Supply Chain Management (SCM)

According to both Joint Publication (JP) 1-02 and JP 4-09, supply chain management is a "cross-functional approach to procuring, producing, and delivering products and services to customers. The broad management scope includes subsuppliers, suppliers, internal information, and funds flow." JP 4-09 also states "supply chain management provides an intellectual and organizational approach to managing, integrating, and assuring all the elements that affect the flow of materiel to the joint force. Military supply chain management is the discipline that integrates acquisition, supply, maintenance, and transportation functions with the physical, financial, information, and communications networks in a results-oriented approach to satisfy joint force materiel requirements."

According to paragraph C1.2.1 of the DoD Supply Chain Materiel Management Regulation (DoD 4140.1-R), dated 23 May 03: "To supply materiel and logistics services to DoD units throughout the world, the DoD Components maintain a supply chain consisting of weapon system support contractors, retail supply activities, distribution depots, transportation networks including contracted carriers, Military Service and Defense Logistics Agency (DLA) integrated materiel managers (IMMs), weapon system program offices, commercial distributors and suppliers including manufacturers, commercial and organic maintenance facilities, and other logistics activities (e.g., engineering support activities (ESAs), testing facilities, cataloging services, reutilization and marketing offices)." Effective supply chain management breaks down traditional functional stovepipes of procurement, transportation, materiel management, maintenance, and so forth, and instead facilitates an integrated end-to-end customer-focused perspective. Although there is no one single universally accepted DoD-commercial sector definition of Supply Chain Management, several other widely accepted definitions include:

"Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the Logistics Management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology." Source: Council of Logistics Management (CLM)

"The supply-chain - a term now commonly used internationally - encompasses every effort involved in producing and delivering a final product or service, from the supplier's supplier to the customer's customer. Supply-chain management includes managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer." Source: Supply Chain Council

Related concepts include Cataloging, the Balanced Scorecard, Strategic Sourcing, and Commodity Councils. A supply chain manager begins the inventory planning process by identifying the discrete items managed in the supply chain. This process is called Cataloging. With the exception of the Learning and Growth perspective, the Balanced Scorecard performance categories are consistent with the Supply Chain Operational Reference (SCOR) model. In fact, many companies use SCOR-based metrics as balanced scorecard metrics. Strategic Sourcing is the process of developing supplier relationships through a disciplined, systematic process of effectively sourcing materials, products, and services to make the supply chain more effective. Commodity Councils are, in their most basic sense, a cross-functional sourcing team.

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