply chains individually. Recently, however, there has been increasing attention placed on the performance, design, and analysis of the supply chain as a whole.

This attention is largely a result of the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies.

One of the important issues in supply chain management is to design and plan out the overall architecture of the supply chain network and the value-adding flows that go through it. This means that managers should step back and looks at the supply chain as a whole and formulates strategies and processes that maximize the total supply chain value-adding and minimizes the total supply chain costs.

Origins of the Lean Manufacturing

Over the span of circa 40 years time, from the beginning of the 1950s to the end of the 1980s, Toyota led Japanese automotive industry created a unique production/manufacturing system, which brought the industry from the ruins of the 2nd World War to the biggest automobile exporter in the world.

Strategic Role of Purchasing

Purchasing function has a strategically indispensable role to play in supply chain management. It covers the sourcing end of supply chain management interfacing with the delivery end of the suppliers.

The classical definition of purchasing is: to obtain materials and/or services of the right quality in the right quantity from the right source, deliver them to the right place at the right price.

Supply Relationship Defined

Supply relationship can be defined as the cross organisational interaction and exchange between the participating members of the supply chain. This means that the relationship is between organisations not individual people within the same supply chain where the material flows defines the boundary. However for the inter-organisational interaction that falls outside of the main streams of the material flows, then it may not be called collaborative relationship or partnership relation, but may not be the supply relationship.

Supply relationship can be either on the upstream side with the suppliers or on the downstream side with the buyers. If the relationship is solely observed between one supply and one buyer, it is also called dyadic relationship.

Back to Top