Article 3

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Title of Article: Defining Supply Chain Management
Written by: John T. Mentzer, William DeWitt, James S. Keebler, Soonhong Min, Nancy W.
Nix, Carlo D. Smith and Zach G. Zacharia
Objective of the article
 To define supply chain management
 To create awareness about supply chain management
 To list out activities included in supply chain management
Introduction
Management is on the verge of a major breakthrough in understanding how industrial company
success depends on the interactions between the flows of information, materials, money,
manpower, and capital equipment. The way these five flow systems interlock to amplify one
another and to cause change and fluctuation will form the basis for anticipating the effects of
decisions, policies, organizational forms, and investment choices. Some scientists introduced a
theory of distribution management that recognized the integrated nature of organizational
relationships. Because organizations are so intertwined, he argued that system dynamics can
influence the performance of functions such as research, engineering, sales, and production they
illustrated this phenomenon utilizing a computer simulation of order information flow and its
influence on production and distribution performance for each supply chain member, as well as
the entire supply chain system. More recent replications of this phenomenon include the “Beer
Game” simulation and research covering the “Bullwhip Effect”
The term supply chain management has risen to prominence over the past ten years. For
example, at the 1995 Annual Conference of the Council of Logistics Management, 13.5% of the
concurrent session titles contained the words “supply chain.” At the 1997 conference, just two
years later, the number of sessions containing the term rose to 22.4%. Moreover, the term is
frequently used to describe executive responsibilities in corporations. SCM has become such a
“hot topic” that it is difficult to pick up a periodical on manufacturing, distribution, marketing,
customer management, or transportation without seeing an article about SCM or SCM-related
topics.
Methods of the study

 The study uses secondary data from former researches by different scientists and
journals.
Key points
The main ideas in this article are summarized as:
 Definition of supply chain management
 The definition of “supply chain” seems to be more common across authors than the
definition of “supply chain management”
 supply chain is a set of firms that pass materials forward. Normally, several
independent firms are involved in manufacturing a product and placing it in the hands
of the end user in a supply chain raw material and component producers, product
assemblers, wholesalers, retailer merchants and transportation companies are all
members of a supply chain.
 supply chain as the alignment of firms that brings products or services to market.
Note that these concepts of supply chain include the final consumer as part of the
supply chain.
 SCM is a concept, “whose primary objective is to integrate and manage the sourcing,
flow, and control of materials using a total systems perspective across multiple
functions and multiple tiers of suppliers.
 Supply Chain Management activities

1. Integrated Behavior
2. Mutually Sharing Information
3. Mutually Sharing Risks and Rewards
4. Cooperation
5. The Same Goal and the Same Focus on Serving Customers
6. Integration of Processes
7. Partners to Build and Maintain Long-Term Relationships
 Supply Chain Management Versus Supply Chain Orientation
 Although these perspectives on defining supply chain management are helpful, a

careful examination of them indicates the literature is actually trying to define two
concepts with one term, i.e., supply chain management. The idea of viewing the
coordination of a supply chain from an overall system perspective, with each of the
tactical activities of distribution flows seen within a broader strategic context (what
has been called SCM as a management philosophy) is more accurately called a
Supply Chain Orientation. The actual implementation of this orientation, across
various companies in the supply chain, is more appropriately called Supply Chain
Management.
 Supply Chain Orientation is defined as the recognition by an organization of the

systemic, strategic implications of the tactical activities involved in managing the
various flows in a supply chain.
 a company possesses a supply chain orientation (SCO) if its management can see the
implications of managing the upstream and downstream flows of products, services,
finances, and information across their suppliers and their customers.
 Antecedents and Consequences

Antecedents to SCM are the factors that enhance or impede the implementation of a
SCO philosophy. Morgan and Hunt propose that cooperation arises directly from both
relationship trust and commitment. trust is a willingness to rely on an exchange
partner in whom one has confidence. Though both trust and commitment are essential
to make cooperation work, trust is a major determinant of relationship commitment.
Thus, trust has both direct and indirect relationships with cooperation. Role of trust to
overcome mutual difficulties such as power, conflict, and the opportunities they
expect to find in the marketplace.
In terms of power and leadership structure of a supply chain, there needs to be a firm
that assumes the leader role. Supply chains need leaders as much as individual
organizations. A supply chain leader is like a channel captain in the marketing
channels literature and plays a key role in coordinating and overseeing the whole
supply chain. in many situations, a specific firm may function as a supply chain
leader as a result of their size, economic power, customer patronage, comprehensive
trade franchise, or the initiation of the inter-firm relationships.
 Consequences of SCM
the consequences of SCM are lower costs and improved customer value and
satisfaction to achieve competitive advantage. Industry reports support this contention
(Performance Management Group 2001)
competitive advantage grows fundamentally out of the customer value a firm creates,
and aims to establish a profitable and sustainable position against the forces that
determine industry competition. Thus, it is proposed that the implementation of SCM
enhances customer value and satisfaction, which in turn leads to enhanced
competitive advantage for the supply chain, as well as each member firm. This,
ultimately, improves the profitability of the supply chain and its members.
 Scope of SCM
The scope of SCM is functional and organizational. The functional scope of SCM
refers to which traditional business functions are included or excluded in the
implementation and the process of SCM. The organizational scope of SCM concerns
what kinds of inter-firm relationships are relevant to the participating firms in the
implementation and the process of SCM.
 Major findings of the study

 The study clarified the difference and similarity between supply chain
management and supply chain orientation
 Identified the scope of SCM
 Activities of supply chain management are clarified
 Strength of the article
 The study was very organized and has more strong qualities than its weakness
 Special the pictorial and graphical method it organize to explain different
ideas was very impressive, which will give the idea of the paper easily
 The flow from the beginning up to the conclusion was good
 Weakness of the article

It will be better if there was an abstract which will express the all over idea of the
article at the beginning
Conclusions
There are several contributions of this paper to the knowledge of supply chain
management. First, it provides an integrative framework of the phenomenon called
SCM. As such, it should help practitioners as well as researchers understand SCM,
give guidance to what SCM is, its prerequisites, and potential effects on business and
supply chain performance. Without a clear understanding of SCM, we cannot expect
wide application of SCM in practice or research. Without such inter-functional
coordination, supply chain management cannot achieve its full potential. The same
can be said for including all the supply chain flows in any supply chain management
planning, organization, or process. In addition, the long-term performance impacts of
SCM need to be examined. Finally, the area of global supply chains provides many
opportunities for research into the phenomenon of supply chains, SCO, and SCM.
This paper also highlights the need for rigor to further develop a theoretical
framework of SCM. In addition to the research questions suggested by, testing the
antecedent, phenomenon, and consequence it would tell us much about the structure
of supply chains and supply chain management.

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Article summary

Title of Article: Defining Supply Chain Management

Methods of the study

 Supply Chain Management activities

 Supply Chain Management Versus Supply Chain Orientation

 Although these perspectives on defining supply chain management are helpful, a

 Supply Chain Orientation is defined as the recognition by an organization of the

 Antecedents and Consequences

 Major findings of the study

 Weakness of the article

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