Supply chain management

Supply chain management, techniques with the aim of coordinating all parts of SC, from supplying raw materials to delivering and/or resumption of products, tries to minimize total costs with respect to existing conflicts among the chain partners. An example of these conflicts is the interrelation between the sale department desiring to have higher inventory levels to fulfill demands and the warehouse for which lower inventories are desired to reduce holding costs.[14]

In 1982, Keith Oliver, a consultant at Booz Allen Hamilton, introduced the term "supply chain management" to the public domain in an interview for the Financial Times.[15] In 1983 WirtschaftsWoche in Germany published for the first time the results of an implemented and so called "Supply Chain Management project", led by Wolfgang Partsch.[16]

In the mid-1990s, the term "supply chain management" gained popularity when a flurry of articles and books came out on the subject. Supply chains were originally defined as encompassing all activities associated with the flow and transformation of goods from raw materials through to the end user or final consumer, as well as the associated information flows. Mentzer et al. consider it worthy of note that the final consumer was included within these early definitions.[17]^: 2 Supply chain management was then further defined as the integration of supply chain activities through improved supply chain relationships to achieve a competitive advantage.[15]

In the late 1990s, "supply chain management" (SCM) rose to prominence, and operations managers began to use it in their titles with increasing regularity.[18][19][20] A supply chain, as opposed to supply chain management, is a set of firms who move materials "forward",[21] or a set of organizations, directly linked by one or more upstream and downstream flows of products, services, finances, or information from a source to a customer. Supply chain management is the management of such a chain.[17]

Other commonly accepted definitions of supply chain management include:

• The management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, company, resellers, and final consumers.[22]
• The systematic, strategic coordination of traditional business functions and tactics across all business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.[17]
• A customer-focused definition is given by Hines (2004:p76): "Supply chain strategies require a total systems view of the links in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the consumer. As a consequence, costs must be lowered throughout the chain by driving out unnecessary expenses, movements, and handling. The main focus is turned to efficiency and added value, or the end user's perception of value. Efficiency must be increased, and bottlenecks removed. The measurement of performance focuses on total system efficiency and the equitable monetary reward distribution to those within the supply chain. The supply chain system must be responsive to customer requirements."[23]
• The integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders.[24][25]
• According to the Council of Supply Chain Management Professionals (CSCMP), supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes coordination and collaboration with channel partners, which may be suppliers, intermediaries, third-party service providers, or customers.[8] Supply chain management integrates supply and demand management within and across companies. More recently, the loosely coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise.

Supply chain visibility, in its origins, was concerned with knowledge of the location/production stage and expected delivery date of incoming products and materials, so that production could be planned,[26] but the development of the term has enabled it to be used to plan orders using knowledge of potential supplies, and to track post-production processes as far as delivery to customers.[27]

Supply chain management software includes tools or modules used to execute supply chain transactions, manage supplier relationships, and control associated business processes.[28] The overall goal of the software is to improve supply chain performance by monitoring a company's supply chain network from end-to-end (suppliers, transporters, returns, warehouses, retailers, manufacturers, and customers).[28]

In some cases, a supply chain includes the collection of goods after consumer use for recycling or the reverse logistics processes for returning faulty or unwanted products back to producers up the value chain.[29]

Supply chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer. As organizations strive to focus on core competencies and become more flexible, they reduce ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other firms that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations. Less control and more supply chain partners lead to the creation of the concept of supply chain management.[30] Supply chain management is concerned with improving trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.[31][32]

Organizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy.[33] In Peter Drucker's (1998) new management paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies.

