SCM Part 1 Introduction to Supply Chain Mgmt AY 25-26 LESSON 3 STUDENTS VERSION.pdf

# Introduction to supply chain management This section introduces the fundamental concepts of supply chain management (SCM), its definition, and its growing significance in the contemporary global business landscape [11](#page=11) [15](#page=15) [1](#page=1) [22](#page=22) [29](#page=29) [2](#page=2) [39](#page=39) [3](#page=3) [57](#page=57). ## 1. Introduction to supply chain management Supply chain management (SCM) is a critical discipline focused on the integrated planning and execution of processes that move a product from raw material to the end customer. It encompasses the management of information, finances, and materials across these interconnected stages. The importance of SCM has been amplified by globalization and digitalization, making efficient and effective supply chains a key competitive advantage [11](#page=11) [15](#page=15) [22](#page=22) [29](#page=29) [2](#page=2) [39](#page=39) [3](#page=3) [57](#page=57). ### 1.1 What is supply chain management? Supply chain management is defined as the design and management of supply chains. A supply chain is a network of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. The ultimate goal of SCM is to maximize customer value while efficiently managing resources [1](#page=1) [29](#page=29). ### 1.2 Key components and scope of SCM SCM involves a series of interconnected activities and entities that work together to deliver a product or service. These include: * **Suppliers:** Providing raw materials or components. * **Manufacturers:** Transforming materials into finished goods. * **Distributors/Wholesalers:** Storing and distributing products. * **Retailers:** Selling products to end consumers. * **Customers:** The final recipients of the product or service. Information flow is bidirectional, from customer orders back to suppliers, and from supplier capabilities back to the customer. Financial flow moves from customer payments back to suppliers, and from supplier investments back to customers. Material flow is typically unidirectional from suppliers to customers, although returns also form a reverse flow [29](#page=29). > **Tip:** Understanding the distinct flows of information, finances, and materials is crucial for effective supply chain design and management. ### 1.3 Importance of SCM in the modern business environment The increasing complexity of global markets, coupled with rapid technological advancements, has made SCM a pivotal function for business success. Key drivers for the growing importance of SCM include [29](#page=29): * **Globalization:** Businesses operate across international borders, leading to longer and more complex supply chains [29](#page=29). * **Digitalization:** The integration of digital technologies enables greater visibility, real-time data, and enhanced collaboration across the supply chain [29](#page=29). * **Customer Expectations:** Consumers demand faster delivery, greater customization, and consistent quality, putting pressure on supply chains to be more responsive and agile [29](#page=29). * **Competitive Advantage:** Effective SCM can lead to lower costs, improved efficiency, and enhanced customer satisfaction, providing a significant edge over competitors [29](#page=29). ### 1.4 Foundational texts and references The introduction to supply chain management heavily relies on foundational texts, with Chapters 1, 2, and 3 of Chopra's work being explicitly referenced as key resources for understanding these initial concepts [11](#page=11) [15](#page=15) [1](#page=1) [22](#page=22) [29](#page=29) [2](#page=2) [39](#page=39) [3](#page=3) [57](#page=57). --- # Key concepts and phenomena in supply chain management This section examines critical phenomena and strategic decisions within supply chain management, focusing on the Forrester effect, customer commit point decisions, and various forms of supply chain management. ### 2.1 The Forrester effect (bullwhip effect) The Forrester effect, also known as the bullwhip effect, describes the phenomenon where order variance increases as it moves upstream in a supply chain. This means that orders placed with a supplier tend to have a larger variance than the actual sales to the buyer, and this distortion amplifies as information propagates towards the raw material manufacturer [7](#page=7). #### 2.1.1 Causes of the Forrester effect The most significant cause of the bullwhip effect is a human factor, specifically the tendency to feel assured of being able to deliver when a customer orders. This feeling is amplified when lead times are longer, leading to greater uncertainty about delivery capabilities. The bullwhip effect can lead to considerable inconsistencies in capacity utilization and inventory levels, resulting in stock-outs or excessive build-ups within the supply chain [9](#page=9). #### 2.1.2 Supply chain management responses to the Forrester effect To prevent or control the Forrester effect, supply chain management strategies focus on controlling or limiting the impact of human decisions. Key strategies include [10](#page=10): * **Limiting the reliance on forecasts:** While forecasts from commercial functions (marketing and sales) are the most crucial input, using statistical methods to forecast sales and applying management by exception can help. Confirmation of forecasts by supply functions is also beneficial when applicable [10](#page=10). * **Automatic