Jordan Wood
Supply Chain Management Trends
The definition of supply chain management, or SCM, is the oversight of information, materials,
and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to
consumer. Supply Chain management coordinates these different aspects and implements them within
companies. There are several different trends and strategies that effect the supply chain management
as well.
There are several different strategies that are involved with supply chain management. Supply
Chain management has three different levels, strategic, tactical, and operational. “At the strategic level,
company management makes high-level strategic supply chain decisions that are relevant to whole
organizations” (Strategic Supply Chain Management, Murray). “When decisions are made involving the
supply chain, it should reflect the company’s overall corporate strategy as a whole. The strategic supply
chain processes that the management team has to decide on such as product development, customers,
manufacturing, vendors, and logistics cover the breadth of the supply chain” (Strategic Supply Chain
Management, Murray). “For product development, management must define a strategic direction when
considering the products that the company should manufacture and offer to their customers” (Strategic
Supply Chain Management, Murray). For instance, when the product cycle matures or sales go down,
strategic decisions must be made by management whether to develop a new product or introduce new
versions of existing products into the marketplace. “However, when making these strategic product
development decisions, the overall objectives of the firm should be the determining factor” (Strategic
Supply Chain Management, Murray). Customers at the strategic level play a big part in the whole
process. “Companies have to identify the customers for its products and services. When company
management makes strategic decisions on the products to manufacture, they need to then identify
the key customer segments where company marketing and advertising will be targeted” (Strategic
Supply Chain Management, Murray). Manufacturing decisions, at the strategic level, are the decisions
that describe what technology is required. Management has to make strategic decisions on how
products will be manufactured and built. New manufacturing facilities may need to be built if decisions
are made that increase production and require the additions of new facilities. If the objective of the
company’s overall goal is to manufacture overseas, then sub contracting might take place. “As
environmental issues influence corporate policy to a greater extent, this may influence strategic supply
chain decisions with regards to manufacturing” (Strategic Supply Chain Management, Murray). Another
aspect that effects the supply chain strategic policies are the suppliers. If a company decides to reduce
the amount purchased, it could potentially increase their profits. Other decisions could be made as well
that would also increase the company’s profits. “Leveraging the total company’s purchases over many
businesses can allow company management to select strategic global suppliers who offer the greatest
discounts. But these decisions must correspond with the overall company objectives” (Strategic Supply
Chain Management, Murray). “As well as strategic decisions on manufacturing locations, the logistics
function is key to the success of the supply chain” (Strategic Supply Chain Management, Murray).
Logistics is a major role in the strategic supply chain decisions. It can greatly affect the success of the
whole program. Being able to fulfill orders in a timely manner is an important part to the logistics side of
the strategic supply chain decisions. “The design and operation of the network have a significant
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influence on the performance of the supply chain” (Strategic Supply Chain Management, Murray).
Making strategic decisions will in turn help decide the overall goal of the company and which direction
they are heading in. “These high-level decisions can be refined, as required, to the specific needs of the
company at the lower levels which allow for tactical and operational supply chain decisions to be made”
(Strategic Supply Chain Management, Murray).
A different aspect that also affects the supply chain is constant changing of demographics. “It’s
no secret that global demographic changes in lifespans and economic statuses are shifting the way
people do distribution logistics” (How Changing Demographics Will Affect the Supply Chain, Koester).
The world is constantly changing, three different aspects of demographics that affect the supply chain
are: different population growth rates, urbanization and growth of megacities, and aging of certain
populations. Different population growth rates affect the supply chain in ways such as nations with less
number of people having babies, might have a labor shortage later down the road. Also, if you have a
high number of middle class people, you might see an increase in certain foods that are being bought for
consumption. With the aspect of Urbanization and growth of mega cities, “Thoughtful planning, supply
chain solutions and distribution improvements will be needed to keep up with urban growth” (How
Changing Demographics Will Affect the Supply Chain, Koester). If you cannot keep up with the supply
and demand changes, you will most likely not be very successful. With an aging of the population,
certain products that are consumed or bought will either increase or decrease, due to the constant
changing ways of living people have. This is turn means demand will either rise of fall. “Even if your
