Editing Supply chain management (section)

==Business-process integration==
{{more citations needed section|date=June 2013}}
Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. In an example scenario, a purchasing department places orders as its requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged through [[business process integration]], e.g., using [[electronic data interchange]].

Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems, and shared information. According to Lambert and Cooper (2000), operating an integrated supply chain requires a continuous information flow. However, in many companies, management has concluded that optimizing product flows cannot be accomplished without implementing a process approach. The key supply chain processes as stated by Lambert (2004)<ref>Lambert, Douglas M., [http://www.scm-institute.org Supply Chain Management: Processes, Partnerships, Performance], 3rd edition, 2008.</ref> are:
* [[Customer relationship management]]
* Customer service management
* Demand management 
* [[Order fulfillment]]
* Manufacturing flow management
* [[Supplier relationship management]]
* Product development and [[commercialization]]
* Returns management

Much has been written about [[demand management]].<ref>{{Cite news|url=https://scm.ncsu.edu/scm-articles/article/lessons-in-demand-management|title=Lessons in Demand Management {{!}} Supply Chain Resource Cooperative {{!}} NC State University|date=2002-09-24|access-date=2018-04-23|language=en}}</ref> Best-in-class companies have similar characteristics, which include the following:
* Internal and external collaboration
* Initiatives to reduce lead time
* Tighter feedback from customer and market demand
* Customer-level forecasting

One could suggest other critical supply business processes that combine these processes stated by Lambert, such as:

; Customer [[service management]] process
: Customer relationship management concerns the relationship between an organization and its customers. [[Customer service]] is the source of customer information. It also provides the customer with real-time information on scheduling and product availability through interfaces with the company's production and distribution operations. Successful organizations use the following steps to build customer relationships:
:* determine mutually satisfying goals for organization and customers
:* establish and maintain customer rapport
:* induce positive feelings in the organization and the customers

=== Business strategy integration ===
Effective business process integration in supply chain management requires not only continuous communication, but also strategic coordination across departments and partner companies. The main reason for this is that it can effectively improve agility.<ref>{{Cite journal |last1=Mellat-Parast |first1=Mahour |last2=E. Spillan |first2=John |date=2014-08-05 |title=Logistics and supply chain process integration as a source of competitive advantage: An empirical analysis |url=https://www.emerald.com/insight/content/doi/10.1108/IJLM-07-2012-0066/full/html |journal=The International Journal of Logistics Management |language=en |volume=25 |issue=2 |pages=289–314 |doi=10.1108/IJLM-07-2012-0066 |issn=0957-4093}}</ref> At the same time, this integration can help businesses respond quickly to changes in demand and improve customer satisfaction.

; Inventory management
:Inventory management is concerned with ensuring the right stock at the right levels, in the right place, at the right time and the right cost. Inventory management entails inventory planning and forecasting: forecasting helps planning inventory.

; [[Procurement]] process
: Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the development of new products.<ref>Mirzaee, H., Naderi, B., & Pasandideh, S. H. R. (2018). A preemptive fuzzy goal programming model for generalized supplier selection and order allocation with incremental discount. Computers & Industrial Engineering, 122, 292-302.</ref> In firms whose operations extend globally, sourcing may be managed on a global basis. The desired outcome is a relationship where both parties benefit and a reduction in the time required for the product's design and development. The purchasing function may also develop rapid communication systems, such as [[electronic data interchange]] (EDI) and internet linkage, to convey possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling, and [[quality assurance]], many of which include the responsibility to coordinate with suppliers on matters of scheduling, supply continuity (inventory), hedging, and research into new sources or programs. Procurement has recently been recognized as a core source of value, driven largely by the increasing trends to outsource products and services, and the changes in the global ecosystem requiring stronger relationships between buyers and sellers.<ref>Chick, Gerard, and Handfield, Robert (2014), ''The Procurement Value Proposition: The Rise of Supply Management'', London, Kogan Page</ref>

; [[Product development]] and commercialization
: Here, customers and suppliers must be integrated into the product development process in order to reduce the time to market. As [[product lifecycle|product life cycles]] shorten, the appropriate products must be developed and successfully launched with ever-shorter time schedules in order for firms to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must:
:# coordinate with customer relationship management to identify customer-articulated needs;
:# select materials and suppliers in conjunction with procurement; and
:# develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the given combination of product and markets.

Integration of suppliers into the new product development process was shown to have a major impact on product target cost, quality, delivery, and market share. Tapping into suppliers as a source of innovation requires an extensive process characterized by development of technology sharing, but also involves managing intellectual<ref>R. Monczka, R. Handfield, D. Frayer, G. Ragatz, and T. Scannell, ''New Product Development: Supplier Integration Strategies for Success'', Milwaukee, WI: ASQ Press, January, 2000</ref> property issues.

; Manufacturing flow management process
: The manufacturing process produces and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible in order to respond to market changes and must accommodate [[mass customization]]. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Changes in the manufacturing flow process lead to shorter cycle times (cycle time compression), meaning improved responsiveness and efficiency in meeting customer demand. La Londe and Masters found in 1994 research that improved supply chain management and cycle time compression were complementary strategies adopted by forward-looking businesses in the United States.<ref name=masters>La Londe, B. and Masters, J. M., [https://www.emerald.com/insight/content/doi/10.1108/09600039410070975/full/html Emerging Logistics Strategies: Blueprints for the Next Century], ''International Journal of Physical Distribution & Logistics Management'', Vol. 24 No. 7, pp. 35-47. {{doi|10.1108/09600039410070975}}, accessed 15 September 2023</ref> This process manages activities related to planning, scheduling, and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites, and maximum flexibility in the coordination of geographical and final assemblies postponement of physical distribution operations.

; Physical distribution
: This concerns the movement of a finished product or service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product or service is a vital part of each channel participant's marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing. Thus it links a marketing channel with its customers (i.e., it links manufacturers, wholesalers, and retailers).

; [[Outsourcing]]/[[partnership]]s
: This includes not just the outsourcing of the procurement of materials and components, but also the outsourcing of services that traditionally have been provided in-house. The logic of this trend is that the company will increasingly focus on those activities in the value chain in which it has a distinctive advantage and outsource everything else. This movement has been particularly evident in logistics, where the provision of transport, storage, and inventory control is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling this network of partners and suppliers requires a blend of central and local involvement: strategic decisions are taken centrally, while the monitoring and control of supplier performance and day-to-day liaison with logistics partners are best managed locally.

;[[Performance measurement]]
: Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can both be correlated with a firm's performance. As logistics competency becomes a critical factor in creating and maintaining competitive advantage, measuring logistics performance becomes increasingly important, because the difference between profitable and unprofitable operations becomes narrower. [[Kearney (consulting firm)|A.T. Kearney Consultants]] (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to experts,{{who|date=August 2023}} internal measures are generally collected and analyzed by the firm, including cost, customer service, productivity, asset measurement, and quality. External performance is measured through customer perception measures and "[[best practice]]" benchmarking.

;[[Warehouse management system|Warehousing management]]
: To reduce a company's cost and expenses, warehousing management is concerned with storage, reducing manpower cost, dispatching authority with on time delivery, loading and unloading facilities with proper area, inventory management system etc.

;[[Workflow management system|Workflow management]]
: Integrating suppliers and customers tightly into a [[workflow]] (or [[business process]]) and thereby achieving an efficient and effective supply chain is a key goal of [[workflow]] management.