Description & Theory of Supply Chain Management

Supply chain management used to be called purchasing. The National Association of Purchasing Management, for example, has renamed itself the Institute for Supply

Management (www.searchtuna.com/ftlive2/3632.html).

A supply chain is a network of facilities and distribution options that performs the function of procurement of materials, transformation of these materials into intermediate and finished products to customers (en.wikpediaq.org/wiki/Supply_chain).

A bit later in their entry on the subject the writer rather cryptically adds "a supply chain is a chain of processes which supply one to another".

Stepping back a step to a higher level of generality another definition calls a supply chain "an entity that transforms various types of inputs into outputs for

chosen customers"(www.searchtuna.com/ftlive2/3632.html).

This definition could also be applied to information. It is the introduction of incorrect information into the global supply chain of Nike, Inc. that is the relevant issue in the case study I am using for this paper.

Wikipedia continues on after the above definition to explain that a supply chain consists of supply, manufacturing, and distribution. Supply deals with getting raw materials to the manufacturing plant, which produces finished products. Distribution involves a network of distributors, warehouses, and retailers to get the products to the customers. And lastly, lots of careful planning is needed to co

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nvironmental concerns, or human rights. And if there are problems, there's always the option of paying off corrupt local officials. Forgetting for a moment the unpleasant fact that most of American manufacturing and assembly jobs have been outsourced to foreign countries with chronic poverty, multinational corporations have dramatically cut their labor costs and increased their profit margins by playing off one poor area starved for jobs against another. For Nike, this means that an Air Jordan which retails for $180 has a labor cost of only $2, far less than it would cost to produce in the United States. But there is also a seamier side to this cutting costs by locating factories in poor countries. There are well-documented reports of child labor, systematic employee abuse, and inhumane sweatshop conditions in outsourced Third World manufacturing and supply chain networks, in places such as Indonesia and Vietnam. By 1998 Nike's international supply chain network had become fragmented into 27 different order management systems that were so individually idiosyncratic and so erratically connected to Nike's Beaverton, Oregon headquarters that "total information integration" became the rallying cry of management. However ineffici

Category: Business - D