replenishment systems:** Implementing systems like Kanban can automate replenishment processes [10](#page=10). * **Expanding downstream control:** Gaining control over customer inventory, for instance, through Vendor Managed Inventory (VMI), can help manage demand more effectively [10](#page=10). * **Transparency of availability information:** Making Available To Promise (ATP) information transparent allows commercial functions to see bookings of goods. Introducing "frozen periods" and masking inventory levels in the chain can also mitigate distortions [10](#page=10). * **Information sharing:** Exchanging information when establishing supply and demand plans, known as Collaborative Planning, is crucial [10](#page=10). * **Multifunctional decision-making:** Deciding on supply and demand strategies in a multifunctional manner through Sales & Operations Planning (S&OP) helps align different parts of the organization [10](#page=10). > **Tip:** Sharing information across the supply chain is vital to prevent the Forrester effect. Integrated information systems like ERP and scanner-based steering of distribution centers and suppliers can facilitate this [19](#page=19). ### 2.2 Customer commit point decisions The customer commit point (CCP) is the decision point where a commitment is made regarding what and how much to produce for a specific customer as a final product. This decision determines whether a product is produced to stock, assembled to order, or made to order [12](#page=12). #### 2.2.1 Production strategies and their impact Different production strategies, influenced by the CCP, have varying impacts on supply chain drivers [12](#page=12). * **Make-to-stock:** Products are produced based on forecasts and held in inventory until a customer orders them. This strategy aims to meet immediate customer demand but can lead to inventory holding costs and potential obsolescence if forecasts are inaccurate. It suits a cost leadership strategy where price is a prime customer driver [12](#page=12) [21](#page=21). * **Assemble-to-order:** Generic products are manufactured to forecast, and then differentiated or customized to customer specifications after an order is received. This allows for some postponement of product differentiation and can balance inventory costs with customization [12](#page=12) [21](#page=21). * **Make-to-order:** Products are produced only after a customer places an order. This strategy is suitable for customer-specific products and minimizes inventory risk but can lead to longer lead times (#page=12, 21). This approach aligns with product leadership and customer intimacy strategies, where speed and flexibility are prioritized [12](#page=12) [21](#page=21). * **Engineer-to-order:** This is the most customized approach, where the product is designed and engineered after the customer order is placed. This strategy requires significant lead time and is best for highly specialized products [12](#page=12). The principle "make what we sell (pull), not sell what we make (push)" advocates for aligning production with actual customer demand, often by strategically placing the CCP [14](#page=14). > **Example:** A donut shop might use a "make-to-stock" strategy for standard donuts, producing a variety of them each morning based on anticipated demand. For custom cake orders, they would use a "make-to-order" strategy, producing the cake only after the customer has placed and specified their order. The CCP for standard donuts is before the morning baking, while for custom cakes, it is at the point of order placement. The choice of CCP impacts inventory levels, manufacturing flexibility, lead times, and supplier selection. For example, involving suppliers in product design can impact stockability, transport, and the customer order commit point [19](#page=19) [21](#page=21). ### 2.3 Forms of supply chain management Supply chain management can take various forms, influenced by factors such as the worth and size of products, which in turn dictate decisions regarding supply chain drivers [16](#page=16). #### 2.3.1 Outsourcing and third-party logistics (3PL) A significant form of SCM involves the introduction of specialized logistics players into the supply chain. This can include keeping SCM in-house, outsourcing logistics activities, or optimizing the chain by partnering with third-party logistics providers (3PLs) [17](#page=17). Benefits of using 3PLs include: * **Prevention of investments in non-core assets:** Companies can avoid capital expenditure on logistics infrastructure [17](#page=17). * **Access to specialized technology:** Providers often have advanced logistics technology, such as tracking systems, distribution optimization tools, and warehouse automation [17](#page=17). * **Availability of flexible value-added activities:** 3PLs can offer services like packaging, labeling, and kitting [17](#page=17). * **Variable costs:** Companies can convert fixed logistics costs into variable ones, paying only for services used [17](#page=17). * **Consolidation at Distribution Centers (DCs):** Consolidating goods at DCs can lead to reduced inventory, lower costs, and improved service levels (#page=17, 20) [17](#page=17) [20](#page=20). #### 2.3.2 Collaborative logistics practices Several practices foster collaboration and efficiency within supply chains: * **Cross-docking:** Goods are transferred directly from inbound to outbound transportation with minimal or no