Operations Management: Supply Chain Management and Inventory Theory

This document provides a comprehensive overview of supply chain management (SCM) and inventory, emphasizing their critical roles in organizational success and customer satisfaction. It delves into the core aspects of SCM, including production, inventory, location, transportation, and information, highlighting how effective management in these areas contributes to maintaining a competitive edge. The document stresses the importance of adapting to industry trends, particularly the shift towards digitalization and direct customer interaction. Inventory management is presented as a crucial component of the supply chain, influencing production activities and organizational performance. The process of inventory management, from forecasting market demands to maintaining optimal stock levels, is detailed, underscoring the need for strong relationships with suppliers and distributors. The document references key academic sources, providing a solid foundation for understanding SCM and inventory principles.

SUPPLY CHAIN MANAGEMENT AND INVENTORY
STUDENT DETAILS
JANUARY 1, 2020

SCM 1
Supply chain management and Inventory
Supply chain management is the management of the activities involved in the supply chain so
that the effectiveness of the supply chain process can be maintained and the organisation can
focus upon maintaining a competitive edge within the industry. As the success of the
organisation is dependent upon its performance and customer satisfaction within the industry.
Therefore, Supply Chain Management is focused on improving the performance of the supply
chain, as an effective supply chain helps the manufacturers in maintaining demand and
supply within the market. The effectiveness of the supply chain can be improved by focusing
on five key areas within the supply chain including; Production, Inventory, Location,
Transportation, Information (Hugos, 2018).
Supply chain management is an important aspect within the management of organisational
activities, as managing supply chain helps the organisation in analysing the key issues within
the supply chain process, and developing strategies so that the issues can be avoided and the
market demand and supply can be ensured. Also, an effective supply chain management
helps in managing the inventory levels and the production process in case of market
fluctuations and ensure that the organisation performance is not affected during the period
(Christopher, 2016).
Effective supply chain results in better customer experience and hence contribute towards
improving the competitive position within the industry. The management is required to focus
upon the changing trends within the industry and implement the necessary technological
changes within the supply chain management of the organisation so that the effectiveness can
be improved. As the industry is becoming more digitalised and the customers are moving
towards online platform, therefore the manufacturers within the industry are focusing on
interacting directly with the customers, therefore it is required that the manufacturer ensure

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that the supply chain management is effective so that it can meet the customer requirements
within the industry and can deliver the products directly to the customer (Meredith & Shafer,
2019).
Supply chain involves everything from procuring raw materials to the transportation of the
finished goods and products to the customers. Within the process, Inventory is an important
component, as the needs and requirements of the customer can be satisfied effectively if the
management focuses on inventory management at its warehouses, which include that keeping
a track record of the products available at the warehouse and managing it according to the
market demand and supply. Inventory management is important in supply chain management
as the production activity is dependent on effective inventory management so that the stocks
can be maintained (Wild, 2018).
Inventory is important in the supply chain as it also influences the performance of the
organisation within the industry, therefore it is required that the management focus upon
forecasting the market requirements and accordingly maintain the inventory at its warehouses
so that when there is a demand within the industry, the manufacturer has sufficient inventory
available to supply its distributors and ensure timely availability of products for its customers.
Inventory management includes the process through which the manufacturer can ensure the
availability of the inventory at its warehouses. The process starts with forecasting of the
market demands, integrating the market demand with the production process, deciding upon
the inventory management process and at last ensuring that the stock level is maintained as
per the predicted market demands (Muller, 2019).
The effectiveness of the supply chain can be ensured if the management effectively focuses
on predicting the market demands, developing effective relations with the supplier and
distributors, and ensuring that the activities within the supply chain are being monitored and
controlled as per planned. As if the predictions within the industry has been made effectively

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then it will help in the inventory management at the warehouses, also the relations with the
suppliers and distributors ensures that the raw material is being supplied at the time when it is
required and the finished products are available in sufficient quantities within the market
(Wisner, et al., 2014).

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References
Christopher, M., 2016. Logistics & Supply Chain Management. 5th ed. UK: Pearson UK.
Hugos, M. H., 2018. Essentials of Supply Chain Management. 4th ed. New Jersey: John
Wiley & Sons.
Meredith, J. R. & Shafer, S. M., 2019. Operations and Supply Chain Management for MBAs.
7th ed. USA: John Wiley & Sons.
Muller, M., 2019. Essentials of Inventory Management. 3rd ed. USA: HarperCollins
Leadership.
Wild, T., 2018. Best Practice in Inventory Management. 3rd ed. New York: Routledge.
Wisner, J. D., Tan, K.-C. & Leong, G. K., 2014. Principles of Supply Chain Management: A
Balanced Approach. 4th ed. Boston: Cengage Learning.