Supply Chain Activities - scm activities determine its purpose

Supply Chain Activities / Functions:
Supply Chain Management is a cross functional approach to managing the movement of raw materials into an organization and movement of the finished goods out of the organization toward the end consumer.


Several models have been proposed to understand the activities required to manage material movement across organizational and functional boundaries.

SCOR is a supply chain management model promoted by the supply chain council. Another model is the Supply Chain Management floated by the Global Supply Chain Forum (GSCF).

Supply Chain activities can be grouped into strategic, tactical and operational level of activities.

A firmís Supply Chain Management efforts start with the development and execution of a long-term supply chain strategy. Among other things, this strategy should:
  • Identify what supply chains the firm wants to compete in
  • Help managers understand how the firm will provide value to the supply chain

  • Guide the selection of supply chain partners, including suppliers, subcontractors, transportation providers, and distributors

As firms gear up to understand what supply chains they compete in, it is often valuable to map the physical flows and information flows that make up these supply chains. From these maps, firms can begin to understand how they add value, and what information is needed to make the supply chain work in the most effective and efficient way possible.

Of course, the firmís supply chain strategy does not exist in a vacuum. It must be consistent with both the overall business strategy and efforts within such areas as purchasing, logistics, manufacturing and marketing. The Supply Chain activities have to be clearly spelled out for the given business.

                                                              Strategic activities :
  • Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.

  • Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.

  • Product design coordination, so that new and existing products can be optimally integrated into the supply chain, load management

  • Information Technology infrastructure, to support supply chain operations.

  • Where to make and what to make or buy decisions

  • Align overall organizational strategy with supply strategy

Tactical activities :

  • Sourcing contracts and other purchasing decisions.

  • Production decisions, including contracting, locations, scheduling, and planning process definition.

  • Inventory decisions, including quantity, location, and quality of inventory.

  • Transportation strategy, including frequency, routes, and contracting.

  • Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise.

  • Milestone payments

Operational activities :

  • Daily production and distribution planning, including all nodes in the supply chain.

  • Production scheduling for each manufacturing facility in the supply chain (minute by minute)

  • Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.

  • Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers.

  • Inbound operations, including transportation from suppliers and receiving inventory.


  • Production operations, including the consumption of materials and flow of finished goods.

  • Outbound operations, including all fulfillment activities and transportation to customers.

  • Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities. distribution centers, and other customers.

  • Performance tracking of all activities.

Thus Supply Chain activities depend a lot on a firm's business model as also on how does it want to move




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