Supply Chain Management:

 

Before getting into the details of Scor model supply chain, you first need to understand te definition of supply chain management. Supply chain management is a terminology which can be best explained by the help of understanding the meaning of each individual words.

 

Supply means needs, wants and demand of a customer or anything.
Chain means that everything is interconnected or linked with each other.
Management can be best explained with the help of basic principle that is (Planning, Organizing, Leading, Controlling and staffing).

 

By combining the above break ups, we can conclude that, supply chain management is basically to full fill customer’s needs, wants and demands by the help of interconnected drivers and using management tools in order to plan for current and future requirements, organizing things in a way to achieve the goal under a leadership that is a person or team taking responsibility by ensuring that all quality checks are intact with right person at the right place (Hire right person for right job).

 

These interconnected drivers can be best explained by the help of SCOR (Supply Chain Operational Reference) model or Scor model supply chain.

 

SCOR model supply chain

 

 

Breakdown of SCOR model supply chain

 

1. Plan

– Demand planning (DP)

– Supply planning (SP)

 

2. Source

– Raw material supply management (RMSM)

– Packaging material supply management (PMSM)

– Non production items (NPI)

 

3. Make

– Production

– Engineering and projects

– Maintenance resource operation (MRO)

 

4. Deliver

– Warehousing / DC

– Distribution planning

– Logistics

 

5. Return

 

We will study the above SCOR model supply chain breakdown in detail in later chapters. Before moving further, we need to understand certain terminologies that will assist you in understanding supply chain management better.

 

Types of Market:

 

There are two types of market:

 

Developed and emerging market:

These kinds of market are usually found in Latin America, South Asia, etc. Taking an example of a product, we can still see powder detergents available in such markets.

 

Developed market:

These kinds of market are mostly found in China, USA, etc. Taking an example of a similar product, we can see that powder detergent are replaced with liquid detergent.

 

Classical conditioning:

To make the behavior of the consumer according to your product and not vice versa is called classical conditioning.

 

Modern Trade:

 

There are two types of modern trade:

 

1. Local modern trade: Super markets that has everything available in one premises (Clothing, groceries, electronics, etc.) and belongs to a local chain is known as Local modern trade.

 

2. International Modern Trade: Super markets that has everything available in one premises (Clothing, groceries, electronics, etc.) and belongs to an international chain is known as International modern trade.

 

Diversification:

There are two types of diversification:

 

1. Concentric diversification:

The literal meaning of concentric is same center. This means that the organization is diversifying or expanding its business in the same domain. For example, an XYZ company is specialized in making solid soap, now it is expanding its domain to liquid soap. This kind of diversification is known as concentric diversification.

 

2. Conglomerate diversification:

The literal meaning of concentric is having different center. This means that the organization is diversifying or expanding its business in a different domain. For example, an XYZ company is specialized in making dairy products, now it is expanding its domain to fertilizers and chemical products. This kind of diversification is known as conglomerate diversification.