Supply Chain Management Systems

The Focusing Story at the beginning of the chapter introduced the concept of Supply Chain Management (SCM) at Wal-Mart. We discussed how managing the flow of goods in its supplier and distribution channels helps the company tightly control its inventory and reduce its costs. Supply chain management, however, can also apply to services, financial products, knowledge, and relationships, as well as goods.

The typical supply chain involves the flow of goods from the manufacturer to the wholesaler to the retailer and to the consumer. A typical supply chain is shown in Figure 12.3. Firms that provide or supply an organization's products or services are considered upstream, while firms that distribute an organization's products or services are considered downstream.