{"id":3154,"date":"2023-02-19T16:11:47","date_gmt":"2023-02-19T16:11:47","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/supply-chain-management-and-logistics\/"},"modified":"2025-05-27T21:15:56","modified_gmt":"2025-05-27T21:15:56","slug":"supply-chain-management-and-logistics","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/supply-chain-management-and-logistics\/","title":{"raw":"Learn It 13.3.4: Production Planning","rendered":"Learn It 13.3.4: Production Planning"},"content":{"raw":"<h2>Supply Chain Management<\/h2>\r\n<section class=\"textbox keyTakeaway\">\r\n<h3>supply chain management<\/h3>\r\n<p><strong>Supply chain management <\/strong>(SCM) is the process of managing the movement of the raw materials and parts from the beginning of production through delivery to the consumer.<\/p>\r\n<\/section>\r\n<p>The supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.[footnote]\"Supply Chains.\" Retail Management. Lumen Learning. https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/chapter\/introduction-to-retail-entities-and-business-decisions\/#footnote-1634-1[\/footnote]<\/p>\r\n<p>It is important that every part of the supply chain is efficient, nimble, and seamless to allow retailers to deliver product to the customers in the most efficient and profitable way.\u00a0 Some of the biggest issues in supply chain management are information systems, finance, effective supplier\/partner relationships, qualified talent, and proper planning.<\/p>\r\n<h3>Supply Chain Components<\/h3>\r\n<p>In many organizations, operational supply chain decisions are made hundreds of times each day affecting how products are developed, manufactured, moved, and sold. The complexity of the supply chain varies with the size of the business and the intricacy and quantity of items manufactured, but most supply chains have elements in common, such as the following:<\/p>\r\n<ul>\r\n\t<li><strong>Customers<\/strong>: Customers start the chain of events when they decide to purchase a product that has been offered for sale by a company. If the product has to be manufactured, the sales order will include a requirement that needs to be fulfilled by the production facility.<\/li>\r\n\t<li><strong>Planning<\/strong>: The planning department will create a production plan to produce the products to fulfill the customer\u2019s orders. To manufacture the products, the company will then have to purchase the raw materials needed.<\/li>\r\n\t<li><strong>Purchasing<\/strong>: The purchasing department receives a list of raw materials and services required by the production department to complete the customers' orders.<\/li>\r\n\t<li><strong>Inventory<\/strong>: The raw materials are received from the suppliers, checked for quality and accuracy, and moved into the warehouse.<\/li>\r\n\t<li><strong>Production<\/strong>: Based on a production plan, the raw materials are moved to the production area. These raw materials are used to manufacture the finished products ordered by the customer and then sent to the warehouse where they await shipping.<\/li>\r\n\t<li><strong>Transportation<\/strong>: When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so they are delivered on or before the date specified by the customer.<\/li>\r\n<\/ul>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"200\"]4331[\/ohm2_question]<\/section>","rendered":"<h2>Supply Chain Management<\/h2>\n<section class=\"textbox keyTakeaway\">\n<h3>supply chain management<\/h3>\n<p><strong>Supply chain management <\/strong>(SCM) is the process of managing the movement of the raw materials and parts from the beginning of production through delivery to the consumer.<\/p>\n<\/section>\n<p>The supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.<a class=\"footnote\" title=\"&quot;Supply Chains.&quot; Retail Management. Lumen Learning. https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/chapter\/introduction-to-retail-entities-and-business-decisions\/#footnote-1634-1\" id=\"return-footnote-3154-1\" href=\"#footnote-3154-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p>It is important that every part of the supply chain is efficient, nimble, and seamless to allow retailers to deliver product to the customers in the most efficient and profitable way.\u00a0 Some of the biggest issues in supply chain management are information systems, finance, effective supplier\/partner relationships, qualified talent, and proper planning.<\/p>\n<h3>Supply Chain Components<\/h3>\n<p>In many organizations, operational supply chain decisions are made hundreds of times each day affecting how products are developed, manufactured, moved, and sold. The complexity of the supply chain varies with the size of the business and the intricacy and quantity of items manufactured, but most supply chains have elements in common, such as the following:<\/p>\n<ul>\n<li><strong>Customers<\/strong>: Customers start the chain of events when they decide to purchase a product that has been offered for sale by a company. If the product has to be manufactured, the sales order will include a requirement that needs to be fulfilled by the production facility.<\/li>\n<li><strong>Planning<\/strong>: The planning department will create a production plan to produce the products to fulfill the customer\u2019s orders. To manufacture the products, the company will then have to purchase the raw materials needed.<\/li>\n<li><strong>Purchasing<\/strong>: The purchasing department receives a list of raw materials and services required by the production department to complete the customers&#8217; orders.<\/li>\n<li><strong>Inventory<\/strong>: The raw materials are received from the suppliers, checked for quality and accuracy, and moved into the warehouse.<\/li>\n<li><strong>Production<\/strong>: Based on a production plan, the raw materials are moved to the production area. These raw materials are used to manufacture the finished products ordered by the customer and then sent to the warehouse where they await shipping.<\/li>\n<li><strong>Transportation<\/strong>: When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so they are delivered on or before the date specified by the customer.<\/li>\n<\/ul>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm4331\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=4331&theme=lumen&iframe_resize_id=ohm4331&source=tnh&show_question_numbers\" width=\"100%\" height=\"200\"><\/iframe><\/section>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-3154-1\">\"Supply Chains.\" Retail Management. Lumen Learning. https:\/\/courses.lumenlearning.com\/wm-retailmanagement\/chapter\/introduction-to-retail-entities-and-business-decisions\/#footnote-1634-1 <a href=\"#return-footnote-3154-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21,"menu_order":15,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Modern warehouse with pallet rack storage system\",\"author\":\"Axisadman\",\"organization\":\"\",\"url\":\"https:\/\/commons.wikimedia.org\/wiki\/File:Modern_warehouse_with_pallet_rack_storage_system.jpg\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Supply Chain Management and Logistics\",\"author\":\"Linda Williams and Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Logisitcs\",\"author\":\"Robert Danielson\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Practice Questions\",\"author\":\"Robert Danielson\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":3138,"module-header":"learn_it","content_attributions":[{"type":"cc","description":"Modern warehouse with pallet rack storage system","author":"Axisadman","organization":"","url":"https:\/\/commons.wikimedia.org\/wiki\/File:Modern_warehouse_with_pallet_rack_storage_system.jpg","project":"","license":"cc-by-sa","license_terms":""},{"type":"original","description":"Supply Chain Management and Logistics","author":"Linda Williams and Lumen Learning","organization":"","url":"","project":"","license":"cc-by","license_terms":""},{"type":"original","description":"Logisitcs","author":"Robert Danielson","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"original","description":"Practice Questions","author":"Robert Danielson","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3154"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":8,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3154\/revisions"}],"predecessor-version":[{"id":9672,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3154\/revisions\/9672"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/3138"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/3154\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=3154"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=3154"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=3154"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=3154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}