The Declarative Framework Approach to Decision Support for Constrained Search Problems - Efficient Decision Support Systems: Practice and Challenges from Current to Future - page 164

distribution centers, retailers and ultimately the customers so that merchandise is produced
and distributed at the right quantities to the right locations and at right times, in order to
minimize the total system cost while satisfying the service level requirements. The main
operational activities of the supply chain system include:
1. Raw materials: sales forecasting, inventory planning, and purchasing, transportation
between suppliers and manufacturers - Suppliers.
2. Work-in-process: processing and managing efficiently the inventories of partially
completed products inside the manufacturing plants - Manufacturers.
3. Finished goods: warehousing of finished goods inventory, servicing the customers, and
transporting materials among the wholesalers, retailers, and customers. These parts
reflect the basic movement of goods, services, and information through an integrated
system-Distributors, Retailers, Customers.
A supply chain is characterized by a forward flow of goods and a backward flow of
information (Fig.1). Commonly, a supply chain is compromised of two basic business
processes:
 material management
 physical distribution
Increasingly, the management of multiple relationships across the supply chain is being
referred to as supply chain management (SCM) (Douglas et al., 2000).
Fig. 1. The supply chain process.
The field of supply chain management uses an increasing set of tools and techniques to
effectively coordinate the decision-making process.
2.1 Integration in SCM
Supply-chain management is one of the leading business process re-engineering, cost-saving
and revenue enhancement strategies in use today. Effective integration of a supply chain
can save money, simultaneously improving customer service and reducing inventories etc..
Supply chains have been more or less integrated to some extent - albeit on a low scale - as a
whole, or in parts. Integration, if done at all, has been mostly done in patches throughout
the supply chain. In many cases, this has been driven more by the need to survive and
improvise, than by the willingness to improve and advance further. Integration can be