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Supply Chain Management (SCM)

DAU GLOSSARY DEFINITION

A cross-functional approach to procuring, producing, and delivering products and services to customers. The broad management scope includes subsuppliers, suppliers, internal information, and funds flow. (Joint Publication 1-02). SCM provides an intellectual and organizational approach to managing, integrating, and assuring all the elements that affect the flow of materiel to the joint force. Military SCM is the discipline that integrates acquisition, supply, maintenance, and transportation functions with the physical, financial, information, and communications networks in a results-oriented approach to satisfy joint force materiel requirements.

General Information

SCM is a term often used in the DoD and industry and holds different meanings for different audiences. Although we often focus on the DoD internal supply chain, it is critical to understand how the commercial market views supply chains.  After all, that is where we get our materials for repairing, overhauling and supplying our enterprise.  Please understand supply chains are complex and often "webs" or "networks", (like our acquisition processes) as opposed to a linear process  The challenge is always to balance the various processes to develop the best enterprise solution. What the 'best' solution needs to be depends on the requirement. There is the constant trading between performance and cost, but more about this in the next paragraph.

The processes identifed in DoDI 4140.01 Vol I, DoD Supply Chain Materiel Management Procedures: Operational Requirements, are Plan, Source, Make/Repair, Distribute and Return.  Through these processes the supply chain transforms raw material into materials for use in the next process and ultimately into a finished good.  Supply chain activities provide time, place and utility to items as they progress through it.  Therefore, until a finished  product is sold, and revenue collected, the entire supply chain is a cost center and typically a focus for efficiency and cost reduction.  This is a key point to understand. 

The Association for Supply Chain Management (APICS) Supply Chain Operations Reference (SCOR) Model captures a consensus view of the supply chain plan, source, maintain/make, deliver, and return, processes in a framework linking business process, metrics, best practices, and technology features into a unified structure for effective supply chain management and for improving related supply chain activities.

Translating SCOR into DoD requires inclusion of maintenance activities The DoD supply chain includes the transportation and maintenance chains as well as the spare/repair parts chain required to provide the user flexible and timely materiel support during peacetime, crises, and joint operations.