Some Basic Terms in Supply Chain Management

Before one gets into a more detailed discussion about various Supply Chain strategies such as Purchasing Strategies, Inventory Strategies, Production Strategies, Warehousing Strategies, etc. and discuss some real life cases, one needs to understand some basic supply chain terms and concepts.

Since I have already explained few things like SCOR, DCOR, CCOR, KPIs, Performance metrics, Oliver Wight checklist, Balance Scorecard, EVA etc., I won’t be discussing them any further but further on focus of discussion encompasses the concepts like: Demand Forecasting Models and Techniques, Bull whip effect, Bandwagon effect, Theory of constraints, Assortment Planning, Store Clustering, Cross Docking, Push-Pull Strategy, Continuous Work-In-Progress (CONWIP), Min-max Strategy, Economic Order Quantity, Safety Stock, Master Production Scheduling (MPS), Takt Time, MRP-I, MRP-II, Cycle Count (Control Group, Random Sample, ABC Analysis), Lean Supply Chain, Kanban/ Three bin system/ e-Kanban, Just-in-time (JIT), Six Sigma, Value Stream Mapping, Continuous Replenishment (CR), Vendor Managed Inventory (VMI), Collaborative Planning, Forecasting & Replenishment (CPFR), etc.

Once you understand the above mentioned definitions and concepts, you can go back to Collaborative Supply Chain – II part of the blog, click on the download link to download the end-to-end supply chain process diagram and go through it once again and you will have a much more clear idea about the supply chain process.

Some concepts such as Demand Forecasting Models & Techniques, Production Planning, Production Scheduling, MRP-I, MRP-II, DRP etc. make more sense when they are explained with practical examples. Practical aspects of these topics will be covered later when I will be explaining the Supply Chain processes in SAP system under Supply Chain Processes in SAP Centric Environment.

Let me mention this once again that the purpose here is to explain the Supply Chain Management process in the shortest and simplest way possible. If you need a more in-depth knowledge and information on Supply Chain Management, I would advise you buy and read some good SCM books. There are few books which I read and I really liked some of them but two Supply Chain books which are my all time favorites are:

1. Supply Chain Management- Strategy, Planning and Operation by Sunil Chopra and Peter Meindl

2. Designing and Managing the Supply Chain by David Simchi-Levi

Besides these two books, I would also recommend the following books:

1. Strategic Supply Chain Management by Shoshanah Cohen and Joseph Roussel
2. Reinventing the Supply Chain Life Cycle by Marc J. Schniederjans and Stephen B. LeGrand
3. Fix Your Supply Chain by Paul C Husby and Dan Swartwood