Supply Chain Management

Supply Chain Management

The Supply-Chain Council defines SCM as the "effort involved in producing and delivering a final product from the supplier's supplier to the customer's customer" (Kranz 1996). In Macro-logistics, Stein and Voehl (1998) define SCM as: "The systematic effort to provide integrated management to the Supply Value Chain in order to meet customer needs and expectations, from suppliers of raw materials through manufacturing and on to end-customers." Lambert, Stock, and Ellram (1998) use the term "supply chain" to represent an alignment of firms. They define SCM as "the integration of business processes from end user through original suppliers that provides products, services, and information that add value for customers." All these focus on supply chain actors or institutions, such as suppliers and customers.

Supply chain management (SCM) is a crucial process, because an optimized supply chain results in lower costs and a faster production cycle. A company needs to utilize a good Information System to manage each aspect of SCM. SAP is an ERP system that offers integrated modules for the key business functions of mid-size to large companies such as Colgate-Palmolive Company (Colgate) - a global consumer products company. Colgate utilizes SAP for their SCM, relying on innovative and unique purchasing tools developed for its global SAP systems, Colgate oversees all global purchasing carried out both by internal Colgate procurement teams and through a collaborative with IBM specialists. This arrangement provides Colgate an extraordinary capability to deliver industry-leading purchasing expertise to all its global locations. "Embracing new ways of managing key business processes, such as procurement and accounts payable, allows leading companies like Colgate to uncover significant new sources of value within their operations," said Ginni Rometty, Senior Vice President, IBM.

Colgate, along with its subsidiaries, manufactures and...