Concept of Supply Chain
Supply chain is a set of firms that takes goods and services; information and finance etc. through upward and downward flows (Londe & Masters, 1994) (Lambert et al., 1998). Supply chain is a set of three or more organizations directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer. Supply chain management can be viewed as an integrated philosophy that guides the flow of goods and services from supplier to ultimate consumer (Cooper et al., 1997). Supply chain is a system of organizations, people, activities, information and resources involved in involved in planning, moving and storage of goods and services from supplier to customers (Myerson, 2015). “A supply chain consists of all parties involved directly or indirectly in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers but also transporters, warehouses, retailers and customer themselves. Supply chains maximize value generated in the system. Effective supply chains share their profits among all stages of supply chain (Chopra & Meindel, 2003). Supply chain management includes all activities that ensure cost minimization and facilitate product customization. Supply chain management oversees flow of goods and services; information and funds. A typical supply chain consists of suppliers‟ suppliers, suppliers, manufacturer, transporters, distributors, retailers and customers‟ customer and the customers (Chopra & Meindel, 2003). Supply chain extends the internal integration of business processes to external firms that are involved in flow of goods and services (Cooper et al., 1997). Integration of all firms in the supply chain improves competitiveness of supply chain and its members. Therefore, the competition today is not between two businesses but between two supply chains (Christopher, 1992). Supply chain and supply chain management are different though both of them are confused to be same (Myerson, 2015). Council of Supply chain management professionals defines supply chain management as “planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, such as suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies” (CSCMP). The objective of any supply chain is to maximize value generation or generation of supply chain surplus. Supply chain surplus is the difference between customer value and supply chain cost (Chopra & Meindl, 2013).
Types of supply chain
- Lean supply chain: The concept of Lean supply chain was introduced by Toyota Motors to eliminate wastes in the supply chain. The intention behind lean supply chain is reduction of wastes through value addition and ensuring the product reaches the customer at right time and right location. Lean supply chains aim at reducing wastes through automation and just-in-time approaches (Womack & Jones, 1996).
- Agile Supply Chain: The concept of agile supply chains has gained attention in the recent years (Christopher M. , 2000). Agile supply chains are highly responsiveness to the changes in market. Agile supply chains respond rapidly to the changes in market when demand is highly volatile (Christopher & Towill, 2000). The characteristics of agile supply chain are market sensitive, virtual, network based, and process aligned (Harrison et al., 1999).
- Leagile supply chain: The term Leagile supply chain was coined by Naylor, Naim and Berry in the year 1997 (Goldsby et al., 2006). Leagile supply chains are hybrids of lean supply chain and agile supply chain. The supply chain is lean at upstream level and agile at downstream level (Jones et al., 2000). Agile supply chain adopts Pareto rule (80/20) because 80% of the revenue is generated by 20% of the products. Fast moving goods that make up 80% of revenue and 20% of products must be produced in agile supply chain focusing on reduction in wastage and rest 80% of the products must be produced in a agile supply chain in accordance with market requirements (Goldsby & García-Dastugue, 2003).
- Green Supply Chain: Green supply chain management is derived from environment and management. Addition of green to the supply chain management signifies the relationship between a supply chain and its natural environment. Green supply chain management is the integration of environmental thinking into supply chain management (Srivastava, 2007). Green supply chains aims at minimizing ecological risks, achieving profit maximization, market share (Zhu et al., 2008) and enhanced organizational performance (Maaz et al., 2021)
For citing this article use:
Maaz, M. A. M. (2022). A study of supply chain management performance measurement of dairy industry in telangana state.