B2B Integration : A Practical Guide to Collaborative E-commerce

Supply Chain Management (SCM) 411
SCM includes a large variety of functions such as demand forecasting,
locating the sources of procurement, inventory and warehouse
management, production scheduling, processing of orders, distribution
logistics, customer service and other disciplines. All these functions are
automated through the use of advanced software application called the
SCM system.
14.2.2. What is a supply chain?
A supply chain is a network of facilities and distribution operations that
procures materials and transforms these materials into intermediate and
finished products and finally distributes them to customers. It is an endto-end
chain with transparency and visibility, which enfolds all suppliers
— main and sub-suppliers — internal operations, customers, both trade
and retail ones and all other end users. All interlinked resources and
activities needed to create and deliver products cum services to customers
constitute a supply chain. This chain exists in manufacturing organizations
and services, though its intricacies may differ substantially from industryto-industry
or company-to-company.
In a supply chain, every customer is a supplier to the next customer
until the finished product reaches the ultimate end consumer.
Example of a supply chain
Before probing into the details of a supply chain, it would be worthwhile
to bring under focus the relationship among trading partners in a supply
chain by analyzing the example of manufacturing and distribution of
cereal.
The whole process starts with farmers sowing, growing and harvesting
grains. So, it is the farmer who puts the process into motion initially.
Companies buy grains from farmers and process the same into cereals
which are packaged into boxes. The boxes in turn are transported to
various distributors for sale to grocers with end consumers eventually
purchasing the cereal boxes.
Various interrelated processes and relationships among trading partners
of a supply chain, as shown in Figure 14.1, together form a supply chain.