storage [17](#page=17). * **Just-In-Time (JIT):** Inventory is received and used only as needed, minimizing holding costs [17](#page=17). * **Co-location:** Suppliers and manufacturers are located in close proximity, as often seen in the automotive industry [17](#page=17). * **Renting capacity from competitors:** In commodity markets, companies may share transportation capacity to reduce costs [17](#page=17). * **Involvement in product design:** Engaging suppliers early in product design (e.g., using Computer-Aided Design or CAD) can impact stockability, transportation, and the customer commit point (#page=17, 19) [17](#page=17) [19](#page=19). #### 2.3.3 Information sharing and inventory management Effective information sharing and inventory management are crucial for various SCM forms: * **Sharing information:** This includes scanner-based steering of DCs and suppliers for automatic replenishment, integrated internal and external information systems (ERP), and overall supply chain information sharing to prevent the Forrester effect [19](#page=19). * **Inventory checking and management:** This encompasses consignment stocks, Vendor Managed Inventory (VMI) where the supplier manages inventory levels, rack-jobbing, and reverse buying. These methods aim to reduce inventory costs and improve service levels through better forecasting, planning, and collaboration [19](#page=19). #### 2.3.4 Multidimensional supply chain strategies Supply chains can be broadly categorized based on their primary goals and strategic approaches: * **Efficient Supply Chains:** The primary goal is to supply demand at the lowest cost. These chains focus on cost leadership, minimizing inventory, and selecting suppliers based on cost and quality. Manufacturing strategies emphasize high utilization, and lead times are reduced only if costs do not significantly increase [21](#page=21). * **Responsive Supply Chains:** The primary goal is to respond quickly to demand. These chains prioritize product leadership and customer intimacy, creating modularity for postponement and maintaining capacity flexibility to buffer against uncertainty. They maintain buffer inventory and aggressively reduce lead times, even if costs are significant. Suppliers are selected based on speed, flexibility, reliability, and quality [21](#page=21). --- # Sustainability in supply chain management Sustainability in supply chain management involves developing supply chains that meet present needs without compromising the ability of future generations to meet their own [23](#page=23). ### 3.1 Defining sustainable development Sustainable development is defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The long-term survival of any supply chain is intrinsically linked to the health of its surrounding environment. This concept requires expanding the goals of a supply chain beyond the immediate interests of its participants [23](#page=23). ### 3.2 Barriers to sustainability implementation Several barriers hinder the increased focus on sustainability within supply chains: * Insufficient return on investment [23](#page=23). * Customers' unwillingness to pay a premium for green products [23](#page=23). * Difficulty in evaluating sustainability across a product's entire lifecycle [23](#page=23). ### 3.3 The role of sustainability in a supply chain The integration of sustainability into supply chain management is driven by several factors: * Reducing risks and improving the financial performance of the supply chain [24](#page=24). * Responding to community pressures and government mandates [24](#page=24). * Attracting customers who value sustainability [24](#page=24). The concept of sustainable development is often described through three interconnected pillars: #### 3.3.1 Economic sustainability Economic sustainability ensures that natural resources are not consumed faster than the Earth's natural replenishment rate. Profitability should stem from thriving ecosystems and growing communities, with profits being shared equitably. Furthermore, the long-term autonomy and freedom of a company are crucial for its ability to maintain and execute sustainability strategies [25](#page=25). #### 3.3.2 Environmental sustainability This pillar focuses on a firm's impact on the environment, encompassing air, land, water, and ecosystems. Key areas of focus include resource reduction, emission reduction, and product innovation. It is important to note that not all claims of environmental friendliness are valid, leading to the phenomenon of "greenwashing" [26](#page=26). > **Tip:** Be critical of environmental claims made by companies, as they may not always be substantiated. #### 3.3.3 Social sustainability Social sustainability pertains to a firm's capacity to address issues critical to its workforce, customers, and society at large. This involves auditing and supporting suppliers, as supplier collaboration and capability building are strongly linked to improvements in social and environmental responsibility performance, as well as reduced operating costs. The benefits of such initiatives accrue to all customers of the supplier [27](#page=27). ### 3.4 Closed-loop supply chains Closed-loop supply chains are a strategy to improve sustainability by designing products that utilize fewer resources and are capable of being recycled and remanufactured. The effectiveness of this approach depends on several factors [28](#page=28): * The incentive to recycle