Supply Chain Management - A Beginner's Brief

Updated: June 02, 2010

The essence of supply chain management is applicable to any kind of manufacturing business. For example, an often common sight in America is the young children manning a lemonade stand alongside any street in any town in the US. In this example, the children have to decide how much lemonade that can be sold and after that estimation, they have to get the lemons. How the children go about getting the lemons, arranging for other suppliers should the primary one run out and estimating how many lemons for the next day is part of supply chain management.

In a modern business, demand planning and forecasting estimates the sales and translates that to an available inventory to meet prospective business requirements. In the traditional business of the 1950's and 1960's, companies planned a year's supply of inventory and asked manufacturing to build for that amount of inventory. If mid-year corrections were needed, then either the primary or secondary suppliers needed to change their own capabilities to match the required materials needed.

In today's cyber business where transactions are accumulated at a furious pace, order management must be swiftly translated to the amount of goods that must be available. To feed that rapid fire pace of order management, a robust manufacturing arm must also have an adaptable supply chain management component. By automating the stages of order management to order fulfillment, the buyer is unaware of the complex nature of supply chain management.

In the case of a service or of information, supply chain theory can also be applied because information that is required needs someone or someplace to supply it. There is a prediction and a forecast of how much that is. Supply chain theory means there is collaboration amongst all of the sources of information that is needed to fulfill a request. For instance, in a hospital, if a program was needed to screen by records a thousand patients, having that information available requires all of the suppliers of information to be able to supply it whether it is the hospital or its affiliated doctors.

Featured Research
  • The Future of ERP

    Today's business decisions are data-driven and the difference between success and failure can be boiled down to utilizing the correct data. Now more than ever, companies have access to not only robust data but consumable data as well, through Enterprise Resource Planning (ERP) software. more

  • Top ERP Trends of 2017

    No matter the size, success or industry in which you do business, data is vital. Because of this, data-driven technologies such as Enterprise Resource Planning (ERP) systems are becoming more important for the streamlining of quantitative data and gaining/analyzing key insights. Even better, as of 2017, ERP tools aren’t only for enterprise companies in the manufacturing and distribution sectors—they’re for everyone. But that’s not the only keynote change that’s taken place this year … Download our latest guide to see what else is happening with ERP! more

  • Making a Business Case for ERP

    Are you in the market for an ERP solution but hesitant to purchase due to the potential financial risks associated with implementing such a tool? While costs may seem prohibitive, and make it difficult to get stakeholders on board, an ERP system can add SIGNIFICANT value to your organization, regardless of what industry you are in. more

  • CIO eGuide

    Data is becoming increasingly important in business. As a result, more and more organizations are becoming attractive targets for hackers. Data breaches caused by stolen credentials are on the rise. You need smarter tools to protect your organization against the monetary and reputational damage caused by a data breach. This guide will explain how Okta Adaptive Multifactor Authentication (MFA) provides the security that IT needs, while also providing the simplicity end users want. more

  • Building Secure Multifactor Authentication

    As threats to password security have increased in recent years, multi-factor authentication (MFA) has rapidly gained adoption as a method for increasing the assurance of authentication for consumer and enterprise web and mobile applications. more