Traditional Perspective

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Traditionally most organizations have viewed themselves as entities that exist independently from others and indeed need to compete with them in order to survive. However such a philosophy can be self-defeating idf it leads to unwillingness to corporate in order to compete. Behind this seemingly paradoxical concept is the idea of supply chain integration.

 

Definition

 

“ Supply chain management is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.”

 

Explanation

 

The 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 in the hands of ultimate consumer. Thus for example a shirt manufacturer is a part of a supply chain that extends upstream through the weavers of fabrics to the manufacturers of fibres, and downstream through distributors and retailers to the final consumer. Each of these organizations in the chain are dependent upon each other by definition and yet and yet paradoxically by tradition do not co-orporate with each other.

 

Clearly this trend has many implications for logistics management, not the least being the challenge of integrating and coordinating the flow of materials from a multitude of suppliers, often offshore, and similarly managing the distribution of the finished product by way of multiple intermediaries.

 

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