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In this Project Management Article, we will understand role of supply chain in managing project.

What is Supply Chain?


Supply chains cover activities which companies or businesses use to design, deliver and use the product or service. Moreover companies or businesss establishments depend upon the supply chains in order to survive as well as thrive. Each and every organization will keep number of supply chains as per their need.

Based on the changing market requirements, competition and uncertainty, companies choose appropriate supply chains as per the roles to be played. Following are the some of the definitions of the supply chain.

Chopra and Meindl stated in their book on Supply Chain Management: Strategy, Planning, and Operations:
"A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves."

Ganeshan and Harrison written in their article on the topic of "An Introduction to Supply Chain Management" that:
"A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers"

Supply Chain Management

The supply chain management refers to efficient co-ordination of inventory, production, transportation and location among participants of a supply chain to achieve best business performance.

As per one article published in Journal of Business Logistics it refers to:
"The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purpose of performance improvement of the supply chain as well as the company."

supply chain drivers

Companies/business establishments in any supply chain need to make decisions individually as well as collectively with regard to their actions in the five following areas:
• Production: Helps analyze products needed in the market.
• Inventory: Helps estimate items required to be stocked at various stages of the supply chain.
• Location: provides information about where the facilities for the inventory and production storage need to be located
• Transportation: How the inventory will be transported from one supply chain to the other supply chain?
• Information: Helps estimate amount of data and information to be shared.
The figure-1 depicts these five drivers of the supply chain.

supply chain structure

The figure-2 depicts supply chain structures. The service providers in the areas such as logistics, finance, market research, product design and information technology will have the extended supply chain structure.