MGT300, Chapter 10: Extending The Organization (Supply Chain Management)

Supply Chain Management

The average company spends nearly half of every dollar that it earns on production.

In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains.

Basics of Supply Chain

The supply chain has three main links:
  1. Materials flow from suppliers and their “upstream” suppliers at all levels
  2. Transformation of materials into semifinished and finished products through the organization’s own production process
  3. Distribution of products to customers and their “downstream” customers at all levels

Information Technology’s Role in the Supply Chain

IT’s primary role is to create integrations or tight process and information linkages between functions within a firm


Supply chain visibility – the ability to view all areas up and down the supply chain

Bullwhip effect – occurs when distorted product demand information passes from one entity to the next throughout the supply chain

Consumer Behavior

Companies can respond faster and more effectively to consumer demands through supply chain enhances 

Demand planning software – generates demand forecasts using statistical tools and forecasting techniques


Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain

Supply chain execution (SCE) software – automates the different steps and stages of the supply chain


Three factors fostering speed

Supply Chain Management Success Factors

Supply Chain Management Stories