All for one and one for all

The spread of globalization has an impact on the entire supply chain. The driving forces of this trend are primarily the increasing homogenization of economic regions, rising customer requirements and new developments in information technology. To meet today’s competitive demands, the supply process must be optimized across all levels of the supply chain - beginning with raw-material extraction and extending to the final customer. This requires all participating companies to cooperate together. This integrated approach is called supply chain management.

Supply chain as a holistic system

Partnerships in the supply chain

Increasing numbers of partnerships are formed by companies connected in a supply chain Supply chain . By taking a holistic view of the flows of goods, information, finance and legal activities, the logistics services provided on all levels of the supply chain are to be improved. The major goal is to increase the efficiency of the entire supply chain.
In general terms, supply chain management is considered to be the integration of all important business processes along a supply chain Supply chain . Synergy effects are achieved both within the individual companies and between the businesses in the supply chain. A key focal point is customer orientation [1].
In the concept of supply chain management, attention is placed on the strategic view of logistics management. Supply chain management has a major effect on a company’s ability to reach its primary objectives, including growth, profit, company value and customer orientation [2].
It also offers large cost-cutting and quality-boosting potential, and enables process times to be shortened and business partnerships to be intensified.

The business processes to be integrated within the framework of supply chain management cannot be examined in isolation. Rather, as a result of the numerous interfaces between individual processes, they must be viewed as a complete system [3].

Customer relationship management

As a result of an efficient customer relationship management, product and service levels tailored to individual customer segments can be offered - so-called product service agreements, or PSA. One important aspect of customer relationship management is to identify key customers and customer groups that represent a high strategic value to the company [3].

Customer service management

Customer service management is the “face to the customer.” On one hand, customers receive real-time Real time information such as product-availability reports and data on shipment tracking. On the other hand, companies gain valuable information about their customers. It encompasses the management and the administration of the PSAs. Individual customer segments are supported by customer service managers [3].

Demand management

Demand management plays a central role in supply chain management. Given the variety of customer orders, efficient replenishment planning and management are crucial in order to promptly fulfill customer requests. In this process, demand management brings customer requests in line with the capacities of the supply chain Supply chain . It encompasses both efficient forecasting and synchronization of supply and demand with production, procurement and distribution. It also increases the flexibility of production and reduces the variability of inventories as a result of the integrated flow of information [3].

Order fulfillment

Efficient order fulfillment is also a fundamental component of supply chain management. Its objective is to develop a seamless process from suppliers to various customer segments. This requires the integration of production, sales and distribution plans [3].

Manufacturing flow management

In contrast to conventional make-to-stock Make to stock production, supply chain management frequently pursues the goal of the pull principle. Unlike the push principle Push principle , in which production is based on past data and forecasts, production using the pull principle Pull principle is initiated only by a customer order.
This requires flexible processes that permit quick reaction to market changes. In particular, manufacturing flow management involves all activities necessary to steer products through a company and to facilitate, implement and manage flexible production in the supply chain Supply chain . One factor to be considered here is that increased flexibility is usually associated with higher investments. Upstream value-chain steps must be integrated into manufacturing flow management because a company’s efficient production is determined to a large extent by suppliers [3].

Supplier relationship management

Supplier relationship management can be viewed as a mirror image of customer relationship management. Here, too, product and service agreements detailing the parameters of the partnership are agreed on. Strategic plans that support manufacturing flow management and product development are worked out with important suppliers.
Long-term partnerships are entered with a small number of strategically important suppliers. These suppliers are integrated into the product-development process at an early stage and can help to significantly shorten development times in the process [3].

Product development and marketing

The process of product development and marketing is designed to integrate customers and suppliers into the product-development process at an early stage in order to reduce the time to market introduction.
These activities must be coordinated with customer relationship management, which identifies customers’ wishes and needs. At the same time, the suppliers are integrated into the selection of materials early on. Finally, integration into the process of manufacturing flow management helps identify suitable production technology [3].

Returns management

The objective of efficient returns management is not just efficient return of products. This approach also helps identify ways of reducing unwanted returns and monitoring the return of reusable assets - such as containers. Effective returns management can create a sustainable competitive edge [3].

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References

[1] Supply Chain Management. Implementation issues and research opportunities | Lambert / Copper / Pagh 1998. In: The International Journal of Logistics Management 9(1998)2
[2] What matters to Top Management? | ELA/Bearing Point 2002
[3] The Supply Chain Management Processes | Croxton / Garcia-Dastugue / Lambert / Rogers 2001. In: The International Journal of Logistics Management 12(2001)2