Agriculture Reference
In-Depth Information
15
Supply chain management
for agribusiness
Objectives
•
Outline the various objectives and functions of supply chain management
•
Understand the steps involved in the supply chain management process
•
Describe the role of, and activities involved in, purchasing/procurement in food and
agribusiness fi rms
•
Distinguish between material requirements planning (MRP) and just-in-time (JIT) pro-
duction operations systems
•
Identify the role of inventory in the agribusiness and the different types of inventory
fi rms hold
•
Describe the different types of inventory tracking systems used in agribusiness
•
Explore the role of physical distribution in the agribusiness
•
Consider how information technology, especially the Internet, impacts the supply chain
management process
Introduction
The previous chapter provided an overview of the production planning aspects of operations
management in the agribusiness. Production planning functions include determining the loca-
tion, layout, capacity, and specifi c processes to be used by the agribusiness in producing goods
and services. A related critical aspect in running the agribusiness is managing the fl ow of mate-
rials, products, and information into and out of the fi rm — or
supply chain management
.
Supply chain management considers the range of activities related to how inputs for the
agribusiness are scheduled and procured, as well as how fi nished products are stored and
distributed to customers. More specifi cally, supply chain management is defi ned by the
Council of Supply Chain Management Professionals as “the planning and management of all
activities involved in sourcing and procurement, conversion, and all logistics management
activities.” Logistics management activities include “inbound and outbound transportation
management, fl eet management, warehousing, materials handling, order fulfi llment, logis-
tics network design, inventory management, supply/demand planning, and management of
third party logistics service providers.” Many see logistics management as the activities
occurring within the fi rm, while supply chain management involves the coordination among
fi rms. The essence of supply chain management is focused around shipping and storing
inputs, fi nished products, and information.