In recent decades, globalization, outsourcing, and information technology have enabled many organizations, such as Dell and Hewlett-Packard, to successfully operate collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities.[34] This inter-organizational supply network can be acknowledged as a new form of organization. However, with the complicated interactions among the players, the network structure fits neither "market" nor "hierarchy" categories.[35] It is not clear what kind of performance impacts different supply-network structures could have on firms, and little is known about the coordination conditions and trade-offs that may exist among the players. From a systems perspective, a complex network structure can be decomposed into individual component firms.[36] Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of an internal management control structure is known to impact local firm performance.[37]

In the 21st century, changes in the business environment have contributed to the development of supply chain networks. First, as an outcome of globalization and the proliferation of multinational companies, joint ventures, strategic alliances, and business partnerships, significant success factors were identified, complementing the earlier "just-in-time", lean manufacturing, and agile manufacturing practices.[38][39][40][41] Second, technological changes, particularly the dramatic fall in communication costs (a significant component of transaction costs), have led to changes in coordination among the members of the supply chain network.[42]

Many researchers have recognized supply network structures as a new organizational form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global Production Network", and "Next Generation Manufacturing System".[43][44][45] In general, such a structure can be defined as "a group of semi-independent organizations, each with their capabilities, which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration".[46]

The importance of supply chain management proved crucial in the 2019-2020 fight against the coronavirus (COVID-19) pandemic that swept across the world.[47] During the pandemic period, governments in countries which had in place effective domestic supply chain management had enough medical supplies to support their needs and enough to donate their surplus to front-line health workers in other jurisdictions.[48][49][50] The devastating COVID-19 crisis in US has turned many sectors of the local economy upside down, including the country's storied logistics industry. Some organizations were able to quickly develop foreign supply chains in order to import much needed medical supplies.[51][52][53]

Supply chain management is also important for organizational learning. Firms with geographically more extensive supply chains connecting diverse trading cliques tend to become more innovative and productive.[54]

The security-management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001 and related standards published jointly by the ISO and the IEC. Supply Chain Management draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach.

An important element of SCM is supply chain resilience, defined as "the capacity of a supply chain to persist, adapt, or transform in the face of change".[55] For a long time, the interpretation of resilience in the sense of engineering resilience (= robustness[56]) prevailed in supply chain management, leading to the notion of persistence.[55] A popular implementation of this idea is given by measuring the time-to-survive and the time-to-recover of the supply chain, allowing to identify weak points in the system.[57]

More recently, the interpretations of resilience in the sense of ecological resilience and social–ecological resilience have led to the notions of adaptation and transformation, respectively.[55] A supply chain is thus interpreted as a social-ecological system that – similar to an ecosystem (e.g. forest) – is able to constantly adapt to external environmental conditions and – through the presence of social actors and their ability to foresight – also to transform itself into a fundamentally new system.[58] This leads to a panarchical interpretation of a supply chain, embedding it into a system of systems, allowing to analyze the interactions of the supply chain with systems that operate at other levels (e.g. society, political economy, planet Earth).[58]

For example, these three components of resilience can be discussed for the 2021 Suez Canal obstruction, when a ship blocked the canal for several days. Persistence means to "bounce back"; in our example it is about removing the ship as quickly as possible to allow "normal" operations. Adaptation means to accept that the system has reached a "new normal" state and to act accordingly; here, this can be implemented by redirecting ships around the African cape or use alternative modes of transport. Finally, transformation means to question the assumptions of globalization, outsourcing and linear supply chains and to envision alternatives; in this example this could lead to local and circular supply chains that do not need global transportation routes any longer.

Six major movements can be observed in the evolution of supply chain management studies: creation, integration, globalization,[59] specialization phases one and two, and SCM 2.0.

Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. In an example scenario, a purchasing department places orders as its requirements become known. The marketing department, responding to customer demand, communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between supply chain partners can only be fully leveraged through business process integration, e.g., using electronic data interchange.

Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems, and shared information. According to Lambert and Cooper (2000), operating an integrated supply chain requires a continuous information flow. However, in many companies, management has concluded that optimizing product flows cannot be accomplished without implementing a process approach. The key supply chain processes as stated by Lambert (2004)[64] are:

• Customer relationship management
• Customer service management
• Demand management
• Order fulfillment
• Manufacturing flow management
• Supplier relationship management
• Product development and commercialization
• Returns management

Much has been written about demand management.[65] Best-in-class companies have similar characteristics, which include the following:

• Internal and external collaboration
• Initiatives to reduce lead time
• Tighter feedback from customer and market demand
• Customer-level forecasting

One could suggest other critical supply business processes that combine these processes stated by Lambert, such as:

Customer service management process

Customer relationship management concerns the relationship between an organization and its customers. Customer service is the source of customer information. It also provides the customer with real-time information on scheduling and product availability through interfaces with the company's production and distribution operations. Successful organizations use the following steps to build customer relationships:

• determine mutually satisfying goals for organization and customers
• establish and maintain customer rapport
• induce positive feelings in the organization and the customers

Inventory management

Inventory management is concerned with ensuring the right stock at the right levels, in the right place, at the right time and the right cost. Inventory management entails inventory planning and forecasting: forecasting helps planning inventory.

Procurement process

Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the development of new products.[66] In firms whose operations extend globally, sourcing may be managed on a global basis. The desired outcome is a relationship where both parties benefit and a reduction in the time required for the product's design and development. The purchasing function may also develop rapid communication systems, such as electronic data interchange (EDI) and internet linkage, to convey possible requirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling, and quality assurance, many of which include the responsibility to coordinate with suppliers on matters of scheduling, supply continuity (inventory), hedging, and research into new sources or programs. Procurement has recently been recognized as a core source of value, driven largely by the increasing trends to outsource products and services, and the changes in the global ecosystem requiring stronger relationships between buyers and sellers.[67]

Product development and commercialization

Here, customers and suppliers must be integrated into the product development process in order to reduce the time to market. As product life cycles shorten, the appropriate products must be developed and successfully launched with ever-shorter time schedules in order for firms to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must:

1. coordinate with customer relationship management to identify customer-articulated needs;
2. select materials and suppliers in conjunction with procurement; and
3. develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the given combination of product and markets.

Integration of suppliers into the new product development process was shown to have a major impact on product target cost, quality, delivery, and market share. Tapping into suppliers as a source of innovation requires an extensive process characterized by development of technology sharing, but also involves managing intellectual[68] property issues.

Manufacturing flow management process

The manufacturing process produces and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be flexible in order to respond to market changes and must accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Changes in the manufacturing flow process lead to shorter cycle times (cycle time compression), meaning improved responsiveness and efficiency in meeting customer demand. La Londe and Masters found in 1994 research that improved supply chain management and cycle time compression were complementary strategies adopted by forward-looking businesses in the United States.[21] This process manages activities related to planning, scheduling, and supporting manufacturing operations, such as work-in-process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites, and maximum flexibility in the coordination of geographical and final assemblies postponement of physical distribution operations.

Physical distribution

This concerns the movement of a finished product or service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product or service is a vital part of each channel participant's marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing. Thus it links a marketing channel with its customers (i.e., it links manufacturers, wholesalers, and retailers).

Outsourcing/partnerships

This includes not just the outsourcing of the procurement of materials and components, but also the outsourcing of services that traditionally have been provided in-house. The logic of this trend is that the company will increasingly focus on those activities in the value chain in which it has a distinctive advantage and outsource everything else. This movement has been particularly evident in logistics, where the provision of transport, storage, and inventory control is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling this network of partners and suppliers requires a blend of central and local involvement: strategic decisions are taken centrally, while the monitoring and control of supplier performance and day-to-day liaison with logistics partners are best managed locally.

Performance measurement

Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. Taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can both be correlated with a firm's performance. As logistics competency becomes a critical factor in creating and maintaining competitive advantage, measuring logistics performance becomes increasingly important, because the difference between profitable and unprofitable operations becomes narrower. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to experts, internal measures are generally collected and analyzed by the firm, including cost, customer service, productivity, asset measurement, and quality. External performance is measured through customer perception measures and "best practice" benchmarking.

Warehousing management

To reduce a company's cost and expenses, warehousing management is concerned with storage, reducing manpower cost, dispatching authority with on time delivery, loading and unloading facilities with proper area, inventory management system etc.

