| A | The traditional definition for supply chain management is that it involves the management of goods and services that span from your supplier's supplier to your customer's customer to deliver products at the right place and at the right time. This is traditional, as in a somewhat dated, production and capacity-driven way of looking at the subject for a couple of key reasons. First, it denotes an individual company's role in this equation, and second, it takes a supplier-centric approach to achieving its purpose. The fact is that the processes that support the design, planning, manufacturing and delivery of products are increasingly being driven by customers, rather than suppliers. The days of building products like homemade soup -- based on what's in the cupboard -- are all but over. Companies compete and execute based on various strategic reasons. Production is critical, but it is no longer the tail wagging the dog. Today, it's about demand, and customers have the leverage. Losing the pulse of the dynamic requirements of the market could be deadly to a company. So, much energy has to be put into knowing what the market wants. Otherwise, the notion of capacity is moot. What this situation describes is a value network, which comprises a network of process activities that stretch out into various customer streams to gauge the various levels and types of demand, and to the supplier side to communicate demand and determine the most efficient way to meet demand. The point is that enterprises now exist in ecosystems, rather than one-way, linear process flows to deliver products and services; operations and process must support this reality. It is not advantageous to be market-savvy and production-challenged, or vice versa. Companies have to be able to do both. While activities like supplier relationship management still require focus on supplier capability and performance, in the bigger picture, the value network represents the whole. So to your question, the value network is more than supply chain management. And in today's environment, it's difficult to see how most companies will compete successfully without that view. |