Objective of a Supply Chain?

5views

written 7.9 years ago by

teamques10 ★ 68k

Maximize overall value created
Supply chain value: difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customer’s request
Value is correlated to supply chain profitability (difference between revenue generated from the customer and the overall cost across the supply chain)
Supply chain incurs costs (information, storage, transportation, components, assembly, etc.)
Difference between $2000$ and the sum of all of these costs is the supply chain profit
Supply chain profitability is total profit to be shared across all stages of the supply chain.
Supply chain success should be measured by total supply chain profitability, not profits at an individual stage
Sources of supply chain revenue: the customer
Sources of supply chain cost: flows of information, products, or funds between stages of the supply chain.
Supply chain management is the management of flows between and among supply chain stages to maximize total supply chain profitability.
Example: Dell receives $2000$ from a customer for a computer (revenue)

ADD COMMENT EDIT