Workflow management

Integrating suppliers and customers tightly into a workflow (or business process) and thereby achieving an efficient and effective supply chain is a key goal of workflow management.

There are gaps in the literature on supply chain management studies at present.[69] A few authors, such as Halldorsson et al.,[70] Ketchen and Hult (2006),[71] and Lavassani et al. (2009), have tried to provide theoretical foundations for different areas related to supply chain by employing organizational theories, which may include the following:

• Resource-based view (RBV)[72]
• Transaction cost analysis (TCA)
• Knowledge-based view (KBV)
• Strategic choice theory (SCT)
• Agency theory (AT)
• Channel coordination
• Institutional theory (InT)
• Systems theory (ST)
• Network perspective (NP)
• Materials logistics management (MLM)
• Just-in-time (JIT)
• Material requirements planning (MRP)
• Theory of constraints (TOC)
• Total quality management (TQM)
• Agile manufacturing
• Time-based competition (TBC)
• Quick response manufacturing (QRM)
• Customer relationship management (CRM)
• Requirements chain management (RCM)
• Dynamic Capabilities Theory
• Dynamic Management Theory
• Available-to-promise (ATP)
• Supply Chain Roadmap[73]
• Optimal Positioning of the Delivery Window (OPDW)[74][75]

However, the unit of analysis of most of these theories is not the supply chain but rather another system, such as the firm or the supplier-buyer relationship. Among the few exceptions is the relational view, which outlines a theory for considering dyads and networks of firms as a key unit of analysis for explaining superior individual firm performance (Dyer and Singh, 1998).[76]

The management of supply chains involve a number of specific challenges regarding the organization of relationships among the different partners along the value chain. Formal and informal governance mechanisms are central elements in the management of supply chain.[77] Particular combinations of governance mechanisms may impact the relational dynamics within the supply chain. The need for interdisciplinarity in SCM research has been pointed out by academics in the field.[78]

In the study of supply chain management, the concept of centroids has become a useful economic consideration. In mathematics and physics, a centroid is the arithmetic mean position of all the points in a plane figure.[79] For supply chain management, a centroid is a location with a high proportion of a country's population and a high proportion of its manufacturing, generally within 500 mi (805 km). In the US, two major supply chain centroids have been defined, one near Dayton, Ohio, and a second near Riverside, California.

The centroid near Dayton is particularly important because it is closest to the population center of the US and Canada. Dayton is within 500 miles of 60% of the US population and manufacturing capacity, as well as 60% of Canada's population.[80] The region includes the interchange between I-70 and I-75, one of the busiest in the nation, with 154,000 vehicles passing through per day, of which 30–35% are trucks hauling goods. In addition, the I-75 corridor is home to the busiest north–south rail route east of the Mississippi River.[80]

A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product. A supply chain encompasses everything from the delivery of source materials from the supplier to the manufacturer through to its eventual delivery to the end user. The supply chain segment involved with getting the finished product from the manufacturer to the consumer is known as the distribution channel.[81]

Tax-efficient supply chain management is a business model that considers the effect of tax in the design and implementation of supply chain management. As the consequence of globalization, cross-national businesses pay different tax rates in different countries. Due to these differences, they may legally optimize their supply chain and increase profits based on tax efficiency.[88]

Supply chain networks are integral to an economy, but their health is dependent on the well-being of the environment and society.[89] Supply chain sustainability is a business issue affecting an organization's supply chain or logistics network, and is frequently quantified by comparison with SECH ratings, which address social, ethical, cultural, and health footprints. These build on the triple bottom line incorporating economic, social, and environmental aspects.[90][91] The more commonly used ESG terminology represents Environment, Social and Governance. Consumers have become more aware of the environmental impact of their purchases and companies' ratings and, along with non-governmental organizations (NGOs), are setting the agenda, and beginning to push for transitions to more sustainable approaches such as organically grown foods, anti-sweatshop labor codes, and locally produced goods that support independent and small businesses. Because supply chains may account for over 75% of a company's carbon footprint, many organizations are exploring ways to reduce this and thus improve their profile.

