What is Supply Chain Management?

What is Supply Chain Management?

Simply put, supply chain management can be defined as the processes and activities of sourcing raw materials or components a business needs to create a product or service and deliver it to customers.

Good supply chain management, including software, can improve performance and make a business more effective by reducing waste and decreasing costs. Globalization and supply chain management are intertwined, as players in the supply chain often span across countries and even continents. Good supply chain management ensures high quality products and services across differing levels of resources and legislation.

Improvements in efficiency and productivity have a lasting impact on the bottom line of a company. A well-managed supply chain helps to cut excess costs and deliver products to consumers quicker. Nowadays, Big Data affects supply chains as data analysts have access to huge amounts of data on all parts of the supply chain, so can focus on what can be done to optimize it.

According to CIO, there are six core components of supply chain management:

  • Planning: Companies must plan and manage resources to meet customer demand. The supply chain must also be designed to ensure it is efficient, and what metrics to use to judge this
  • Sourcing: Choosing the right suppliers to provide goods and/or services needed to create a product. This also covers monitoring and managing relationships with suppliers
  • Making: Co-ordinating the activities needed to accept raw materials, test for quality, manufacture the product and schedule for delivery
  • Delivering: Also known as logistics, this covers many aspects including coordinating customer orders, scheduling and dispatching deliveries, invoicing customers and receiving payments. The delivery process is often outsourced to specialist firms (such as UPS)
  • Returning: A network must be in place to take back unwanted, defective or excess products. Defective products are usually reworked or scrapped, whereas unwanted or excess products can be returned to the warehouse for sale
  • Enabling: For an efficient supply chain, there are multiple support processes to monitor information. These include finance, IT, HR, portfolio management, facilities, sales, product design and quality assurance

Supply Chain Management at Business School

Supply Chain Management is increasingly becoming an area of focus at business schools. MBA programs specializing in supply chain management will teach you skills needed to thrive in the field, such as decision modelling, supply chain systems integration, strategic purchasing and supply management and logistics.

Top schools offering specializations in supply chain management include:

NYU Stern School of Business – Supply chain management and global sourcing concentration for their full-time MBA course.

Columbia Business School – The Decisions, Risk and Operations Division includes a focus on supply chain management.

The Fuqua School of Business – Operations Management MBA concentration also focuses on supply chain management.

Marshall School of Business – Admitted MBA students can also pursue a Graduate Certificate in Optimization and Supply Chain Management.

Hough Graduate School of Business – Supply Chain concentration on their full-time MBA program.

Carlson School of Management – Specialization in Supply Chain on their full-time MBA.

Most MBA courses will involve some level of tuition in the essentials of supply chain management, either in core or elective courses. Master’s degrees in supply chain management are also available, including the Global Supply Chain Management MSc at Cass Business School and the Logistics and Supply Chain Management MSc at Cranfield School of Management, amongst others.

Careers in Supply Chain Management

Supply chain management is a fast-growing field, with the US Bureau of Labor Statistics projecting that professions in supply chain management will grow seven percent in the next 10 years. Almost every large-scale company will have a supply chain, so you have the opportunity to work in a wide range of sectors globally.

There are a huge variety of roles that you can choose from in supply chain management, including logisticians, purchasing managers, transport, storage and distribution managers, operations managers and cost estimators.

Logisticians, who co-ordinate and analyze a company’s supply chain and manage the lifecycle of a product generally command the highest median salaries (around US$148,700). According to PayScale, the average salary for supply chain management jobs in the US is US$81,439.

The top 10 companies for supply chain management careers according to Gartner’s Supply Chain Top 25 are:

  1. Unilever
  2. Inditex
  3. Cisco Systems
  4. Colgate-Palmolive
  5. Intel
  6. Nike
  7. Nestle SA
  8. PepsiCo
  9. H&M
  10. Starbucks
Written by Julia Gilmore

Julia is a writer for TopMBA.com, publishing articles for business students and graduates across the world. A native Londoner, she holds an MSc in Marketing Strategy & Innovation from Cass Business School and a BA in Classical Studies & English from Newcastle University.

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