The supply chain is the flow of both information and material through a manufacturing company, from the supplier to the customer. Traditionally the flow of material has been considered only at an operational level, but this approach is no longer adequate. It is now essential for businesses to manage the supply chain in order to improve customer service, achieve a balance between costs and services, and thereby give a company a competitive advantage. Managers must work to integrate the supply chain – i.e. to ensure that all the functions and activities involved in the chain are working harmoniously together. To develop an integrated supply chain means managing material flow from three perspectives: strategic, tactical and operational. At each of these levels, the use of facilities, people, finance and systems must be co‐ordinated and harmonised as a whole. The article describes how this can be achieved in practice by working through three phases: (1) evaluation of the competitive environment; (2) diagnostic review of the supply chain; (3) development of the supply chain, which involves functional integration, internal integration and finally external integration. Companies which develop an integrated supply chain, with all that this involves, will benefit hugely in the marketplace. Those that do not will get left behind in the struggle for survival.
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