Supply chain management integrates the management of supply and demand.

According to the
Council of Supply Chain Management Professionals, it encompasses the planning and management
of all activities involved in sourcing and procurement, conversion and logistics. Supply chain
management also covers coordination and collaboration with channel partners, such as customers,
suppliers, distributors and service providers.
The key elements of supply chain management are universal in nature, but the way they are managed
and leveraged varies with demographics. In this section, these key elements have been elaborated in
European Context.

Demand Management This element requires meeting the needs of the customers. Mapping
and estimating customer demand is vital for the supply chain. Europe is a developed
economy with slow growth. The overall surge or fall in functional commodity demand and
prices is low (goods and services consumed generally and not innovative or high fashion
products). The stagnant nature of demand eases the forecasting and mapping process.
Demand management remains a challenge in the case of innovative and short-life-cycle
products.
Communication The flow of information upstream and downstream the supply chain affects
the productivity and efficiency of the supply chain. The quality of information systems and less
variation in demand facilitates effective communication. European supply chain is
characterized by a circle of information wherein all stakeholders share same operational and
demand information. The rapid communication channel enables stakeholders to respond
quickly to new business opportunities, helping to get new products to market quickly or
increasing supply levels following a successful marketing campaign.
Integration Integration refers to sharing supply and demand data across stakeholders to
make the process cost efficient. High level of integration lies in sectors like retail and FMCG,
whereas Mittlestand firms are unable to harness the power of integration.
Collaboration Collaboration strengthens relationships, improves teamwork and helps
stakeholders increase business. On the contrary, lack of trust invites huge costs. The amount
of energy and resources wasted in checks and balances to ensure perfect supplies is
humongous. European economy showcases variations in collaborative forces for e.g.,
German firms maintain high level of trust thus exhibit high level of collaboration whereas firms
in France lack collaboration.

One additional important element in European supply chain is presence of Reverse Supply Chain. In
our words we call it a complete supply chain circle.

Revers
e back
to
su pplie
r

Forw ar
d to
custo m
er

As per the diagram, loads of emphasis is laid upon Recycle, Reuse, Reduce philosophy. Europe
has been able to channelize and enhance its reverse supply chain in line with its forward supply
chain.