An Integrated Approach

Supply chain management is a cross-function approach including managing the movement of raw materials and consumables into an organisation, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organisation and toward the end-consumer. As organisations strive to focus on core competencies and becoming more flexible, they reduce their ownership of materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organisations involved in satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.

Several models have been proposed for understanding the activities required to manage material movements across organisational and functional boundaries. Walsh VMI can implement this as a supply chain management model. Supply chain activities can be grouped into strategic, tactical, and operational levels.