or remanufacture [28](#page=28). * The cost associated with recycling or remanufacturing [28](#page=28). A potential challenge with closed-loop systems is the cannibalization of demand for new products. The overall cost of recycling or remanufacturing significantly influences the extent to which these processes are adopted [28](#page=28). > **Example:** A company designs its electronics with modular components that can be easily replaced or upgraded, and its packaging uses biodegradable materials. When a product reaches its end-of-life, the company offers a take-back program to reclaim components for remanufacturing and recycle or compost the packaging. --- # Case studies and technology in supply chain management This topic explores the practical application of supply chain management principles through detailed case studies and examines the indispensable role of technology and information systems in optimizing supply chain operations. ### 4.1 Case studies in supply chain management Case studies provide practical illustrations of how companies manage their supply chains to achieve competitive advantages. #### 4.1.1 Zara (Inditex) Zara's success is heavily attributed to its highly responsive supply chain strategy, which allows it to react quickly to fashion trends and customer demand. This responsiveness provides a significant advantage over competitors who often have longer lead times [32](#page=32) [35](#page=35). * **Production strategy:** Inditex strategically employs a hybrid model, utilizing both in-house production and outsourced manufacturing. Keeping production capacity in Europe, despite higher costs compared to Asia, is a deliberate choice to maintain speed and flexibility for products with uncertain demand. Products with more predictable demand are often sourced from Asian manufacturers to leverage cost efficiencies [35](#page=35). * **Distribution benefits:** Zara stocks its shops several times a week, a practice that enhances its ability to offer fresh merchandise and adapt to changing customer preferences more effectively than less frequent delivery schedules [35](#page=35). * **Channel suitability:** Zara's responsive provisioning infrastructure is well-suited for both online and retail sales, enabling it to cater to the immediate demands of consumers across different channels [35](#page=35). #### 4.1.2 Amazon Amazon's growth and dominance in e-commerce are intrinsically linked to its sophisticated supply chain and warehousing network. The company continually expands its warehouse presence to improve delivery speed and reach [36](#page=36) [38](#page=38). * **Warehouse strategy:** Amazon's rationale for building more warehouses is to reduce delivery times by positioning inventory closer to customers. Determining the optimal number and location of warehouses involves balancing service levels, transportation costs, and inventory holding costs [38](#page=38). * **Product stocking:** The decision of whether Amazon should stock every product it sells is complex, involving considerations of demand variability, inventory costs, and the potential for dropshipping or third-party logistics. * **Omnichannel benefits:** For online players like Amazon, establishing physical stores offers benefits such as enabling customer returns, providing click-and-collect services, and offering a tactile experience for certain products. Optimally, these channels should be integrated to leverage the strengths of each, such as using physical stores as fulfillment centers or showrooms [38](#page=38). * **Channel advantages for specific products:** The online channel offers significant advantages over physical stores for products characterized by low individual transaction value, standardized features, and widespread demand, such as shoes and nappies, where convenience and selection are paramount. However, for certain products, a physical store might offer advantages in terms of immediate availability, the ability to try before buying, or personalized service [38](#page=38). ### 4.2 Technology and information systems in supply chain management Information Technology (IT) is a fundamental driver of modern supply chain management, impacting all core SC drivers: facilities, transport, inventory, sourcing, and pricing [40](#page=40). #### 4.2.1 The role of IT in the supply chain IT plays a crucial role in optimizing the use of assets and coordinating workflows to reduce costs and increase responsiveness within the supply chain. Information is the foundation upon which transactions, movements, and decision-making occur. For IT to be effective, information must be accurate, accessible in a timely manner, relevant, and shared across the supply chain. Companies are increasingly competing through their supply chains, and IT is a key enabler of globalization, digitalization, and meeting customer demands [42](#page=42) [45](#page=45). #### 4.2.2 Components of information decisions * **Push versus Pull:** Different supply chain strategies (push and pull) have distinct information requirements and utilization [46](#page=46). * **Coordination and information sharing:** Effective supply chain coordination relies on sharing information across all stages to collectively maximize total supply chain profitability [46](#page=46). * **Sales and Operations Planning (S&OP):** This process involves creating an integrated plan for production and inventories to meet anticipated demand [46](#page=46). * **Enabling Technologies:** Key technologies that support information decisions include: * Electronic Data Interchange (EDI) [47](#page=47). * The Internet [47](#page=47). * Enterprise Resource Planning (ERP) systems [47](#page=47). * Supply Chain Management (SCM) software [47](#page=47). * Radio Frequency Identification (RFID) [47](#page=47). #### 4.2.3 Supply chain macro processes Supply chains are often structured around three core macro processes, which rely on a foundation of transaction management, typically managed by ERP systems [48](#page=48). 