For example, in July 2009, Wal-Mart announced its intentions to create a global sustainability index that would rate products according to the environmental and social impacts of their manufacturing and distribution. The index is intended to create environmental accountability in Wal-Mart's supply chain and to provide motivation and infrastructure for other retail companies to do the same.[92]

It has been reported that companies are increasingly taking environmental performance into account when selecting suppliers. A 2011 survey by the Carbon Trust found that 50% of multinationals expect to select their suppliers based upon carbon performance in the future and 29% of suppliers could lose their places on 'green supply chains' if they do not have adequate performance records on carbon.[93]

In addition to environmental concerns, increased globalization within global supply chains challenges human rights and worker exploitation risks within multinational corporations including forced labor and modern slavery. Textiles, agriculture, and manufacturing are some of the industries with significant labor exploitation risks.[94] There are many different methods governments, corporations, and NGOs use to prevent labor exploitation, including corporate social responsibility,[95] export controls,[96] import bans,[97] and monitoring labor standards.[98][99]

The US Dodd–Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July 2010, contained a supply chain sustainability provision in the form of the Conflict Minerals law. This law requires SEC-regulated companies to conduct third party audits of their supply chains in order to determine whether any tin, tantalum, tungsten, or gold (together referred to as conflict minerals) is mined or sourced from the Democratic Republic of the Congo, and create a report (available to the general public and SEC) detailing the due diligence efforts taken and the results of the audit. The chain of suppliers and vendors to these reporting companies will be expected to provide appropriate supporting information.

Incidents like the 2013 Savar building collapse, with more than 1,100 victims, have led to widespread discussions about corporate social responsibility across global supply chains. Wieland and Handfield (2013) suggest that companies need to audit products and suppliers and that supplier auditing needs to go beyond direct relationships with first-tier suppliers. They also demonstrate that visibility needs to be improved if supply cannot be directly controlled and that smart and electronic technologies play a key role to improve visibility. Finally, they highlight that collaboration with local partners, across the industry and with universities is crucial to successfully managing social responsibility in supply chains.[100]

Circular Supply Chain Management (CSCM) is "the configuration and coordination of the organizational functions marketing, sales, R&D, production, logistics, IT, finance, and customer service within and across business units and organizations to close, slow, intensify, narrow, and dematerialise material and energy loops to minimize resource input into and waste and emission leakage out of the system, improve its operative effectiveness and efficiency and generate competitive advantages". By reducing resource input and waste leakage along the supply chain and configure it to enable the recirculation of resources at different stages of the product or service lifecycle, potential economic and environmental benefits can be achieved. These comprise e.g. a decrease in material and waste management cost and reduced emissions and resource consumption.[101]

Consultancies and media expect the performance efficacy of digitizing supply chains to be high.[126] Additive manufacturing and blockchain technology have emerged as the two technologies with some of the highest economic relevance.

Additive manufacturing

The potential of additive manufacturing is particularly high in the production of spare parts, since its introduction can reduce warehousing costs of slowly rotating spare parts.[127] Digitizing technology bears the potential to completely disrupt and restructure supply chains and enhance existing production routes.[128]

Blockchain

In comparison, research on the influence of blockchain technology on the supply chain is still in its early stages. The conceptual literature has argued for a considerably long time that the highest performance efficacy is expected in the potential for automatic contract creation.[129] Empirical evidence contradicts this hypothesis: the highest potential is expected in the arenas of verified customer reviews and certifications of product quality and standards.[130] In addition, traditional supply chain has many drawbacks such as lack of transparency and trust, and some of them can be solved by blockchain technology.[131] The technological features of blockchains support transparency and traceability of information, as well as high levels of reliability and immutability of records.[132] That helps traditional supply chain management to be more efficient and reliable.

