The purpose of this essay is to explore and evaluate the various approaches that can be taken to facilitate the management of supply chains.

Supply Chain Management - A terminological background

The Institute for Supply Chain Management has defined supply management as "the identification, acquisition, access, positioning and management of resources an organisation needs or potentially needs in the attainment of its strategic objectives." The essence is a shift of focus away from business units such as warehouses or factories to a more holistic view of a supply chain. For a given company this might include parts suppliers, manufacturers, transport, logistics and retailers.

SCM has is origins in organisational extension theory first proposed by Mallen in 1963. Mallen's theory was developed within the context of marketing and advocated the extension of an organization to include all members of the distribution channel.

Supply chain management as a concept has been evolved to address a number of issues that effect modern companies as follows.

The number of suppliers that companies use has tended to increase greatly, f

New approaches to manufacturing become possible such as Just-in-Time (JiT) and Build-to-Order (BTO). A large company is now able to react to a change request from a customer, giving more added value.

In this area are grouped together procurement, factory/warehouse management and logistics. These areas can all be greatly assisted by modern improvements in communications and software. A great deal of time and money is wasted by companies still relying on the use of the telephone, fax or post to communicate between these departments and with external sources. Once a company has rationalised its data storage it becomes possible to automate many inter-departmental processes. It need not stop there either, systems are available to transfer information between various trading partners; systems such as these are known as inter-organisational information systems (IOIS).

Underneath the bonnet most SCM software that has been written in the last twenty years uses a technology called Electronic Data Interchange to implement the communications required between processes, departments and companies. With the advent of the internet and the dominance of TCP/IP transport, new powerful concepts are beginning to emerge. Companies have understandably been reluctant to use what is essentially a public network to transmit their sensitive data but the introduction of 128+bit encryption is able to offer as least as much security as EDI over a phone line.

Whilst this is probably the most important factor for any company, it is often the most difficult to make changes in due to the extremely high initial costs and disruption incurred. However, without a well structured database a company will find its ability to make progress in other areas hampered.

Business to Business Integration (B2Bi) is the name given to the standards for inter-company communications over the internet. These are open standards and they all revolve around the use of extensible mark-up language, better known as XML. This user-definable mark-up language can be used to describe interfaces to services that a company wishes to offer. The success or failure of B2Bi is largely dependant on the uptake of the various proposed standards such as Web Services Description Language (WSDL) - for defining services - and Universal Description, Discovery and Integration - which is like a yellow pages services for customers to look for a

Some topics in this essay:
Sun Microsystems, Operational Processes, Storage Step, Server Summary, Resource Planning, Chain Management, Inventory Carrying, Data Interchange, JiT BTO, Potential Pitfalls, supply chain, chain management, supply chain management, information companies, competitive advantage, giving added value, able offer, chain company, mark-up language, added value, operational efficiency, supply chain company, share information companies, procurement professionals,