1. **Customer Relationship Management (CRM):** Focuses on managing interactions with current and potential customers [48](#page=48). 2. **Internal Supply Chain Management (ISCM):** Involves the internal operations of planning, sourcing, making, and delivering goods and services [48](#page=48). 3. **Supplier Relationship Management (SRM):** Deals with managing relationships with suppliers to ensure efficient sourcing and supply [48](#page=48). When enterprise performance is closely tied to supply chain performance, firms must prioritize these macro processes [48](#page=48). #### 4.2.4 Transaction management foundation and ERP systems Enterprise Resource Planning (ERP) systems form the Transaction Management Foundation (TMF) for managing the supply chain macro processes. They are designed to manage transactions and automate processes [49](#page=49) [50](#page=50) [51](#page=51) [52](#page=52). #### 4.2.5 The future of IT in the supply chain The future of IT in supply chain management is shaped by three key trends [52](#page=52): * **Software as a Service (SaaS):** Increased adoption of cloud-based software solutions. * **Real-time data availability:** Greater access to up-to-the-minute information. * **Mobile technology:** Increased use of mobile devices for supply chain operations. Modern ERP systems have evolved from basic transaction management and process automation to focusing on improving decision-making across the three macro processes, automating transactions, and optimizing real-time goods flows. Internal and external integration capabilities are advancing, though they often require significant tuning [52](#page=52). > **Tip:** Technologies like Supplier portals and shared data pools (e.g., GDSN) are transforming communication and data management, reducing workload and increasing efficiency [53](#page=53) [55](#page=55). #### 4.2.6 Electronic Data Interchange (EDI) EDI facilitates electronic business by enabling the exchange of business documents like orders, invoices, and delivery confirmations between trading partners in a standardized format. This streamlines communication and reduces manual effort [53](#page=53) [54](#page=54). #### 4.2.7 Risk management in IT Implementing new IT systems in supply chains involves significant risks, including revised business processes and integration challenges. Potential problems such as software glitches, bugs, power outages, viruses, and hacking can disrupt operations and even shut down the business. Careful planning and robust security measures are essential for mitigating these risks [56](#page=56). --- # Conclusion and future outlook of supply chain management Supply chain management (SCM) is paramount for competitive advantage, with the focus shifting to entire supply chains competing rather than individual companies. ### 5.1 Key takeaways for supply chain management The core objectives for SCM include ensuring product availability and providing online responses to customers. Achieving optimal stock levels and maximizing capacity utilization are also critical. Furthermore, SCM aims to reduce lead and cycle times, while balancing flexibility with forward planning. The overarching principle is to proactively plan supply chain operations [58](#page=58). ### 5.2 The '7 Rs' of supply chains A fundamental framework for effective supply chain management is encapsulated by the '7 Rs' ] [58](#page=58): * **Right product:** Ensuring the correct item is delivered. * **Right quantity:** Supplying the precise amount ordered. * **Right condition:** Delivering the product in optimal state. * **Right place:** Ensuring availability at the designated location. * **Right time:** Meeting requested delivery schedules. * **Right customer:** Delivering to the intended recipient. * **Right cost:** Achieving all objectives at the most economical cost [58](#page=58). > **Tip:** Mastering the '7 Rs' is essential for meeting customer expectations and achieving operational efficiency, thereby contributing to a competitive edge. ### 5.3 Future outlook While specific future outlook details are not explicitly detailed on pages 58-59, the emphasis on supply chains competing implies a dynamic environment where continuous adaptation and innovation in SCM practices will be crucial. This includes leveraging technology and data analytics to enhance responsiveness, resilience, and cost-effectiveness across the entire supply network. The academic year mentioned (AY 2025-2026) suggests a forward-looking perspective within the context of the document [58](#page=58) [59](#page=59). --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Supply Chain Management (SCM) | The overarching management of the flow of goods and services, involving the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Crucially, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party logistics providers, and customers. In essence, SCM