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The Importance of Supply Chain Management
Supply chain management (SCM) is very important and effective to all companies. David
Simchi-Levi, Philip Kaminsky, and Edith Simchi-Levi defines supply chain management
as "a set of approaches utilized to efficiently integrate suppliers, manufacturers,
warehouses, and stores, so that merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time, in order to minimize systemwide
costs while satisfying service level requirements."“ Supply chain management, also called
logistics network, includes suppliers, industrialized centers, warehouses, distributions
centers, and retail outlets, as well as unprocessed materials, work-in-progress stock, and
finished goods that run linking the facilities. SCM is all about having the right product in
the right place, at the right price, at the right time and in the right condition. A good way to
explain supply chain management is to use a worldwide known restaurant for an example,
because depending on where the location of the restaurant is tells you where the inventory
comes from. It is essential for restaurants to have enough inventory to cover the customer
demand no matter what. For this, supply chain management is extremely crucial and can
make or break a business. Charles Dominick explains, the three types of entities of a
supply chain: customers, a producer, and the producers suppliers. The extended supply
chain includes customers customers and suppliers suppliers. SCM oversees and optimizes
the processes of acquiring inputs from suppliers (purchasing), converting those inputs into
a finished product (production), and delivering those products *ƒ²*ƒ"€š or outputs - to
