Aims of SCM:

Main aim of SCM is to optimize the total performance of the entire network of the supply-chain. The word "entire" is very significant here. With experience in enterprise-research, we have realized that in spite of each of distribution centre, factories and other elements of supply-chain operating at the best levels, the supply-chain as an entire can operate sub-optimally. Let us examine this issue.

All of the constituents of supply-chain have their own short-term and long-term objectives. Their operating decisions are depend on these objectives. It is extremely common that the decisions of the constituents may not be aligned to the overall strategic goal of the entire supply chain. For instance, the optimal strategy for the logistics may be selection of nearest vendor/supplier, bulk shipments, one-time order, etc. In several situations, when entire chain performance is considered, these particular strategies fail to deliver the best. Therefore, it is an integrated-holistic view of supply-chain, which is necessary. Many situations force management to go for incurring more than the double cost in order to build up inventories to support some enhance in customer's service.