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Supply Chain

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Supply Chain Management (SCM) is the coordination of material, information and financial flows between the participating companies. SCM can also mean all kinds of activities of basic commodities to selling the final product to the consumer to recycle products that have been used.

Material flows involve physical product flow from suppliers to consumers through the chain, as well as the feedback from the returns of products, services, recycling and disposal. The information flow includes demand forecasts, the transmission of orders and order status reports, this flow is two-way between the end consumer and the provider of the raw material. Financial flows include credit card information, credit terms, payment schedules in setting ownership and delivery. (Kalakota, 2000, h198)

According to Turban, Rainer, Porter (2004, page 321), there are three kinds of supply chain components, namely :

  • 1. Supply Chain Upstream / Upstream supply chain Section upstream (upstream) supply chain includes the activities of a manufacturing company with the distribution (which can manufacture, assembler, or both) and connect them to the retailer and they (dealers’ second-trier) , Relations dealers can be extended to several strata, all the way from the source material (eg ore, plant growth). In the upstream supply chain, whose main activity is procurement.
  • 2. Internal Supply Chain Management / Internal supply chain management Part of the internal supply chain includes all the work of putting the goods into the warehouse used in transforming inputs from suppliers into the organization’s output. It extends from the input time of entry into the organization. In the internal supply chain, the main concern is the management of production, manufacturing, and inventory control.
  • 3. Downstream Segment Supply Chain / Downstream supply chain segment Downstream (estuary) supply chain includes all activities that involve the delivery of products to end customers. In the downstream supply chain, attention is directed to the distribution, warehousing, transportation, and after-sales-service.

Source : Wikipedia Indonesia