What is Supply Chain Management?
Supply chain management drives the success of the world's top companies such as Apple, Amazon and Walmart. A supply chain process is made up of an organization's people, activities and information, as well as the resources involved in moving a product or service from the origins of supply to final consumption. Increasingly, supply chains also respond to environmental needs and manage what happens to unused material, determining how it can be reused or recycled.
Ted Stank, the Harry J. and Vivienne R. Bruce Chair of Business Excellence and professor of Supply Chain Management at Haslam, explains, "The supply chain is the systematic coordination of traditional business functions within a particular organization and across organizations within the supply chain, for the purposes of improving the long-term performance of the individual enterprises and the supply chain as a whole." Relationships, information, talent, financials, performance measurement and risk analysis are all part of the supply chain operation. Stank is quick to point out the supply chain exists within the broader external business environment. It must respond to geo-political forces, government regulations, industry and competitive factors and the changing nature of markets and demand.
Innovations in technology are enabling companies to digitize the supply chain, and in today's tech-driven world, taking a broad definition of supply chain management helps Haslam graduates understand how companies like Apple and Amazon, neither of which make physical goods, are still true supply chain companies.
Haslam has earned its reputation as a world leader in supply chain management research and education by maximizing value creation for customers and organizations. Through innovation, continuous improvement, integration and collaboration, Haslam supply chain management students and graduates deliver end-to-end value, helping both companies and consumers.
Here, we look at why the supply chain is important to understand; next, looking at the five ways supply chains deliver products, services and results; and then exploring how you can solve complex problems and add immediate value to your organization with a master's in supply chain management.
Why understanding the supply chain is important (for everyone)
The end-to-end supply chain encompasses everything from supplier's supplier to consumption or use of a product. It impacts consumer health and happiness, business success, the global economy and sustainability-which makes understanding the supply chain relevant not only for every company, but every person.
Everyone must maintain understanding of the supply chain, as it impacts key issues, such as:
- Consumer/Customer Satisfaction and Safety: Delays, contamination and excess expenses in the supply chain affect the availability, inventory levels, quality and cost of products. The rise of online retail gives consumers more options, which means the balance of power has shifted, and companies rely on efficient supply chains to stay relevant and profitable. Consumer health and safety is also maintained by the supply chain.
- Business Processes and Success: Companies rely on the supply chain to develop and maintain a competitive edge. Every company in every industry experiences challenges and must be able to adapt accordingly.
- The Global Economy: Recent escalations in the US-China trade war have drawn attention to the supply chain's critical influence on the global economy. Concerns over tariffs have caused some companies to shift manufacturing from China to other countries like Vietnam, Bangladesh and Cambodia.
- Sustainability: Global supply chain executives are turning to sustainable models in response to concerns about ethical, business and waste-elimination savings. Some companies, like Walmart, believe sustainability enhances profitability. Others, like Patagonia, are driven by a mission to find solutions for complex issues of sustainability, which can be best understood as ethical social and environmental practices.
While each of these areas are distinct, they are deeply intertwined. For example, if, out of concern over tariffs, a company shifts production from China to Cambodia the ways goods are delivered to consumers and sustainability practices will also have to be re-evaluated. These changes can then affect a company's profits. Jamie Dimon, the CEO of J.P. Morgan, recently cautioned, "You're already starting to see business starting to think about moving their supply lines. That can obviously slow down business investment and cause uncertainty of all different types."
From the products we consume to the health of our environment, whether directly or indirectly, we all rely on supply chain experts who understand the complexity, nuance, and global position of the supply chain. The world's leading supply chain managers look to key concepts to satisfy each stakeholder in the supply chain.
How supply chains deliver
To achieve successful results for individual business, consumers, the global economy, and the social good, a supply chain manager does these five things:
- It all starts with supply chain integration. Technology allows workflows to happen globally, which means business functions-both internal and external-can, and most often do, operate separately. Fragmented workflows require managers who can take a comprehensive view of the supply chain and focus on total value. Under the design of a single corporate executive, integrated, end-to-end supply chains offer a common strategy, vision and culture.
- To constantly improve, companies need supply chain visibility-insight into every step in the supply chain, from procurement of raw materials to final delivery. The GSCI found best-in-class enterprises look at visibility broadly, and defines supply chain visibility as, "capturing usable supply chain data and freight transactions as you exchange information between different systems." Challenges with data standardization and systems integrations can make this difficult, which is why to achieve visibility companies need supply chain leaders who understand how their systems are connected to their business partners and networks.
- The supply chain is the primary driver of a company's growth, and to do this they require agile, transformational supply chain strategy. By recognizing that no business competes autonomously, agile strategies allow companies to quickly and decisively respond to rapid and volatile market and geopolitical changes.
- Supply chain logistics are critical, yet many firms are woefully undereducated about the important role logistics play in propelling economic growth. In one case study shared with the GSCI, a CPG retail executive shared that by increasing on-shelf availability through better transportation and logistics by 1.5 percentage points, the company increased sales revenue by $120 million.
- Arguably, because of its end-to-end reach, the GSCI has found the supply chain faces more risk than any area of a company. Supply chain risk includes: dealing with quality and safety challenges, supply shortages, inventory, legal issues, security problems, regulatory and environmental compliance, geopolitical forces, and weather and natural disasters. Returning to the example of Blue Bell, the company did not have any recalls in 106 years of operating history, but in their 107th year they faced a deadly public health crisis. Supply chains need formal, documented processes to manage risk.
Supply chain management is critical to success, and supply chain managers must be well-versed in best planning and practices. An efficient supply chain drives integration to produce products and services at a high availability at minimum cost with minimal waste. The supply chain increases profitability by supporting more opportunities for revenue at lower costs.
How you can add value with a Master of Science in Supply Chain Management from Haslam, now Online
The single biggest way you can impact your company and your own career is by increasing your knowledge and expanding your experience to drive meaningful value. Haslam is recognized as a top-ranked, industry connected program in supply chain management. The Master of Science in Supply Chain Management program (MSSCM) prepares you to get ahead in your organization, broaden your skills and career path, or begin a new career.
Haslam's renowned faculty bring real-world experience to the classroom, preparing students to have an immediate effect on their organizations. The program offers the most relevant curriculum in supply chain management, focusing on:
- Leveraging supply chain concepts to deliver impact;
- Honing your critical thinking to use theory and strategy to solve real business problems;
- Gaining an understanding of how supply chain management processes create value; and
- Mastering effective workflows with remote and diverse teams.
Now, Haslam is excited to offer access to the MSSCM online. Online learning is not only flexible, but it reflects the way business across the supply chain is conducted remotely, with the help of technology.
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