Supply Chain Management Process Standards
Supply chain management is defined as follows by the Council of Supply Chain Management Professionals (CSCMP), “encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes the crucial components of coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers.” (Myerson, 2016). This implies that supply chain activities and supply chain management are not the same things, as supply chain management is a broad concept of overlooking every supply chain activity. The difference between the two terms becomes even clearer when the standards set by the council are studied.
Supply chain management of an organization regarding its goods and products plays an integral role in bringing success to the company. An efficient and strategic supply chain system supports the business operations and minimizes the risk of failure of a product. The Council of Supply Chain Management Professionals has formulated a process guide to rule the best supply chain practices. The standards by the council can help a company in managing its supply chain system by suggesting standard practices in the form of ‘minimum’ suggested and ’best practice’ for supply chain processes. These standards are accepted as professional guidelines to manage the supply chain activities. Benchmarking plays an important role in setting the standards. For instance, the best performing organization becomes a benchmark for the other organizations that are still struggling to improve their supply chain system. The purpose of these standards is to support the companies by allowing the organizations to identify its weaknesses and utilize the strengths to improve the overall supply chain operations. These standards also narrow down the focus of the business managers as the sole purpose of these standards lies in measuring the effectiveness of the organization’s activities. The work of one organization can influence the rest of the industry players and thus, the outcomes of the work can be shared with these organizations, to help them in improvising their supply chain systems. These standards also use American Productivity & Quality Center (APQC) and Process Classification Framework (PCF) to determine the benchmark activities in the industry.
These standards support a numbering based program, which divides the activities in different categories, depending upon their nature. The numbering of the standards works just as numbering of subheading goes in MS Office, which is 1, 1.1, 1.1.1, and so on. Each category has its own Process group, then process, and lastly the activities (Cscmp.org, 2016). In this regard, ‘minimum suggested’ and ‘best practices’ describe the maturity level of an activity or procedure. If there were no such standards that deal with the easily compromised process (as compared to the other processes) of supply chain, it would be hard to formulate a uniform level of performance each time. This is the reason that a huge number of the business organizations have adopted the supply chain standards or benchmark. There are two editions of the standards, while the 2nd edition being the latest and more inclusive of the issues faced by the organizations in today’s world. Many SMEs including educators, lawyers, researchers, and consultants adopted the standards given in the first edition. Wal-Mart used standards set by the council and announced to monitor the procedures, in terms of their impact on the environment. Many SMEs and individuals have expressed their interests in achieving the benchmark situation regarding the role of the supply chain in the organization.
REFERENCES
Cscmp.org,. (2016). Organizing Supply Chains in a Time of Change | Council of Supply Chain Management Professionals. Retrieved 12 January 2016, from https://cscmp.org/research/organizing-supply-chains-time-change
Myerson, P. (2016). Introduction to Supply Chain and Logistics Management Made Easy: Methods and Applications for Planning, Operations, Integration, Control and Improvement, and Network Design | Supply Chain Defined | FT Press. Ftpress.com. Retrieved 12 January 2016, from http://www.ftpress.com/articles/article.aspx?p=23396324
