To compete successfully in today's market place, companies need to manage effectively and efficiently the activities of design, manufacturing, distribution, service and recycling of their products and services to their customers. Supply chain management deals with the management of materials, information and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. The coordination and integration of these flows within and across companies are critical in effective supply chain management. It is important that the information, material and financial flows are coordinated effectively in a supply chain. Material flows involve both physical product flows from suppliers to customers through the chain, as well as the reverse flows via product returns, servicing, recycling and disposal.
Information flows involve order transmission and delivery status.
Financial flows involve credit terms, payment schedules, and consignment and title ownership arrangements. These flows cut across multiple organizations within a company as well as across companies and industries. In the last few years, the coordination and integration of these flows have attracted significant interest on the part of researchers, management, consultants and practitioners in academia and industry. Due to the recent trends of vertical disintegration, international procurements, new information technologies and increasing pressure from customers on responsiveness and reliability, and the globalization of operations and markets, supply chain management has become at once a challenge and an opportunity. Indeed, many companies have now viewed supply chain management as the core of their business strategy.