SUPPLY CHAIN MANUFACTURING

First came material requirement planning (MRP). Then came manufacturing resource planning (MRP II) followed by just-in-time (JIT) manufacturing. Now, there’s supply chain manufacturing (SCM). SCM is a comprehensive, integrated manufacturing approach using leading-edge technologies to produce and deliver goods and services to the customer.

Unlike MRP, MRP II, and JIT, SCM looks at all processes and players as an integrated system. Working closely with suppliers and customers, a manufacturer produces based upon pull (customer-driven) rather than push (manufacturer-driven) considerations.

All the disciplines (e.g., logistics, engineering, procurement, finance, manufacturing) are an integrated unit. It is this integration and scope that gives SCM its distinctive character.

The benefits of SCM are many. It can still employ the tools and techniques of MRP, MRP II, and JIT. It also capitalizes on the use of the newest technology (e.g., the Internet) and builds a closer relationship with both suppliers and customers. Furthermore, it requires teamwork among all the disciplines and reduces inventory, particularly just-in-case inventory.

for Applying Supplier Chain Manufacturing

• Identify all the suppliers, customers, and functional participants (e.g., logisticians).
• Identify all the processes (e.g., engineering).
• Develop models of the entire manufacturing operation.
• Identify which areas (e.g., inventory, handling, planning, production) of the supply chain leverage the use of new information technologies (e.g., Internet tools).
• Develop a close relationship with suppliers and customers that includes sharing information about inventory and planned production.