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iSSN No: 2249 = 7463

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TO SUPPLY CHAIN| MANAGEMENT
Dr. M.M. Puri Director,
Jayawant Shikshan Prasarak Dr. Savita Pathak,

Director,
Abacus lnstitute of Computer Applications; Pune

lntroduction
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purchasing in.organizations O Traditionally, marketing, distribut{on, planning, manufacturing, and the 1*1,t1: rhese organizations.have their own :11."":Y.* aepenoenpy. ;i;ish .rr[or", service and maximum sales conflict yttr .mantita,l'.t]1u-ii^1d.'.t]1b:.t.:l ;Ilrlrindr goals. Many manufaaurifi opJrations are designed to maximize throughput l"y1^_.-::,:-Y:rl Purchasing contracts are often consideration for the irprlt o.J inr"ntory levels and distribution capabilities. uery littteinformption beyond historical buying patterns. The result of these factors]:]l.l-.1T"_': plans as businesses- Clearly, there is a need noi a Sngte, integraied plan for th" org.nir"tion---there were as many integrated together' Supply chain management is a for a meihanismihrough which ihese Jifferent functions can be to lie such integration can be achieved. Supply chain management is typicallv viewed i"*gr, entire material flow is owned by a single firm, and those where between fully vertically integrated irms, where the is independently. Therefore coordination between the various players in the chain

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each channel member op"rlt", management to a well-balanced effective management. Cooper and Etlram [1993] carmpare supply chain positioned for a team is more competitive when each player knows how to be and well-practiced relay team. Such the entire team pass the baton, but the hahd-off. The relationships are the strongest between players who directly coordinated effort to win the race' needs to make a

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Supply Chain Decisions fortulply chain management into two broad categories - strategic and operational' As time horizon. These are closely linked to the ;il ilii"r, ,irrt"ci. aectgons are made typically over a longer and guide supply chain policies from a design "* corporate strategy (they sometimes Nt are) the corporate strategy),
we
classify the decisions
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over a day-to-day perspegtive. oniie other hand, operational decisions are short term, and focus on activities effectively and efficiently manage the product flow in the basis. The effort in these types of decisions is to
,,strategically,, planned supply chain. There are four major decision areas in supply chain management:

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3" 4- -

location, production, .inventory, and

decision

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transportation or djstribution, and there are both strategic and operational elements

in each oi

these

areas.

Location Decisions
points is the natural first step in The giographic placement of production facilities, stocking points, and sourcing plan- Once the .ru.frng , supply chain. Th9 location of facilities involves a commitment of resources to a.long-term possible paths by which'the product flows throu8hto size, number, and location 6t tn"r. are determined, so are the for the final customer. These decisions are of great significance to a firm since they represent the basic strategy revenue, c9s-t, apd level of accessjng customer markets, and will have a considerable impact on .servlce' lh,e;e duq dutles should be determined by an optimization routine that considers Rrody_aio1 co:ts, tal(:s, decisiqni 3nd Arntzen, Brown) H.anison and drawback, tariffs, local content, distribution costs, production limitations, ete.(See primarily strategic, they Trafton [19g5] for a thorough discussion of these aspects.) Although location decisi.ons,are I ,: also have implications on an operational

level.

Production Decisions
..-l..J^.,.L^*^.^A,,l+at^.r^i!t.aearlrr.rlrirh,,,',:l',,.,.' plants to, fjrcdUbe-them The straiegic decisions inolude what producis io produce, and u"'lrich ,. ., -_ -- :mai-kets, As before,,thbse'de.1isio4s'h1ve a big' iinb"ttto.h ,oppiie* tI ptants, plants to DC's, and DC's is custorner
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