Simplified Automotive Supply Chain

Supply Chain Management Fundamentals

Adrian Supply Chain Management, Toolkit 1 Comment

What is Supply Chain Management

According to the Council of Supply Chain Management Professionals (CSCMP); SCM includes all the activities that take place to get a product in your hands – from the time of raw materials extraction to the minute you pull out your credit card and take the final product home.

APICS define SCM as; the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.

Depiction of a simplified Supply Chain

(adapted from Porter’s Value Chain activities)

Simplified Supply Chain, Porter

Simplified Supply Chain, Porter














Physical products and components flow from left to right, as components are made into finished products which are transported to and sold to end customers. These are performed by the primary activities at the top of the upper diagramme.

Support functions perform those activities which assist the primary activities to gain the competitive advantage – these include Finance, IT, Procurement and HR as shown.

As shown in the lower diagramme, within Operations (or Manufacturing / Assembly) the key steps of Automotive Assembly are broken down as depicted – including Component Production and Assembly.

Automotive Supply Chain

This is a more realistic, but still very simplified, depiction of the Supply Chain.

Simplified Automotive Supply Chain

Simplified Automotive Supply Chain

Objectives of Supply Chain Management

Supply Chain Management improves a company’s competitive advantage by aligning the Supply Chain to the achievement of the primary objective of the company. The key objectives of SCM are described below.

Supply Chain Management Objectives

Supply Chain Management Objectives










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