| Chapter 1: | Objectives, methodology, approach and definition of terms |
In focusing upon the primary Supply Chain area or (to use another title) the corporate-policy point of view, it is possible to categorize further and differentiate on the grounds of strategy, function, logistics-transportation, and information management points of view.
The strategic view considers the Supply Chain design to be the most important element of the competitive strategy. As a part of this, the Supply Chain represents an alignment of resources which are used to support the product’s position in the market with regard to the combination of end customers, price calculation and sales measures. The purpose of such a process is the improvement of profit margin upon product turnover.
In the functional view, the Supply Chain consists of the individual organizations that are required in order to purchase, transform and sell materials. The focal point is occupied by the material: its procurement, transportation, and other costs are important. The aim is to lower cost in the functional areas relevant to success.77
The logistics-transportation view assumes that the Supply Chain represents the physical course of a product through a number of operating plants and facilities which are connected by means of a transport association. These facilities and installations include factories, warehouses, sales centers, vehicle pools and distribution centers, and the view seeks to bring about the minimization of logistic cost.
In the information management view, the information flow between the various parties represents the integration factor. In this sense, an integrated Supply Chain possesses a communal basis of information, as well as mechanisms with which to exchange this information amongst the participants. Accordingly, the aim of this view is a reduction of the information process cost.78
This study follows the latter categorization. This type of linkage is anchored most strongly into the SCOR model, which will be dealt with later. But for the purposes of this study, it must be decided what the importance of the Supply Chain is with regard to the competition between companies. The unequivocal – and simultaneously most “radical” – answer, with which the author agrees, is as follows: