Supply Chain Management : Strategic Management

833 Words4 Pages
All flows of information, products or funds generate costs within the supply chain. Efficient management of these flows is the key to success in the supply chain. Effective and efficient supply chain management involves the management of supply chain assets and product, information, and fund flows to maximize total supply chain profitability. “Supply chain efficiency is related to whether a company’s processes are harnessing resources in the best way possible, whether those resources are financial, human, technological or physical” (Borgström, 2016, pp. 2). Supply chain management involves strategic decision making processes at many levels, from the strategic level through the tactical to the operational level, relating to design, planning and operation of the supply chain, because these three subjects have a strong impact on the overall profitability, efficiency, competitiveness and success of the supply chain (Simchi-Levi et al, 2010). Figure 1: Strategic management processes (Monczka, 2000)
The changing global business context has contributed to the growing strategic importance of sourcing, purchasing and supply chain management. To achieve competitive advantage, companies have to design their supply chain efficient to meet the customer needs better than their competitors (Weele, 2014). The supply chain design (also known as supply chain strategy) is a plan how to structure and organize the supply chain for an x period of time based on the marketing and pricing plans
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