The new model of competition suggests that individual companies…

The new model of competition suggests that individual companies compete not as a company against company , but rather as supply chain against supply chain. Thus the successful companies will be those whose supply chains are more efficient and cost effective than those of their competitors.

Under the supply chain management model, the goal is to maximize profit through enhanced competiveness in the final market- a competiveness that is achieved by a lower cost to serve, achieved in the shortest time frame possible. Such goals are only attainable, if the supply chain as a whole is closely coordinated in order that total inventory is minimized, bottlenecks are eliminated, time frames compressed and quality problems eliminated.

Typically in the past, supply management has been paid scant attention in many companies. even though the costs of purchases for most businesses are the largest single cost, procurement and the supply chain have not been seen as strategic costs. That view is now changing, as the realisation grows that not only are costs dramatically impacted by procurement decisions and procedures but also that innovation in the supply chain both upstream to suppliers and downstream to final customers, are vitally important to a business’s success.