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Supply chain: the facilities, functions, and activities that

are involved in producing and delivering a product or service from suppliers to the end customer.

focusing on integrating and managing the flow of goods, services, and information through the supply chain in order to make it responsive to customer needs while lowering total costs.

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Supply chain management:

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Supply chain strategy: designing a firm’s supply chain to

meet the competitive priorities of the firm’s operations strategy. 2

The goal is to reduce costs as well as increase performance which
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can be accomplished by better forecasting, inventory management, operations planning and scheduling, and resource planning.

Dynamic sales volumes

Customer service levels

Service/product proliferation

•One of the most costly operating aspects of supply chains is trying to meet the needs of volatile sales volumes.
•Involves excessive inventories, underutilized personnel, expensive delivery options to meet customer demands on time.

•Questions such as “What service level should be guaranteed?” or “How speedy must our deliveries be?” need collaborative discussion from the sales, marketing, and finance groups.
•The answers will affect on the design of the supply chain, particularly its points of supply and the choice of suppliers.

•The sales and marketing groups can create new services or products because they are closely in touch with customers and their needs.
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Capital investments in machinery and equipment are typically much higher in the manufacturing industry.

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Fundamental purpose of supply chain design for manufacturers is to control inventory by managing the flow of materials 

The typical manufacturer spends more than 60 percent of its total income from sales on purchased services and materials, whereas the typical service provider spends only
30 to 40 percent.
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