integrates supply and demand management within and across companies. | | Forrester Effect | A phenomenon observed in supply chains where demand variability increases as one moves upstream from the customer. This occurs due to amplified distortions in orders as they pass from one stage of the supply chain to the next, often exacerbated by factors like lead times and human decision-making. It is also known as the bullwhip effect. | | Bullwhip Effect | See Forrester Effect. It refers to the phenomenon where orders to the supplier tend to have a larger variance than sales to the buyer, leading to information distortion and variance amplification propagating upstream in the supply chain. | | Customer Commit Point (CCP) | The specific point in the supply chain where a customer order is committed and a final product or service is configured or produced to meet specific customer requirements. This decision point influences production strategies and impacts supply chain drivers like inventory and lead time. | | Make-to-stock | A production strategy where products are manufactured in advance of customer demand and held in inventory. This strategy is suitable for products with predictable demand and aims to fulfill customer orders immediately upon request. | | Assemble-to-order | A production strategy where products are partially assembled based on forecasts, and final assembly or customization occurs only after a customer order is received. This balances inventory costs with customer responsiveness. | | Make-to-order | A production strategy where products are manufactured only after a customer order is placed. This is typically used for highly customized or complex products, leading to longer lead times but minimal finished goods inventory. | | Engineer-to-order | A production strategy where the product is designed and engineered specifically to meet the unique requirements of a customer order. This is common for highly specialized or custom-engineered products and involves the longest lead times. | | 3PL (Third-Party Logistics) | A company that provides outsourced logistics services, such as transportation, warehousing, and inventory management, to other businesses. Utilizing 3PLs can help companies optimize their supply chains, reduce costs, and improve service levels by leveraging specialized expertise and infrastructure. | | Cross-docking | A logistics practice where incoming goods are unloaded from an incoming truck or railcar and immediately loaded onto an outbound truck or railcar with little or no storage in between. This minimizes storage costs and reduces handling time. | | JIT (Just-In-Time) | A production and inventory management strategy that aims to receive goods only as they are needed in the production process, thereby reducing inventory costs and waste. | | VMI (Vendor-Managed Inventory) | A supply chain management approach where the supplier is responsible for maintaining the customer's inventory levels. The supplier monitors inventory and replenishes it as needed, often based on pre-agreed reorder points and inventory levels. | | ERP (Enterprise Resource Planning) | An integrated system of business management software, typically a suite of applications, that an organization uses to collect, store, manage, and interpret data from many business activities. ERP systems help manage core business processes such as finance, HR, manufacturing, supply chain, services, procurement, and more. | | Sustainability | Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. In supply chains, it encompasses economic, environmental, and social considerations to ensure long-term viability and positive societal impact. | | Closed-Loop Supply Chains | Supply chains designed to improve sustainability by incorporating product take-back, recycling, and remanufacturing processes. Products are designed for disassembly, reuse, and material recovery to minimize waste and conserve resources. | | RFID (Radio Frequency Identification) | A technology that uses radio waves to identify and track tags attached to objects. In supply chains, RFID enables automated tracking of inventory, products, and assets, improving visibility and efficiency. | | EDI (Electronic Data Interchange) | The computer-to-computer exchange of business documents in a standard electronic format between business partners. EDI streamlines transactions, reduces errors, and speeds up business processes such as order taking and invoicing. | | S&OP (Sales and Operations Planning) | A process that creates an overall supply plan, including production and inventory, to meet anticipated demand. It involves aligning sales forecasts with operational capabilities to balance supply and demand effectively. | | ATP (Available To Promise) | An inventory management system that calculates the quantity of a product that is available for sale. It considers on-hand inventory, scheduled receipts, and customer orders to provide a realistic promise to customers. | | Greenwashing | The practice of making misleading or unsubstantiated claims about the environmental benefits of a product, service, or company. It is often used to mislead consumers into believing that a company or its products are more environmentally sound than they actually are. | | GDSN (Global Data Synchronization Network) | A set of standards and a network that allows trading partners to exchange standardized product data, ensuring accuracy and consistency across the supply chain. |