Definitions of Supply Chain Management

Monezka, Trent, and Handfield agree that the structure of SCM requires
traditionally separate materials functions to report to an executive responsible for
coordinating the entire materials process, as well as requiring joint relationships
with suppliers across multiple tiers. The authors also argue that a strategic,
proactive approach to managing the supply chain is critical for survival beyond the
year 2000 because the best supply chain will have a competitive advantage. By the
same token, Christopher argues that the real competition is not company against
company, but rather supplies chain against supply chain.

La Londe and Masters compared a supply chain strategy to alliances and

partnering strategies and suggested that they generally involve elements including.

Stevens stated that

The objective of managing the supply chain is to synchronize the requirements

of the customer with the flow of materials from suppliers in order in effect a
balance between what are often seen as conflicting goals of high customer service,
low inventory management, and low unit cost.

Monezka and colleagues stated that SCM is a concept

Whose primary objective is to integrate and manage the sourcing, flow, and
control of materials using a total systems perspective across multiple functions and
multiple tiers of suppliers.

Houlihan (1988) defined four differences between supply chain management and
classical materials and manufacturing control including
 (1) The supply chain is viewed as a single process. Responsibility for the
various segments in the chain is not fragmented and relegated to functional
areas such as manufacturing, purchasing, distribution and sales.

(2) Supply chain management calls for and in the depends on strategic decision
making. “Supply” is a shared objective of practically every function in the
chain and is of particular strategic significance because of its impact on
overall costs and market share.

(3) Supply chain management calls for a different perspective on invention

which are used as a balancing mechanism of last, not first, resort.

(4) A new approach to systems is required integration rather than interfacing.

Jones and Riley state that

Supply chain management deals with the total flow of materials from suppliers
through end users.

Referring to Stevens, Houlihan and Jones and Riley, Eliram and Cooper define
Supply chain management broadly as

“an integrative philosophy to manage the total flow of a distribution channel

form supplier to the ultimate user ”.

As illustrated above, the definitions of SCM differ across authors. They can,
however, be classified into three categories: a management processes. The
alternative definitions and the categories they represent suggest that the term
“Supply chain management” presents a source of confusion for those involved in
researching the phenomenon as well as those attempting to establish a supply chain
approach to management. Research and practice would be improved if a single
definition were adopted.

SCM as a Management Philosophy:

As a philosophy, SCM takes a system approach to viewing the channel as a

single entity, rather than as a set of fragmented parts, each performing its own
function (Eliram & Cooper; Houlihan). In other words, the philosophy of Supply
chain management extends the concept of partnerships into a multiform effort to
manage the total flow of goods form the supplier to the ultimate customer (Eliram
& Cooper; Jones & Riley Thus, SCM is a set of beliefs that each firm in the supply
chain directly and indirectly affects the performance of all the other Supply chain
members, as well as ultimate, overall channel performance.

SCM as a philosophy of channel management seeks synchronization and

conveyance of interfirm operational and strategic capabilities into a unified,
compelling marketplace force. SCM as an integrative philosophy directs supply
chain members to focus on developing innovative solutions to create unique,
individualized sources of customer service value. Langley and Holcomb suggest
that the objectives of SCM should be the synchronization of all channel activities
to create customer value. Thus SCM philosophy suggests the boundaries of SCM
includes not only logistics but also all other functions within a firm and a within a
Supply chain to create customer value and satisfaction. In this context,
understanding the customer’s values and requirements is essentially (Tyndall et al).
in other words, SCM philosophy drives supply chain members to have a customer
orientation. As one executive we interviewed put it.

The purpose of Supply chain management is to improve customer value and

satisfaction-that is why we are doing this.
Based upon the literature review, it is proposed that SCM as a management
philosophy has the following characteristics:

(1) A system approach to viewing the channel as a whole and to managing the
total flow of goods inventory form the supplier to the ultimate customer.

(2) A strategic orientation toward cooperative efforts to synchronize and

converge intrafirm and interfirm operational and strategic capabilities into a
unified whole and

(3) A customer focuses to create unique and individualized sources of customer

value leading to customer satisfaction.