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Components of Supply Chain Management
SCM components are the third constituent of the four-square circulation framework. The level of integration and management of a business process link is a function of the number and level of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985). Therefore, adding more management components or increasing the level of each component can augment the level of amalgamation of the business process link.
The various studies on business process re-engineering, buyer-supplier relationships and SCMpropose several possible components that should be focused on by managers when managing supply relationships. Lambert and Cooper (2000) identified the following components:
- Planning and control
- Work Structure
- Organization structure
- Product flow facility structure
- Information flow facility structure
- Management methods
- Power and leadership structure
- Risk and reward structure
- Culture and attitude
On the other hand, a more thorough review of the existing studies has lead to an increased understanding of what should be the important supply chain components, or “branches” of the previously identified supply chain business processes. According to Bowersox and Closs (1996) the emphasis on cooperation represents the synergism leading to the highest level of joint achievement. A primary-level channel participant is a business that is willing to participate in responsibility for inventory ownership or assume other financial risks, thus including primary level components (Bowersox and Closs, 1996). A secondary-level participant (specialized) is a business that participates in channel relationships by performing essential services for primary participants, including secondary level components, which support primary participants. Third-level channel participants and components that support primary-level channel participants and are the fundamental branches of secondary-level components may also be included.
Lambert and Cooper’s framework of supply chain components does not point to any conclusion about what are the primary- or secondary-level (specialized) supply chain components,, how these components should be structured in order to achieve a more comprehensive supply chain structure, and how to examine the supply chain as an integrative one.
