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Tne Global Supply Chain Forum of The Ohio State University has identified eight processes that form the foundation of supply chain success. The challenge is to integrate these processes both internally and externally with key partners in the supply chain. Two of those key processes - customer relationship of management and supplier relationship management - help companies accomplish this integration and realize the revenue and profitability gains that inevitably follow.
Successful supply chain management requires cross-functional integration of key business processes within the firm and across the network of firms that comprise the supply chain. It is focused on relationship management and the performance improvements that result. In many companies, however, executives struggle to achieve the necessary integration and, consequently, the resulting improvements. The problem is that they don't fully understand the supply chain business processes-and the linkages necessary to integrate those processes.
Drawing from work done by The Global Supply Chain Forum, this article identifies the eight processes that need to be managed and integrated for successful supply chain management. (For more on the Global Supply Chain Forum, see the sidebar on page 21.) Two of these processes provide the linkages required to facilitate integration among the supply chain members to coordinate the other processes. These two key linkages are customer relationship management (CRM) and supplier relationship management (SRM).
By understanding the key supply chain management processes-and recognizing why and how they should be integrated-supply chain managers can successfully position their companies for higher revenues and profitability.
Just What Is Supply Chain Management?
Before proceeding, it's important to define supply chain management because there's still a great deal of confusion over the term. Many people consider il to he synonymous with logistics or with logistics that also includes customers and suppliers. Others view supply chain management (SCM) as the new name for purchasing or operations-or the combination of purchasing, operations, and logistics. Increasingly, however, executives in leading companies are recognizing supply chain management as the management of relationships across the supply chain. They view SCM in terms of husiness process excellence and as a new way of managing the business and the relationships with other members of the supply chain.
In this article, we adopt the following definition of SCM developed by the...