Operations Management: An Integrated Approach, 5th Edition

THE SUPPLY CHAIN LINK

This chapter provides the framework for understanding supply chain management. Supply chains consist of external suppliers, internal processes, and external distributors. Internal processes (purchasing, processing, production planning and control, quality assurance, and shipping) are integrated first since the manufacturer has direct control over these activities. Integrating external suppliers into the supply chain begins with sourcing decisions and subsequent strategic partnership development by the purchasing function. Electronic net marketplaces facilitate sourcing by bringing together thousands of suppliers and buyers to a common site. Distributors are usually the last segment of the chain to be integrated. Warehouses can be used for consolidation, product mixing, or finalizing products. Crossdocking can reduce transit time as well as reduce handling of goods. RFID helps track materials as they flow through the supply chain. POS demand data are provided to all members of the supply chain to reduce uncertainty and to assure that all members of the supply chain work with common data.