Supply chain systems configure value for those that organize the networks. Value is the additional revenue over and above the costs of building the network. Co-creating value and sharing the benefits appropriately to encourage effective participation is a key challenge for any supply system. Tony Hines defines value as follows: "Ultimately it is the customer who pays the price for service delivered that confirms value and not the producer who simply adds cost until that point".[23]

Global supply chains pose challenges regarding both quantity and value. Supply and value chain trends include:

• Globalization
• Increased cross-border sourcing
• Collaboration for parts of value chain with low-cost providers
• Shared service centers for logistical and administrative functions
• Increasingly global operations, which require increasingly global coordination and planning to achieve global optimums
• Complex problems involve also midsized companies to an increasing degree

These trends have many benefits for manufacturers because they make possible larger lot sizes, lower taxes, and better environments (e.g., culture, infrastructure, special tax zones, or sophisticated OEM) for their products. There are many additional challenges when the scope of supply chains is global. This is because with a supply chain of a larger scope, the lead time is much longer, and because there are more issues involved, such as multiple currencies, policies, and laws. The consequent problems include different currencies and valuations in different countries, different tax laws, different trading protocols, vulnerability to natural disasters and cyber threats,[133] and lack of transparency of cost and profit.

Supply chain professionals play major roles in the design and management of supply chains. In the design of supply chains, they help determine whether a product or service is provided by the firm itself (insourcing) or by another firm elsewhere (outsourcing). In the management of supply chains, supply chain professionals coordinate production among multiple providers, ensuring that production and transport of goods happen with minimal quality control or inventory problems. One goal of a well-designed and maintained supply chain for a product is to successfully build the product at minimal cost. Such a supply chain could be considered a competitive advantage for a firm.[134][135]

Beyond design and maintenance of a supply chain itself, supply chain professionals participate in aspects of business that have a bearing on supply chains, such as sales forecasting, quality management, strategy development, customer service, and systems analysis. Production of a good may evolve over time, rendering an existing supply chain design obsolete. Supply chain professionals need to be aware of changes in production and business climate that affect supply chains and create alternative supply chains as the need arises.

In a research project undertaken by Michigan State University's Broad College of Business, with input from 50 participating organizations, the main issues of concern to supply chain managers were identified as capacity/resource availability, talent (recruitment), complexity, threats/challenges (supply chain risks), compliance and cost/purchasing issues. Keeping up with frequent changes in regulation was identified as a particular concern.[136] Complexity within supply chains has also been highlighted in Supply Chain Digest and by Gartner as a perennial challenge.[137][138]

Supply chain consultants may provide expert knowledge in order to assess the productivity of a supply chain and, ideally, to enhance its productivity. Supply chain consulting involves the transfer of knowledge on how to exploit existing assets through improved coordination and can hence be a source of competitive advantage: the role of the consultant is to help management by adding value to the whole process through the various sectors from the ordering of the raw materials to the final product.[139] In this regard, firms may either build internal teams of consultants to tackle the issue or engage external ones: companies choose between these two approaches taking into consideration various factors.[140]

The use of external consultants is a common practice among companies.[141] The whole consulting process generally involves the analysis of the entire supply chain process, including the countermeasures or correctives to take to achieve a better overall performance.[142]

Supply chain professionals need to have knowledge of managing supply chain functions such as transportation, warehousing, inventory management, and production planning. In the past, supply chain professionals emphasized logistics skills, such as knowledge of shipping routes, familiarity with warehousing equipment and distribution center locations and footprints, and a solid grasp of freight rates and fuel costs. More recently, supply chain management extends to logistical support across firms and management of global supply chains.[143] Supply chain professionals need to have an understanding of business continuity basics and strategies,[144] and Tramarico et al noted that several processes from other disciplinary theories, including the resource-based view, supply chain design and interorganizational relationships are integral to a mature understanding of supply chain management.[145] A shortage of skilled supply chain professionals was highlighted in a study by the Massachusetts Institute of Technology published in 2010, which highlighted plentiful supply of staff with "narrow techincal skillsets" but shortages in the numbers of job applicants with "broader business skills".[146][147]

• Beer distribution game
• Demand-chain management
• Military supply chain management