The role of manufacturing industry is to create wealth by
adding value and selling products. Common to all
manufacturing companies is the need to control the flow
of material from suppliers, through the value adding
processes and distribution channels, to customers. The
supply chain, as shown in Figure 1, is the connected series
of activities which is concerned with planning, coordinating
and controlling material, parts and finished
goods from suppliers to the customer. It is concerned with
two distinct flows through the organisation: material and
information. The scope of the supply chain begins with
the source of supply and ends at the point of consumption.
It extends much further than simply a concern with the
physical movement of material and is just as much
concerned with supplier management, purchasing,
materials management, manufacturing management,
facilities planning, customer service and information flow
as with transport and physical distribution.
The objective of managing the supply chain is to
synchronise the requirements of the customer with the
flow of material from suppliers in order to effect a balance
between what are often seen as the conflicting goals of
high customer service, low inventory investment and low
unit cost. The design and operation of an effective supply
chain is of fundamental importance to every company.
It is important to understand that customer service
encompasses all the points of contact between the