How Supply Chain Management Impacts Company Performance

Abstract

This paper is concerned with the ever growing importance of supply chain management to the overall performance and success of companies. Trough literature review many definitions and objectives of supply chain management are explored. What are the different directions and effects in setting out strategies for supply chain management? What tools and techniques supply chain managers have at hand? A multitude of strategies and then tactical and operational activities to underpin the overall strategy are discussed and their importance on company performance highlighted. In conclusion, the general discussion on the role and importance of SCM is taken into a more specific direction, into the reality of the globalized world where many entities no longer act as independent, but as part of elongated, global supply chains. The issues arising and the dilemma around the various strategic directions to be taken in this new reality will be discussed in the next paper.

Keywords: supply chain management, supply chain strategies, supply chain management objectives

Introduction

Supply chain management (SCM) is the management of a network of different interrelated business entities working in line to producing a product or service and delivering it to the end consumer (Harland, 1996). A supply chain entails all the activities, processes and resources of a set of organizations employed in the flow and transformation of materials to a final product and in ensuring the products’ availability to the time and place required by customers (Mentzer et al., 2001).

Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities (Borade and Nansod, 2007:112, as cited in Intaher, 2010). In simple words, SCM is all about having the right product at the right place, at the right price, at the right time, and in the right condition.

As Chopra and Meindl, 2010...