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48 SMT Magazine • July 2015 by Steve Williams STEvE WilliAMS ConSulTing llC The shift away from vertical integration has pushed the topic of supply chain management (SCM) to the forefront of strategic planning for many manufacturers. Having a supply chain that provides a competitive advantage will be the dif- ferentiator in today's business environment. According to James B. Ayers' paper "A Prim- er on Supply Chain Management," a supply chain involves life cycle processes supporting physical, information, financial, and knowl- edge flows for moving products and services from suppliers to end users. Meanwhile, he de- fines supply chain management as the design, maintenance, and operation of supply chain processes for satisfaction of end-user needs. The fundamental concept of supply chain management is based on two core principles. The first principle is that virtually every prod- uct delivered to an end customer has gone through a number of touches in a number of manufacturing and/or service organizations. These organizations are referred to collective- ly as that product's supply chain. The second principle is that while supply chains have been around for thousands of years, most compa- nies have only been concerned with what was happening in their own sandbox, so to speak. In fact, PCB manufacturers have always expected their OEM and EMS customers to actively manage their supply chains. Many still have not filtered that expectation down to their sub-suppliers. Customer audits are a way of life for printed circuit fabricators, but it is surprising to see how many of them have never visited, much less audited, their own key strategic suppliers. I think it is reasonable to expect that a supplier actually visit, audit and collaborate with their key sub-suppliers on a regular basis. Few businesses took the time to under - stand, much less manage, the entire "chain" of suppliers and activities that were required to transform raw materials into finished, deliv- ered product to the end customer. This lack of understanding often led to extremely dysfunc- Supply Chain in the 21 st Century ArtiCle exCerPt

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