For over 18 years Supply Velocity has focused on Supply Chain Consulting. While the term Supply Chain Management has been around since the early 1990’s, its meaning has not always been clear. Some people think it is another name for purchasing; others confuse it with Logistics. Our definition of Supply Chain Management (SCM) is:
The coordination and management of materials, information and money from suppliers’ suppliers, suppliers, your firm, customers and customers’ customers to provide great service and profitably grow sales.
In addition, to clarify the difference between SCM and Logistics, we define logistics as:
The management of the supply chain within your firm, encompassing: 1) Resource and demand planning, 2) Sourcing and purchasing, 3) Production, warehousing and inventory management, 4) Delivery and 5) Managing returns.
This definition of Logistics also aligns with the Supply Chain Operations Reference (SCOR) model.
There are other definitions of Supply Chain Management but we think ours captures the spirit of the domain. It is much more difficult to implement Supply Chain Management than provide a definition. Specifically, when we are providing Supply Chain Consulting we focus on helping our clients make decisions that can improve the performance of their firm, and their supply chain. These include qualitative and quantitative supply chain and logistics decisions.
When implementing Supply Chain Management we help our clients:
- Align internal functional departments around serving customers and managing suppliers.
- Determine which customers and suppliers should be involved in an active collaboration program including collaborative planning, forecasting and replenishment (CPFR), sharing inventory data and new product development.
- Create processes to integrate suppliers into planning, inventory management and new product development.
- Integrate information technology into supply chain processes.
- Understand the level of flexibility, resilience and agility to build into your supply chain.
- Design the supply chain network, including warehouses and factory locations of your suppliers, your firm and your customers.
- Mitigate the Bullwhip Effect and Risks in your Supply Chain
- Evaluate when economies-of-scale are advantageous to costs and customer service
- Choose the transportation mode and routing that optimizes costs and customer service.
- Decide on supply chain performance measures for your firm, your suppliers and even your customers.
Our founder, Mitch Millstein, Ph.D. is a widely recognized researcher and teacher in the area of Supply Chain Optimization, Supply Chain Analysis and Supply Chain Decisions. His research includes manufacturing cellular production, supply chain network design, supply chain performance measurement and inventory optimization.