Supply chain

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The definition of "supply chain" seems to be more common across authors than the definition of "supply chain management" (Cooper and Ellram 1993; La Londe and Masters 1994: Lambert. Stock, and Ellram 1998). La Londe and Masters proposed that a supply chain is a set of firms that pass materials forward. Normally, several independent firms are involved in manufacturing a product and placing it in the hands of the end user in a supply chain—raw material and component producers, product assemblers, wholesalers, retailer merchants and transportation companies are all members of a supply chain (La Londe and Masters 1994). By the same token, Lambert, Stock, and Ellram define a supply chain as the alignment of firms that brings products or services to market. Note that these concepts of supply chain include the final consumer as part of the supply chain. Another definition notes a supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer (Christopher 1992). In other words, a supply chain consists of multiple firms, both upstream (i.e., supply) and downstream (i.e., distribution), and the ultimate consumer.


Given these definitions, for the purposes of this paper, a supply chain is defined as a set of three or more entities (organizations or mdividuab} directly involved in the upstream and downstream flows of products, sen-icesjinances. and/or information from a .source to a customer.

Encompassed within this definition, we can identify three degrees of supply chain complexity: a "direct supply chain." an "extended supply chain," and an "ultimate supply chain." A direct supply chain consists of a company, a supplier, and a customer involved in the upstream and/or downstream flows of products, services, finances, and/or information (Figure 1 a). An extended supply chain includes suppliers of the immediate supplier and customers of the immediate customer, all involved in the upstream and/or downstream flows of products, services, finances, and/or information (Figure lbj. An ultimate supply chain includes all the organizations involved in all the upstream and downstream flows of products, services, finances, and information from the ultimate supplier to the ultimate customer. Figure I c illustrates the complexity that ultimate supply chains can reach. In this example, a third party financial provider may be providing financing, assuming some of the risk, and offering financial advice; a third party logistics (3PL) provider is performing the logistics activities between two of the companies; and a market research finn is providing information about the ultimate customer to a company well back up the supply chain. This very briefly illustrates some of the many functions that complex supply chains can and do perform. Although we will address this point in greater depth later in this paper, it is important to realize that implicit within these definitions is the fact that supply chains exist whether they are managed or not. If none of the organizations in Figure 1 actively implements any of the concepts discussed in this paper to manage the supply chain, the supply chain—as a phenomenon of business—still exists. Thus, we draw a definite distinction between supply chains as phenomena that exist in business and the management of those supply chaitis. The former is simply something that exists (often also referred to as distribution channels), while the latter requires overt management efforts by the organizations within the supply chain. Given the potential for countless alternative supply chain configurations, it is important to note that any one organization can be part of numerous supply chains. Wal-Mart, for example, can be part of the supply chain for candy, for clothing, for hardware, and for many other products. This multiple supply chain phenomenon begins to explain the network nature that many supply chains possess. For example, AT&T might find Motorola to be a cu.stomer in one supply chain, a partner in another, a supplier in a third, and a competitor in still a fourth supply chain. Note also that within our definition of supply chain, the final consumer is considered a member of the supply chain. This point is important because it recognizes that retailers such as Wai-Man can be part of the upstream and downstream flows that constitute a supply chain.

A supply chain is the alignment of firms that bring products or services to market (Stock, Lambert, Ellram, 1998) A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request (Chopra, Meindl, 2003) A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials into intermediate and finished products, and the distribution of these finished products to customers (Ganeshan, Harrison, 1995)

Types of channel relationships

Types of channel relationships

References

  1. Mentzer J., DeWitt W., Keebler J., Soonhoong M., Nix N. Smith C., Zacharia Z. (2001) Defining supply chain management Journal of Business Logistics, Vol. 22 Issue 2, p1-25,

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