Supply Chain and Demand

Hearing the terms Supply Chain and Supply Chain Management or commonly shortened to SCM must be familiar. The supply chain according to Lu (2011: p9) is a group of interrelated participating companies that add value to the flow of changing inputs from their source of origin to the final product or service demanded from the intended final consumer. supply chain is formed and can only be formed if there is more than one participating company. From the above definition, it can be concluded that the supply chain is a group or supply chain that forms each other from changing inputs and sending products to the intended final consumer. The definition of supply chain management according to Heizer and Render (2011: 452) is the integration of activities to obtain materials and services, turn them into semi-finished goods and finished goods, and send them to consumers. These activities include purchasing activities, outsourcing activities plus other functions that are important for the relationship between suppliers and distributors. It can be concluded that Supply Chain Management is a method that integrates the management of the flow of information, products, goods and services in the supply chain function with an integrated approach. Supply chain management involves the coordination of all supply activities of an organization from suppliers and delivery of products to customers. In the past in a company for product delivery using estimates and sometimes not according to market demand, from inventory management, product delivery to final fulfillment to consumers. . Currently the situation is starting to change because the industry has begun to realize the need for collaboration with partners, such as suppliers, distributors, and customers, both business and individual customers. Customers and suppliers gather together to discuss benefits, the need for a better supply chain management process and a system that is clearly more useful and brings high business priority. Industry players are starting to realize that in order to provide cheap, quality, and fast products, internal improvements in manufacturing companies are not enough. The participation of suppliers, transportation companies and distributor networks is needed. Awareness of the existence of cheap, fast and quality products is what created the concept of Supply Chain Management (SCM).

Supply Chain Activities

In supply chain management there are 2 supply chain activities, namely:

• upstream supply chain activities: transactions between organizations, suppliers, and intermediaries which are equivalent to buying-side e-commerce
• Downstream supply chain activities: transactions between organizations, customers, and intermediaries which are equivalent to the sales side of e-commerce

Position in Supply Chain Management

There are 5 positions in supply chain management, namely:

• Suppliers: parties who provide raw materials, raw materials, and others
• Manufacturer: the party who does the work, makes, fabricates, assembles, converts to finish goods or finishing
• Distributor: a party who conducts business activities by buying goods from manufacturers and reselling these goods to retailers or customers directly. Goods from the factory will be sent from the manufacturer’s warehouse to the distributor’s warehouse in large quantities.
• Retail outlets: those who offer goods directly to customers
• Customers: parties who use the goods and receive the goods.

Pillars of Supply Chain Management

There are 4 pillars of a successful Supply Chain Management according to IGD, 2017, namely:

• Customer Centric

Which means that a good supply chain is serving customers by building upstream supply chain activities. With upstream processes to support the provision of services for customers.

• Powered By People

Which means that a good supply chain is using people to add value, namely by attracting, retaining, and retraining which are the main elements in the supply chain.

• Transformed By Technology

Innovation and adopting technology help transform supply chain transformations. Key areas include automation, synchronization, and the transition to a data-driven environment.

• Resilient and Responsive

One of the first steps in building a strong and responsive supply chain is to pay attention to the risks and impacts of the micro-environment, which requires careful planning.